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Ecnomic Explains ,pls make a video about "How Robot take away the jobs of human and how can human live without jobs or income"??????????..?????????????????????????????????????????????????????....... ,??????
Or they take over the government directly and transform the governmental system to their benefit. City Republics in Europe? Dominated by the filthy rich, who levied taxes on everybody but their own families and companies. On the other hand, impoverished disenfranchised citizens tend to follow every leader who promises them a better life. Imagine a country with corruption to the highest ranks, a political process stalled by hateful division, ambitious egomaniacs with big bank accounts gaining huge followerships and constantly testing how much they can undermine the law and the constitution for their own gain, eventually transforming the government into a one man show...Of course I´m talking about the late Roman republic.
@@antyspi4466 Or much more extreme in the US where electoral campaigns have to be paid for by "donations" from the wealthy, which then gain huge influence regarding policy decisions. As a privateer in the US you have a statistically insignificant chance of winning when running for office.
@@antyspi4466 Just have a look at South Africa. The government is drawing prosperity from their own country via greed an corruption, using racism as an excuse and making us all worse off for it while banking billions.
I think one point you forgot to mention was how wealthiest people have a greater say in the political decisions. I guess that is one reason that drives opponents of capitalism crazy.
That's not an economic issue. That's a political issue. Supporters of capitalism also hate it; economists call it rent-seeking. Something we can agree on!
@@fatpotatoe6039 If they pay their way to say, making unionization more difficult or deregulation of an entire industry so it can be moved overseas while still reaping the benefits of being a domestic company, then it is an economic issue. Those actions directly effect their employees and consumers in the nations where they nominally are counted on the same scales as the billionaire owners, so they're relevant factors in changes in economic reality of those nations.
@@fatpotatoe6039 Stop treating it as seperate issues. The ruling class is naturally the dictator of the state, no matter which mode of production is in place. In slave society slave owners control the state. In feudal society feudal lords control the state. In a capitalist society capitalists control the state. In a socialist society socialists control the state.
@@georgepeterjoubert7482 i'm about to enter college as a freshman and i took up stem for my senior years. i'm planning to go into a business major instead of stem because of that saturation u just talked about. but even business is saturated and it's a bit scary knowing that there's a huge possibility that i might not even get a job (though i wasn't planning to be THAT invested in having a job, anyway. because i'm planning to help my dad run his business.) i already knew this as a child, but, surviving in this world is hard. but i'm lucky that i have my parents to support me financially. but even that won't be enough when sht hits the fan
@@gajjang968 It may seem hard to you but as the video said this generation is the most privileged ever. Many of the things that your generation complains about possibly not having would not even have been dreamed of by your grandparents. If you have a smartphone, computer, car and A/C you are extraordinarily privileged.
@@darleyt1 did someone hit a nerve? 99.99% of grad students contribute nothing to society. Other then basic science, it’s the private sector that contributes most of societies advancements.
I'd say this video suffers from the usual problem of some of this channel's content - the unspoken presupposition of the fundamental goals of the economy. "Leaving aside the morality" is a good point when abstracting away from the injustice of the super-rich not having to work for their wealth to grow and looking at the wider effects of their existence, but it also cuts out the discussion of what the economy is even for. What are we optimizing here? The example of having to save money to get a spaceship to work your second job is actually very demonstrative here. The free market economy optimizes productivity. Even when the average person becomes wealthier, they don't get to relax and enjoy their wealth as they have to keep doing the maximum possible amounts of ever-more-productive work to sustain it. If more wealth stayed at the bottom of the economy instead of being channeled to the top then people would get to work less to maintain the same effective income, living better lives as a result. This is, of course, utterly impossible in the free market, where the investors would rather see worker pay cuts and layoffs than a reduction in their own profit margins. And it would have to come out of the profits, since passing it on to the customer would either make the product uncompetitive or drive inflation and just add an extra layer to the mess. The arguments for wealth concentration being natural and coming back as innovation are disingenuous. Richer economies have more "spare" resources to channel to the rich, but that doesn't mean that they have to be channeled to them, it's a case of correlation not equaling causation. And the concentration of resources required for innovation can just as easily be done by state actors rather than private ones, with the innovation itself being created by engineers rather than capitalists. The role of inequality in driving worker self-improvement is fine in theory, but in reality it may restrict access to good education for the poor people who need it the most to escape said poverty, leaving their potential unfulfilled and forcing them to the bottom of the economy regardless of their talent.
Yeah, this is my main disagreement with the video as well. The purpose of the economy should not be to just increase the average wealth, or even the wealth of most people, because there's more to life and standard of living than that. Extreme inequality *is* inherently unjust, and benefiting the economy doesn't make up for that.
@@oterceslanaclevvo9855 Is there some line where you don't care if you and everyone else gets wealthier, but you have to bring down someone who's doing better than you, even if it comes at the cost of the rest of society? This is just pointless envy. If everyone is better off with an increased amount of inequality, then society is better off with it. I get that humans are comparative creatures, but if you try to think rationally about this what you're saying doesn't make any sense. It's the same spiteful logic some people tend to use in relationships as well. If they didn't have a good relationship with their mother, then neither should anyone else, because that would be "inherently unjust". The "if I can't have it, nobody else should"-mentality is counterproductive nonsense. Note that this isn't necessarily an argument for inequality in the real world, but you said that inequality is inherently unjust, even if everyone benefits which is completely ridiculous.
you forgot the the most reliable investment: politicians. you got all this money, you need to spend it on something, why not lobbying, the roi is amazing.
The government is the biggest investment for the owners of big box corporations because of how the regulatory and tax systems are set up in favor of such corporations. Well, thet and politicians are corrupt enough to take bribes.
@@suthinanahkist2521 They don't need to take bribes. That's the frightening part. Just assume two things. 1) Corporations tell politicians to vote for bill X (or against it) 2) Corporations will spend money on ads that promote their interests. Which also just happen to align with politics. Who knows, a green energy company might point out that they have a fantastic product, and it would make your life better if not for naysayers like senator E. McSinnerson. What happens next? Mr Sinnerson can still promise to vote against bill X. Nothing stops him. But if he does, he knows those ads will go up, and soon he'll be replaced by someone who will vote for bill X. Either way, his seat will vote for bill X, his only choice is whether he'll be in it. As a closing note, in case you have any optimism left: you can't stop it either. Even if you could pass a bill through congress that bans any and all political ads from corporations, and if you seal all the loopholes, and if somehow the politicians vote it in despite their donors' requests... billionaires like Jeff Bezos can just print it in a newspaper, labeled "news". Who knows, Exxon could buy CNN some day. It would only give the super-rich a bigger slice of the power pie by completely wiping out the smaller business options.
@@sorsocksfake Oh and without wealth inequality media would be free and do only things for good. In communism, socialism even without wealth inequality would be status inequality. And they will use their status to make movies with narrative they like, media push their ideas etc.
@@dmitrizaslavski8480 Yeah obviously that didn't work either, and we understand why. Social liberalism seems to have a more stable solution, where there is a floor but not a ceiling. Strengthening the bottom of the pyramid foremost, without trying to crush the top.
I think when one digs a bit further, the criticism of wealth inequality stems from two forces which aren't being represented well in this video. The first is often that economic analysis and the markets we have created are not properly capturing costs that have been built up from industrialization and modern society. For one, we face a slow-motion existential crisis in the form of global warming and the general ecological collapse we are seeing around the world. Some people are getting quite rich off that destruction but it is everyone who will eventually pay that cost. The other side to this is that wealth at the billionaire level isn't just increasing one's purchasing power, but weighing in on topics of government regulation and judicial impartiality. The wealthy can afford good lawyers to get them out of trouble when they drunkenly get into a car accident and kill several people while the poor often find themselves better off admitting to crimes they didn't commit rather than face a trial based on the ten minutes of time they were given with a public defender. Further, the wealthy have access to policy makers that the average person doesn't have. This means when deciding on regulatory reform that could determine the extent to which we, say, continue to tolerate the release of green house gasses into the environment, the wealthy tend to have an overstated role in determining those outcomes. When so many of the wealthy make their money through the release of green house gasses, this provides at the very least the image of corruption. A key problem many will have watching this video is that economics is not an all-encompassing view-point and certainly doesn't solve all our problems.
but thats not a problem caused by wealth inequality. even without wealth inequality people would still take the path of least resistance to economic growth. Also there will still be good and bad lawyers
I agree with you, but corruption can happen with any system, the USSR was an incredibly corrupt government, even though there weren't any billionaires there. (I'm not trying to bash the USSR, just saying that there are many more issues rather than wealth disparity which contribute to differences in power)
He actually made the point in the video, but it's a bit subtle. He basically said in some cases wealth inequality comes at the expense of others, for example the leeches of society like criminals. The only difference between criminals and, say polluters, is that some of the worst polluting industries hasn't yet been outlawed. The guy who gets away with murder is also another example.
As an Australian, as well as watching China rise to become a juggernaut, people won't ever revolt or really start getting upset about inequalities as long as their needs and wants are being met. It's why Australians totally forgot about the brutal fires in January and why the Chinese don't care about the uyghur camps; as long as we have our holidays, steady jobs and netflix, we're good fam
@@danielt6856 , not an Australian but why would a 40% Divorce rate be a bad thing? that simply means that 40% of marriages weren't working out.. should those folks be forced to stay miserable (or at the very least in marriages that aren't making them happy) or should we trust them to behave like adults and figure out what's best for their individual situations?
@@danielt6856 I would say that has nothing to do with our economics. If everyone had all the money they need it won't necessarily change that. If anything it's a cultural or philosophical issue.
The issue with wealth inequality is not necessarily material, but an issue of power. I'm afraid you overlooked that. The mother struggling to pay bills is in fact deprived of power and being forced to act in a certain way by those that have more power than her. Generalize this at the level of populations, and there you go.
@Richard Casterly a worker woman is forced to act a certain way. she can't decide buisness policy, she cant decide any policy outside of her home. not even that because probably she has no home and is renting so can't even decide that. She can only decide what dictator she prefers and they all look quite the same. the alternative is homelessness and hunger so not much of a choice. If I hold you at gun point you can not say "oh well at least I have the choice to be shot"
@Richard Casterly I think the idea is that a minimum wage earner shouldn't "struggle" with a kid or two. That is the goal, but given the direction of our wealth inequality that ramps up prices and barely changes wages hinders that.
@Richard Casterly I think what Rasmy was getting at, was that there's often a trade off between what a person really wants to do and what they can get paid to do. A good example is that no one pays you to stay home with your kids. Having the option to pause your career to focus on your family is increasingly a privilege for the minority. Another good example is that a majority of people work in jobs they don't really care about. A gallup poll from 2017 found that only 15% of global workers (and only 30% of American workers) are engaged at work. Lower wealth inequality might allow people to work in areas that they love, even if those areas are economically riskier.
Who’s making her act in what way? That’s what you need to work on. I don’t think it’s rich people’s fault. Even if it is rich people’s fault, I don’t think it’s inequality’s fault, it’s just those certain actions of the rich people that would need regulation
Richard Casterly i think we are in an atmosphere where cost of production is invested in automation to scale things and no longer by increasing labor. Everybody needs everyone else, whether youre a businessman or a cleaner or low skilled worker. Someone has got to do the job until we’re all easily replaced by machines. It’s mutual agreement that society needs your skill and for that society has to assure you live the most humane way. And dont be throwing that it’s only the mother’s responsibility to take care of the kid when everyones preaching that it takes a community to raise one. After neglect, all the government wants now is the “unleashed” potential of its youth which is quite delusional
Some comments have already touched on this, but the argument that inequality breeds innovation is not guaranteed. In fact, you contradict it somewhat in your own point later about the 5k loan...if there is not enough profit, then what's the point? Thus excessive wealth may slow certain types of innovation. This video also assumes people are completely motivated by wealth. I won't say they're not, but it becomes...attenuated. As a person progresses in their career, they may stop caring about sheer money and more about things like time, vacations, etc (wealth, but not necessarily for economic gain...). In other words, caring about money until basic lifestyle needs are met. More is nice, but stops being a main motivator. The other assumption I thought this video went on is that large capital projects require accumulation of wealth. I'm personally really curious if this is true - space flight, for example, was the government (a stockpile of cash from mostly not super rich people) the main funder of this project? It is in some sense a use of distributed and small amounts of wealth, so I don't see that it is required we enable people to be super wealthy for this to happen. I think the other common argument I'd be curious about that wasn't really addressed here is, yes, Bill Gates has massively impacted the world, but has he impacted it a mind boggling amount of dollars worth? If rich people cannot conceivably find a use for their money, should they not distribute it to people with very real problems causing literal stress and health issues and other issues? There are studies about how no-strings-attached angel funds and such can really help kickstart smaller economies, help people escape poverty, homelesses, etc. I think the common idea I heard is "maximum wage" - an analogue to minimum wage that says "okay, you can buy everything you've ever dreamed of, stop now". - the wealthy would be motivated to continue working to maintain their lifestyle, but that money could be used by non-profit driven institutions (govt, charity, etc) to perhaps fix more systemic issues.
Great video as usual man, thank you. One point I disagree with towards the middle of the video and on which I wanted to share some thoughts: "All these innovations would not have been possible without wealth inequality." -> When you look at some more innovations beyond the steam engine, you find that innovations are not just driven by wealth but also by spare time of some individuals and their intellectual skills - these individuals were not always wealthy (e.g. Nikola Tesla, Niels Bohr, Albert Einstein...). Today, it is driven by companies, and the most innovative companies are the ones trying to attract the most skilled workers, offering them big pay and better work-life balance (the modern equivalent of more "spare time"). In these companies, the top directors running the business and making millions / billions are not the ones innovating most of the time, but rather their employees, at various levels. So one could argue that, if there were less inequalities and if people around the world had more spare time to educate themselves and imagine new things rather than spend their days worrying about how to make ends meet, we would have many more brains working across the globe on solving problems, and thus we would see more innovation.
But such innovation use to come out once every decade of 2 only. And someone got rich on the back of innovations done by Tesla, wright brothers, etc. It's just that tesla and wright brothers didn't get the fruits of their innovation and labour.
@@marshalLannes1769 yes but the point was that the innovations werent made by rich people, someone got rich off of it but these things but they werent invented by rich people.
And don't forget that many poor communities in cities are reliant upon laundromats owned by rich people, who are basically taking advantage of people who can't save enough money to buy their own.
@@Dthatsmi "Taking advantage", really? It's an alternative. If you can't afford your own washing machine, you can instead pay a small fee to effectively rent one for each laundry. It's also convenient in cases where you wouldn't get your own anyway (lack of room, temporary stay, etc). I suppose you could also wash your clothes by hand, if you really don't want to feel "taken advantage of".
@@gaohkai9441 Funny how dumb it sounds with laundry machines. Maybe if I blow the concept up to the huge housing crises in Boston, NYC, San Francisco you can make more sense of it. The difference is that people who are looking to buy a house are an entire different class of people who are looking to buy a washing machine. You're so blind to the reality and depth of wealth inequality (even in the US) that you assume everyone using a landromate is just doing it because it's a wise economical decision on their point. No, they have no other option, the prices are set to keep the landromate in business by leeching money out of poor communities. I can understand laundry machines in college dorm buildings, but please explain to me why every poor community in an urban environment is chalk full of laundromats. I would love to understand your point better.
@@Dthatsmi What are you trying to say? Are landromates bad because they are leaching money out of the poor and are the "only choice"? What is the solution to the landromate problem? SHould we close them? Should we regulate them so they can't charge "unreasonable" amount of cash? Pardon me but I have difficulty understanding your point. A bit of elaboration will be greatly appreciated.
I think this video completely missed a very important nuance about wealth accumulation and innovation; it's not wealth that creates innovation, it's wealth invested into innovative institutions that *facilitate* that innovation. It's hundreds of thousands of dollars in education and research, both public and private, across hundreds of universities across all of academia. It wouldn't make us more efficient if we just pooled all the resources to one dude because concentration =/= innovation. That innovation comes from the sensible *distribution* of resources into *institutions* that facilitate that sort of learning. He mentioned the Italian renaissance which yes is famous for it's economic boom but it was an economic boom amongst the nobility and urban middle class, *not simply making the richest people in Northern Italy even richer*. It involved dozens of cities and individuals investing that newfound wealth over the long term into artistic, cultural and learning institutions, not just hoarding.
It's been a year. Has your narrative changed? After reading your reply to the EE discourse. I am more confident that all players in the equation contribute their part. The ones at the top are simply more visible.
sensible investment in institutions? sounds like a great way to waste money. Let the market flow baby! If people want stuff, someone with money will figure out a way to give it to them. Then that company gets really good at it, makes it more quickly, competitors step in for a piece of the pie, prices go down, product becomes accessible to everyone, the end.
@@timbutlerr6246 Have you considered that maybe that sort of company your describing could be viewed as an example of an institution that many different people put money into, which is what the original comment described. Like, you do know what a share/stock market is, right? It's a medium through which financial capital from many different people is able to be concentrated into companies (Institutions) which in turn spur the development necessary to create long term wealth. That both fits your point on private companies being created and becoming efficient at producing through competition, and the original comment's point on Institutions. You're describing the exact same thing as the original comment, just you seem to think that this term 'institution' somehow doesn't include private sector entities, despite the original comment explicitly stating, "It's hundreds of thousands of dollars in education and research, both public and PRIVATE". Private, as in private sector, private owned, private capital investment. Did you like skim read the original comment and miss the point?
@@jamesclarke2789 I think you may have skim read this comment. "across hundreds of universities across all of academia". Pretty clear he believes that "artistic, cultural and learning institutions" are responsible for the bulk of innovation. Which I disagree with, that's my point. I will not deny their are some advances coming from these "institutions" but much more slowly. A perfect and undeniable example is the vaccine for coronavirus. If we relied on universities and academia to find a vaccine, it would have taken many more years. Crisis provides an opportunity for companies like Pfizer and AstraZeneca, who saw the huge demand, and turbocharged their development to beat the competition.
I feel like this video didn't touch on the economic reality of non-first world economies. Extraction of natural resources of a poor country by multi-million corporations are a reality that hyper capitalists tend to ignore. Even labor is exploited in poorer countries so the economic viability of a product is maintained. I wish future videos get more in-depth with the analysis as this felt like preaching to the pro-corporation choir.
Economic reality of non-first world economies largely bases in someone who already has power using said influence to obtain money. Talking about wealth inequality in such countries is self-defeating, it is not rooted in economics to begin with.
> Extraction of natural resources of poor country by multi- million corporations What you mention basically sounds like the Prebisch - Singer thesis. There have been serious doubts regarding the thesis. Techically, reality gave opposite results to those expected by theory (policies created following Prebisch ideas didn't redult as intended in latín América; and in the case of China, literally happened the opposite to what was predicted by the theory). The net result of the 2000's commodities boom basically debunked this thesis.
Protectionism and subsidies by the governments of rich countries are much more damaging to poor countries than whatever corporations do. For example if the EU got rid of protectionist policies and the CAP subsidies, most european producers would move their production to poorer countries bringing trillions with them, and with that money those economies would thrive, just like Asian countries thrived when manufacturing was moved there.
"Inequality motivates people and drives innovation." Shortly after: "Innovations in the past were driven by the rich nobility as a hobby". It's not either or but money is certainly not the unique nor primary factor motivating people, we just live in a world which doesn't know how to function without assuming that it is.
"doesn't know how to function" As long as people are alive, which means they have the means to take in food, it functions. Doesn't mean it should function in a way everyone is happy. But it functions. A car with only one headlight and running on 3 cylinders - still functions
I didn't say it doesn't currently function (albeit with many issues, as you concede). I'm saying our culture has not conceived a viable model that puts something other than accumulation of capital as the main driving factor for the economy.
@@pneumonoultramicroscopicsi4065 Good observation. But I was focusing on the mistaken argument that it is only or mostly the pursuit of financial reward that drives innovation.
@@magnusanderson6681 The revolution's instated rulers have this annoying tendency, to get rid of their instigators. He couldn't be trusted against the previous ruling class, and no socialist ruler has ever cared for anything other than his own pockets. So the instigator will probably at some point, turn against him... so the instigator must go where he can never in eternity make any trouble for the socialist. If AOC and her squad truly cared about the environment and the poor as much as they love instigating them against people who dare to work for what they have, they'd have scaled down their living quarters to afford doing charity, and taken the train and buses wherever they go, don'cha think? Did you notice her celebrating extending poverty and unemployment in Queens, NY? Her followers are her "useful idiots", to get her and her cronies in power and thereafter, their faithful serfs for time immemorial. For that is how every socialist leader gets into, and retains, power. What your history books most likely leave out, is that Robespierre's revolution became a witch-hunt thereafter, against any who dares question him - much like any who dares oppose Blank Lies Makers. It became so bad, that Robby himself was eventually executed for some crime against the revolution.
@@JFDSmit-rm6tw Lol one of the few things I do remember about the Revolution was that Robespierre was executed. But yeah, I was writing a 1 sentence comment, not an epic business strategy. Also, I don't agree with what the left is doing right now.
i'm very suspicious of the notion that wealth inequality breeds innovation as I haven't seen studies that really link those in an way other than conjecture, but I can easily find MANY more peer-reviewed articles that provide ample support for how wealth inequality breeds crime, illness, social distress, and increased financial burden/stress. What is the opportunity cost of NOT distributing wealth in a more equal manner?
Wealth inequality breeding innovation is an outright lie, and easily disproved. Innovation comes almost 100% from prosperous nations, one where resources and knowledge are easy to acquire. Third world nations have the greatest inequality and have the least innovation, while the greatest innovation in the US almost always comes from at least the middle class.
An example could be someone working hard to become the manager of a place in order to earn more money. A good manager is more skilled and can deal with the various issues that the employees either can't or don't want to do. Another example is entrepreneurship, where the chance of becoming rich helps motivates start ups and inventors.
It actively destroys innovation. It's like depriving a brain of nutrient-rich blood; coagulating it in tiny portions of the body. In addition - trauma damages DNA, and the damage is inheritable. The claim that "quality of life has improved for everyone" expressed in the video requires a delusional sampling / survivorship bias to make. Further, these privatized "huge concentrations of wealth" are born of *socialized* risk/cost.
I wish this made some attempt to answer how MUCH inequality is good or bad, including things like welfare/education via taxation which reduce inequality but can also fuel economic growth.
Or the different kinds of inequality, like how South Africa is growing more unequal, but because the poor is getting poorer there, not necessarily the rich are getting richer. Likewise, he didn't address how countries that get richer while reducing their inequality tend to be better off than countries that get richer while gaining inequality.
I do not think its possible currently to solve this issue without degrading our society into anarchy. The rich control infrastructure and most of technology so we would have to topple that in the process. Also wealth inequality is too ingrained in society for it to change, and what social structure would replace it if it were to change. So in summary wealth inequality is too fundamental to our society, so it cannot be toppled without destroying modern society in the process.
One of the things that bother me so much is that the idea of having a roof over your head is getting more expensive everyday because we allow speculators to speculate with land ownership. Young people are getting priced out of the idea of having roofs over their heads. Also, with regards to the video, while in the grand scheme of things we are better off now than 300 years ago, I don't think we're better now than 50 years ago. At least not if you're a middle-class person. A middle-class wage used to allow families to live with many comforts.
1. The super rich often use their money to influence government policy to the detriment of the general population. 2. They often keep an outrageously disproportionate amount of the wealth generated by their businesses by underpaying their employees.
People are free to take their labor elsewhere. People are free to not buy those products made by those businesses. You can do with a cheap phone from Cricket, but you want the latest iPhone. Who’s fault and decision is that. What examples do you have of those rich people creating a disadvantage for the regular people? A lot of those rich people donate great sums of money for worthwhile causes and invest in other ideas that noN wealthy people Come up with. Creating money for both. There also is nothing stopping regular people from coming together with their money as a group to influence government policy. But they’re too busy buying lottery tickets and buying the newest iPhone and wasting their money. Obviously not all, but a great deal.
@@joedirte8355 this the problem with the victim mentality we have today. The rich have more than me, I am a victim of oppression. To absolve myself from the decisions that I am free to make, I must be a victim of oppression. Its easier to say others must change to than to make changes to yourself.
Joe Dirte' with healthcare tied to jobs and the vast majority of americans living paycheck to paycheck, there is not the liberty to take labor elsewhere. Fact of the matter is that a significant amount of americans cannot afford an emergency payment of $400. Let alone a hospital bill - even with medicare. That significant majority in that position is stuck there due to skyrocketing costs of living with wage stagnation. The question then becomes, do we sit and watch our middle class disappear making these problems worse? Or do we try to fix it with better worker protection, updated wage laws, detaching healthcare from employment through public healthcare. The developed nations of the world have made their choice and are better off for it while we continue to suffer more and more due to inaction and attitudes that blame those caught between high inflation/over valued markets and stagnant wages with the risk of everything to change work.
@@OopsAllFrench I'm also curious about the proportion of Open jobs and Unemployed+unsatisfied workers. If its less than 1, then even if any individual has the chance at getting a new job, its impossible for everyone to, thus there would always be a number of people who lack the practical liberty to control their own life. Maybe in the past a person could go out and build a log cabin or start a farm, I don't know how possible that is today (or if that was even possible then). Also, businesses are expensive to start up today, meaning you need to take out loans to even try, but if your credit is bad since you didn't make enough to pay other loans, you're kinda screwed. Social mobility is a real problem; the US at least is lagging behind where we really should be. From geography, to ideology, to geopolitics, we really ought to be able to be #1, but if I recall, most of Europe, Canada, Japan, Australia, New Zealand, Singapore, and South Korea all rank ahead us. That being said, I am open to new information in case I missed something, sometimes I'm wrong.
So.... if more of us had more money we would have more time to spend on "hobbies" that have the potential to create "innovations" that would better all of society? Isnt that more an argument for more equitable wealth distribution rather than one for wealth accumulation?
