Causes of social inequality - Politics Forum.org | PoFo

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#14772845
In basic economics, as I’m sure you all know, there are 4 key factors of production, land, labour, enterprise, and capital. Broadly speaking, the different social classes control these factors; the lower classes control the labour; the middle classes control the enterprise and the upper classes control the land and capital. However, in the past few decades’ improvements in technology have been automating manual jobs which reduces the need for labour but increases the need for capital. This means that the stake which the lower classes have in production is reducing and so, naturally, their stake of the profits will reduce. However, the requirement for capital is also increased, thus increasing the