Interesting, then the US must have grown significantly poorer 1940-1985 as the share of wealth owned by the richest 10% decreased from 82% to 64% in that period. Then the country obviously got super-rich during the second Reagean term and after, when the inequality skyrocketed. Now go and pitch that idea to the auto-workers in Detroit and coal miners in West Virginia ;)
@@SigFigNewton or maybe people should aquire better skills and not regulate themselves in declining and obsolete industries like coal or cars. America became wealth cause the skills required to be marketable yields the most wealth. You see this everytime in every information and industrial revolution Ie. Learn to code
@@bellphorusnknight supply and demand. If everyone learned how to code the supply would go way up and the wages way down, ironiccly what happened in car manufacturing. If you need three jobs to pay rent then you don't have time for education. A UBI would be great for this but only then could your solution be viable in some extent
But, forgive me if I'm mistaken, that reducion in inequality was a CONSEQUENCE of poorer americans getting wealthier, not the cause of it. Like, if we were to just kill every billionare alive, inequality would descrease, but that probably wouldn't directly improve the economic lives of common folk, at least not directly.
@@bellphorusnknight that would only be a free choice if aquiring new skills was free. But it isnt. It costs a lot of money, thats lacking way too often. Thats where your idea fails to meet reality. If students got funding so nobody was relying on private money to get new skills, then you have a very valid point. But at the moment, thats not true.
Oh man, you SAVED my life! I spent my entire life believing that inequality was a terrible thing, but your video proves that it is actually a great thing! This explains why the most equal countries in the world, like Norway, Denmark and New Zealand are so bad to live in, and why the most unequal countries like South Africa, Haiti and Colombia are so developed! All the other videos on youtube show only the bad aspects of inequality, but you showed us the truth, thank you for that! I'm selling everything and taking the next flight to South Africa, I imagine that inequality will make me super motivated, and I will be able to produce a lot of wealth for the world!
The part about prosperity reminds me of a joke from my former communist country "Is it true that everybody is equal here in Romania?" "Yes, everybody is equally poor"
"In December 2008, Goldman Sachs paid out $2.6 billion in end of year bonuses in spite of it's $6-billion-dollar bailout by the US government justifying these on the basis that they helped to ' attract and motivate' the best people
Economists are dumb, they don't understand things. Or care about things like humanity. We produce 4x the world's food needs. Why are there people starving then?
Ohh look here, an edgelord i am so impressed. Do you not at all understand private property or is that something you know a few levels above your level of understanding?
I miss some downsides of Wealth Inequality: 1. The wealthy receive a large part of the general increase in value. This leads to an increasingly uneven distribution of capital. The normal population degenerates exclusively into labour. In our modern society, however, almost every innovation requires capital, which excludes a considerable part of possible improvements or makes them fail due to gatekeepers. 2. Wealth Inequality transfers to democratic inequality. Either by influencing public opinion through (owned) newspapers or television channels or by having better access to politicians. The mere difference in the frequency with which political decision-makers meet with representatives of business as opposed to civil society is enormous. In addition, they are often major donors to the parties or election campaigns. This lever is then used to pass laws that directly (depriving criminals of voting rights) or indirectly (registration hurdles or fees) disadvantage poorer people.
1. Even though the wealthy receive "most" of the increase in value, the other hundreds of millions are still getting an increase in their basic living year after year. Having it the other way around would leave no incentive to invest in creating value thus standard of living would not increase at the same rate as it does now. 2. I agree for the most part
@@Harvindg40 1. the idea that income is the only possible incentive for creating value is very much bs. a sense of agency which people would experience through actual democratic involvement would be arguably just as powerful.
@@Harvindg40 Then explain why life expectancy has stagnated in the US. Or why minimum wage from the 1970s adjusted for inflation would be over $20/hour.
I think he actually did sort of cover 1- How the wealthy invest in large but dumb ventures, when there are loads of reliable smaller ventures to be had and small improvements to be made. If the general population is living meal to mean while the rich sit in their golden hills, society won't improve as much as if the general population each had a bit of extra money to kick in to, say, build public works like roads and clean water.
To everyone saying he was out of touch: 1) This video was not about regulatory laws but about wealth accumulation. A lot of people are saying that those with great wealth influence those in positions of power. While this is true, it is outside the scope of economics and thus a channel called "Economics Explained" did not touch on it, which makes sense to me. Yes obviously we should have more robust laws that limit how much you can influence politicians with lobbying, especially in countries with high rates of corruption. 2) The presenter regards Scandinavian economic systems as very good, and people there pay very high taxes and as a result have low income inequality when compared to other countries. 3) In my personal opinion, wealth inequality in and of itself isn't an issue as long as long as the base standard of living is high enough to where everyone can live comfortably doing what they like to do. Take Sweden for example, they have some of the highest standards of living in the world, everyone can afford housing, food, and to not be overworked and live comfortably at the same time, yet the country has some of the highest wealth inequality in the world.
You should look at the data for point (3). It really does appear like wealth inequality itself is a better predictor for societal ills such as violence and suicide than poverty.
@@endlessxaura I would not argue it is the best predictor though. While high wealth inequality does correlate with the things you mentioned, it is not always the case. Sweden for example has very high wealth inequality but low levels of violence and suicide. I think this is likely due to the high base standard of living present in Sweden, meaning that even the poorest there are able to make ends meet without having to overwork themselves. The reason for this is that income inequality in Sweden is very low, and income taxes there are used to prop up the most vulnerable in their economy. Therefore I would argue that wealth inequality in and of itself isn't an issue, but rather the issue is what leads to wealth inequality and how "high" those at the bottom of the ladder are, so to speak.
People thinking wealth inequality is ok are people assuming a certain baseline equality exists. I think there is a lack of understanding the term. Different levels of wealth isn’t wealth inequality
Good video, but no mention of the Gini coefficient or its associated impacts? Also, this is USA centric, but the purchasing power of our people has been deteriorating since the 70s, due to a combination of stagnant wages, and inflation. Obama admits that 95% of the wealth generated under his tenure went to the top 1%. The rich are getting richer in real terms, while the poor are getting poorer in real terms, *as a matter of policy* .
Exactly correct. The extremely wealthy have a stranglehold on our policy and thus our democracy, and have routinely furthered the wealth gap to line their pockets.
That's not completely true. It only looks at wages, and when we look at wages AND others sources of income everyone got richer. Also: did the poor have computers, internet and delivery services at their disposal back then? They didn't.
@@thrawn9115 The prices of certain products can be lowered for the sake of demand. All for American consumption. The price of land, property and rent have gone massively up. You can get a cheap smartphone for 40$ nowadays instead of a 1000$ iphone. But I bet that the country that suppies the materials doesn't earn enough. So tech is extremely cheap in America and some first world countries.
I know I'm late, but I dont have a problem with people accumulating unfathomable wealth. I have a problem with those people not paying taxes, and yet still having immense political sway, lobbying to keep minimum wage down, increasing taxes on the poor, and keeping Healthcare a private industry run more like a business, and buying their dumb children an unearned spot in a university effectively buying their diploma.
Increasing taxes is something that socialists/communists do. And you say that it’s the same people that increase taxes on the poor that privatize healthcare? Isn’t that the opposite of a socialist policy? Think
@@obamama4632 who said anything about communism or socialism? Trump passed legislation to increase the tax on poor and decrease the tax on corporations. The same corporations that keep the health sector privatized. You can think all the stupidity you want, it doesn't change facts. All you know how to do is spew buzzwords and think that makes a compelling argument. It doesn't. Go educate yourself.
@@obamama4632 Increasing taxes is something capitalists do as well, they just do it more to the poor while reducing taxes on the capital owners. It's not like taxes weren't being collected from serfs during feudal times.
If their children were really dumb they would squander the wealth in a generation. More likely the children are smart but they spend their time on horse riding , attending fund raisers and other social activities which will enable them to actually manage their wealth. The college degree is not going to make a difference in their lives but it is a necessary social cachet they need to have so they spend the money so their children dont have to waste high school prepping. Once in college they are plenty smart enough to get through.
“The disposition to admire, and almost to worship, the rich and the powerful, and to despise, or, at least, to neglect persons of poor and mean condition is the great and most universal cause of the corruption of our moral sentiments.” -ADAM SMITH , SCOTTISH POLITICAL ECONOMIST (1723-1790)
@@sangeetanarendrasingh5416 You really are going to split hairs between how banks behave today compared to feudal lords in England? Its far more prevalent today.
@@sangeetanarendrasingh5416 You mean like... All the people that hoard real estate and rent it out? Landlords are still very strongly represented among the wealthy... A bank is also by definition something whose existence is largely built on 'rent-seeking', which is in the same category as a landlord. (rent-seeking: The desire to find a way to be paid not for doing anything productive, but merely for owning something.) This behaviour is rampant, and it is pretty much guaranteed parasitic in nature most of the time...
I don't understand how this quote is being framed. Is this a statement about this video is worshipping billionaires or how this video shows worshipping anyone for their wealth is dumb because they're just acting based on the sum of the economic forces imputed on them?
You missed one of the major problems with that level of wealth disparity: capitalism only works when there is a lot of competition on a level playing field. Capital and market share are power: and when there is too much of a disparity, the powerful use their power to crush others and harm society. Look at Bezos/Amazon and it's workers; look at the Waltons and Walmart vs it's workers and small businesses in the communities they enter; look at the Koch bros vs scientists, environmentalists, and the rest of society; look at Gates and Microsoft vs other tech startups. Just like the Lords of old used their knights to force the peasantry to do their bidding, some supper wealthy wield their wealth as a bludgeon. That alone is a good argument to do something about wealth inequality
It's more about the government being in the pocket of those with wealth, and that goes beyond the wealth inequality itself. Government should be above the fray, ensuring a fair competitive marketplace, but it isn't. And if it isn't, then how are you going to address wealth inequality in the first place? Citizens do need to educate themselves, and hold their government accountable. Participate in the political process. As bad as things sometimes look, we are not threatened by violence from Jeff Bezos. But if we tear down the system in search of something better, it's very likely we will get something worse.
All the examples you cited are from the USA, and the problem there is not wealth but poor workers rights. You can read up about how Amazon was forced to close it's warehouses in France after the unions sued them.
Too counter; look at the fairness of the CCP, Venezuela or North Korean systems. We could be equally poor like Cuba. The current capitalistic system might not be the best but it sure beats the rest. Cheers mate.
@@Xalta_Sailor The USA is a mixed economy. Pure capitalism ceased trending in the 1890s. As far as 'states' are concerned, Hong Kong and Monte Carlo are about as close as we get to capitalism and even this point is, by the day, up for dispute.
Some wealth inequality may be necessary to incentivize work, but there are diminishing returns. It is doubtful that increasing a CEO's pay from $5M to $10M would double their performance or attract a replacement who is twice as talented, meanwhile that extra $5M would be better spent literally anywhere else. People should not be satisfied that they are living better than medieval peasants. Human rights has always been about achieving a basic level of guarantee that is within our capability, to make sure that people are not left behind as our capabilities increase.
And more people *are* getting pulled forwards. And sure, there may be some benefit to more appropriately distributing funds- but it's almost impossible to "properly" assign wealth in a completely optimal manner. Where would you want that hypothetical $5M to go? To the employees? The suppliers? The contractors? Where should it go, in what ratios, at what times?
@@travispluid3603 So.. We better give $5M to CEO for no reason.. Anyway, my opinion in this case is that employees should receive this money.. Why? Because suppliers and contractors are "other" businesses. its not "our" and if CEO deserves salary increase, I think that employees deserve that too (this statement is ofc applicable in basic situation where CEO-employees are directly related)
@@Cermix14 But then, how much *is* the right amount that should go to the CEO? You've got the option to pay him anywhere from minimum wage to all the money the company profits, except the money that is used to pay minimum wage for every other employee.
@@travispluid3603 If the CEO and the front line worker both work 40 hour weeks, and both jobs have the same daily difficulty, why should they get paid differently?
There's something I would like to add, workers compensation compared to their production, since 1989 people have become 200% more productive on average, but compensation only increased by 100%
@@Noam_.Menashe both, since people did have to improve and specialize their skills in order to man the new technologies. However beyond that I believe the workers deserve it because without them nothing would work. This causes no harm to you, and would improve the lives of millions as well as create a more prosperous society. I see no logical reason to not support higher wages for workers.
@@shakshukioflibya6633 - it comes back to supply and demand for the worker’s value proposition. If 5 workers are capable of doing a job and there is only 1 job opening, competition will drive down the wage. Compensation tends to go to productivity that is both highly valued and relatively scarce.
As a relatively well to do (very by South African standards) I can tell you that the political risks of wealth inequality here could dwarf any of the drawbacks that you've mentioned.
Western civilization: Relies on rewarding people for doing the things that civilisation needs. Also western civilization: gives people vast amounts of money because they already own vast amounts of money.
The real question is: "When is wealth inequality actually a problem?" and the answer is quite simple "Wealth inequality is a problem when it grows faster than the economy"
@@nathanc7566 untill the 80'ies, when Milton Friedman convinced everyone in USA that greed is good. At least the Business Roundtable recently announced that they finally realised this was a shitty idea.
Damogen I mean we need some level of that, people wanting to be as rich as possible, that’s why we need the government to make sure they don’t harm society as a whole. I think that’s what Milton meant
@@nathanc7566 Yes, that is the idea. However, there are two obvious dangers with throwing all moral and personal responsibility overboard: 1) The government might not succeed in stopping it from going to far. 2) Politicians might also start believing that greed is good.
The two Co-CEOs of the non-profit I work for probably wouldn't shake their heads furiously at the title of this video. Even though their salaries are about four-and-a-half times the wage an entry level worker in our company makes.
its supposed to be incomplete. if they showed you whats really going on, put the spotlight to guys like lucky larry silverstein, weinstein, and the rothschildes, youtube would ban the channel. youre not on a free website, this place is owned too. dont expect to find the truth here, because that wouldnt be beneficial to the guys in control.
@@roxanneconner7185 he actually said as much at the very end of the video, innovation of small and medium size is getting crippled by not being able to get the funds they need
Innovation happens in spite of wealth inequality, not because of it. If we all enjoyed the fruits of our productivity gains, we'd all have more free time to innovate.
Mostly yes, but it's mixed, actually. Search google for "most innovative countries", those at the top are some with a very high inequality (Korea, Singapore, USA) and some with very low inequality (Germany, Sweden, Switzerland, Denmark, ...). Overall from these lists it seems that the countries with less inequality are more innovative, yes.
8:30 "......none of these technological marvels would have been possible if it weren't for the Hugh concentration of wealth" What absolute BS, and contradictory of previous EE vid that argued that many of the innovation such as the internet were the product of government spending that were then usurped by the few.
Sorry, this is pretty late, but I think it's interesting that governments and corporations both lead to innovation. I mean, governments and large corporations are both organizations that only make sense in a large society. I would say innovation is inherent to humans, and those who have the means will pursue it, whether they be 7 billionaires all hiring specific innovators with their vast wealth or the entire population who create a government to, among other things, invent on their behalf with their tax dollars. Innovation will reflect the desires of those who fund innovators, so if the public funds the innovation then it will be more useful for the public. The example of the industrial revolution is kind of counter intuitive because while some inventions were made by tge wealth the broader context was one where a growing middle class meant that their was demand for practical inventions to take hold and their were people willing to fund them because demand more accurately described need and inequality decreased.
@@sdrk1125 Is the US government considered in inequality calculations? No. Basically, the argument is that EE doesn't expand their point about concentration of wealth to concentration in organizations and only in concentration of individual ownership. If this point applies to government, then it defeats it's purpose to argue for the good wealth inequality
Not really??? The point is that once someone is so rich that they don't really care about it they start creating useless things like electric cars. But yes, too much of the problem.
When talking about wealth inequality throughout the ages you approach it materialistically and fail to see how wealth is leveraged to affect other aspects of life. An example would be leisure time. A medieval king whilst not having access to the technology and consumer goods of today, had the opportunity to engage in leisurely activities at a scale unimaginable for a member of the working class of today. What's the point of having central heating, smartphones, Netflix etc if you're having to work 60-70 hour weeks to stay afloat.
@@titolovely8237 Sure, but what is money except a measure of value. We say time is money, and while that is not always true. Leisure time has obvious value. This is DEFINITELY part of the economic analysis.
@@titolovely8237 So, economically speaking, there's no difference between someone who makes $100k a year and doesn't work, and someone who makes $100k a year and works 80 hours per week? If that is true then why is it useful to analyze wealth inequality through an economics lens? I don't care about how wealth inequality affects the stock market, I care about how it affects people.
@@onyimahumphery1961 you're right! But what I don't get is how some investors are able to double their profit within a short period of time. I understand that the market crash is the best time to make money but there's this particular investor who made $100,000 in few weeks trading with about $15,000. Does it mean they stand a better chance than others?
55.8% of billionaires are selfmade. Most had a lot of stem background. I can guarantee they are individuals with high intellectual capacity and would have a greater critical understanding of certain things. I would say, it would not be that hard for them compared to intellectual deficient plebes.
OK so lets invent a simple world with two people. A "poor" person with $100 and a "rich" person with $1000. Lets assume we're all comfortable with that for now. Next, we'll assume the economy grows by 10%. In a fair world the poor person would now have $110 while the rich person has $1100. Everyone wins, yay! In the real world however, it tends to work out more along the lines that the poor person now has $101 while the rich person has $1109. Its not fair, but we're still all getting richer so we'll let it slide. Finally, assume 2% inflation over that same period. That $101 is now only worth about $99 in original dollars while the $1109 is worth around $1087. The rich still got richer, but the poor person is somewhat worse off. Now we have a problem. That's the situation the US (and many other developed nations) have been driving towards since the 70s or so when "supply side" economics (aka trickle-down) first really started taking hold. Inflation keeps going up, but wages have remained (comparatively) flat. While our bank account may show $101 compared to our parents' $100, the purchasing power of our $101 is actually less than their $100. The standard counter-argument to is we have a TV and a cell phone that our parents wouldn't have even dreamed of. And while that's true, the technological innovations that led to $1000 cell phones being a thing doesn't really compensate for the fact that the vast majority of us will never be able to fully own a house (ie: mortgage-free) and even a car is questionable in many cases. And to make matters worse, the speed of technological innovation is slowing. Its far from stopped of course, but we're running into some fundamental physical limits of computational ability, and computers have driven the vast majority of the technology that pundits claim is supposed to balance wage stagnation. Where will _our_ children be when we run into both wage stagnation and technological stagnation?
In reality, the poor person wouldn't make any money at all as the economy grows. They don't invest. They would lose all their assets to inflation and non-productive consumption. The rich person would probably be able to leverage their money and get much more than you could think. Put a poor person and a rich person in a situation where they both have no money. I think it makes sense that it is much more likely that the rich person will be rich. Of course, there are exceptions. The really problem here is education in combination with circumstance. Poor people are poor because of a lack of financial education along with some unfortunate background (probably).
8:30 that is quiet fallacious and unsubstantiated. Ingenuity does not only come from an abundance of resources. This statement also does not take into account the vast amount of potential inventions that we are missing because the people that might come up with that happen to be on the lacking end of inequality.
"the ultrawealthy are running out of safe havens and investments to sink their piles of money into" oh no my heart sinks for them, how will they manage
I feel like you've seriously glossed over the fact of the relationship between money and political and legal power, and the fact that all of the amazing medical science and wonderful homes that exist today, the vast majority of americans simply do not have reasonable access to, as houses are far out of financial possibility for most americans, and serious medical care will often cost so much as to not be much better than the alternative of death. Overall, I think that saying that wealth inequality is important in driving motivation is in somewhat poor taste and almost malicious, when over half of americans, I imagine most of which are as motivated as the next person, have under a thousand dollars in the bank, and whose world would be crushed by even relatively common untimely expenses. Wealth inequality may, in some fashion, not be an inherent negative, but surely it must apply that the floor of applicability of that must be that even the bottom members have humane conditions. Perhaps it is fine for the wealthy to stand as symbols of possibility (disregarding for a moment that very many are more the product of networking connections between wealthy individuals than hard work), but if the lower levels of society still must spend the majority of their existence simply concerned for survival, in a time of unparalleled plenty, is even morally acceptable?
Also remember that almost ALL the advances in medical science (including pharmaceuticals) were paid for by taxpayers through government grants to university researchers. Ditto advances in technology (internet, GPS etc etc etc). Little advances come from private money -- their time-window for ROI is too short to permit the kind of investment that you need for major tech advancement.
As far as housing goes, there is plenty of affordable housing in the US. Just not in places like California and NYC. I am 28 and have all of my debts including mortgage paid off living in Indiana. I have never made more than 50k a year and that was only for 2 years before I was laid off for corona.
@@ColinTherac117 Okay so everyone just go live in indiana now oh wait. . . okay everyone just move out of those places now we don't need those people to work there! oh wait. . .
@@otsoko66 87% of pharmaceutical innovation comes from the private sector patientdaily.com/stories/511201422-medical-innovation-driven-largely-by-private-sector-not-government-funding-professor-says#:~:text=September-,Medical%20innovation%20driven%20largely%20by%20private,not%20government%20funding%2C%20professor%20says&text=And%20he%20said%20at%20the,percent%20from%20public%20sector%20research.
You used to be cool, who paid you to omit the most commonly laid critiques against the wealth inequality of today? I just cant see it being accidental, you're too smart and knowledgable to leave it out of a video on this exact topic.
"the space programs were funded by rich individuals pooling their resources" in other words the rich paid taxes... NASA and space travel were not started by market forces. they were taken over but government spending and innovation started it.
Elon Musk and Jeff Bezos's space-faring ventures SpaceX and Blue Origin have cut the cost of attaining orbit greatly benefitting all of mankins. These are the passion projects of wealthy individuals -- essentially hobbies.
@@gallaxian yes, except the technology had to be invented by a non-ROI source, before they privatize and streamline it. there is a reason why space x and blue origen came AFTER NASA and not the other way around.
@@nigen I don't know if it had to be this way. Certainly government expenditure accelerated rocketry and related technological innovation dramatically but I don't think we can say that, absent government investment, mankind would not have eventually ventured off the planet.
@@gallaxian well, what market force would cause you to need to leave the planet and invest the trillions in mistakes required to get the R&D right based on a profit model?
@@nigen A passion project of billionaires (as seen with Musk and Bezos) or many people of modest means pooling resources (e.g., Planetary Society) or profit-seeking companies seeking to exploit the mineral wealth of the moon or asteroids. Innovations in many sectors (such as computing and material science) have lowered the cost of space faring independent of the efforts of space programs - whether public or private.
I usually love EE's videos, but this one misses about everything the topic is about. We start off equalling wealth inequality with prosperity and then go on to talk about the latter. At one point, the concentration of wealth (which happens in private pockets) is cited as the driving force of the (entirely publicly funded) space programs. How that is supposed to work remain undisclosed (mainly because it makes no sense whatsoever, I guess). Then we're throwing around income and wealth inequality as it fits, all the while not even mentioning once how concentration of wealth *might* lead to concentration of power in one or the other way (democracies not being perfect, you know). There's an ongoing discussion among economists about inequality for at least ten years, and still here we are defending concepts from the Cold War by redefining their meaning entirely and then not bothering to go into detail? This sounds like what could have been the latest output of the Rothbard Institute, so shallow and biased it is.
So I think he's referring to SpaceX, with regards to the privately-funded space programs. 90% of the investment has already been done with public money (German rockets in the 40's, and NASA in the 60's), but SpaceX had to get itself up and running with Elon Musk's own personal fortune before it could put itself in a position to compete for NASA contracts and receive any public funding. Any competition awards it may have won (even if they're millions of dollars) are usually no more than 10% of the development costs that got them to that point in the first place. But you're right: figuring out how rockets work in the first place was funded in large part by the Third Reich, and the up-scaling for space travel, and modifications for safe human transport were funded by the US and Soviet governments, of which SpaceX mostly benefits from the former.
@@Delimon007 He's a successful businessman who's managed to accumulate a lot of wealth in one spot, which has enabled him to start multiple companies with sufficient resources to develop new technologies or advance existing technologies and bring a formerly uncommon product to market in greater quantity than previously available. Some of those resources might be from investments, but a lot of it will be personal wealth accrued from previous successful ventures. (In short: Tesla profits paid to start up SpaceX).
@@JusteFantastico Do you have citations for that claim? I decided to double-check myself, and all I can find is that Elon Musk started SpaceX just like any other private corporation: out of his own pocket, and with the help of whatever investors he could get interested, with the purpose of building his own rockets (apparently he tried to buy some from Russia, but they were too expensive, and he decided it'd be cheaper to just build them, himself), with the aim of landing a fully functional biodome on Mars. The personal dreams of someone who's super-rich, and has the personal economic might to make something like that happen on his own... As a consequence of his corporate endeavors, he's built a sufficiently reliable rocket to contract its services to NASA. Near as I can tell, that's the extent of SpaceX's "subsidies", although I wouldn't call payment for services a "subsidy". As for Tesla, it's technically furthering environmentally friendly technology, so I can definitely see it receiving environmental subsidies on that basis.
A certain amount of inequality is OK as long as people's basic needs on the lower end are met easily (and I'd argue, without any work requirement). Our current system though is on the verge of snapping because a lot of people are living paycheck to paycheck, working two jobs etc. You seem to denigrate the "guillotine" people as extremists, but sometimes that's all they have left to reestablish a semblance of a balanced economy and finally not feel absolutely miserable.
People basic needs on the lower end are easily met in areas where capitalism is free to build housing to meet demand. The only reason people's basic needs aren't being met in rich countries is specifically because of government policy "to help the poor" drives up costs for those who were able to take care of themselves before. Then those people end up needing government assistance. Taxes go up. More assistance is given. Prices go up. More assistance is given. Taxes go up. You need to break the cycle and let the markets do what they're good at. Bringing prices down.
This is why some websites like Reddit hide the likes from some post because if someone sees a post with alot of likes and support they're more likely to agree and like the post themselves same the other way around with dislikes. Most ratings are artificially inflated by mob mentality. It all depends which way the first brave souls get the ball rolling and the hive will follow.
Great vid! One major flaw here is that technological progress is attributed to the concentration of wealth in advanced societies. The problem with this is that most of the amenities which we enjoy (smartphones, etc.) today and leaps in technology we've managed (space flight etc.) are based on research and funds granted by governments and NOT private capital. Mariana Mazzucato The Value of Everything is a worthy read on the topic.
Interesting because I have heard something similar. Private companies are improving existing technology. The state is responsible for the invention of new technology, often in connection with war.
That's not really true Nevl. Because the government itself is SOLELY funded by successful businesses who employ people and are themselves taxed. Government gets it's revenue, one way or the other, from business success. Meaning business was sucessful and government made an invention here or there off the backs of business, not the other way around.
@@EconomicsExplained Ecnomic Explains ,pls make a video about "How Robot take away the jobs of human and how can human live without jobs or income"??????????..?????????????????????????????????????????????????????....... ,??????
@@EconomicsExplained why you never mentioned anything about rich actually using their influence to make sure poor people stay poor instead just using the same argument over and over and over and over and over how older times people can't use washing machine and now people can. If you look outside things r complex. I love your videos bro like I really really enjoy them but why u keep trying to shoving that kind of simpleton logic down to throat???
I understand this is a youtube video and one that focuses on economic aspects, but I think a lot of the ideas and conclusions you reach are just wrong. Saying that greater productive capacity leads to increased wealth inequality yet greater general prosperity is just not true. Many people (who were usually slaves) tried to escape agrarian societies, and many people were demonstrated to have poorer health than the so-called "primitive tribespeople". People during the industrial revolution who were funneled into the cities after commons closures had worse living conditions than the peasants centuries ago. It's only when people threatened revolution and social democracies started pegging wages to productivity gains that we saw serious improvements in living standards, until the 80s. Secondly, the idea that massive wealth inequality allows for large capital investments is circular logic at best. They're wealthy precisely because they're the only ones who can do large capital investments, THAT's why inequality is a problem, they're the ones who decided where resources go, and the rest of humanity just has to accept it. So when massive investment banks on behalf of the wealth are STILL investing in fossil fuels and the deforestation of the amazon to make more beef, you have to wonder if they should have such control over the whole planet. Again I hardly think they're innovating when so many companies spend so much on stock buy backs to please the shareholders. Thirdly, saying inequality allows for motivation is true to some extent, but hardly goes to explaining such massive indifferences. you could also argue that many socially valuable jobs are disincentivised because they don't turn a profit for investors, such educators get paid pennies. Sorry for the rant, but the video seemed incredibly one-sided.
You are inheriting social democratic lies in your thought. The video seems one-sided because an objective understanding of economics and economic history, left or right, reveals the flaws in typical "bash the rich" opinions that advocate policies all of which undermine the poor the most. Wages doubled during the height of the British Industrial Revolution despite unions being banned. Workers in the countryside increased by a million in spite of enclosures, and living standards for workers improved because of the Industrial Revolution (although they were lower than some centuries ago, but that was because of the Black Death raising them to a height that couldn't be sustained given Britain's high preindustrial birth rates and low productivity growth due to mercantilism and, get this, scarcity of capital due to constant warfare - it was only between and after wars that industrialisation really accelerated in Britain as capital was transferred from government war efforts to the private sector). Greater productive capacity lowers prices and thus increases general prosperity and real wages. Stock buybacks transfer capital resources from companies who can't find as marginally valuable uses of the money as those the investors think they can, raising total value-added. Many "wealthy" can and do accumulate their wealth through saving and investing over time, and even inheritance must earn interest to not be depleted, which is money only earned by serving consumers - the mass of which are the majority of consumption spending and purchasing power. And "social value" of a job doesn't matter; its marginal value to consumers does - that's what determines the wage that can be paid. That is an arbitrary moral pretension.
But some wealthy people did some good things and publicize them so... This video is so sad. It only crows the benefits of wealth inequality and brings up the strangest counter arguments I've never seen before. -No mention of the political or social clout wealth provides and how that impact society. -No mention of how tax law (at least in the US) rewards wealthier people with fewer relative taxes through loopholes. -No mention of how while GDP has risen steadily over the past 30 years median household income is practically flat. All inequality is painted being the same and as a necessity to have progress. Very few people would argue that everyone should have the same wealth. But almost everyone would say that when seven people have the same wealth as half the world there's a problem. The worst part is he actually mentions @11:55 that we see the lower rate of return in giving money to wealthier people as opposed to poorer people. So clearly, at some point, concentrating more money in already wealthy individuals HURTS economic growth.
@@fatpotatoe6039 @Fat Potatoe there are a few things I take issue with here. firstly, " despite unions being banned", unions were legalisd in the 1820s, and they were widespread beforehand, so it's dubious to say they had no hand in increase wages during the industrial revolution. in fact the data suggest that legalisation spurred wage increases due to greater bargaining power. Indeed, it's one's power to assert a stake to the economic output that is probably the only real determiner of wealth distribution, if we're being real. Greater productictivity does make products cheaper per unit, that is true, but it doesn't take away the fact that ownership of productive assets is monopolised by a small section of society. Without access to this, the majority of mankind is dependent on selling its labour to make a living, which is vulnerable to inflation and technological changes. Let's not forget also the fact that most of our commodities are produced in "developing" countries where labour laws are even worse, so yes exploiting poor people does make a lot of cheap products for western markets and improve profit margins, but it is not sustainable, and western countries are already being hollowed out as a consequence. "Stock buybacks transfer capital resources from companies who can't find as marginally valuable uses of the money as those the investors think they can, raising total value-added" That's patently false, this channel just did a video on how amazon has become so fantastically successful by reinvesting its profits into small side businesses that need capital support, in other words, companies that no investor would bother investing in. There are always ways of reinvesting, THOUSANDS of ways, but not all return a profit. Why have real wages stalled for decades relative to the increasing yields from assets? why has the middle class shrunk in most countries? why are so many unable to afford a house? why is one person's income not enough to sustain a family? why are people up to their eyeballs in debt to get a degree? Sure, the marginal cost of producing The answer is simple, people have less economic power to assert their claim to the pie, and to belittle this as "lies" inherited from social democracy is just bizarre.
@@hjalmarjonssonrantala5375 Issues of social and political power ARE inextricably linked to economics, so that's a dumb comment. For example, the concept of subjective value is a socioeconomic issue. The value people attach to things are driven by social cues, which then dictates how much they are willing to pay for these things. Similarly, accumulation of corrupt political power (e.g. buying politicians that favor deregulation) by the elites is a cheap and rational way for them to maximize profits. If left unchecked this leads to disasters like the 2008 financial crisis. This TH-camr actually talks about these social, political and economic issues all the time - as he should.
@@andreipopescu5342 The point is, Microsoft isn't really an innovative company. Even if Microsoft never existed, we'd still have all the same types of software they're known for today. DOS? Look to Digital Research with CP/M. Windows? Look at Xerox. Microsoft Office? While bringing them together might be considered a Microsoft "innovation", all the types of program they bundled into Office already existed. In fact, I can't think of any major innovation Microsoft is responsible for.
@@rodh1404 I don't think the point made in the video was that Microsoft is either good or bad. Anyway, it's the same thing with Edison and, historically, it turns out that actually having a debatably new idea isn't exactly the main force of progress. Did Rockefeller invent anything new per se?
@@rodh1404 That's the case everywhere, wasn't it Visicalc who was first? The innovator may not be very good with the follow through, Microsoft was, they made it a product every business needed.
wages are based on the product not the wealth of the ceo. if you give the workers more money the goods n services is more expensive and you lose business and jobs.
@@bw1247 Tell that to exporting labor to china. That iphon would cost roughly the same made here, but the ceo of apple would not skim off nearly as much.
Your main argument is that progress creates wealth inequality therefore wealth inequality is not a problem. Your argument falls apart in several places. First, you broadly state that wealth inequality increases with increased wealth but this is generally false. Wealth inequality ultimately increases due to class inequality such as a suppressed labor market, lack of access to education, globalization, government corruption or monopolies. The huge wealth inequality in Botswana is due to a monopoly control of their natural resources, not because Botswana is a wealthy country. Meanwhile, wealth inequality decreased in the United States from 1929 to 1978 while the US experience huge growths in wealth. You frequently mention in your other videos that a strong MIDDLE class increases growth. Second, you falsely relate wealth inequality to technological progress. Strangely you credit spaceflight to wealth inequality when it was lead by the Soviet Union, a country with very low wealth inequality. Instead wealth inequality works to stop overall innovation to hold on to the existing market share; Apple stopped improving their phones once they controlled the market.
Second false attribution: Billionaires create wealth. That is wrong. A CEO or a director organises and creates structures to generate services or products. He provides a very important part and should be (amongst) the richest - but not all total gains should go to him. EE made the point that wealth itself is not the problem, but poor investing is, and I could not agree more. A billionaire is a barely regulated individuum that can spend his/her money as he/she sees fit. Critical investments that do not return a monetary profit (education, health, infrastructure etc) are neglected on a large scale. That is why I do not see any other way than massively increasing taxes. We need to make sure that those investments are being made and are accessible to the public and do not extort money out of those vital institutions.
@@irrelevantirrelevant7332 No one becomes rich without exploiting the labor and hard work of others. Poor investing is a problem, but that's because we have this notion in the U.S. that the rich are altruistic and that they deserve their obscene wealth because they work hard. They are working hard to exploit the intellectual property and labor of other people. In essence, they are thieves, and this theft is not only legal in the U.S. it is encouraged.
@@ansoc1173 U.S. before the regan era was better i guess. Everyone could afford a home, a car and a good education. These things should be free or affordable by taxes.
Wealth inequality dropped within those years in large part due to a real free market being practiced, after the 80s government interference heavily increased. Also the USSR went ahead in space tech by stealing things from different places and building upon them, not making them from ground up like others did.
The wealthiest few: 1. Build their wealth at the expense of the middle and lower classes 2. Are not loyal to any one country as they spread their money around the globe to achieve the most favorable returns. 3. Have undue influence over governments. 3. Influence legislatures to pass favorable laws to preserve their wealth. 4. Do not pay their fair share of taxes. 5. Believe less fortunate people are lazy. 6. Are not satisfied and continue to expand their net worth.
buddy, their wealthy because we made them wealthy. It's voluntary, stop using PCs, amazon, any apple product, any disney product, don't buy a tesla car, etc. They get wealthy because they improve our lives.
Nathan C It would seems so. However we are all products of our environment. Humans are programmable. If something is repeated enough and in the right way, it becomes true. Big business uses advertising and marketing to encourage people to buy what they don't need. Political parties use repetition and marketing in the same way. It's not entirely voluntary.
Joseph Barros look I’m not saying it’s perfect, but our system runs on voluntary transactions. I get that Apple may charge overpriced phones but we can fix that. The options now are to be a recluse and love like it was in the 19th century or buy products that the prices aren’t fair or the benefits go to too few. What I’m saying is rich ceos and such are mostly getting rich through legit means, we can tax them or something or have a wealth tax but we can’t say they get rich by exploiting middle class people. They largely don’t.
Lobbying is an issue, yes. i am a huge supporter of capitalism, leaning very much to the anarcho capitalist side. lobbying should not be a thing as the private and public sector should be separate, and it is unfair, especially for small business. that being said i think a very small government will solve a lot of this as then the companies wont spend money trying to influence laws when the government doesn't meddle in the free private market to begin with
I don't think that lobbying itself is the problem, The problem is that our politicians are accepting the kickbacks from lobbyists, while telling us to our faces that they're in their positions of power to act in our best interests. I could throw $1000 at you until I'm blue in the face, but nothing will change unless you decide to take it. Government corruption and fiscal waste is hugely detrimental to our success and security as a nation and as a people.
I wished you had addressed one of the key issues I see with inequality: the more you earn the less likely you are to pay taxes, from hiring companies to make creative accounting, to moving monies to tax havens. Which in turn means that middle classes have to shoulder the government expenses while the richest still enjoy the benefits these governments provide. I don't mind people being awfully rich as long as they pay an equal amount of taxes.
but lets face reality, even in the lower income classes we want to pay less taxes, in fact we do manouvers to pay less. And people keep doing so when they scale up the ladder because of progressive taxes. The real question is why we want to pay less taxes? At least in Mexico, because that money in most states, will not end up where it is promised to be and regular people often don't see a real benefit form paying relatively high taxes. So there's no incentive for people to earn more and declare taxes and they prefer to run business and avoid the fisco. If that money was spent locally where you can actually see the benefits or invested in education and tech, I bet most people would like to pay taxes or if state institutions would offer quality services no one would complain.
Very unpopular opinion: If people did not know that others owned more than them, they wouldn't even care. It's all driven by envy. People do not own less because others own more. It takes a supreme kind of greed to come up with that line of thinking. The ground state is poverty, not prosperity and it does not take much to return to it.
@@gabimcchuckleson9399 No one denies that, I think. But the amount of people that live in such poverty decreased tremendously together with increasing wealth inequality
You know, here 5:30 it's actually very frustrating and even somewhat depressing that in 300 years some people will still live from salary to salary and with the constant fear of crumbling under economic pressure. Why can't we prioritise to minimise human suffering from economic asymmetries starting at least now? For what we are even going to colonize other planets if we just export our problems to outer space even considering that without billionaires' investments we wouldn't acquire cheap interplanetary commuting in the first place
@@JNM578 As our technological progress moves forward we find new ways/machines to improve our production that far outweighs effort needed to produce such amounts. Yet we are stagnating when it comes to giving people their production's worth. Reading your message is infuriating on the same level as someone in ancient Sparta saying "What? Slaves living on same level as citizens? That's an utopia!". Especially how your post shows someone working (so not a leech) can still be forced to worry about their life.
The point is, you need to take care of yourself. What prevents you from doing so is government. A free man responsible for himself only thrives and if he does not he cannot blame others. There are only negative rights that can be deducted by axioms. The world does not owe us anything. We have to create things and be free to pursue happiness. If you are threaten protect yourself. If you wish more or better, create it. Fight against what blocks you from that. Those who do that are not a richer neighbour but the government.
My biggest criticism is that it's not that easy for people on the lower end to invest the time and money in education and improve their lives. Speaking as one of those, sure I've got the incentive. I just don't have the time or money.
We all have the same amount of time, and education is becoming less and less expensive thanks to online classes and courses. Let's say you work every day, eight hours a day to survive. Sleep nine. This leaves you with seven hours to eat, shower and do everything else. Sacrifice fun and distractions and you'll always find a couple of hours a day to study and improve.
It is so easy to get education when you are poor. The government will literally pay for it. Education is a sacrifice. You have to be willing to make that sacrifice of time and hard work. The problem is people want the government to coddle them instead of making that sacrifice.
High School is free. Teenagers have time. They live with their Parents. McDonald's hires the young, uneducated and unskilled. We all have these same choices. There is a Chinese Proverb "If there is a thing to do to that makes things much better that anyone can and should do so many people are too lazy and stupid to do it." Please give me a break about no opportunity.
@@jameshudkins2210 I see your point. High school is free, and entry-level jobs exist that require little to no education. I can't argue with this because I took advantage of a free high school education and took an entry-level job that required no education. After working at this company for a number of years, I even started to earn (barely) a living wage so that I could finally afford to move out of my parent's house and get my own place at age 31. I would now like to improve my life even further by making enough money to start a family of my own without falling into a world of constant stress, hopefully some time before the age of 40. What opportunities exist for someone in my position to achieve this goal?
@@dylanjones9061 Go to Community College. They don't cost very much and are often in evenings. If you work nights they have classes during the day. One of the Spreadsheet teachers said someone would pay us to do it if we learned the software he was teaching. He was very right. Your employer is already OK with you and might do something to help if you said you wanted to gain skills. If you move back in with your Patents you could save money, help them and devote more time to school. Do not get Student loans and do not study art or something which would not help you earn more money. Study art on your own leisure time. It takes years of study and doing with out income and nice things when you are young. It will take the same after you are older. There is no easy way to do it. Look around at people who are doing things you admire. Ask them how they do it. Some people will take a greater interest in seeing you succeed than you might. Be ready to try and work at it. If you don't follow through they will give up on you really soon. Do not give up on yourself.
Using medieval societies to justify modern wealth inequality. Weird given how bad they were at innovation and- well- everything. Glossing over the much lower wealth inequality in the mid 20th century when prosperity and the greatest leaps forward in standards of living and tech were made. Odd, but okay you're making a point. That if things were more equitable, people wouldn't work as hard. Hm, psychology suggests people with attainable goals are more likely to work towards and achieve those goals. The perception of upward mobility is crazy important for the attraction of modern talent. Technical innovation in the modern age is typically the result of expensive research done on the taxpayer's dime, and development/refinement done by private enterprise. The wealth of a nation is the wealth of it's populace, billionaires essentially operate outside the bounds of nations. Ah yes, a billionaire bidding war is far more disastrous prospect than the diminishing buying power of the middle and working class. One mega yacht has less of a benefit on the economy than the production of 200 cars for the working or middle class, you know this. I dunno man, I know you're trying to make a point, but this is really willfully ignorant cherry picking.
@@ilikefoodcrazy Being poisoned and getting eaten by bears is also natural, but as we get smarter, we learn how to avoid such things, and as we understand each other better, we learn that people value not dying pretty universally, and so, as a society, we can work towards the mutually beneficial goal of not getting poisoned or getting eaten by bears. Powerful people hoarding resources and then leveraging them to dis-empower others is also a naturally dominant strategy, when one's values are the prosperity of single individuals. That doesn't mean we can't agree as a society that we should rather value a distribution of resources that perhaps emphasizes food and medicine over yachts.
I was waiting for him to mention the fact that paying your employees as little as possible is encouraged because it increases profits(rich people buying several yachts vs a struggling mother), but he never did. Weird for him to omit such an well-known fact in economics, I don't think he was entirely neutral in this video.
I wouldnt agree with that innovation bit. For example companies like tesla, spacex, apple or before them microsoft were not funded by the tax payer monies. They moved the world forward with innovation.
It’s actually a modern misunderstanding that hunter gatherer tribes struggled day in and day out to scrape by a survival existence. In fact, because of their versatile diets and connection with the environment some experts think they worked as little as 15 hours a week on survival activities. Read James Suzmans great work, “Affluence Without Abundance” where he lays out this argument.
We have modern day hunter gatherers living quite well. I can't speak for their working hours, but they're nomadic, healthy, and happy. Check out the Khoisan people.
That book is based around one tribe, brainlet. Believing that one tribe would be the rule for most people for most of history is what we call and ad hoc falacy.
Inequality isn't inherently a problem, but letting the rich hold everyone else back is a problem. It's also a problem to let poor and middle class steal from and hinder other poor and middle class people. The real goal should be to help everyone be all they can be and to have the wealth that they want and need within reason. No one should be rich enough to buy entire countries, or to force others to live a certain way.
you have a communist way of thinking, in a bad way I mean. No one can have "as much as they want" but should have as much as they can afford - people who do not participate in an economic or technical development should have the least, that's it.
Once only one group can have guns, control, and lobby for regulations these will thrive. Others, like normal people, got their freedom reduced, and so cannot walk up the wealth ladder. Inequality is natural on any sense objectively. Protectionism is the issue in this case. Give all man the same freedom and remove killing legislation and see how it goes.
@@Danskadreng Centralized state controlled money is evil by definition. It is just a soft variation of socialism/fascism. There is just a group of people that can make your "capital" loose value in one minute. Billionaires created artificially by state influence have a play in dictating at least economic trends.
It feels like you really stretched the semantic definition of inequality to make your argument. You didn't mention political influence, killing social services, tax evasion, or any of the things the ultra wealthy do that does literally just oppress people. Or what wealth could be created by taxing the ultra wealthy a reasonable amount to pay for healthcare or housing or a universal basic income, the concept of an income cap that caps wages or income of any kind at, say, 40 or 50 times that of the absolute lowest paid employee or contractor. A CEO can still make a few million a year, but if they want to secure a higher wage contract, it has to include a raise for the lowest paid as well. This would help wage stagnation, which you also didn't mention in relation to quality of life or average lifespan (which has actually gone down lately) Even setting my own biases aside, and I say this as a big fan, this was your worst video by far in terms of scope and depth.
@@keshav3479 To me, this video was an attempt to admonish the rich for not fulfilling their societal responsibilities. As long as big companies are making money, then society should be happy with whatever they decide to give to us in the form of taxes or salaries. But the truth is, they ONLY have this wealth because of the people that work for them and also protect them in this society.
Came here from the Q&A follow-up and you’ve summarized exactly how I felt about this video. I’m usually a big fan, but this was a very shallow and theoretical look on a contentious issue. He hardly addresses the meat of the criticisms of wealth inequality, besides bringing up the basketball example as a strawman.
Two points/questions: Firstly, is the ability to contribute positively to society truly the main driver for the accumulation of wealth? Is skill and education the dominant factor that allows some to become rich compared to others? How many of the world's richest reach their position by going to school, studying hard and not taking risks with negative outcomes that would have meant financial ruin for the average person? Secondly, accumulation of financial wealth seems possible to me without it belonging to a few individuals. I guess the draw back is that it would be harder to organize concentrated efforts in funding particular research, with the benefit being that you no longer rely on a few people to make decisions on where funding is directed for everyone else (kind of like how democracy is supposed to work). Would love to hear anyone's thoughts on these.
With your second point I often see capitalists suggest that people vote with their wallets. This gives the businesses and people who serve their customers the most money as a reward and so they can choose how to invest their money that they earned from their customer. With regards to your first point, 'ideally' doing what the customer wants better or equal to your competitors is how people get wealthy. Capitalists do not like it when people get wealthy through force, either political force, threats of force or actual force.
The way I see it, yes the desire to make money has been the main driver of innovation throughout history. People pick skills to learn and invest their money/time in places where theyll get the most return. This generally leads to an improved quality of life. I think you overlook what it means to be educated though. In the traditional sense, you seek knowledge to learn a skill and then generally someone hires you for that knowledge. Yes, the most successful people often got that way generally by taking risks and maybe not getting educated in a university, but they still sought out education to be able to understand which risks were the right risks to be taking in business. They are educated, but maybe not by the textbooks. And onto your second point, I think we misconceive that rich people accumulated their wealth “legitimately” by working harder and smarter than everyone else, but that’s kind of a flawed view of things. In a fully functioning capitalist democracy, a country creates a fantastic business environment which allows for their to be massive amounts of innovation and a few people get really rich, but society then gets a cut because the society was designed for that kind of innovation to be possible and benefit everyone financially (think Norway, sovereign wealth fund). However, the way it generally goes in America is that society does not take a small chunk of the profits, an even smaller sliver of the profits end up in the hands of politicians through lobbying and campaign donations who then make the tax codes favorable towards the businesses that donate to their campaigns, essentially destroying other potentially innovative businesses. Ill give you an example, both walmart and amazon often get huge tax credits for building stores, warehouses, or recently headquarters in whichever local city. The problem is, because of their size, they get an unfair advantage, not because theyre better in any way, but because they paid off the right politician. Amazon is also currently lobbying for a $15 nationwide minimum wage, but this is clearly to just make other retailers suffer because prices tend to be much more tied to wages at companies which arent amazon. In the past, the wealth came back to society through income tax, but profit is less and less ties to wages as we live in a more gloablized and connected society. Essentially, society is not benefitting in the way it is supposed to from capitalism when we have a system which awards people power based on their wealth and ultimately need a unavoidable tax system that does not discourage innovation (like a VAT for example). If everyone had the wealth to start a small business and no business was given special treatment, I get the feeling we would have a lot more successful small businesses in the US.
@@SimonTimbers The amount of new bussiness and innovation that you have in US is amazing,i don't see how you would explain that the system is going wrong with that result.
1. Yes. Just think about how wealth is accumulated in modern, Western economies. People produce or invest in something that millions of others are willing to purchase and efficiently enough to make profits. Furthermore production itself distributes wealth in the form of workers' wages. It's important to understand that most of the wealth of the ultra-rich is in their businesses, it isn't idle money. 2. 'Democratic investment' already exists in the form of public funding and central planning. Instead of a number of investors an even smaller number of politicians, bureaucrats and activists decide what to invest in. Besides government is terribly inefficient; take schools for example: spending per pupil goes up, scores barely change and this underperformance is usually met with more money. OTOH for-profit schools like charters are better or the same and cost less. @Qwert That only makes sense if you think of entertainment, food, housing, healthcare and education generically but that would be a mistake. People have different consumption patterns depending on their income; there's alot of flexibility. If one can't afford a house one rents an apartment. If lobster is too costly one can buy tuna instead and so on.
@@alvarolopezgomez6543 despite us having an amazing business environment, our system doesn't really bring the profits of those businesses to help out the people as much as they do in countries like Norway and Finland. There's no denying a lot of great things have come from american business, but we still have pretty serious poverty and lower happiness across the country in a lot of places. Granted, it's first world poverty, which takes a different form than it would in a third world country. And as for the business environment, after just having done my taxes as a small business owner, I'm beginning to realize the tax code is really geared towards big business, especially those who have been around for a long time. While we have a lot of wealth and a lot of innovation, we don't have the same social mobility that we claim we have. The poorest half of America continues to get poorer despite the richest half getting a lot richer. At the end of the day, I love America but any good business person knows the theory of entropy: any system that does not adapt over time will eventually fail.
Keep an open mind but still question the economy or market Well, asking questions would enable us look at different perspectives of the market that we initially may not be aware of, it's vital.
Let's just not stick to simple and random questions like “is the market crashing?” By questioning, I mean that we should ask what the market “should” do in light of all the information - fundamentals, technicals, and sentiment - available at that moment.
The enigma of the economy as well the various financial market would definitely make either of those out of you but in as much as you attain profits from the market with all the sentiments in the way then you're good to go.
Ethane I believe that much of the information we need to catch those good economical opportunities are already available to us. It’s just that our biases often make them unclear.
"The bottom dredgers from societe = Gradstudents". That's somewhat out of touch I would argue. Also, making the point that aristocrats from old morphed into billionaires today is missing the point. We cut off their heads precisely to get rid of aristocrats. In essence the video attacks the strawman argument that all wealth inequality is bad. Through the critique is that huge amounts of wealth inequality are detrimental to society.
The aristocrats seldom provided anything to the society, whereas the modern billionaires have to do so in a free market economy. For as long as people aren't starving to death, wealth inequality shouldn't be such an issue to begin with.
The "straw man" is all too prevalent in actual discourse. As an economics channel, to have a proper discourse all the morons out there first have to get a basic understanding before the actual argument against it can even be addressed. But I understand why you'd be disappointed for want of actual arguments that it is a problem.
Yeah, this video is deliberately framed in a way that dismisses the actual concerns raised by most anyone that's done research on the subject out of hand. Very easy to make an argument when your starting premise negates the actual point most of your 'opposition' is actually making. The negatives of wealth inequality largely are NOT economic in nature... (at least, not directly.)
This video is an ahistorical pile of drivel. It makes assumptions that are flagrantly false and fly in the face of 6th grade history. First it equates technological progress with prosperity. These things are not equal. Sure, technological progress has made everyone's lives easier, but that's a completely separate topic than economic equity. The richest man who ever lived was Marcus Crassus in the Roman Empire. They were certainly prosperous, and certainly had technology far ahead of their peers, but their technology doesn't hold a candle to today's. Wealth inequality has lead to wars since the dawn of civilization in all eras, and to say a commoner today has it better than a king 1,000 years ago ignores a host of relevant factors such as protection, prosecution, and education. Having a washing machine installed in your apartment doesn't negate the host of other issues that wealth can insulate your from such as crime, medicine and opportunity. It's also a dangerous notion to entertain. Taking the argument that wealth inequality is a symptom of prosperity further, it follows that the more prosperous a nation, the more destitute its poorest citizens. Thusly, slavery and starvation is the natural outcome of prosperity, yet the United States outlawed slavery and became the most powerful and prosperous nation on earth within a century, and conversely (and obviously) the poorest citizens in the world reside in poor and often corrupt countries that enrich the elite, yet these countries are far from prosperous. The assumption that wealth inequality can only exist with prosperity, while an interesting theory, has no basis in reality. The Gini coefficient, an international measure of wealth inequality has poor and destitute countries alongside developed and prosperous. Among the most equal countries are the developed and prosperous South Korea, Japan and Belgium alongside poorer countries such as Myammar, Iraq, and Moldova. Conversely, the most unequal countries also have prosperous and poor countries in their rank. The United States, Germany, and Thailand sit alongside Saudi Arabia, Haiti, and Botswana. Ironically, the video also attributes the advent of space travel at least partially to wealth inequality, yet it took place when wealth inequality was at its lowest point in American history in what's referred to as the Great Compression.
Was wealth inequality really at its lowest point in American history during the space race or was America ignoring the plight of non-white Americans and not including them in those statistics? Yeah I suspect the latter.
The video's argument regarding wealth inequality does not state that more inequality means that the poorest individuals are even more destitute. Even the poorest bracket of US citizens still enjoy a standard of living much higher than many third world countries. It does not have any implication that slavery or starvation or destitution is natural. There is far more inequality between a person with $50,000 and a person with $1M than with a person with $1000 v.s. $50,000. Your argument here puts words into the mouth of the presenter to frame his viewpoint in a false but beneficial format for your criticism.
Inequality is a side effect of capitalism. The poor are poor beacuse they lack opportunities. They lack access to proper knowledge and resources which will make them productive. Relative poverty will never cease to exist but absolute poverty must be eliminated.
@@DANtheMANofSIPA I mean even in an ideal communist society, there will be people who earn more things through their work than other people. The difference would be that everyone would have a basic standard of living.
@@DANtheMANofSIPA a realistic society would mean that capital and labor would belong to the same people. This would mean that decisions are made by workers both at the political and the economic level. If automation truly swipes the need for the majority of people to have a job then communities (through communes, unions, and cooperatives) would have the task to distribute capital gains to its constituents. Investment decisions would be made both by the individuals and the communities (or by a combination of both agencies). But the individual would only get its capital gains to a certain amount. But this is surely uncertain. Meanwhile, the first proposition would not be so different, but workers would share profits (also through unions and cooperatives) and pay taxes. the existence of a state as we know it is hard to predict. But in order to take advantage of coordination externalities, something like a small and limited federal/confederal government could be wise
@@DANtheMANofSIPA communist as an extreme example (soviet, china, cuba) is not the only alternative... we just need a cort of communist capitalism... one with rules enough to protect us from extreme greed and power concentration and lack of respect for life.
tried to come into this with an open mind but you really lost me when implying that anyone can casually afford a plane. the simple act of getting on a spirit airlines flight could mean saving for many months for a significant amount of families in the US, and i know more than a few people who work more than 1 job that opt to take the bus instead when they need to travel, no matter how many more hours it takes. of course, this is anecdotal, but this video is using a lot of absolutes that can be taken down with one casual look of what's going on in the real world. pointing to wealthy people inventing seems weirdly one sided, there's more than enough evidence of working class people inventing things too? and often those inventions don't get their due because they get drowned out by wealthier people who often take the credit for the same inventions? i think the end of this video pointing out irresponsible investing/hoarding by the wealthy is a good and fair point - but your (i am assuming middle class) worldview is really showing here. you're making a lot of assumptions about the lives of poorer people without actually knowing what that life entails.
Many cannot casually afford a plane ticket, but I don't think that is what he meant. He meant what you just said, that they can save, work hard, and have access to a plane. 200 years ago, it didn't matter how much money you had. You would never be able to fly on a plane.
Yeah, this really shows that he is indeed very out of touch and privileged, he doesn't realize the actual scale of inequality and sees only the milder version of the problem from his perspective as a citizen of a developed country; this gets really bad outside of this bubble (and even within sometimes), the sheer amount of inequality gives people at the top overwhelming power which is used most of the time to increase their wealth and power, and in countries like mine, people that try to resist against this get killed while the oligarchs secure their assets in the Virgin Island and invest on Real State in Vancouver, Sydney, or NY.
I agree with you and would just like to add that he also ignores that explanation can come in many forms. Companies like Microsoft and Amazon where by no means built or invented by a single person. They may not be exploiting their costumers, but they are exploiting their workers. There are no person so valuable to the world, that they are worth billions.
@@shorewall That is a function of scientific progress, not just because people have gotten wealthier. Indeed this channel seems to rely on the benefits afforded to us by scientists a lot for its arguments, despite EE not even himself being a scientist. He's talking about economics, while falling back on scientists whenever he brings up the good stuff we currently enjoy, rather than any benefits accruing from his own field...
@@ikaantynytlapsi9474 Please show me what share of the wealth the average billionaire has that goes into genuine innovations as well as employing people. Can even sum the two. Now check how much the govt. spends on both financing research as well employing people (yeah, govts. do both - a lot!). Then we can talk about how "the government manages to waste a lot of that money". How much does it waste, compared to how much your garden variety billionaire wastes? And what makes you so confident the govt. share is worse?
Economic inequality has shown to have a strong inverse relationship with social mobility - more inequality = less social mobility. Economists call this "The Great Gatsby Curve"
1: It does not have to be an individual holding that accumulated money, it can be put into a reserve that uses it for the purpose of whatever common good it is intended for, an (uncorrupt) organization is actually much more suited then an individual to hold such a responsibility. 2: You fail to take into account how the choices of the rich is putting all of society into an existential crisis, we are in the midst of a climate crisis, created by the system that favors short term economic profit before everything else. Take this into account and the list of people getting rich by pushing others down will have to grow ridiculously long, failing future generations is pure evil.
Addressing 2 I always find this to be a poor argument. Granting that the claim "the wealthy created the climate crisis" is true, (No one is innocent, not even you) this ultimately was to create technological innovations that allow our lifestyle. Electricity and fossil fuels created global warming and the climate crises with it, but that's so you didn't have to worry about people burning down your town because someone dropped their oil lamp, and so that we could have access to electricity for the things we do every day. Not to mention, driving around and getting from place to place in the span of minutes or an hour instead of the days it might take to walk the average salary man's drive to work. Fast transportation and electricity are also good if you want to bring food and store food in say, a market, for a while so that there's generally always a plentiful amount of food, so people aren't starving. And it's not like you always had a wealth of good options to achieve all of those things. Thus what you end up with people who use fossil fuels because it was the most abundant and efficient way of creating the energy necessary for them. The list of technological benefits continues, but the point is, that the reason we relied on fossil fuels for power and "the rich" made those short term decisions is because ultimately it generated wealth for people at the moment as well as allowed people to live longer more comfortable lives and dealt with the problems they faced at the time. But the thing is, when people live longer more comfortable lives, they don't have to worry about their immediate circumstances and can look ahead and see a new set of problems. In neolithic times, the problem was inconsistent amounts of food and lack of security from the elements, but we developed into agriculture and a more sedentary lifestyle, so that became less of a problem, and new problems arose, and new solutions to those problems and new problems with those new solutions, so on, so forth, until you reach the modern-day, where the previous solution to some set of our problems created a new set of problems, namely global warming. Even at that, it's not like nothing is being done. That problem is ultimately being handled by the collective order generated by the individual chaos of human civilization, through people innovating and coming up with new small solutions to that problem (that, in turn, will likely create other problems).
Worse than failing future generations, they've been selling future generations in every first world country since the inception of central banks. Your national debt is literally monies borrowed from and owed back by children that first and foremost may never be born.
an "uncorrupt organization" is much more suited than an individual huh? Well you basically just said a "fairy" is more suited than an individual. Since the fairy doesn't exist, I'll leave it in the hands of the individual since all organizations are corrupt and have motives that someone will disagree with and call corrupt. Unless you're saying only 1 brand of politics is right and can solve everyone's issues.
@@jfast8256 A governmental unit is on average much less corrupt then an individual - Just look at how much of the income is spent on the common good compared between governments and rich individuals and it gets super obvious that the individuals are the more corrupt/greedy ones.
I've said this myself. A few hundred years ago cinnamon cost half it's weight in gold. Today you can pick up a tin for a few dollars. I'm average income and I live better than a king a few hundred years ago.
Exactly! Part of the problem as I see it, is that everyone these days expects to be rich right away. And when they don't achieve this financial status they look for someone to blame amd the obvious target is other people that are rich. People have to temper their expectations or if being rich is the only option for them, find an avenue for success and work like crazy till they get there.
That is besides the point. Of course tax revenue is spent on public goods, but that doesn't mean it is spent fairly but most of all, taxation is usually not the reason for inequality at all.
If you do have a washing machine then ompared to rest of the world, your in the richest 10%. So maybe better appreciate what you have is what that line meant?
@@Robert-rw5lm I think I read somewhere you need a total net-worth of like $700k USD to be a member of the global 1%. Its not the 1% that are the problem, It's the 0.0001%
@@Tralvan And not even that, it's how the 0.0001% use their money the problem. As the video states, casinos only take from society isn't of benefitting them, which in turn damages economies as a whole. Warren Buffet and Bill Gates are one of the few people that belong to the 0.0001% and have actually contributed A LOT to society.
According to Marx, who wrote the most scientific critique of capitalism, inequality is built into the way capitalism works. The labour theory of value says that all wealth comes from labour and if goods are exchanged for their equivalent value then the only way to get profit is to pay a wage labourer less than the actual value of his / her labour. So overtime this results in massive inequality.
Marx was an idiot. Inequality is built into ALL political and economic systems because every family and clan is in competition with every other family and clan to some degree in a race that in its rawest form is about who gets stabbed to death and who does the stabbing. All systems beyond the family and clan are coalitions to either keep from being victimized or victimize others for the benefit of the whole coalition. Cheating in all cases is part of the game, and often he who dares wins.
@@sophiam2095 Hi there - interesting perspective but if you've read any of his works it's clear that he wasn't an idiot as had a lot of interesting things to say about how capitalism works as a system in motion and how it can be disguised from other means of production such as slavery and feudal system. The point about inequality is about who owns the means of production - as whomever owns this own the surplus value and can therefore increase their wealth much quicker than one individual that can only sell their labour. This seems obvious as there are so many hours in a day that a person can work but a capitalist can scale up their factory (as an example) with hundreds of workers. So whether you think this is a good thing or a bad thing, it's clear that capitalism leads to inequality as only a tiny percentage of the population have enough capital to buy the means of production. I think you're right that inequality is built into other systems such as slavery and feudal system (master and slave, Lord and surf) but that doesn't mean we couldn't envisage a political system that didn't have this oppressor and oppressed relation. I think we should aim for a world where people are truly free to spend their time pursuing their own interests and not just stuck in meaningless work. I think capitalism provides a lot of freedoms but also constrains people and provides un-freedoms like the freedom to die of curable diseases and the freedom to starve to death if you don't / can't find employment etc. I think we can and should aim for something better.
But the labourer is also using the equipment and resources of the company. These examples do not work when considering the complexity of supply chains.
@@PointNemo9 yes, correct - tools and equipment that were created human labour that was employed at a different company. This is an abstract question - how is value created, I don't see what it has to do with supply chains. Try and turn a tree into a chair - you will need human labour or a machine that was created by human labour.
@@pbeeby Because there is value in putting supply chains together. The value of a product is not simply a product of the human labour required to create it.
6:32 'Higher pay leads to lower results' How come every large corporation completely ignores this and thinks paying the CEO $20M/year is a fantastic idea? The reasoning for paying a CEO 200 times more than the engineers who actually create the products is that "we need to attract the best talent". So the engineers are motivated to keep producing better and better products because they too think they can one day earn far more. They can't. The managerial class is a professional class all of its own. It doesn't matter how good the engineer is. They will never be the head of a large corporation.
Well, your view is a little bit one sided. E8 level engineer at Google makes around 1.5M dollars a year. Purely professional. There are a few guys in E9 s and E10 s as well earning several times that.
I think you missed the mark on a couple of points in this video. First, as has been pointed out by many people, is the political corruption that comes with inequality. Second, it's important to differentiate between wealth creation and wealth transfer. I think few people have trouble accepting wealth creation as a source of inequality, but wealth transfer can seem blatantly unfair. The banks in the wake of the financial crisis are a clear example of this: bank executives got millions in bonuses, paid for by tax payer dollars, while overseeing some of the greatest wealth destruction in a generation. Heirs to fortunes are also subject to much social ire. Really, the issue boils down to politics rather than economics. Wealth inequality is sometimes good sometimes bad for the economy as a whole, but politically, most people find unacceptable that we COULD be helping lift the entire country out of dire poverty but CHOOSE not to out of some firm belief that doing so will destroy the market (when firm evidence shows that a rise in taxes on the wealthiest would have minimal impact on actually economic growth).
Wealth inequality of the kind we see today is bad. Mistifying the thing using the meritocratic argument or pointing to the advantages of huge concentration of capital, all in order to not seem a pinko-commie to a certain vocal part of the public, does not make a good review of the subject, IMO.
Yeah. Inequality today is the concentration of advantages passed generation to generation, solidified politically. A truly meritorious society would be one where each child gets equal access to education, and time with their parents, and where there are significant regulations on nepotism and maybe even inheritance taxes. Every person wants the chance to work hard, to be successful; it just sucks that some people will out-compete me because of who their parents were
@@MineRoyale. Do you not have equal access to education? Time with your parents? Do you not have the chance to work hard? To be successful? You have the equal opportunity that you claim to want. That doesn't guarantee that you will have an equal outcome. Nothing does. It's called chance for a reason.
I like how the title of the video makes it sound like you're going to show how wealth inequality isn't actually a problem, but instead, you ask a question to which the answer is "yes"
Are you saying if people have enough wealth and don't need to work to survive, they would dedicate time as a hobby to make scientific and philosophical innovations. Boy, imagine what would happen if more people would be able to survive working 10 hours a week and then spent more time dedicated to hobbies. If wealth is distributed more evenly, there is enough resources to allow people having more free time and would produce a better future. Not only the rich can innovate. Also assuming that people need external motivation to work properly while also assuming that rich people did and do great things as a hobby is a contradiction.
@@Inquiring Let's keep in mind corporations have been bailed out to the tune of TRILLIONS. Money printer go brrr. The mainstay of redistribution I've seen has been upwards.
Forget about redistribution for a moment. Is the idea that wealth should be spread more equally a bad one. Please just don't shut down to the idea. Also, would you prefer a worse fate for humanity because you want billioners to hold to their power. It is not like a group of engineers wouldn't want to go to Mars and spend time and resources doing it without Elon musk forcing them to.
Oh please, what has the Amazon (featured as a good guy here apparently) brought to society other than just the capacity, soon to turn into coercion, to purchase and sell a bazillion of wares under the same virtual roof? This is not based on any brilliant idea - it is just putting huge capital to use by eliminating small competitors and increasing pressure on the labor market. Any storekeeper could have come up with such a vile strategy, the difference is none other than the investment they got. Wealth inequality mostly brings us vicious monopolies - see Picketty 101. What's more, why wouldn't wealth be better distributed to those vital small businesses and households through government spending rather than some billionaire's whim? A government, for all it's worth, is more likely to be capable of making informed investment decisions at that scale. Plus, Bezos really has no interest in making his own workforce less desperate for pennies.
Yup, these are just government subsidized monopolies. There has been no great invention or contribution to society made by these companies that is worth all the small businesses they put out.
Bezos is only worth $200B because the entire WORLD likes what it does enough to value the company in the trillions. Bezos' net worth is 100% a vote by anyone who cares to buy or sell Amazon. Nothing could be more democratic or fair. Losers like Bernie and AOC actually believe that 435 members of the House and 100 Senators are better judges of how much "worth" someone should have. It's laughable.
@@rufuspipemos Well, in Poland, where Amazon came as an employer some 7 years ago and as a seller around 2 years back, they are still more commonly known as a company where one could be worked to death quite easily than (note: this does not typically happen to career junkies but to people who struggle to earn their bread and a tacky roof over their heads, as of 2021, both in Poland and in the US) than as a marketplace. Let's see if the advantage in shipping cost and possibly things like stepping into Polish TV series with their unobtrusive occurances (like say Uber in every f# Netflix/HBO offering) will allow them to crush the competition. Who are no heaven's send either. At the end of the day, consumers don't care much about a random guy dying, even within their own country. It won't be brought about much anywhere around you. The cost-profit spiral has more momentum than decency. Unless you decide for yourself it won't be so for you. And pay what it takes. After all, when you decide to shun decency, you may sooner or later trick yourself into coercion and see who has the last laugh.
"even the bottom dredges of society, grad-students" that hit where it hurt mate... XD Back on topic though, i think a major issue with wealth hoarding is that it does prevent the advancement of society to some extent, some people who contribute to society like Bill Gates do become rich, but it also has to do with opportunity, a lot of poor individuals may be able to greatly contribute to society but have no means to present their ideas or skills on the market, and some people who become rich contributing to society no longer do after their deaths but the wealth stays within the family or a select group with it stagnates without it contributing to society any longer, there are plenty of rich people today that have never known work or how to contribute to society because they live off of passive income. Progress slows down when resources aren't efficiently distributed.
I think that is the key. Getting money to work. But I don't think any rich person lives off of passive income, contributing nothing to society. The way they get passive income is by investing, and that money is then used by society. It can still be misallocated, which EE mentions a lot, but it is being used.
Bill gates does not contribute much to society realistically, most of his efforts have led to increased poverty and the deduction of taxes from his forms (putting money in a Roth ira for “charity” and never using it)
The accumulated money is spent, no one sleeps on a pile of cash. Even just by keeping it in the bank you facilitate the bank to finance home loans and business loans, which generate more wealth.
The biggest drawback of wealth inequality is: that wealth is power and 7 people have as much power as 3.5 Billion people. That is very dangerous. We all agree that democracy is one of the most important values of Western Civilization but we only apply this value to government. I think that the economy is as powerful if not more powerful than the government so why don't we structure the economy democratically as well? Also wealth inequality is not responsible for technological advances. Look at Mansa Musa for instance he was the richest person in history and I don't see West Africa expelling in any kind of technological field. The Soviet Union made massive technological advances despite not having any kind of billionaires.
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hmm weird
Economics Explained there has to be inequality for innovation
Ecnomic Explains ,pls make a video about
"How Robot take away the jobs of human and how can human live without jobs or income"??????????..?????????????????????????????????????????????????????.......
,??????
Amazing video as always, please take a note to make a video about Chile's economy!
Really enjoy your videos!
You missed the most dire drawback of wealth inequality:
A handful of people having massive influence over governments all over the world.
What rich people don’t corrupt government your insane
Or they take over the government directly and transform the governmental system to their benefit. City Republics in Europe? Dominated by the filthy rich, who levied taxes on everybody but their own families and companies.
On the other hand, impoverished disenfranchised citizens tend to follow every leader who promises them a better life. Imagine a country with corruption to the highest ranks, a political process stalled by hateful division, ambitious egomaniacs with big bank accounts gaining huge followerships and constantly testing how much they can undermine the law and the constitution for their own gain, eventually transforming the government into a one man show...Of course I´m talking about the late Roman republic.
Official Ancapistan TH-cam channel thank you for that amazing insight “Official Ancapistan TH-cam channel”!
@@antyspi4466 Or much more extreme in the US where electoral campaigns have to be paid for by "donations" from the wealthy, which then gain huge influence regarding policy decisions. As a privateer in the US you have a statistically insignificant chance of winning when running for office.
@@antyspi4466 Just have a look at South Africa. The government is drawing prosperity from their own country via greed an corruption, using racism as an excuse and making us all worse off for it while banking billions.
I think one point you forgot to mention was how wealthiest people have a greater say in the political decisions. I guess that is one reason that drives opponents of capitalism crazy.
That's not an economic issue. That's a political issue. Supporters of capitalism also hate it; economists call it rent-seeking. Something we can agree on!
@@fatpotatoe6039 but it is a wealth problem.
Capitalists control policy, therefore true democracy is impossible, without socialist elements.
@@applez4life200 or make lobbying illegal?
@@fatpotatoe6039 If they pay their way to say, making unionization more difficult or deregulation of an entire industry so it can be moved overseas while still reaping the benefits of being a domestic company, then it is an economic issue. Those actions directly effect their employees and consumers in the nations where they nominally are counted on the same scales as the billionaire owners, so they're relevant factors in changes in economic reality of those nations.
@@fatpotatoe6039 Stop treating it as seperate issues. The ruling class is naturally the dictator of the state, no matter which mode of production is in place. In slave society slave owners control the state. In feudal society feudal lords control the state. In a capitalist society capitalists control the state. In a socialist society socialists control the state.
"The bottom dredges of society, like grad students." This line made me laugh so hard I almost fell out of my chair. THANK YOU!
Ah those grad students who invented modern medicine, all technological advancements in human history, complete dredges of society.
Only trades and stem add value .
Pick a trade pick it young get good.
If particularly academic do stem.
Everything else is a road to retail.
@@georgepeterjoubert7482 i'm about to enter college as a freshman and i took up stem for my senior years. i'm planning to go into a business major instead of stem because of that saturation u just talked about. but even business is saturated and it's a bit scary knowing that there's a huge possibility that i might not even get a job (though i wasn't planning to be THAT invested in having a job, anyway. because i'm planning to help my dad run his business.) i already knew this as a child, but, surviving in this world is hard. but i'm lucky that i have my parents to support me financially. but even that won't be enough when sht hits the fan
@@gajjang968 It may seem hard to you but as the video said this generation is the most privileged ever. Many of the things that your generation complains about possibly not having would not even have been dreamed of by your grandparents. If you have a smartphone, computer, car and A/C you are extraordinarily privileged.
@@darleyt1 did someone hit a nerve? 99.99% of grad students contribute nothing to society. Other then basic science, it’s the private sector that contributes most of societies advancements.
I'd say this video suffers from the usual problem of some of this channel's content - the unspoken presupposition of the fundamental goals of the economy. "Leaving aside the morality" is a good point when abstracting away from the injustice of the super-rich not having to work for their wealth to grow and looking at the wider effects of their existence, but it also cuts out the discussion of what the economy is even for. What are we optimizing here?
The example of having to save money to get a spaceship to work your second job is actually very demonstrative here. The free market economy optimizes productivity. Even when the average person becomes wealthier, they don't get to relax and enjoy their wealth as they have to keep doing the maximum possible amounts of ever-more-productive work to sustain it. If more wealth stayed at the bottom of the economy instead of being channeled to the top then people would get to work less to maintain the same effective income, living better lives as a result. This is, of course, utterly impossible in the free market, where the investors would rather see worker pay cuts and layoffs than a reduction in their own profit margins. And it would have to come out of the profits, since passing it on to the customer would either make the product uncompetitive or drive inflation and just add an extra layer to the mess.
The arguments for wealth concentration being natural and coming back as innovation are disingenuous. Richer economies have more "spare" resources to channel to the rich, but that doesn't mean that they have to be channeled to them, it's a case of correlation not equaling causation. And the concentration of resources required for innovation can just as easily be done by state actors rather than private ones, with the innovation itself being created by engineers rather than capitalists. The role of inequality in driving worker self-improvement is fine in theory, but in reality it may restrict access to good education for the poor people who need it the most to escape said poverty, leaving their potential unfulfilled and forcing them to the bottom of the economy regardless of their talent.
Yeah, this is my main disagreement with the video as well. The purpose of the economy should not be to just increase the average wealth, or even the wealth of most people, because there's more to life and standard of living than that. Extreme inequality *is* inherently unjust, and benefiting the economy doesn't make up for that.
@@oterceslanaclevvo9855 Is there some line where you don't care if you and everyone else gets wealthier, but you have to bring down someone who's doing better than you, even if it comes at the cost of the rest of society?
This is just pointless envy. If everyone is better off with an increased amount of inequality, then society is better off with it. I get that humans are comparative creatures, but if you try to think rationally about this what you're saying doesn't make any sense. It's the same spiteful logic some people tend to use in relationships as well. If they didn't have a good relationship with their mother, then neither should anyone else, because that would be "inherently unjust". The "if I can't have it, nobody else should"-mentality is counterproductive nonsense.
Note that this isn't necessarily an argument for inequality in the real world, but you said that inequality is inherently unjust, even if everyone benefits which is completely ridiculous.
So what's the alternative?
you forgot the the most reliable investment: politicians. you got all this money, you need to spend it on something, why not lobbying, the roi is amazing.
*Taking notes*
The government is the biggest investment for the owners of big box corporations because of how the regulatory and tax systems are set up in favor of such corporations. Well, thet and politicians are corrupt enough to take bribes.
@@suthinanahkist2521
They don't need to take bribes. That's the frightening part.
Just assume two things.
1) Corporations tell politicians to vote for bill X (or against it)
2) Corporations will spend money on ads that promote their interests. Which also just happen to align with politics. Who knows, a green energy company might point out that they have a fantastic product, and it would make your life better if not for naysayers like senator E. McSinnerson.
What happens next? Mr Sinnerson can still promise to vote against bill X. Nothing stops him. But if he does, he knows those ads will go up, and soon he'll be replaced by someone who will vote for bill X. Either way, his seat will vote for bill X, his only choice is whether he'll be in it.
As a closing note, in case you have any optimism left: you can't stop it either. Even if you could pass a bill through congress that bans any and all political ads from corporations, and if you seal all the loopholes, and if somehow the politicians vote it in despite their donors' requests... billionaires like Jeff Bezos can just print it in a newspaper, labeled "news". Who knows, Exxon could buy CNN some day. It would only give the super-rich a bigger slice of the power pie by completely wiping out the smaller business options.
@@sorsocksfake Oh and without wealth inequality media would be free and do only things for good. In communism, socialism even without wealth inequality would be status inequality. And they will use their status to make movies with narrative they like, media push their ideas etc.
@@dmitrizaslavski8480
Yeah obviously that didn't work either, and we understand why.
Social liberalism seems to have a more stable solution, where there is a floor but not a ceiling. Strengthening the bottom of the pyramid foremost, without trying to crush the top.
I think when one digs a bit further, the criticism of wealth inequality stems from two forces which aren't being represented well in this video. The first is often that economic analysis and the markets we have created are not properly capturing costs that have been built up from industrialization and modern society. For one, we face a slow-motion existential crisis in the form of global warming and the general ecological collapse we are seeing around the world. Some people are getting quite rich off that destruction but it is everyone who will eventually pay that cost. The other side to this is that wealth at the billionaire level isn't just increasing one's purchasing power, but weighing in on topics of government regulation and judicial impartiality. The wealthy can afford good lawyers to get them out of trouble when they drunkenly get into a car accident and kill several people while the poor often find themselves better off admitting to crimes they didn't commit rather than face a trial based on the ten minutes of time they were given with a public defender. Further, the wealthy have access to policy makers that the average person doesn't have. This means when deciding on regulatory reform that could determine the extent to which we, say, continue to tolerate the release of green house gasses into the environment, the wealthy tend to have an overstated role in determining those outcomes. When so many of the wealthy make their money through the release of green house gasses, this provides at the very least the image of corruption. A key problem many will have watching this video is that economics is not an all-encompassing view-point and certainly doesn't solve all our problems.
Yes, but we saved a ton of money by having one dude on Excell, and 19 others unemployed.
Great response!
but thats not a problem caused by wealth inequality. even without wealth inequality people would still take the path of least resistance to economic growth. Also there will still be good and bad lawyers
I agree with you, but corruption can happen with any system, the USSR was an incredibly corrupt government, even though there weren't any billionaires there.
(I'm not trying to bash the USSR, just saying that there are many more issues rather than wealth disparity which contribute to differences in power)
He actually made the point in the video, but it's a bit subtle. He basically said in some cases wealth inequality comes at the expense of others, for example the leeches of society like criminals. The only difference between criminals and, say polluters, is that some of the worst polluting industries hasn't yet been outlawed. The guy who gets away with murder is also another example.
As an Australian, as well as watching China rise to become a juggernaut, people won't ever revolt or really start getting upset about inequalities as long as their needs and wants are being met. It's why Australians totally forgot about the brutal fires in January and why the Chinese don't care about the uyghur camps; as long as we have our holidays, steady jobs and netflix, we're good fam
Divorce rate of ~40% in Australia. Do you think that we are a completely fulfilled nation?
@@danielt6856 , not an Australian but why would a 40% Divorce rate be a bad thing? that simply means that 40% of marriages weren't working out.. should those folks be forced to stay miserable (or at the very least in marriages that aren't making them happy) or should we trust them to behave like adults and figure out what's best for their individual situations?
"Bread and circuses."
@@danielt6856 I would say that has nothing to do with our economics. If everyone had all the money they need it won't necessarily change that. If anything it's a cultural or philosophical issue.
@@Gorilder It just means that more people are thinking of marriage as a status change rather than eternal partnership
The issue with wealth inequality is not necessarily material, but an issue of power. I'm afraid you overlooked that.
The mother struggling to pay bills is in fact deprived of power and being forced to act in a certain way by those that have more power than her. Generalize this at the level of populations, and there you go.
@Richard Casterly a worker woman is forced to act a certain way. she can't decide buisness policy, she cant decide any policy outside of her home. not even that because probably she has no home and is renting so can't even decide that. She can only decide what dictator she prefers and they all look quite the same. the alternative is homelessness and hunger so not much of a choice. If I hold you at gun point you can not say "oh well at least I have the choice to be shot"
@Richard Casterly I think the idea is that a minimum wage earner shouldn't "struggle" with a kid or two. That is the goal, but given the direction of our wealth inequality that ramps up prices and barely changes wages hinders that.
@Richard Casterly I think what Rasmy was getting at, was that there's often a trade off between what a person really wants to do and what they can get paid to do. A good example is that no one pays you to stay home with your kids. Having the option to pause your career to focus on your family is increasingly a privilege for the minority.
Another good example is that a majority of people work in jobs they don't really care about. A gallup poll from 2017 found that only 15% of global workers (and only 30% of American workers) are engaged at work. Lower wealth inequality might allow people to work in areas that they love, even if those areas are economically riskier.
Who’s making her act in what way? That’s what you need to work on. I don’t think it’s rich people’s fault. Even if it is rich people’s fault, I don’t think it’s inequality’s fault, it’s just those certain actions of the rich people that would need regulation
Richard Casterly i think we are in an atmosphere where cost of production is invested in automation to scale things and no longer by increasing labor. Everybody needs everyone else, whether youre a businessman or a cleaner or low skilled worker. Someone has got to do the job until we’re all easily replaced by machines. It’s mutual agreement that society needs your skill and for that society has to assure you live the most humane way. And dont be throwing that it’s only the mother’s responsibility to take care of the kid when everyones preaching that it takes a community to raise one. After neglect, all the government wants now is the “unleashed” potential of its youth which is quite delusional
Some comments have already touched on this, but the argument that inequality breeds innovation is not guaranteed. In fact, you contradict it somewhat in your own point later about the 5k loan...if there is not enough profit, then what's the point? Thus excessive wealth may slow certain types of innovation. This video also assumes people are completely motivated by wealth. I won't say they're not, but it becomes...attenuated. As a person progresses in their career, they may stop caring about sheer money and more about things like time, vacations, etc (wealth, but not necessarily for economic gain...). In other words, caring about money until basic lifestyle needs are met. More is nice, but stops being a main motivator.
The other assumption I thought this video went on is that large capital projects require accumulation of wealth. I'm personally really curious if this is true - space flight, for example, was the government (a stockpile of cash from mostly not super rich people) the main funder of this project? It is in some sense a use of distributed and small amounts of wealth, so I don't see that it is required we enable people to be super wealthy for this to happen.
I think the other common argument I'd be curious about that wasn't really addressed here is, yes, Bill Gates has massively impacted the world, but has he impacted it a mind boggling amount of dollars worth? If rich people cannot conceivably find a use for their money, should they not distribute it to people with very real problems causing literal stress and health issues and other issues? There are studies about how no-strings-attached angel funds and such can really help kickstart smaller economies, help people escape poverty, homelesses, etc. I think the common idea I heard is "maximum wage" - an analogue to minimum wage that says "okay, you can buy everything you've ever dreamed of, stop now". - the wealthy would be motivated to continue working to maintain their lifestyle, but that money could be used by non-profit driven institutions (govt, charity, etc) to perhaps fix more systemic issues.
Very good points 👍
@@Inquiring Weird, all I see is "Ree, better ad hominem since I'm wrong." Maybe I left an extension on.
Thank you for such an intelligent comment. I agree with you but i would not of been able to say it like you did.
@@Inquiring "Obviously if someone says something I disagree with they're wrong and dumb REEEEEEEE" live your life
A maximum wage is the same as a maximum limit on innovation.
Great video as usual man, thank you.
One point I disagree with towards the middle of the video and on which I wanted to share some thoughts: "All these innovations would not have been possible without wealth inequality." -> When you look at some more innovations beyond the steam engine, you find that innovations are not just driven by wealth but also by spare time of some individuals and their intellectual skills - these individuals were not always wealthy (e.g. Nikola Tesla, Niels Bohr, Albert Einstein...). Today, it is driven by companies, and the most innovative companies are the ones trying to attract the most skilled workers, offering them big pay and better work-life balance (the modern equivalent of more "spare time"). In these companies, the top directors running the business and making millions / billions are not the ones innovating most of the time, but rather their employees, at various levels. So one could argue that, if there were less inequalities and if people around the world had more spare time to educate themselves and imagine new things rather than spend their days worrying about how to make ends meet, we would have many more brains working across the globe on solving problems, and thus we would see more innovation.
Well said! The rich don't usually have a reason to innovate.
I love this response. Very true. The mind is only creative if it has the capacity to be rather than focusing on working day in and day out to survive.
But such innovation use to come out once every decade of 2 only. And someone got rich on the back of innovations done by Tesla, wright brothers, etc. It's just that tesla and wright brothers didn't get the fruits of their innovation and labour.
@@marshalLannes1769 We also have a lot more people who can innovate now though.
@@marshalLannes1769 yes but the point was that the innovations werent made by rich people, someone got rich off of it but these things but they werent invented by rich people.
Ah yes, my washing machine, or as most people call it *laundry slave*
And don't forget that many poor communities in cities are reliant upon laundromats owned by rich people, who are basically taking advantage of people who can't save enough money to buy their own.
@@Dthatsmi "Taking advantage", really? It's an alternative. If you can't afford your own washing machine, you can instead pay a small fee to effectively rent one for each laundry. It's also convenient in cases where you wouldn't get your own anyway (lack of room, temporary stay, etc). I suppose you could also wash your clothes by hand, if you really don't want to feel "taken advantage of".
@@gaohkai9441 Funny how dumb it sounds with laundry machines. Maybe if I blow the concept up to the huge housing crises in Boston, NYC, San Francisco you can make more sense of it. The difference is that people who are looking to buy a house are an entire different class of people who are looking to buy a washing machine. You're so blind to the reality and depth of wealth inequality (even in the US) that you assume everyone using a landromate is just doing it because it's a wise economical decision on their point. No, they have no other option, the prices are set to keep the landromate in business by leeching money out of poor communities. I can understand laundry machines in college dorm buildings, but please explain to me why every poor community in an urban environment is chalk full of laundromats. I would love to understand your point better.
@@Dthatsmi What are you trying to say? Are landromates bad because they are leaching money out of the poor and are the "only choice"? What is the solution to the landromate problem? SHould we close them? Should we regulate them so they can't charge "unreasonable" amount of cash?
Pardon me but I have difficulty understanding your point. A bit of elaboration will be greatly appreciated.
Or as the neighbours call it *my wife*
Works as a dishwasher too
I think this video completely missed a very important nuance about wealth accumulation and innovation; it's not wealth that creates innovation, it's wealth invested into innovative institutions that *facilitate* that innovation. It's hundreds of thousands of dollars in education and research, both public and private, across hundreds of universities across all of academia. It wouldn't make us more efficient if we just pooled all the resources to one dude because concentration =/= innovation. That innovation comes from the sensible *distribution* of resources into *institutions* that facilitate that sort of learning. He mentioned the Italian renaissance which yes is famous for it's economic boom but it was an economic boom amongst the nobility and urban middle class, *not simply making the richest people in Northern Italy even richer*. It involved dozens of cities and individuals investing that newfound wealth over the long term into artistic, cultural and learning institutions, not just hoarding.
Well said.
It's been a year. Has your narrative changed? After reading your reply to the EE discourse. I am more confident that all players in the equation contribute their part. The ones at the top are simply more visible.
sensible investment in institutions? sounds like a great way to waste money. Let the market flow baby! If people want stuff, someone with money will figure out a way to give it to them. Then that company gets really good at it, makes it more quickly, competitors step in for a piece of the pie, prices go down, product becomes accessible to everyone, the end.
@@timbutlerr6246 Have you considered that maybe that sort of company your describing could be viewed as an example of an institution that many different people put money into, which is what the original comment described.
Like, you do know what a share/stock market is, right? It's a medium through which financial capital from many different people is able to be concentrated into companies (Institutions) which in turn spur the development necessary to create long term wealth.
That both fits your point on private companies being created and becoming efficient at producing through competition, and the original comment's point on Institutions.
You're describing the exact same thing as the original comment, just you seem to think that this term 'institution' somehow doesn't include private sector entities, despite the original comment explicitly stating, "It's hundreds of thousands of dollars in education and research, both public and PRIVATE".
Private, as in private sector, private owned, private capital investment. Did you like skim read the original comment and miss the point?
@@jamesclarke2789 I think you may have skim read this comment. "across hundreds of universities across all of academia". Pretty clear he believes that "artistic, cultural and learning institutions" are responsible for the bulk of innovation. Which I disagree with, that's my point. I will not deny their are some advances coming from these "institutions" but much more slowly. A perfect and undeniable example is the vaccine for coronavirus. If we relied on universities and academia to find a vaccine, it would have taken many more years. Crisis provides an opportunity for companies like Pfizer and AstraZeneca, who saw the huge demand, and turbocharged their development to beat the competition.
I feel like this video didn't touch on the economic reality of non-first world economies. Extraction of natural resources of a poor country by multi-million corporations are a reality that hyper capitalists tend to ignore. Even labor is exploited in poorer countries so the economic viability of a product is maintained. I wish future videos get more in-depth with the analysis as this felt like preaching to the pro-corporation choir.
Of course the video didn't, that would make wealth inequality look bad.
Economic reality of non-first world economies largely bases in someone who already has power using said influence to obtain money. Talking about wealth inequality in such countries is self-defeating, it is not rooted in economics to begin with.
> Extraction of natural resources of poor country by multi- million corporations
What you mention basically sounds like the Prebisch - Singer thesis.
There have been serious doubts regarding the thesis. Techically, reality gave opposite results to those expected by theory (policies created following Prebisch ideas didn't redult as intended in latín América; and in the case of China, literally happened the opposite to what was predicted by the theory).
The net result of the 2000's commodities boom basically debunked this thesis.
15:17
Protectionism and subsidies by the governments of rich countries are much more damaging to poor countries than whatever corporations do. For example if the EU got rid of protectionist policies and the CAP subsidies, most european producers would move their production to poorer countries bringing trillions with them, and with that money those economies would thrive, just like Asian countries thrived when manufacturing was moved there.
"Inequality motivates people and drives innovation." Shortly after: "Innovations in the past were driven by the rich nobility as a hobby". It's not either or but money is certainly not the unique nor primary factor motivating people, we just live in a world which doesn't know how to function without assuming that it is.
"doesn't know how to function"
As long as people are alive, which means they have the means to take in food, it functions.
Doesn't mean it should function in a way everyone is happy. But it functions.
A car with only one headlight and running on 3 cylinders
- still functions
I didn't say it doesn't currently function (albeit with many issues, as you concede). I'm saying our culture has not conceived a viable model that puts something other than accumulation of capital as the main driving factor for the economy.
@@Anatolij86 thanks man. i can look Egoism (anarchi) with another view, but not from a good way to seized materialisme as a whole.
But those rich people can't exist without inequality, the statements aren't contradictory, you failed to understand them.
@@pneumonoultramicroscopicsi4065 Good observation. But I was focusing on the mistaken argument that it is only or mostly the pursuit of financial reward that drives innovation.
Spoken like a man who hasn't invested in guillotine manufacturers.
Profit off the revolution :thinking:
Someone's going to and it may as well be me.
@@magnusanderson6681 The revolution's instated rulers have this annoying tendency, to get rid of their instigators. He couldn't be trusted against the previous ruling class, and no socialist ruler has ever cared for anything other than his own pockets. So the instigator will probably at some point, turn against him... so the instigator must go where he can never in eternity make any trouble for the socialist.
If AOC and her squad truly cared about the environment and the poor as much as they love instigating them against people who dare to work for what they have, they'd have scaled down their living quarters to afford doing charity, and taken the train and buses wherever they go, don'cha think?
Did you notice her celebrating extending poverty and unemployment in Queens, NY? Her followers are her "useful idiots", to get her and her cronies in power and thereafter, their faithful serfs for time immemorial. For that is how every socialist leader gets into, and retains, power.
What your history books most likely leave out, is that Robespierre's revolution became a witch-hunt thereafter, against any who dares question him - much like any who dares oppose Blank Lies Makers. It became so bad, that Robby himself was eventually executed for some crime against the revolution.
@@JFDSmit-rm6tw Lol one of the few things I do remember about the Revolution was that Robespierre was executed. But yeah, I was writing a 1 sentence comment, not an epic business strategy. Also, I don't agree with what the left is doing right now.
Many of the people guillotined were members of the revolution. Ignorance run rampant with failures like you.
i'm very suspicious of the notion that wealth inequality breeds innovation as I haven't seen studies that really link those in an way other than conjecture, but I can easily find MANY more peer-reviewed articles that provide ample support for how wealth inequality breeds crime, illness, social distress, and increased financial burden/stress. What is the opportunity cost of NOT distributing wealth in a more equal manner?
100%
Wealth inequality breeding innovation is an outright lie, and easily disproved. Innovation comes almost 100% from prosperous nations, one where resources and knowledge are easy to acquire. Third world nations have the greatest inequality and have the least innovation, while the greatest innovation in the US almost always comes from at least the middle class.
An example could be someone working hard to become the manager of a place in order to earn more money. A good manager is more skilled and can deal with the various issues that the employees either can't or don't want to do.
Another example is entrepreneurship, where the chance of becoming rich helps motivates start ups and inventors.
The opportunity cost would be... not as many people would be buying their 30th private jet.
It actively destroys innovation.
It's like depriving a brain of nutrient-rich blood; coagulating it in tiny portions of the body.
In addition - trauma damages DNA, and the damage is inheritable. The claim that "quality of life has improved for everyone" expressed in the video requires a delusional sampling / survivorship bias to make.
Further, these privatized "huge concentrations of wealth" are born of *socialized* risk/cost.
I wish this made some attempt to answer how MUCH inequality is good or bad, including things like welfare/education via taxation which reduce inequality but can also fuel economic growth.
Or the different kinds of inequality, like how South Africa is growing more unequal, but because the poor is getting poorer there, not necessarily the rich are getting richer.
Likewise, he didn't address how countries that get richer while reducing their inequality tend to be better off than countries that get richer while gaining inequality.
Absolutely, it feels like an oversimplification
@@optimize. it's a complex topic. There's only so much you can say in 16 minutes
I do not think its possible currently to solve this issue without degrading our society into anarchy. The rich control infrastructure and most of technology so we would have to topple that in the process. Also wealth inequality is too ingrained in society for it to change, and what social structure would replace it if it were to change. So in summary wealth inequality is too fundamental to our society, so it cannot be toppled without destroying modern society in the process.
One of the things that bother me so much is that the idea of having a roof over your head is getting more expensive everyday because we allow speculators to speculate with land ownership. Young people are getting priced out of the idea of having roofs over their heads.
Also, with regards to the video, while in the grand scheme of things we are better off now than 300 years ago, I don't think we're better now than 50 years ago. At least not if you're a middle-class person.
A middle-class wage used to allow families to live with many comforts.
1. The super rich often use their money to influence government policy to the detriment of the general population.
2. They often keep an outrageously disproportionate amount of the wealth generated by their businesses by underpaying their employees.
People are free to take their labor elsewhere. People are free to not buy those products made by those businesses. You can do with a cheap phone from Cricket, but you want the latest iPhone. Who’s fault and decision is that. What examples do you have of those rich people creating a disadvantage for the regular people? A lot of those rich people donate great sums of money for worthwhile causes and invest in other ideas that noN wealthy people Come up with. Creating money for both. There also is nothing stopping regular people from coming together with their money as a group to influence government policy. But they’re too busy buying lottery tickets and buying the newest iPhone and wasting their money. Obviously not all, but a great deal.
@@joedirte8355 this the problem with the victim mentality we have today. The rich have more than me, I am a victim of oppression. To absolve myself from the decisions that I am free to make, I must be a victim of oppression. Its easier to say others must change to than to make changes to yourself.
Joe Dirte' with healthcare tied to jobs and the vast majority of americans living paycheck to paycheck, there is not the liberty to take labor elsewhere. Fact of the matter is that a significant amount of americans cannot afford an emergency payment of $400. Let alone a hospital bill - even with medicare. That significant majority in that position is stuck there due to skyrocketing costs of living with wage stagnation. The question then becomes, do we sit and watch our middle class disappear making these problems worse? Or do we try to fix it with better worker protection, updated wage laws, detaching healthcare from employment through public healthcare. The developed nations of the world have made their choice and are better off for it while we continue to suffer more and more due to inaction and attitudes that blame those caught between high inflation/over valued markets and stagnant wages with the risk of everything to change work.
@@joedirte8355 "People are free to take their labor elsewhere."
Noncompete agreements: Allow us to introduce ourselves.
@@OopsAllFrench I'm also curious about the proportion of Open jobs and Unemployed+unsatisfied workers. If its less than 1, then even if any individual has the chance at getting a new job, its impossible for everyone to, thus there would always be a number of people who lack the practical liberty to control their own life. Maybe in the past a person could go out and build a log cabin or start a farm, I don't know how possible that is today (or if that was even possible then). Also, businesses are expensive to start up today, meaning you need to take out loans to even try, but if your credit is bad since you didn't make enough to pay other loans, you're kinda screwed. Social mobility is a real problem; the US at least is lagging behind where we really should be. From geography, to ideology, to geopolitics, we really ought to be able to be #1, but if I recall, most of Europe, Canada, Japan, Australia, New Zealand, Singapore, and South Korea all rank ahead us. That being said, I am open to new information in case I missed something, sometimes I'm wrong.
So.... if more of us had more money we would have more time to spend on "hobbies" that have the potential to create "innovations" that would better all of society?
Isnt that more an argument for more equitable wealth distribution rather than one for wealth accumulation?
@@Ren33469 What class do you fall in?
@@Ren33469 Fair enough
yes
@@QuackersMcCrackers he was being sarcastic
@@liblib89 Ahhhh
Interesting, then the US must have grown significantly poorer 1940-1985 as the share of wealth owned by the richest 10% decreased from 82% to 64% in that period. Then the country obviously got super-rich during the second Reagean term and after, when the inequality skyrocketed. Now go and pitch that idea to the auto-workers in Detroit and coal miners in West Virginia ;)
@@SigFigNewton or maybe people should aquire better skills and not regulate themselves in declining and obsolete industries like coal or cars. America became wealth cause the skills required to be marketable yields the most wealth. You see this everytime in every information and industrial revolution
Ie. Learn to code
@@bellphorusnknight supply and demand. If everyone learned how to code the supply would go way up and the wages way down, ironiccly what happened in car manufacturing. If you need three jobs to pay rent then you don't have time for education. A UBI would be great for this but only then could your solution be viable in some extent
But, forgive me if I'm mistaken, that reducion in inequality was a CONSEQUENCE of poorer americans getting wealthier, not the cause of it. Like, if we were to just kill every billionare alive, inequality would descrease, but that probably wouldn't directly improve the economic lives of common folk, at least not directly.
@@bellphorusnknight that would only be a free choice if aquiring new skills was free. But it isnt. It costs a lot of money, thats lacking way too often. Thats where your idea fails to meet reality. If students got funding so nobody was relying on private money to get new skills, then you have a very valid point. But at the moment, thats not true.
Oh man, you SAVED my life!
I spent my entire life believing that inequality was a terrible thing, but your video proves that it is actually a great thing!
This explains why the most equal countries in the world, like Norway, Denmark and New Zealand are so bad to live in, and why the most unequal countries like South Africa, Haiti and Colombia are so developed!
All the other videos on youtube show only the bad aspects of inequality, but you showed us the truth, thank you for that!
I'm selling everything and taking the next flight to South Africa, I imagine that inequality will make me super motivated, and I will be able to produce a lot of wealth for the world!
🙄🙄
@@queen_elizabeth he's being sarcastic
Right just like EE said
EE just reserved himself a spot on the up coming "guillotine party".
This is an underated comment
EE - "...the real issue is outrageous investing."
Me - *closes portfolio tab full of meme stocks*
I hope you only hold leveraged derivatives on those meme stocks for some true degeneracy
Err nerr, mah stonks!
Dogecoin time...
man of wsb?
buy more hentai!!!
The part about prosperity reminds me of a joke from my former communist country
"Is it true that everybody is equal here in Romania?"
"Yes, everybody is equally poor"
"In December 2008, Goldman Sachs paid out $2.6 billion in end of year bonuses in spite of it's $6-billion-dollar bailout by the US government justifying these on the basis that they helped to ' attract and motivate' the best people
Economists are dumb, they don't understand things. Or care about things like humanity. We produce 4x the world's food needs. Why are there people starving then?
@@Jmanblack22 Because it is hard (expensive, way more than producing it) to transport the food to the one who need it.
@@Jmanblack22 because defining "needs" is far from objective. Also I know economists that double your IQ
Ohh look here, an edgelord i am so impressed. Do you not at all understand private property or is that something you know a few levels above your level of understanding?
@@apc9714 Great job by the market forces to allocate resources. Oh wait
I miss some downsides of Wealth Inequality:
1. The wealthy receive a large part of the general increase in value. This leads to an increasingly uneven distribution of capital. The normal population degenerates exclusively into labour. In our modern society, however, almost every innovation requires capital, which excludes a considerable part of possible improvements or makes them fail due to gatekeepers.
2. Wealth Inequality transfers to democratic inequality. Either by influencing public opinion through (owned) newspapers or television channels or by having better access to politicians. The mere difference in the frequency with which political decision-makers meet with representatives of business as opposed to civil society is enormous. In addition, they are often major donors to the parties or election campaigns. This lever is then used to pass laws that directly (depriving criminals of voting rights) or indirectly (registration hurdles or fees) disadvantage poorer people.
1. Even though the wealthy receive "most" of the increase in value, the other hundreds of millions are still getting an increase in their basic living year after year. Having it the other way around would leave no incentive to invest in creating value thus standard of living would not increase at the same rate as it does now.
2. I agree for the most part
@@Harvindg40 1. the idea that income is the only possible incentive for creating value is very much bs.
a sense of agency which people would experience through actual democratic involvement would be arguably just as powerful.
@@Harvindg40 Then explain why life expectancy has stagnated in the US. Or why minimum wage from the 1970s adjusted for inflation would be over $20/hour.
I think he actually did sort of cover 1- How the wealthy invest in large but dumb ventures, when there are loads of reliable smaller ventures to be had and small improvements to be made. If the general population is living meal to mean while the rich sit in their golden hills, society won't improve as much as if the general population each had a bit of extra money to kick in to, say, build public works like roads and clean water.
Well put, sir.
To everyone saying he was out of touch:
1) This video was not about regulatory laws but about wealth accumulation. A lot of people are saying that those with great wealth influence those in positions of power. While this is true, it is outside the scope of economics and thus a channel called "Economics Explained" did not touch on it, which makes sense to me. Yes obviously we should have more robust laws that limit how much you can influence politicians with lobbying, especially in countries with high rates of corruption.
2) The presenter regards Scandinavian economic systems as very good, and people there pay very high taxes and as a result have low income inequality when compared to other countries.
3) In my personal opinion, wealth inequality in and of itself isn't an issue as long as long as the base standard of living is high enough to where everyone can live comfortably doing what they like to do. Take Sweden for example, they have some of the highest standards of living in the world, everyone can afford housing, food, and to not be overworked and live comfortably at the same time, yet the country has some of the highest wealth inequality in the world.
You should look at the data for point (3). It really does appear like wealth inequality itself is a better predictor for societal ills such as violence and suicide than poverty.
@@endlessxaura I would not argue it is the best predictor though. While high wealth inequality does correlate with the things you mentioned, it is not always the case. Sweden for example has very high wealth inequality but low levels of violence and suicide. I think this is likely due to the high base standard of living present in Sweden, meaning that even the poorest there are able to make ends meet without having to overwork themselves. The reason for this is that income inequality in Sweden is very low, and income taxes there are used to prop up the most vulnerable in their economy. Therefore I would argue that wealth inequality in and of itself isn't an issue, but rather the issue is what leads to wealth inequality and how "high" those at the bottom of the ladder are, so to speak.
People thinking wealth inequality is ok are people assuming a certain baseline equality exists. I think there is a lack of understanding the term. Different levels of wealth isn’t wealth inequality
@@rainbomg Yes exactly.
Yes as long as the wealth gap isn’t too big then people tend to be happier and less crime in those areas.
Good video, but no mention of the Gini coefficient or its associated impacts?
Also, this is USA centric, but the purchasing power of our people has been deteriorating since the 70s, due to a combination of stagnant wages, and inflation.
Obama admits that 95% of the wealth generated under his tenure went to the top 1%. The rich are getting richer in real terms, while the poor are getting poorer in real terms, *as a matter of policy* .
Exactly correct. The extremely wealthy have a stranglehold on our policy and thus our democracy, and have routinely furthered the wealth gap to line their pockets.
Very well stated.
That's not completely true. It only looks at wages, and when we look at wages AND others sources of income everyone got richer. Also: did the poor have computers, internet and delivery services at their disposal back then? They didn't.
Fiat currency problems
@@thrawn9115 The prices of certain products can be lowered for the sake of demand. All for American consumption. The price of land, property and rent have gone massively up. You can get a cheap smartphone for 40$ nowadays instead of a 1000$ iphone. But I bet that the country that suppies the materials doesn't earn enough. So tech is extremely cheap in America and some first world countries.
I know I'm late, but I dont have a problem with people accumulating unfathomable wealth. I have a problem with those people not paying taxes, and yet still having immense political sway, lobbying to keep minimum wage down, increasing taxes on the poor, and keeping Healthcare a private industry run more like a business, and buying their dumb children an unearned spot in a university effectively buying their diploma.
Increasing taxes is something that socialists/communists do. And you say that it’s the same people that increase taxes on the poor that privatize healthcare? Isn’t that the opposite of a socialist policy? Think
@@obamama4632 who said anything about communism or socialism? Trump passed legislation to increase the tax on poor and decrease the tax on corporations. The same corporations that keep the health sector privatized. You can think all the stupidity you want, it doesn't change facts. All you know how to do is spew buzzwords and think that makes a compelling argument. It doesn't. Go educate yourself.
@@obamama4632 Increasing taxes is something capitalists do as well, they just do it more to the poor while reducing taxes on the capital owners. It's not like taxes weren't being collected from serfs during feudal times.
If their children were really dumb they would squander the wealth in a generation. More likely the children are smart but they spend their time on horse riding , attending fund raisers and other social activities which will enable them to actually manage their wealth. The college degree is not going to make a difference in their lives but it is a necessary social cachet they need to have so they spend the money so their children dont have to waste high school prepping. Once in college they are plenty smart enough to get through.
You don't have a problem with people accumulating unfathomable wealth? Whose approval are you seeking by saying that? I love you so much 💀💀💀
“The disposition to admire, and almost to worship, the rich and the powerful, and to despise, or, at least, to neglect persons of poor and mean condition is the great and most universal cause of the corruption of our moral sentiments.”
-ADAM SMITH
, SCOTTISH POLITICAL ECONOMIST (1723-1790)
Adam Smith was referring to the feudal lords of old, not the billionaires of today. Specifically he was against parasitic landlord.
@@sangeetanarendrasingh5416 You really are going to split hairs between how banks behave today compared to feudal lords in England? Its far more prevalent today.
@@sangeetanarendrasingh5416 You mean like... All the people that hoard real estate and rent it out?
Landlords are still very strongly represented among the wealthy...
A bank is also by definition something whose existence is largely built on 'rent-seeking', which is in the same category as a landlord.
(rent-seeking: The desire to find a way to be paid not for doing anything productive, but merely for owning something.)
This behaviour is rampant, and it is pretty much guaranteed parasitic in nature most of the time...
@@KuraIthys stay mad, nothing wrong with renting out your house
I don't understand how this quote is being framed. Is this a statement about this video is worshipping billionaires or how this video shows worshipping anyone for their wealth is dumb because they're just acting based on the sum of the economic forces imputed on them?
You missed one of the major problems with that level of wealth disparity: capitalism only works when there is a lot of competition on a level playing field.
Capital and market share are power: and when there is too much of a disparity, the powerful use their power to crush others and harm society.
Look at Bezos/Amazon and it's workers; look at the Waltons and Walmart vs it's workers and small businesses in the communities they enter; look at the Koch bros vs scientists, environmentalists, and the rest of society; look at Gates and Microsoft vs other tech startups.
Just like the Lords of old used their knights to force the peasantry to do their bidding, some supper wealthy wield their wealth as a bludgeon. That alone is a good argument to do something about wealth inequality
It's more about the government being in the pocket of those with wealth, and that goes beyond the wealth inequality itself. Government should be above the fray, ensuring a fair competitive marketplace, but it isn't. And if it isn't, then how are you going to address wealth inequality in the first place?
Citizens do need to educate themselves, and hold their government accountable. Participate in the political process. As bad as things sometimes look, we are not threatened by violence from Jeff Bezos. But if we tear down the system in search of something better, it's very likely we will get something worse.
@messman10 completely agreed.
All the examples you cited are from the USA, and the problem there is not wealth but poor workers rights. You can read up about how Amazon was forced to close it's warehouses in France after the unions sued them.
Too counter; look at the fairness of the CCP, Venezuela or North Korean systems. We could be equally poor like Cuba. The current capitalistic system might not be the best but it sure beats the rest. Cheers mate.
@@Xalta_Sailor The USA is a mixed economy. Pure capitalism ceased trending in the 1890s. As far as 'states' are concerned, Hong Kong and Monte Carlo are about as close as we get to capitalism and even this point is, by the day, up for dispute.
Some wealth inequality may be necessary to incentivize work, but there are diminishing returns. It is doubtful that increasing a CEO's pay from $5M to $10M would double their performance or attract a replacement who is twice as talented, meanwhile that extra $5M would be better spent literally anywhere else.
People should not be satisfied that they are living better than medieval peasants. Human rights has always been about achieving a basic level of guarantee that is within our capability, to make sure that people are not left behind as our capabilities increase.
And more people *are* getting pulled forwards. And sure, there may be some benefit to more appropriately distributing funds- but it's almost impossible to "properly" assign wealth in a completely optimal manner. Where would you want that hypothetical $5M to go? To the employees? The suppliers? The contractors? Where should it go, in what ratios, at what times?
@@travispluid3603 So.. We better give $5M to CEO for no reason.. Anyway, my opinion in this case is that employees should receive this money.. Why? Because suppliers and contractors are "other" businesses. its not "our" and if CEO deserves salary increase, I think that employees deserve that too (this statement is ofc applicable in basic situation where CEO-employees are directly related)
@@Cermix14 But then, how much *is* the right amount that should go to the CEO? You've got the option to pay him anywhere from minimum wage to all the money the company profits, except the money that is used to pay minimum wage for every other employee.
@@travispluid3603 If the CEO and the front line worker both work 40 hour weeks, and both jobs have the same daily difficulty, why should they get paid differently?
@@wylantern ...They don't have the same daily difficulty, nor do they do the same hours.
There's something I would like to add, workers compensation compared to their production, since 1989 people have become 200% more productive on average, but compensation only increased by 100%
Did people become more productive, or do we have better machines?
@@Noam_.Menashe both, since people did have to improve and specialize their skills in order to man the new technologies.
However beyond that I believe the workers deserve it because without them nothing would work. This causes no harm to you, and would improve the lives of millions as well as create a more prosperous society. I see no logical reason to not support higher wages for workers.
people on average... the truth is most of that productivity increase was concentrated among the people at the top.
@@vexed5567 that's demonstrably false, productivity increased for everyone in general.
@@shakshukioflibya6633 - it comes back to supply and demand for the worker’s value proposition. If 5 workers are capable of doing a job and there is only 1 job opening, competition will drive down the wage. Compensation tends to go to productivity that is both highly valued and relatively scarce.
As a relatively well to do (very by South African standards) I can tell you that the political risks of wealth inequality here could dwarf any of the drawbacks that you've mentioned.
Your opinion does not matter. Respect mah authoritah!
For those who are interested, Economics Explained analyzed South Africa's wealth inequality before this video was posted.
@@user-sr3ip8ut5k I'll check it out.
Let's just say that quality of life and social mobility are more important than inequality. Inequality is bad when it compromises them.
Very well put, in such few words
Pretty much.
I like this, it is simple and elegant and beautifully summarised the point of this video!
@@EconomicsExplained wierd, I did not get that from watching this video.
So basically you want just the right amount of inequality jut like unemployment and inflation
Western civilization: Relies on rewarding people for doing the things that civilisation needs.
Also western civilization: gives people vast amounts of money because they already own vast amounts of money.
The real question is: "When is wealth inequality actually a problem?" and the answer is quite simple "Wealth inequality is a problem when it grows faster than the economy"
yeah, right now the top 20% and bottom 20% of wealth is growing further apart, that was stable for a long time until the 21st century
@@nathanc7566 untill the 80'ies, when Milton Friedman convinced everyone in USA that greed is good. At least the Business Roundtable recently announced that they finally realised this was a shitty idea.
Damogen I mean we need some level of that, people wanting to be as rich as possible, that’s why we need the government to make sure they don’t harm society as a whole. I think that’s what Milton meant
@@nathanc7566 Yes, that is the idea. However, there are two obvious dangers with throwing all moral and personal responsibility overboard:
1) The government might not succeed in stopping it from going to far.
2) Politicians might also start believing that greed is good.
@@nathanc7566 oh, yeah:
3) 100% focus on short term profit, is gong to have a negative effect on long term viability.
*Every CEO furiously shaking their head when reading the title of this video
I know some CEO's who live paycheck to paycheck. (They still act like they're the most important person on Earth though)
As long as they spend it on something that will bring value to society, it doesn't matter if they are extremely wealthy.
@@MrC0MPUT3R mad bro?
The two Co-CEOs of the non-profit I work for probably wouldn't shake their heads furiously at the title of this video. Even though their salaries are about four-and-a-half times the wage an entry level worker in our company makes.
@@michaelstollairetbarceo3287 Not mad at all. I jumped ship from the one company and I'm watching from a far as it slowly sinks.
This video seems very incomplete, we need a part two addressing a lot of the things talked about in the comments.
It's not an analysis, it's pro elite propaganda made by a bootlicking maggot.
its supposed to be incomplete. if they showed you whats really going on, put the spotlight to guys like lucky larry silverstein, weinstein, and the rothschildes, youtube would ban the channel.
youre not on a free website, this place is owned too. dont expect to find the truth here, because that wouldnt be beneficial to the guys in control.
@Seven V Welcome to youtube^^
@@Giedolf2 the internet*
"A massive inequality has existed _and_ innovations happened,... _therefore_ inequality is required for innovations to happen"
That is exactly right.
Exactly. If wealth= innovative potential, would not spreading excess wealth create greater innovation?
@@roxanneconner7185 he actually said as much at the very end of the video, innovation of small and medium size is getting crippled by not being able to get the funds they need
Innovation happens in spite of wealth inequality, not because of it. If we all enjoyed the fruits of our productivity gains, we'd all have more free time to innovate.
Mostly yes, but it's mixed, actually. Search google for "most innovative countries", those at the top are some with a very high inequality (Korea, Singapore, USA) and some with very low inequality (Germany, Sweden, Switzerland, Denmark, ...). Overall from these lists it seems that the countries with less inequality are more innovative, yes.
8:30 "......none of these technological marvels would have been possible if it weren't for the Hugh concentration of wealth" What absolute BS, and contradictory of previous EE vid that argued that many of the innovation such as the internet were the product of government spending that were then usurped by the few.
Sorry, this is pretty late, but I think it's interesting that governments and corporations both lead to innovation. I mean, governments and large corporations are both organizations that only make sense in a large society. I would say innovation is inherent to humans, and those who have the means will pursue it, whether they be 7 billionaires all hiring specific innovators with their vast wealth or the entire population who create a government to, among other things, invent on their behalf with their tax dollars. Innovation will reflect the desires of those who fund innovators, so if the public funds the innovation then it will be more useful for the public. The example of the industrial revolution is kind of counter intuitive because while some inventions were made by tge wealth the broader context was one where a growing middle class meant that their was demand for practical inventions to take hold and their were people willing to fund them because demand more accurately described need and inequality decreased.
Many not all of them
I think Government funds should be considered as the biggest type of wealth concentration, so I don't see any contradiction
@@sdrk1125 Is the US government considered in inequality calculations? No. Basically, the argument is that EE doesn't expand their point about concentration of wealth to concentration in organizations and only in concentration of individual ownership. If this point applies to government, then it defeats it's purpose to argue for the good wealth inequality
Conclusion: Some inequality good - too much or too little inequality bad!
Oh look the only non retarded comment goes largely ignored.
@@likira111 yeah
Not really??? The point is that once someone is so rich that they don't really care about it they start creating useless things like electric cars. But yes, too much of the problem.
Unfortunately, the "too much" threshold was passed about 4000 years ago and has only gotten worse over time.
When talking about wealth inequality throughout the ages you approach it materialistically and fail to see how wealth is leveraged to affect other aspects of life. An example would be leisure time. A medieval king whilst not having access to the technology and consumer goods of today, had the opportunity to engage in leisurely activities at a scale unimaginable for a member of the working class of today. What's the point of having central heating, smartphones, Netflix etc if you're having to work 60-70 hour weeks to stay afloat.
agreed but i think he wanted to keep it strictly in an economics discussion, rather than socio-political.
@@titolovely8237 Sure, but what is money except a measure of value. We say time is money, and while that is not always true. Leisure time has obvious value. This is DEFINITELY part of the economic analysis.
@@titolovely8237 Well, he was stupid to do so, as the two are intertwined. Money is power, and politics is the use of power.
@@titolovely8237
So, economically speaking, there's no difference between someone who makes $100k a year and doesn't work, and someone who makes $100k a year and works 80 hours per week?
If that is true then why is it useful to analyze wealth inequality through an economics lens? I don't care about how wealth inequality affects the stock market, I care about how it affects people.
@@titolovely8237 Any attempt to separate politics from economics is foolish or dishonest and should be disregarded outright in either case.
6:32 "higher pay leads to lower results" Well, my employers must have agreed with this.
:'(
BUT... (imagine it in EE's smooth accent!)
'The PROMISE of higher pay in the future if they show good results is a good motivator!'
Lol higher pay can never lead to bad results! The don't want the works to leave and become investors like them
@@onyimahumphery1961 you're right!
But what I don't get is how some investors are able to double their profit within a short period of time. I understand that the market crash is the best time to make money but there's this particular investor who made $100,000 in few weeks trading with about $15,000.
Does it mean they stand a better chance than others?
@@onh1137 No they don't stand a better chance they only did their homework and proper research
New tv show. Bear grylls drops 20 billionaires on an island with limited tools and wonder how quickly hunger games kick in
@@chrissi.enbyYT 😂
If you dropped 20 normal people on an island do you think the outcome would be different?
@@Crack-Insomniac no...but id get less satisfaction from it
@@xanderjames8682 ma man
55.8% of billionaires are selfmade. Most had a lot of stem background. I can guarantee they are individuals with high intellectual capacity and would have a greater critical understanding of certain things. I would say, it would not be that hard for them compared to intellectual deficient plebes.
OK so lets invent a simple world with two people. A "poor" person with $100 and a "rich" person with $1000. Lets assume we're all comfortable with that for now.
Next, we'll assume the economy grows by 10%. In a fair world the poor person would now have $110 while the rich person has $1100. Everyone wins, yay!
In the real world however, it tends to work out more along the lines that the poor person now has $101 while the rich person has $1109. Its not fair, but we're still all getting richer so we'll let it slide.
Finally, assume 2% inflation over that same period. That $101 is now only worth about $99 in original dollars while the $1109 is worth around $1087. The rich still got richer, but the poor person is somewhat worse off. Now we have a problem.
That's the situation the US (and many other developed nations) have been driving towards since the 70s or so when "supply side" economics (aka trickle-down) first really started taking hold. Inflation keeps going up, but wages have remained (comparatively) flat. While our bank account may show $101 compared to our parents' $100, the purchasing power of our $101 is actually less than their $100.
The standard counter-argument to is we have a TV and a cell phone that our parents wouldn't have even dreamed of. And while that's true, the technological innovations that led to $1000 cell phones being a thing doesn't really compensate for the fact that the vast majority of us will never be able to fully own a house (ie: mortgage-free) and even a car is questionable in many cases.
And to make matters worse, the speed of technological innovation is slowing. Its far from stopped of course, but we're running into some fundamental physical limits of computational ability, and computers have driven the vast majority of the technology that pundits claim is supposed to balance wage stagnation. Where will _our_ children be when we run into both wage stagnation and technological stagnation?
Lost me at the inflation part. The bottom 10% have increased their wealth by 30% over the past 20 years adjusted for inflation.
Too many assumptions and figures not backed up by anything except your imagination.
You said a lot, but said nothing at the same time
In reality, the poor person wouldn't make any money at all as the economy grows. They don't invest. They would lose all their assets to inflation and non-productive consumption.
The rich person would probably be able to leverage their money and get much more than you could think.
Put a poor person and a rich person in a situation where they both have no money. I think it makes sense that it is much more likely that the rich person will be rich. Of course, there are exceptions.
The really problem here is education in combination with circumstance. Poor people are poor because of a lack of financial education along with some unfortunate background (probably).
You make too many baseless assumptions. Electro Squid shot down your entire argument.
The last part where you say the issue is with “outrageous investing” really is spot on, on the environment we’re living in today
8:30 that is quiet fallacious and unsubstantiated. Ingenuity does not only come from an abundance of resources.
This statement also does not take into account the vast amount of potential inventions that we are missing because the people that might come up with that happen to be on the lacking end of inequality.
"the ultrawealthy are running out of safe havens and investments to sink their piles of money into"
oh no my heart sinks for them, how will they manage
Lol
It's a problem for the whole economy
I feel like you've seriously glossed over the fact of the relationship between money and political and legal power, and the fact that all of the amazing medical science and wonderful homes that exist today, the vast majority of americans simply do not have reasonable access to, as houses are far out of financial possibility for most americans, and serious medical care will often cost so much as to not be much better than the alternative of death. Overall, I think that saying that wealth inequality is important in driving motivation is in somewhat poor taste and almost malicious, when over half of americans, I imagine most of which are as motivated as the next person, have under a thousand dollars in the bank, and whose world would be crushed by even relatively common untimely expenses. Wealth inequality may, in some fashion, not be an inherent negative, but surely it must apply that the floor of applicability of that must be that even the bottom members have humane conditions. Perhaps it is fine for the wealthy to stand as symbols of possibility (disregarding for a moment that very many are more the product of networking connections between wealthy individuals than hard work), but if the lower levels of society still must spend the majority of their existence simply concerned for survival, in a time of unparalleled plenty, is even morally acceptable?
Also remember that almost ALL the advances in medical science (including pharmaceuticals) were paid for by taxpayers through government grants to university researchers. Ditto advances in technology (internet, GPS etc etc etc). Little advances come from private money -- their time-window for ROI is too short to permit the kind of investment that you need for major tech advancement.
"Almost malicious"
Lol you are too kind.
As far as housing goes, there is plenty of affordable housing in the US. Just not in places like California and NYC. I am 28 and have all of my debts including mortgage paid off living in Indiana. I have never made more than 50k a year and that was only for 2 years before I was laid off for corona.
@@ColinTherac117
Okay so everyone just go live in indiana now oh wait. . .
okay everyone just move out of those places now we don't need those people to work there! oh wait. . .
@@otsoko66 87% of pharmaceutical innovation comes from the private sector
patientdaily.com/stories/511201422-medical-innovation-driven-largely-by-private-sector-not-government-funding-professor-says#:~:text=September-,Medical%20innovation%20driven%20largely%20by%20private,not%20government%20funding%2C%20professor%20says&text=And%20he%20said%20at%20the,percent%20from%20public%20sector%20research.
I am surprised you didnt talk about how money influences politics
What with big box corporations lobbying for increased regulations and red tape.
That's a different beast entirely
It called economics explained for a reason.
Money is power. Power influences everything. Thus why my lifes goal is to accumulate as much money as possible.
You used to be cool, who paid you to omit the most commonly laid critiques against the wealth inequality of today?
I just cant see it being accidental, you're too smart and knowledgable to leave it out of a video on this exact topic.
I had exactly the same tought
they probably don't want to be demonitized
I really don't think somebody paid him.
"the space programs were funded by rich individuals pooling their resources"
in other words the rich paid taxes... NASA and space travel were not started by market forces. they were taken over but government spending and innovation started it.
Elon Musk and Jeff Bezos's space-faring ventures SpaceX and Blue Origin have cut the cost of attaining orbit greatly benefitting all of mankins. These are the passion projects of wealthy individuals -- essentially hobbies.
@@gallaxian
yes, except the technology had to be invented by a non-ROI source, before they privatize and streamline it. there is a reason why space x and blue origen came AFTER NASA and not the other way around.
@@nigen I don't know if it had to be this way. Certainly government expenditure accelerated rocketry and related technological innovation dramatically but I don't think we can say that, absent government investment, mankind would not have eventually ventured off the planet.
@@gallaxian
well, what market force would cause you to need to leave the planet and invest the trillions in mistakes required to get the R&D right based on a profit model?
@@nigen A passion project of billionaires (as seen with Musk and Bezos) or many people of modest means pooling resources (e.g., Planetary Society) or profit-seeking companies seeking to exploit the mineral wealth of the moon or asteroids. Innovations in many sectors (such as computing and material science) have lowered the cost of space faring independent of the efforts of space programs - whether public or private.
I usually love EE's videos, but this one misses about everything the topic is about.
We start off equalling wealth inequality with prosperity and then go on to talk about the latter. At one point, the concentration of wealth (which happens in private pockets) is cited as the driving force of the (entirely publicly funded) space programs. How that is supposed to work remain undisclosed (mainly because it makes no sense whatsoever, I guess).
Then we're throwing around income and wealth inequality as it fits, all the while not even mentioning once how concentration of wealth *might* lead to concentration of power in one or the other way (democracies not being perfect, you know). There's an ongoing discussion among economists about inequality for at least ten years, and still here we are defending concepts from the Cold War by redefining their meaning entirely and then not bothering to go into detail?
This sounds like what could have been the latest output of the Rothbard Institute, so shallow and biased it is.
So I think he's referring to SpaceX, with regards to the privately-funded space programs. 90% of the investment has already been done with public money (German rockets in the 40's, and NASA in the 60's), but SpaceX had to get itself up and running with Elon Musk's own personal fortune before it could put itself in a position to compete for NASA contracts and receive any public funding. Any competition awards it may have won (even if they're millions of dollars) are usually no more than 10% of the development costs that got them to that point in the first place.
But you're right: figuring out how rockets work in the first place was funded in large part by the Third Reich, and the up-scaling for space travel, and modifications for safe human transport were funded by the US and Soviet governments, of which SpaceX mostly benefits from the former.
@@c182SkylaneRG
You DO realize that elon is getting his money from other people to include tax payers and he's not actually rich right?
@@Delimon007 He's a successful businessman who's managed to accumulate a lot of wealth in one spot, which has enabled him to start multiple companies with sufficient resources to develop new technologies or advance existing technologies and bring a formerly uncommon product to market in greater quantity than previously available. Some of those resources might be from investments, but a lot of it will be personal wealth accrued from previous successful ventures. (In short: Tesla profits paid to start up SpaceX).
@@c182SkylaneRG Tesla and SapceX are both literally subsidized by the government.
@@JusteFantastico Do you have citations for that claim? I decided to double-check myself, and all I can find is that Elon Musk started SpaceX just like any other private corporation: out of his own pocket, and with the help of whatever investors he could get interested, with the purpose of building his own rockets (apparently he tried to buy some from Russia, but they were too expensive, and he decided it'd be cheaper to just build them, himself), with the aim of landing a fully functional biodome on Mars. The personal dreams of someone who's super-rich, and has the personal economic might to make something like that happen on his own... As a consequence of his corporate endeavors, he's built a sufficiently reliable rocket to contract its services to NASA. Near as I can tell, that's the extent of SpaceX's "subsidies", although I wouldn't call payment for services a "subsidy". As for Tesla, it's technically furthering environmentally friendly technology, so I can definitely see it receiving environmental subsidies on that basis.
A certain amount of inequality is OK as long as people's basic needs on the lower end are met easily (and I'd argue, without any work requirement). Our current system though is on the verge of snapping because a lot of people are living paycheck to paycheck, working two jobs etc. You seem to denigrate the "guillotine" people as extremists, but sometimes that's all they have left to reestablish a semblance of a balanced economy and finally not feel absolutely miserable.
People basic needs on the lower end are easily met in areas where capitalism is free to build housing to meet demand.
The only reason people's basic needs aren't being met in rich countries is specifically because of government policy "to help the poor" drives up costs for those who were able to take care of themselves before. Then those people end up needing government assistance. Taxes go up. More assistance is given. Prices go up. More assistance is given. Taxes go up.
You need to break the cycle and let the markets do what they're good at. Bringing prices down.
@@flakgun153 "People are poor because we're too nice to them." No way you actually believe that
@@Benben-sx6ei Because it isn't about "being nice" to them, it's the government graft to benefit politically connected, not to actually help.
What are basic needs? 500 years ago a basic need was having access to wood and fire.
Benben 219219
No, the assistance to the extreme poor causes an increase in prices that negatively impact the working poor and middle class the most.
How am I supposed to know whether or not I agree with you if the comments don't have any opinions for me to copy yet?
hahaha, wow that's actually a very concerning insight. but unfortunately all too true!
I am going to copy that.
This is why some websites like Reddit hide the likes from some post because if someone sees a post with alot of likes and support they're more likely to agree and like the post themselves same the other way around with dislikes. Most ratings are artificially inflated by mob mentality. It all depends which way the first brave souls get the ball rolling and the hive will follow.
There’s a good comment from ZoonEconomics
@@themongolsarecoming_9437 Communist behaviour xD joking
Great vid! One major flaw here is that technological progress is attributed to the concentration of wealth in advanced societies. The problem with this is that most of the amenities which we enjoy (smartphones, etc.) today and leaps in technology we've managed (space flight etc.) are based on research and funds granted by governments and NOT private capital. Mariana Mazzucato The Value of Everything is a worthy read on the topic.
I too find it little mislead.
Flux. You wrote that 6 months ago,, and wth the advent of SpaceX. Would you say your narrative is in flux?
Interesting because I have heard something similar. Private companies are improving existing technology. The state is responsible for the invention of new technology, often in connection with war.
That's not really true Nevl. Because the government itself is SOLELY funded by successful businesses who employ people and are themselves taxed. Government gets it's revenue, one way or the other, from business success. Meaning business was sucessful and government made an invention here or there off the backs of business, not the other way around.
I was immediately triggered by the title of the video.... then I realized that probably means I should try to learn more
come for the controversy, stay for the economics lesson.
@@EconomicsExplained Ecnomic Explains ,pls make a video about
"How Robot take away the jobs of human and how can human live without jobs or income"??????????..?????????????????????????????????????????????????????.......
,??????
@@jijov.j1545 there is actually a great video on this subject by cgp grey
@@EconomicsExplained why you never mentioned anything about rich actually using their influence to make sure poor people stay poor instead just using the same argument over and over and over and over and over how older times people can't use washing machine and now people can. If you look outside things r complex. I love your videos bro like I really really enjoy them but why u keep trying to shoving that kind of simpleton logic down to throat???
@@vishalrajput-ny3oh how do rich people use influence to keep other people poor and why would they even do it? What would be their motivation?
I understand this is a youtube video and one that focuses on economic aspects, but I think a lot of the ideas and conclusions you reach are just wrong.
Saying that greater productive capacity leads to increased wealth inequality yet greater general prosperity is just not true.
Many people (who were usually slaves) tried to escape agrarian societies, and many people were demonstrated to have poorer health than the so-called "primitive tribespeople".
People during the industrial revolution who were funneled into the cities after commons closures had worse living conditions than the peasants centuries ago.
It's only when people threatened revolution and social democracies started pegging wages to productivity gains that we saw serious improvements in living standards, until the 80s.
Secondly, the idea that massive wealth inequality allows for large capital investments is circular logic at best. They're wealthy precisely because they're the only ones who can do large capital investments, THAT's why inequality is a problem, they're the ones who decided where resources go, and the rest of humanity just has to accept it. So when massive investment banks on behalf of the wealth are STILL investing in fossil fuels and the deforestation of the amazon to make more beef, you have to wonder if they should have such control over the whole planet.
Again I hardly think they're innovating when so many companies spend so much on stock buy backs to please the shareholders.
Thirdly, saying inequality allows for motivation is true to some extent, but hardly goes to explaining such massive indifferences. you could also argue that many socially valuable jobs are disincentivised because they don't turn a profit for investors, such educators get paid pennies.
Sorry for the rant, but the video seemed incredibly one-sided.
You are inheriting social democratic lies in your thought. The video seems one-sided because an objective understanding of economics and economic history, left or right, reveals the flaws in typical "bash the rich" opinions that advocate policies all of which undermine the poor the most.
Wages doubled during the height of the British Industrial Revolution despite unions being banned. Workers in the countryside increased by a million in spite of enclosures, and living standards for workers improved because of the Industrial Revolution (although they were lower than some centuries ago, but that was because of the Black Death raising them to a height that couldn't be sustained given Britain's high preindustrial birth rates and low productivity growth due to mercantilism and, get this, scarcity of capital due to constant warfare - it was only between and after wars that industrialisation really accelerated in Britain as capital was transferred from government war efforts to the private sector). Greater productive capacity lowers prices and thus increases general prosperity and real wages. Stock buybacks transfer capital resources from companies who can't find as marginally valuable uses of the money as those the investors think they can, raising total value-added. Many "wealthy" can and do accumulate their wealth through saving and investing over time, and even inheritance must earn interest to not be depleted, which is money only earned by serving consumers - the mass of which are the majority of consumption spending and purchasing power. And "social value" of a job doesn't matter; its marginal value to consumers does - that's what determines the wage that can be paid. That is an arbitrary moral pretension.
But some wealthy people did some good things and publicize them so...
This video is so sad. It only crows the benefits of wealth inequality and brings up the strangest counter arguments I've never seen before.
-No mention of the political or social clout wealth provides and how that impact society.
-No mention of how tax law (at least in the US) rewards wealthier people with fewer relative taxes through loopholes.
-No mention of how while GDP has risen steadily over the past 30 years median household income is practically flat.
All inequality is painted being the same and as a necessity to have progress. Very few people would argue that everyone should have the same wealth. But almost everyone would say that when seven people have the same wealth as half the world there's a problem.
The worst part is he actually mentions @11:55 that we see the lower rate of return in giving money to wealthier people as opposed to poorer people. So clearly, at some point, concentrating more money in already wealthy individuals HURTS economic growth.
@@fatpotatoe6039 @Fat Potatoe
there are a few things I take issue with here.
firstly, " despite unions being banned", unions were legalisd in the 1820s, and they were widespread beforehand, so it's dubious to say they had no hand in increase wages during the industrial revolution. in fact the data suggest that legalisation spurred wage increases due to greater bargaining power. Indeed, it's one's power to assert a stake to the economic output that is probably the only real determiner of wealth distribution, if we're being real.
Greater productictivity does make products cheaper per unit, that is true, but it doesn't take away the fact that ownership of productive assets is monopolised by a small section of society. Without access to this, the majority of mankind is dependent on selling its labour to make a living, which is vulnerable to inflation and technological changes.
Let's not forget also the fact that most of our commodities are produced in "developing" countries where labour laws are even worse, so yes exploiting poor people does make a lot of cheap products for western markets and improve profit margins, but it is not sustainable, and western countries are already being hollowed out as a consequence.
"Stock buybacks transfer capital resources from companies who can't find as marginally valuable uses of the money as those the investors think they can, raising total value-added" That's patently false, this channel just did a video on how amazon has become so fantastically successful by reinvesting its profits into small side businesses that need capital support, in other words, companies that no investor would bother investing in. There are always ways of reinvesting, THOUSANDS of ways, but not all return a profit.
Why have real wages stalled for decades relative to the increasing yields from assets? why has the middle class shrunk in most countries? why are so many unable to afford a house? why is one person's income not enough to sustain a family? why are people up to their eyeballs in debt to get a degree? Sure, the marginal cost of producing
The answer is simple, people have less economic power to assert their claim to the pie, and to belittle this as "lies" inherited from social democracy is just bizarre.
@@fatpotatoe6039 Speaking of lies, you're just flat out wrong in your VERY FIRST POINT. Incredible.
You guys should move to China. Seriously.
You haven't really touched on a lot of important aspects, such as political power and social problems
Read the TH-camr's name twice and ask yourself why a channel called Economics Explained focused solely on the economic aspect of the issue.
@@hjalmarjonssonrantala5375 Issues of social and political power ARE inextricably linked to economics, so that's a dumb comment. For example, the concept of subjective value is a socioeconomic issue. The value people attach to things are driven by social cues, which then dictates how much they are willing to pay for these things. Similarly, accumulation of corrupt political power (e.g. buying politicians that favor deregulation) by the elites is a cheap and rational way for them to maximize profits. If left unchecked this leads to disasters like the 2008 financial crisis. This TH-camr actually talks about these social, political and economic issues all the time - as he should.
"One person with excel can do the work of 20 people with an abicus" *laughs in Libre office*
But it's the same thing, relative to what he's saying.
@@andreipopescu5342 The point is, Microsoft isn't really an innovative company. Even if Microsoft never existed, we'd still have all the same types of software they're known for today. DOS? Look to Digital Research with CP/M. Windows? Look at Xerox. Microsoft Office? While bringing them together might be considered a Microsoft "innovation", all the types of program they bundled into Office already existed. In fact, I can't think of any major innovation Microsoft is responsible for.
@@rodh1404 I don't think the point made in the video was that Microsoft is either good or bad. Anyway, it's the same thing with Edison and, historically, it turns out that actually having a debatably new idea isn't exactly the main force of progress. Did Rockefeller invent anything new per se?
@@rodh1404 That's the case everywhere, wasn't it Visicalc who was first? The innovator may not be very good with the follow through, Microsoft was, they made it a product every business needed.
Also think, if it wasn't Microsoft, it would have been some other company...
"Money with nowhere better to go" Oh you mean like paying the entire working chain of your work more?
wages are based on the product not the wealth of the ceo. if you give the workers more money the goods n services is more expensive and you lose business and jobs.
How did the value of workers work increase, just because the wealth of the CEO had increased? After all, they're doing the same work.
@@bw1247 Tell that to exporting labor to china. That iphon would cost roughly the same made here, but the ceo of apple would not skim off nearly as much.
Ben Whittington
Wrong, if you give more money to the poor, they would actually spend the money thus stimulating the economy
"Even the bottom dredges of society like grad students"
-the man who knew everything
How many comments are u going to make.
This is casually explained’s joke
EREX98
Actually it's probably because EE was a grad student himself. Speaking from his experience you know.
@@amoghus just a few
Your main argument is that progress creates wealth inequality therefore wealth inequality is not a problem. Your argument falls apart in several places.
First, you broadly state that wealth inequality increases with increased wealth but this is generally false. Wealth inequality ultimately increases due to class inequality such as a suppressed labor market, lack of access to education, globalization, government corruption or monopolies. The huge wealth inequality in Botswana is due to a monopoly control of their natural resources, not because Botswana is a wealthy country. Meanwhile, wealth inequality decreased in the United States from 1929 to 1978 while the US experience huge growths in wealth. You frequently mention in your other videos that a strong MIDDLE class increases growth.
Second, you falsely relate wealth inequality to technological progress. Strangely you credit spaceflight to wealth inequality when it was lead by the Soviet Union, a country with very low wealth inequality. Instead wealth inequality works to stop overall innovation to hold on to the existing market share; Apple stopped improving their phones once they controlled the market.
Agreed, this video goes into absolutely zero detail on how someone becomes wealthier. Disappointed, as I generally like the channel.
Second false attribution: Billionaires create wealth. That is wrong. A CEO or a director organises and creates structures to generate services or products. He provides a very important part and should be (amongst) the richest - but not all total gains should go to him.
EE made the point that wealth itself is not the problem, but poor investing is, and I could not agree more. A billionaire is a barely regulated individuum that can spend his/her money as he/she sees fit. Critical investments that do not return a monetary profit (education, health, infrastructure etc) are neglected on a large scale.
That is why I do not see any other way than massively increasing taxes. We need to make sure that those investments are being made and are accessible to the public and do not extort money out of those vital institutions.
@@irrelevantirrelevant7332 No one becomes rich without exploiting the labor and hard work of others. Poor investing is a problem, but that's because we have this notion in the U.S. that the rich are altruistic and that they deserve their obscene wealth because they work hard. They are working hard to exploit the intellectual property and labor of other people. In essence, they are thieves, and this theft is not only legal in the U.S. it is encouraged.
@@ansoc1173 U.S. before the regan era was better i guess. Everyone could afford a home, a car and a good education. These things should be free or affordable by taxes.
Wealth inequality dropped within those years in large part due to a real free market being practiced, after the 80s government interference heavily increased.
Also the USSR went ahead in space tech by stealing things from different places and building upon them, not making them from ground up like others did.
The wealthiest few:
1. Build their wealth at the expense of the middle and lower classes
2. Are not loyal to any one country as they spread their money around the globe to achieve the most favorable returns.
3. Have undue influence over governments.
3. Influence legislatures to pass favorable laws to preserve their wealth.
4. Do not pay their fair share of taxes.
5. Believe less fortunate people are lazy.
6. Are not satisfied and continue to expand their net worth.
buddy, their wealthy because we made them wealthy. It's voluntary, stop using PCs, amazon, any apple product, any disney product, don't buy a tesla car, etc. They get wealthy because they improve our lives.
Nathan C It would seems so. However we are all products of our environment. Humans are programmable. If something is repeated enough and in the right way, it becomes true. Big business uses advertising and marketing to encourage people to buy what they don't need. Political parties use repetition and marketing in the same way. It's not entirely voluntary.
they pay almost nothing in taxes in comparison the their wealthiness
@@nathanc7566 its not voluntary don't be silly
Joseph Barros look I’m not saying it’s perfect, but our system runs on voluntary transactions. I get that Apple may charge overpriced phones but we can fix that. The options now are to be a recluse and love like it was in the 19th century or buy products that the prices aren’t fair or the benefits go to too few. What I’m saying is rich ceos and such are mostly getting rich through legit means, we can tax them or something or have a wealth tax but we can’t say they get rich by exploiting middle class people. They largely don’t.
Short answer: yes
Long answer:
Yes but further down the screen
Real answer: Yo and Nes
And what about wealth and lobbying? For me, it looks like a huge threat to democracy
You won't say that if companies lobby for things you want
Arguably, in a world with the Patriot Act and a President Trump, the relative threat to democracy is minor.
Lobbying is an issue, yes. i am a huge supporter of capitalism, leaning very much to the anarcho capitalist side. lobbying should not be a thing as the private and public sector should be separate, and it is unfair, especially for small business. that being said i think a very small government will solve a lot of this as then the companies wont spend money trying to influence laws when the government doesn't meddle in the free private market to begin with
I don't think that lobbying itself is the problem, The problem is that our politicians are accepting the kickbacks from lobbyists, while telling us to our faces that they're in their positions of power to act in our best interests. I could throw $1000 at you until I'm blue in the face, but nothing will change unless you decide to take it. Government corruption and fiscal waste is hugely detrimental to our success and security as a nation and as a people.
I wished you had addressed one of the key issues I see with inequality: the more you earn the less likely you are to pay taxes, from hiring companies to make creative accounting, to moving monies to tax havens. Which in turn means that middle classes have to shoulder the government expenses while the richest still enjoy the benefits these governments provide. I don't mind people being awfully rich as long as they pay an equal amount of taxes.
This. If I could insist on “incentives” for basic business growth and had a team of people to litigate my problems to dust I’d be killin it too
but lets face reality, even in the lower income classes we want to pay less taxes, in fact we do manouvers to pay less. And people keep doing so when they scale up the ladder because of progressive taxes. The real question is why we want to pay less taxes? At least in Mexico, because that money in most states, will not end up where it is promised to be and regular people often don't see a real benefit form paying relatively high taxes. So there's no incentive for people to earn more and declare taxes and they prefer to run business and avoid the fisco. If that money was spent locally where you can actually see the benefits or invested in education and tech, I bet most people would like to pay taxes or if state institutions would offer quality services no one would complain.
Not true. Also that is just envy of a fiction anyway
Very unpopular opinion: If people did not know that others owned more than them, they wouldn't even care. It's all driven by envy. People do not own less because others own more. It takes a supreme kind of greed to come up with that line of thinking. The ground state is poverty, not prosperity and it does not take much to return to it.
I think people notice when they're starving bro
@@gabimcchuckleson9399 No one denies that, I think. But the amount of people that live in such poverty decreased tremendously together with increasing wealth inequality
You know, here 5:30 it's actually very frustrating and even somewhat depressing that in 300 years some people will still live from salary to salary and with the constant fear of crumbling under economic pressure. Why can't we prioritise to minimise human suffering from economic asymmetries starting at least now? For what we are even going to colonize other planets if we just export our problems to outer space even considering that without billionaires' investments we wouldn't acquire cheap interplanetary commuting in the first place
But the thing is, how are we going to fix this? We're very far from a utopia where people can work without worrying about their neccessities.
@@JNM578 As our technological progress moves forward we find new ways/machines to improve our production that far outweighs effort needed to produce such amounts. Yet we are stagnating when it comes to giving people their production's worth.
Reading your message is infuriating on the same level as someone in ancient Sparta saying "What? Slaves living on same level as citizens? That's an utopia!". Especially how your post shows someone working (so not a leech) can still be forced to worry about their life.
The point is, you need to take care of yourself. What prevents you from doing so is government. A free man responsible for himself only thrives and if he does not he cannot blame others. There are only negative rights that can be deducted by axioms. The world does not owe us anything. We have to create things and be free to pursue happiness. If you are threaten protect yourself. If you wish more or better, create it. Fight against what blocks you from that. Those who do that are not a richer neighbour but the government.
My biggest criticism is that it's not that easy for people on the lower end to invest the time and money in education and improve their lives. Speaking as one of those, sure I've got the incentive. I just don't have the time or money.
We all have the same amount of time, and education is becoming less and less expensive thanks to online classes and courses. Let's say you work every day, eight hours a day to survive. Sleep nine. This leaves you with seven hours to eat, shower and do everything else. Sacrifice fun and distractions and you'll always find a couple of hours a day to study and improve.
It is so easy to get education when you are poor. The government will literally pay for it.
Education is a sacrifice. You have to be willing to make that sacrifice of time and hard work. The problem is people want the government to coddle them instead of making that sacrifice.
High School is free. Teenagers have time. They live with their Parents.
McDonald's hires the young, uneducated and unskilled.
We all have these same choices. There is a Chinese Proverb "If there is a thing to do to that makes things much better that anyone can and should do so many people are too lazy and stupid to do it."
Please give me a break about no opportunity.
@@jameshudkins2210 I see your point. High school is free, and entry-level jobs exist that require little to no education. I can't argue with this because I took advantage of a free high school education and took an entry-level job that required no education. After working at this company for a number of years, I even started to earn (barely) a living wage so that I could finally afford to move out of my parent's house and get my own place at age 31.
I would now like to improve my life even further by making enough money to start a family of my own without falling into a world of constant stress, hopefully some time before the age of 40.
What opportunities exist for someone in my position to achieve this goal?
@@dylanjones9061 Go to Community College. They don't cost very much and are often in evenings. If you work nights they have classes during the day. One of the Spreadsheet teachers said someone would pay us to do it if we learned the software he was teaching. He was very right.
Your employer is already OK with you and might do something to help if you said you wanted to gain skills.
If you move back in with your Patents you could save money, help them and devote more time to school. Do not get Student loans and do not study art or something which would not help you earn more money. Study art on your own leisure time.
It takes years of study and doing with out income and nice things when you are young. It will take the same after you are older. There is no easy way to do it.
Look around at people who are doing things you admire. Ask them how they do it. Some people will take a greater interest in seeing you succeed than you might. Be ready to try and work at it. If you don't follow through they will give up on you really soon.
Do not give up on yourself.
Using medieval societies to justify modern wealth inequality. Weird given how bad they were at innovation and- well- everything.
Glossing over the much lower wealth inequality in the mid 20th century when prosperity and the greatest leaps forward in standards of living and tech were made. Odd, but okay you're making a point.
That if things were more equitable, people wouldn't work as hard. Hm, psychology suggests people with attainable goals are more likely to work towards and achieve those goals. The perception of upward mobility is crazy important for the attraction of modern talent.
Technical innovation in the modern age is typically the result of expensive research done on the taxpayer's dime, and development/refinement done by private enterprise. The wealth of a nation is the wealth of it's populace, billionaires essentially operate outside the bounds of nations.
Ah yes, a billionaire bidding war is far more disastrous prospect than the diminishing buying power of the middle and working class.
One mega yacht has less of a benefit on the economy than the production of 200 cars for the working or middle class, you know this.
I dunno man, I know you're trying to make a point, but this is really willfully ignorant cherry picking.
Basically inequality is natural in life. This world is all about survival. It always has been.
@@ilikefoodcrazy Being poisoned and getting eaten by bears is also natural, but as we get smarter, we learn how to avoid such things, and as we understand each other better, we learn that people value not dying pretty universally, and so, as a society, we can work towards the mutually beneficial goal of not getting poisoned or getting eaten by bears.
Powerful people hoarding resources and then leveraging them to dis-empower others is also a naturally dominant strategy, when one's values are the prosperity of single individuals. That doesn't mean we can't agree as a society that we should rather value a distribution of resources that perhaps emphasizes food and medicine over yachts.
I was waiting for him to mention the fact that paying your employees as little as possible is encouraged because it increases profits(rich people buying several yachts vs a struggling mother), but he never did. Weird for him to omit such an well-known fact in economics, I don't think he was entirely neutral in this video.
Nah man, just wait till the Kongo spearheads the next industrial Revolution thanks to all the profits from the mining industry
I wouldnt agree with that innovation bit. For example companies like tesla, spacex, apple or before them microsoft were not funded by the tax payer monies. They moved the world forward with innovation.
It’s actually a modern misunderstanding that hunter gatherer tribes struggled day in and day out to scrape by a survival existence. In fact, because of their versatile diets and connection with the environment some experts think they worked as little as 15 hours a week on survival activities. Read James Suzmans great work, “Affluence Without Abundance” where he lays out this argument.
We have modern day hunter gatherers living quite well. I can't speak for their working hours, but they're nomadic, healthy, and happy. Check out the Khoisan people.
That book is based around one tribe, brainlet. Believing that one tribe would be the rule for most people for most of history is what we call and ad hoc falacy.
@@juanjoseph You sound like a fun guy.
Ahh yes, only 15 hours a week for the bare minimum to survive. What a great deal!
@@joshthegringo u too
Inequality isn't inherently a problem, but letting the rich hold everyone else back is a problem. It's also a problem to let poor and middle class steal from and hinder other poor and middle class people.
The real goal should be to help everyone be all they can be and to have the wealth that they want and need within reason. No one should be rich enough to buy entire countries, or to force others to live a certain way.
you have a communist way of thinking, in a bad way I mean. No one can have "as much as they want" but should have as much as they can afford - people who do not participate in an economic or technical development should have the least, that's it.
This a very shallow analysis that doesn’t take into account how billionaires can change laws and control governments to further enrich themselves.
Once only one group can have guns, control, and lobby for regulations these will thrive. Others, like normal people, got their freedom reduced, and so cannot walk up the wealth ladder. Inequality is natural on any sense objectively. Protectionism is the issue in this case. Give all man the same freedom and remove killing legislation and see how it goes.
this whole channel is this....
This analysis lacks so many crucial factors, that it can be easily discarded. Besides, his view on human nature is just so simplistic.
@@atomikgeist6795 Maybe money to begin with is inherently faulty?
@@Danskadreng Centralized state controlled money is evil by definition. It is just a soft variation of socialism/fascism. There is just a group of people that can make your "capital" loose value in one minute. Billionaires created artificially by state influence have a play in dictating at least economic trends.
It feels like you really stretched the semantic definition of inequality to make your argument. You didn't mention political influence, killing social services, tax evasion, or any of the things the ultra wealthy do that does literally just oppress people. Or what wealth could be created by taxing the ultra wealthy a reasonable amount to pay for healthcare or housing or a universal basic income, the concept of an income cap that caps wages or income of any kind at, say, 40 or 50 times that of the absolute lowest paid employee or contractor. A CEO can still make a few million a year, but if they want to secure a higher wage contract, it has to include a raise for the lowest paid as well. This would help wage stagnation, which you also didn't mention in relation to quality of life or average lifespan (which has actually gone down lately)
Even setting my own biases aside, and I say this as a big fan, this was your worst video by far in terms of scope and depth.
I completely agree. Usually the videos are somewhat in-depth and nuanced but what was this?
@@keshav3479 To me, this video was an attempt to admonish the rich for not fulfilling their societal responsibilities. As long as big companies are making money, then society should be happy with whatever they decide to give to us in the form of taxes or salaries.
But the truth is, they ONLY have this wealth because of the people that work for them and also protect them in this society.
This whole video reminds me of "Economists arguing that employees dying is good because it makes the squiggly line go up"
Came here from the Q&A follow-up and you’ve summarized exactly how I felt about this video. I’m usually a big fan, but this was a very shallow and theoretical look on a contentious issue. He hardly addresses the meat of the criticisms of wealth inequality, besides bringing up the basketball example as a strawman.
I don't see how "rich nobles invented the steam engine" can justify "the 7 wealthiest people are wealthier than the poorest 3.9 billion"
this whole video is full of extremely stupid logic
But I can see how enviness could blind your thinking
Two points/questions:
Firstly, is the ability to contribute positively to society truly the main driver for the accumulation of wealth? Is skill and education the dominant factor that allows some to become rich compared to others? How many of the world's richest reach their position by going to school, studying hard and not taking risks with negative outcomes that would have meant financial ruin for the average person?
Secondly, accumulation of financial wealth seems possible to me without it belonging to a few individuals. I guess the draw back is that it would be harder to organize concentrated efforts in funding particular research, with the benefit being that you no longer rely on a few people to make decisions on where funding is directed for everyone else (kind of like how democracy is supposed to work).
Would love to hear anyone's thoughts on these.
With your second point I often see capitalists suggest that people vote with their wallets. This gives the businesses and people who serve their customers the most money as a reward and so they can choose how to invest their money that they earned from their customer. With regards to your first point, 'ideally' doing what the customer wants better or equal to your competitors is how people get wealthy. Capitalists do not like it when people get wealthy through force, either political force, threats of force or actual force.
The way I see it, yes the desire to make money has been the main driver of innovation throughout history. People pick skills to learn and invest their money/time in places where theyll get the most return. This generally leads to an improved quality of life. I think you overlook what it means to be educated though. In the traditional sense, you seek knowledge to learn a skill and then generally someone hires you for that knowledge. Yes, the most successful people often got that way generally by taking risks and maybe not getting educated in a university, but they still sought out education to be able to understand which risks were the right risks to be taking in business. They are educated, but maybe not by the textbooks. And onto your second point, I think we misconceive that rich people accumulated their wealth “legitimately” by working harder and smarter than everyone else, but that’s kind of a flawed view of things. In a fully functioning capitalist democracy, a country creates a fantastic business environment which allows for their to be massive amounts of innovation and a few people get really rich, but society then gets a cut because the society was designed for that kind of innovation to be possible and benefit everyone financially (think Norway, sovereign wealth fund). However, the way it generally goes in America is that society does not take a small chunk of the profits, an even smaller sliver of the profits end up in the hands of politicians through lobbying and campaign donations who then make the tax codes favorable towards the businesses that donate to their campaigns, essentially destroying other potentially innovative businesses. Ill give you an example, both walmart and amazon often get huge tax credits for building stores, warehouses, or recently headquarters in whichever local city. The problem is, because of their size, they get an unfair advantage, not because theyre better in any way, but because they paid off the right politician. Amazon is also currently lobbying for a $15 nationwide minimum wage, but this is clearly to just make other retailers suffer because prices tend to be much more tied to wages at companies which arent amazon. In the past, the wealth came back to society through income tax, but profit is less and less ties to wages as we live in a more gloablized and connected society. Essentially, society is not benefitting in the way it is supposed to from capitalism when we have a system which awards people power based on their wealth and ultimately need a unavoidable tax system that does not discourage innovation (like a VAT for example). If everyone had the wealth to start a small business and no business was given special treatment, I get the feeling we would have a lot more successful small businesses in the US.
@@SimonTimbers The amount of new bussiness and innovation that you have in US is amazing,i don't see how you would explain that the system is going wrong with that result.
1. Yes. Just think about how wealth is accumulated in modern, Western economies. People produce or invest in something that millions of others are willing to purchase and efficiently enough to make profits. Furthermore production itself distributes wealth in the form of workers' wages. It's important to understand that most of the wealth of the ultra-rich is in their businesses, it isn't idle money.
2. 'Democratic investment' already exists in the form of public funding and central planning. Instead of a number of investors an even smaller number of politicians, bureaucrats and activists decide what to invest in. Besides government is terribly inefficient; take schools for example: spending per pupil goes up, scores barely change and this underperformance is usually met with more money. OTOH for-profit schools like charters are better or the same and cost less.
@Qwert That only makes sense if you think of entertainment, food, housing, healthcare and education generically but that would be a mistake. People have different consumption patterns depending on their income; there's alot of flexibility. If one can't afford a house one rents an apartment. If lobster is too costly one can buy tuna instead and so on.
@@alvarolopezgomez6543 despite us having an amazing business environment, our system doesn't really bring the profits of those businesses to help out the people as much as they do in countries like Norway and Finland. There's no denying a lot of great things have come from american business, but we still have pretty serious poverty and lower happiness across the country in a lot of places. Granted, it's first world poverty, which takes a different form than it would in a third world country. And as for the business environment, after just having done my taxes as a small business owner, I'm beginning to realize the tax code is really geared towards big business, especially those who have been around for a long time. While we have a lot of wealth and a lot of innovation, we don't have the same social mobility that we claim we have. The poorest half of America continues to get poorer despite the richest half getting a lot richer. At the end of the day, I love America but any good business person knows the theory of entropy: any system that does not adapt over time will eventually fail.
Keep an open mind but still question the economy or market Well, asking questions would enable us look at different perspectives of the market that we initially may not be aware of, it's vital.
Let's just not stick to simple and random questions like “is the market crashing?”
By questioning, I mean that we should ask what the market “should” do in light of all the information - fundamentals, technicals, and sentiment - available at that moment.
Let me ask you a question, are you an economist or a benefactor of the market? Cause you sound like either of them.
The enigma of the economy as well the various financial market would definitely make either of those out of you but in as much as you attain profits from the market with all the sentiments in the way then you're good to go.
Ethane I believe that much of the information we need to catch those good economical opportunities are already available to us. It’s just that our biases often make them unclear.
Wisely interpreted Ethane, which services are you most thankful for so far?
"The bottom dredgers from societe = Gradstudents". That's somewhat out of touch I would argue.
Also, making the point that aristocrats from old morphed into billionaires today is missing the point. We cut off their heads precisely to get rid of aristocrats.
In essence the video attacks the strawman argument that all wealth inequality is bad. Through the critique is that huge amounts of wealth inequality are detrimental to society.
The aristocrats seldom provided anything to the society, whereas the modern billionaires have to do so in a free market economy. For as long as people aren't starving to death, wealth inequality shouldn't be such an issue to begin with.
The "straw man" is all too prevalent in actual discourse. As an economics channel, to have a proper discourse all the morons out there first have to get a basic understanding before the actual argument against it can even be addressed. But I understand why you'd be disappointed for want of actual arguments that it is a problem.
Yeah, this video is deliberately framed in a way that dismisses the actual concerns raised by most anyone that's done research on the subject out of hand.
Very easy to make an argument when your starting premise negates the actual point most of your 'opposition' is actually making.
The negatives of wealth inequality largely are NOT economic in nature...
(at least, not directly.)
Yep it is attacking the good ol internet commies that don't acutally exist in the main stream
@@cellceair8772 I have talked to plenty of people who think like this. They are not communists - they are morons.
This video is an ahistorical pile of drivel. It makes assumptions that are flagrantly false and fly in the face of 6th grade history.
First it equates technological progress with prosperity. These things are not equal. Sure, technological progress has made everyone's lives easier, but that's a completely separate topic than economic equity. The richest man who ever lived was Marcus Crassus in the Roman Empire. They were certainly prosperous, and certainly had technology far ahead of their peers, but their technology doesn't hold a candle to today's. Wealth inequality has lead to wars since the dawn of civilization in all eras, and to say a commoner today has it better than a king 1,000 years ago ignores a host of relevant factors such as protection, prosecution, and education. Having a washing machine installed in your apartment doesn't negate the host of other issues that wealth can insulate your from such as crime, medicine and opportunity.
It's also a dangerous notion to entertain. Taking the argument that wealth inequality is a symptom of prosperity further, it follows that the more prosperous a nation, the more destitute its poorest citizens. Thusly, slavery and starvation is the natural outcome of prosperity, yet the United States outlawed slavery and became the most powerful and prosperous nation on earth within a century, and conversely (and obviously) the poorest citizens in the world reside in poor and often corrupt countries that enrich the elite, yet these countries are far from prosperous.
The assumption that wealth inequality can only exist with prosperity, while an interesting theory, has no basis in reality. The Gini coefficient, an international measure of wealth inequality has poor and destitute countries alongside developed and prosperous. Among the most equal countries are the developed and prosperous South Korea, Japan and Belgium alongside poorer countries such as Myammar, Iraq, and Moldova. Conversely, the most unequal countries also have prosperous and poor countries in their rank. The United States, Germany, and Thailand sit alongside Saudi Arabia, Haiti, and Botswana.
Ironically, the video also attributes the advent of space travel at least partially to wealth inequality, yet it took place when wealth inequality was at its lowest point in American history in what's referred to as the Great Compression.
Was wealth inequality really at its lowest point in American history during the space race or was America ignoring the plight of non-white Americans and not including them in those statistics? Yeah I suspect the latter.
The video's argument regarding wealth inequality does not state that more inequality means that the poorest individuals are even more destitute. Even the poorest bracket of US citizens still enjoy a standard of living much higher than many third world countries. It does not have any implication that slavery or starvation or destitution is natural. There is far more inequality between a person with $50,000 and a person with $1M than with a person with $1000 v.s. $50,000. Your argument here puts words into the mouth of the presenter to frame his viewpoint in a false but beneficial format for your criticism.
Inequality is a side effect of capitalism. The poor are poor beacuse they lack opportunities. They lack access to proper knowledge and resources which will make them productive. Relative poverty will never cease to exist but absolute poverty must be eliminated.
Would this side effect change in a socialist/Communist society? Not an ideal socialist/Communist society, a realistic one.
@@DANtheMANofSIPA I mean even in an ideal communist society, there will be people who earn more things through their work than other people. The difference would be that everyone would have a basic standard of living.
@@DANtheMANofSIPA a realistic society would mean that capital and labor would belong to the same people. This would mean that decisions are made by workers both at the political and the economic level. If automation truly swipes the need for the majority of people to have a job then communities (through communes, unions, and cooperatives) would have the task to distribute capital gains to its constituents. Investment decisions would be made both by the individuals and the communities (or by a combination of both agencies). But the individual would only get its capital gains to a certain amount. But this is surely uncertain. Meanwhile, the first proposition would not be so different, but workers would share profits (also through unions and cooperatives) and pay taxes. the existence of a state as we know it is hard to predict. But in order to take advantage of coordination externalities, something like a small and limited federal/confederal government could be wise
No, it's a side effect of reality.
Life is inequal.
@@DANtheMANofSIPA communist as an extreme example (soviet, china, cuba) is not the only alternative... we just need a cort of communist capitalism... one with rules enough to protect us from extreme greed and power concentration and lack of respect for life.
tried to come into this with an open mind but you really lost me when implying that anyone can casually afford a plane. the simple act of getting on a spirit airlines flight could mean saving for many months for a significant amount of families in the US, and i know more than a few people who work more than 1 job that opt to take the bus instead when they need to travel, no matter how many more hours it takes. of course, this is anecdotal, but this video is using a lot of absolutes that can be taken down with one casual look of what's going on in the real world.
pointing to wealthy people inventing seems weirdly one sided, there's more than enough evidence of working class people inventing things too? and often those inventions don't get their due because they get drowned out by wealthier people who often take the credit for the same inventions?
i think the end of this video pointing out irresponsible investing/hoarding by the wealthy is a good and fair point - but your (i am assuming middle class) worldview is really showing here. you're making a lot of assumptions about the lives of poorer people without actually knowing what that life entails.
Many cannot casually afford a plane ticket, but I don't think that is what he meant. He meant what you just said, that they can save, work hard, and have access to a plane. 200 years ago, it didn't matter how much money you had. You would never be able to fly on a plane.
Yeah, this really shows that he is indeed very out of touch and privileged, he doesn't realize the actual scale of inequality and sees only the milder version of the problem from his perspective as a citizen of a developed country; this gets really bad outside of this bubble (and even within sometimes), the sheer amount of inequality gives people at the top overwhelming power which is used most of the time to increase their wealth and power, and in countries like mine, people that try to resist against this get killed while the oligarchs secure their assets in the Virgin Island and invest on Real State in Vancouver, Sydney, or NY.
I agree with you and would just like to add that he also ignores that explanation can come in many forms. Companies like Microsoft and Amazon where by no means built or invented by a single person. They may not be exploiting their costumers, but they are exploiting their workers. There are no person so valuable to the world, that they are worth billions.
@@shorewall That is a function of scientific progress, not just because people have gotten wealthier. Indeed this channel seems to rely on the benefits afforded to us by scientists a lot for its arguments, despite EE not even himself being a scientist. He's talking about economics, while falling back on scientists whenever he brings up the good stuff we currently enjoy, rather than any benefits accruing from his own field...
@@ikaantynytlapsi9474 Please show me what share of the wealth the average billionaire has that goes into genuine innovations as well as employing people. Can even sum the two. Now check how much the govt. spends on both financing research as well employing people (yeah, govts. do both - a lot!). Then we can talk about how "the government manages to waste a lot of that money". How much does it waste, compared to how much your garden variety billionaire wastes? And what makes you so confident the govt. share is worse?
Economic inequality has shown to have a strong inverse relationship with social mobility - more inequality = less social mobility. Economists call this "The Great Gatsby Curve"
Denmark and Sweden both have very high wealth inequality (almost the same as USA), yet have high social mobility.
TLDW - No one hates wealth inequality. They only hate it when they're not the ones benefitting.
demondojr nailed it!
1: It does not have to be an individual holding that accumulated money, it can be put into a reserve that uses it for the purpose of whatever common good it is intended for, an (uncorrupt) organization is actually much more suited then an individual to hold such a responsibility.
2: You fail to take into account how the choices of the rich is putting all of society into an existential crisis, we are in the midst of a climate crisis, created by the system that favors short term economic profit before everything else. Take this into account and the list of people getting rich by pushing others down will have to grow ridiculously long, failing future generations is pure evil.
Addressing 2
I always find this to be a poor argument.
Granting that the claim "the wealthy created the climate crisis" is true, (No one is innocent, not even you) this ultimately was to create technological innovations that allow our lifestyle. Electricity and fossil fuels created global warming and the climate crises with it, but that's so you didn't have to worry about people burning down your town because someone dropped their oil lamp, and so that we could have access to electricity for the things we do every day. Not to mention, driving around and getting from place to place in the span of minutes or an hour instead of the days it might take to walk the average salary man's drive to work. Fast transportation and electricity are also good if you want to bring food and store food in say, a market, for a while so that there's generally always a plentiful amount of food, so people aren't starving. And it's not like you always had a wealth of good options to achieve all of those things. Thus what you end up with people who use fossil fuels because it was the most abundant and efficient way of creating the energy necessary for them.
The list of technological benefits continues, but the point is, that the reason we relied on fossil fuels for power and "the rich" made those short term decisions is because ultimately it generated wealth for people at the moment as well as allowed people to live longer more comfortable lives and dealt with the problems they faced at the time.
But the thing is, when people live longer more comfortable lives, they don't have to worry about their immediate circumstances and can look ahead and see a new set of problems.
In neolithic times, the problem was inconsistent amounts of food and lack of security from the elements, but we developed into agriculture and a more sedentary lifestyle, so that became less of a problem, and new problems arose, and new solutions to those problems and new problems with those new solutions, so on, so forth, until you reach the modern-day, where the previous solution to some set of our problems created a new set of problems, namely global warming.
Even at that, it's not like nothing is being done. That problem is ultimately being handled by the collective order generated by the individual chaos of human civilization, through people innovating and coming up with new small solutions to that problem (that, in turn, will likely create other problems).
Worse than failing future generations, they've been selling future generations in every first world country since the inception of central banks. Your national debt is literally monies borrowed from and owed back by children that first and foremost may never be born.
an "uncorrupt organization" is much more suited than an individual huh? Well you basically just said a "fairy" is more suited than an individual. Since the fairy doesn't exist, I'll leave it in the hands of the individual since all organizations are corrupt and have motives that someone will disagree with and call corrupt. Unless you're saying only 1 brand of politics is right and can solve everyone's issues.
@@jfast8256 A governmental unit is on average much less corrupt then an individual - Just look at how much of the income is spent on the common good compared between governments and rich individuals and it gets super obvious that the individuals are the more corrupt/greedy ones.
I've said this myself. A few hundred years ago cinnamon cost half it's weight in gold. Today you can pick up a tin for a few dollars. I'm average income and I live better than a king a few hundred years ago.
Exactly! Part of the problem as I see it, is that everyone these days expects to be rich right away. And when they don't achieve this financial status they look for someone to blame amd the obvious target is other people that are rich. People have to temper their expectations or if being rich is the only option for them, find an avenue for success and work like crazy till they get there.
Don't governments funded by tax payer money fund most of the innovations mentioned in this video?
Sooo, still wealth accumulation.
@@shorewall Wealth concentration, not necessarily the accumulation of wealth for individuals. See: space program in communist USSR.
That is besides the point. Of course tax revenue is spent on public goods, but that doesn't mean it is spent fairly but most of all, taxation is usually not the reason for inequality at all.
Goliath Steinbeisser unless you mean a lack of taxation
@@shorewall Ostensibly, that money belongs to every citizen through their elected representatives who control the national budget.
"Even the most bottom dredges of society like grad students"
Let the record show that the ultimate truth has been learnt.
"You're not poor! You have a washing machine. Stop complaining."
If you do have a washing machine then ompared to rest of the world, your in the richest 10%. So maybe better appreciate what you have is what that line meant?
@@Robert-rw5lm I think I read somewhere you need a total net-worth of like $700k USD to be a member of the global 1%.
Its not the 1% that are the problem, It's the 0.0001%
@@Tralvan And not even that, it's how the 0.0001% use their money the problem. As the video states, casinos only take from society isn't of benefitting them, which in turn damages economies as a whole. Warren Buffet and Bill Gates are one of the few people that belong to the 0.0001% and have actually contributed A LOT to society.
@@Tralvan Not even. If you earn €37,000 a year, you are in the global 1%.
That's how poor the world is.
@@bothi00keep in mind a dollar in the US doesn't go as far as it does in an African or Asian nation. But yet still quite shocking
According to Marx, who wrote the most scientific critique of capitalism, inequality is built into the way capitalism works. The labour theory of value says that all wealth comes from labour and if goods are exchanged for their equivalent value then the only way to get profit is to pay a wage labourer less than the actual value of his / her labour. So overtime this results in massive inequality.
Marx was an idiot. Inequality is built into ALL political and economic systems because every family and clan is in competition with every other family and clan to some degree in a race that in its rawest form is about who gets stabbed to death and who does the stabbing. All systems beyond the family and clan are coalitions to either keep from being victimized or victimize others for the benefit of the whole coalition.
Cheating in all cases is part of the game, and often he who dares wins.
@@sophiam2095 Hi there - interesting perspective but if you've read any of his works it's clear that he wasn't an idiot as had a lot of interesting things to say about how capitalism works as a system in motion and how it can be disguised from other means of production such as slavery and feudal system. The point about inequality is about who owns the means of production - as whomever owns this own the surplus value and can therefore increase their wealth much quicker than one individual that can only sell their labour. This seems obvious as there are so many hours in a day that a person can work but a capitalist can scale up their factory (as an example) with hundreds of workers. So whether you think this is a good thing or a bad thing, it's clear that capitalism leads to inequality as only a tiny percentage of the population have enough capital to buy the means of production.
I think you're right that inequality is built into other systems such as slavery and feudal system (master and slave, Lord and surf) but that doesn't mean we couldn't envisage a political system that didn't have this oppressor and oppressed relation. I think we should aim for a world where people are truly free to spend their time pursuing their own interests and not just stuck in meaningless work. I think capitalism provides a lot of freedoms but also constrains people and provides un-freedoms like the freedom to die of curable diseases and the freedom to starve to death if you don't / can't find employment etc. I think we can and should aim for something better.
But the labourer is also using the equipment and resources of the company. These examples do not work when considering the complexity of supply chains.
@@PointNemo9 yes, correct - tools and equipment that were created human labour that was employed at a different company. This is an abstract question - how is value created, I don't see what it has to do with supply chains. Try and turn a tree into a chair - you will need human labour or a machine that was created by human labour.
@@pbeeby Because there is value in putting supply chains together. The value of a product is not simply a product of the human labour required to create it.
6:32 'Higher pay leads to lower results'
How come every large corporation completely ignores this and thinks paying the CEO $20M/year is a fantastic idea? The reasoning for paying a CEO 200 times more than the engineers who actually create the products is that "we need to attract the best talent".
So the engineers are motivated to keep producing better and better products because they too think they can one day earn far more. They can't. The managerial class is a professional class all of its own. It doesn't matter how good the engineer is. They will never be the head of a large corporation.
Well, your view is a little bit one sided. E8 level engineer at Google makes around 1.5M dollars a year. Purely professional. There are a few guys in E9 s and E10 s as well earning several times that.
The skill set needed to be a good engineer is completely different from the skill set needed to be a good manager
ill let you play with the head of my large corporation
Actually the CEO get paid normal wage the 20million is actually in stock options
I think you missed the mark on a couple of points in this video. First, as has been pointed out by many people, is the political corruption that comes with inequality. Second, it's important to differentiate between wealth creation and wealth transfer. I think few people have trouble accepting wealth creation as a source of inequality, but wealth transfer can seem blatantly unfair. The banks in the wake of the financial crisis are a clear example of this: bank executives got millions in bonuses, paid for by tax payer dollars, while overseeing some of the greatest wealth destruction in a generation. Heirs to fortunes are also subject to much social ire.
Really, the issue boils down to politics rather than economics. Wealth inequality is sometimes good sometimes bad for the economy as a whole, but politically, most people find unacceptable that we COULD be helping lift the entire country out of dire poverty but CHOOSE not to out of some firm belief that doing so will destroy the market (when firm evidence shows that a rise in taxes on the wealthiest would have minimal impact on actually economic growth).
Wealth inequality of the kind we see today is bad. Mistifying the thing using the meritocratic argument or pointing to the advantages of huge concentration of capital, all in order to not seem a pinko-commie to a certain vocal part of the public, does not make a good review of the subject, IMO.
Yeah. Inequality today is the concentration of advantages passed generation to generation, solidified politically. A truly meritorious society would be one where each child gets equal access to education, and time with their parents, and where there are significant regulations on nepotism and maybe even inheritance taxes. Every person wants the chance to work hard, to be successful; it just sucks that some people will out-compete me because of who their parents were
@@MineRoyale. Do you not have equal access to education? Time with your parents? Do you not have the chance to work hard? To be successful? You have the equal opportunity that you claim to want. That doesn't guarantee that you will have an equal outcome. Nothing does. It's called chance for a reason.
I like how the title of the video makes it sound like you're going to show how wealth inequality isn't actually a problem, but instead, you ask a question to which the answer is "yes"
8:30. Ussr sent gagarin to space while people toiled in kolkhoz fields, unable to leave, effectively serfs to the state.
Are you saying if people have enough wealth and don't need to work to survive, they would dedicate time as a hobby to make scientific and philosophical innovations. Boy, imagine what would happen if more people would be able to survive working 10 hours a week and then spent more time dedicated to hobbies.
If wealth is distributed more evenly, there is enough resources to allow people having more free time and would produce a better future. Not only the rich can innovate.
Also assuming that people need external motivation to work properly while also assuming that rich people did and do great things as a hobby is a contradiction.
Fausto Guerrero Redistribution is such a nice way to word theft.
@@Inquiring Let's keep in mind corporations have been bailed out to the tune of TRILLIONS. Money printer go brrr.
The mainstay of redistribution I've seen has been upwards.
another name for the redistribution is tax and is it working?
Forget about redistribution for a moment. Is the idea that wealth should be spread more equally a bad one. Please just don't shut down to the idea. Also, would you prefer a worse fate for humanity because you want billioners to hold to their power. It is not like a group of engineers wouldn't want to go to Mars and spend time and resources doing it without Elon musk forcing them to.
@@Inquiring What could you call the 550 Million in taxes large corporations got as a result of the pandemic?
Oh please, what has the Amazon (featured as a good guy here apparently) brought to society other than just the capacity, soon to turn into coercion, to purchase and sell a bazillion of wares under the same virtual roof? This is not based on any brilliant idea - it is just putting huge capital to use by eliminating small competitors and increasing pressure on the labor market. Any storekeeper could have come up with such a vile strategy, the difference is none other than the investment they got. Wealth inequality mostly brings us vicious monopolies - see Picketty 101.
What's more, why wouldn't wealth be better distributed to those vital small businesses and households through government spending rather than some billionaire's whim? A government, for all it's worth, is more likely to be capable of making informed investment decisions at that scale. Plus, Bezos really has no interest in making his own workforce less desperate for pennies.
Yup, these are just government subsidized monopolies. There has been no great invention or contribution to society made by these companies that is worth all the small businesses they put out.
Bezos is only worth $200B because the entire WORLD likes what it does enough to value the company in the trillions. Bezos' net worth is 100% a vote by anyone who cares to buy or sell Amazon. Nothing could be more democratic or fair. Losers like Bernie and AOC actually believe that 435 members of the House and 100 Senators are better judges of how much "worth" someone should have. It's laughable.
@@rufuspipemos Well, in Poland, where Amazon came as an employer some 7 years ago and as a seller around 2 years back, they are still more commonly known as a company where one could be worked to death quite easily than (note: this does not typically happen to career junkies but to people who struggle to earn their bread and a tacky roof over their heads, as of 2021, both in Poland and in the US) than as a marketplace. Let's see if the advantage in shipping cost and possibly things like stepping into Polish TV series with their unobtrusive occurances (like say Uber in every f# Netflix/HBO offering) will allow them to crush the competition. Who are no heaven's send either. At the end of the day, consumers don't care much about a random guy dying, even within their own country. It won't be brought about much anywhere around you. The cost-profit spiral has more momentum than decency. Unless you decide for yourself it won't be so for you. And pay what it takes. After all, when you decide to shun decency, you may sooner or later trick yourself into coercion and see who has the last laugh.
"even the bottom dredges of society, grad-students" that hit where it hurt mate... XD
Back on topic though, i think a major issue with wealth hoarding is that it does prevent the advancement of society to some extent, some people who contribute to society like Bill Gates do become rich, but it also has to do with opportunity, a lot of poor individuals may be able to greatly contribute to society but have no means to present their ideas or skills on the market, and some people who become rich contributing to society no longer do after their deaths but the wealth stays within the family or a select group with it stagnates without it contributing to society any longer, there are plenty of rich people today that have never known work or how to contribute to society because they live off of passive income. Progress slows down when resources aren't efficiently distributed.
I think that is the key. Getting money to work. But I don't think any rich person lives off of passive income, contributing nothing to society. The way they get passive income is by investing, and that money is then used by society. It can still be misallocated, which EE mentions a lot, but it is being used.
Bill gates does not contribute much to society realistically, most of his efforts have led to increased poverty and the deduction of taxes from his forms (putting money in a Roth ira for “charity” and never using it)
Bill became rich by selling other person work (selling dos to ibm, then buying dos from its developer), i would not call it contributing
Hoarding of opportunity
The accumulated money is spent, no one sleeps on a pile of cash. Even just by keeping it in the bank you facilitate the bank to finance home loans and business loans, which generate more wealth.
The biggest drawback of wealth inequality is: that wealth is power and 7 people have as much power as 3.5 Billion people. That is very dangerous. We all agree that democracy is one of the most important values of Western Civilization but we only apply this value to government. I think that the economy is as powerful if not more powerful than the government so why don't we structure the economy democratically as well? Also wealth inequality is not responsible for technological advances. Look at Mansa Musa for instance he was the richest person in history and I don't see West Africa expelling in any kind of technological field. The Soviet Union made massive technological advances despite not having any kind of billionaires.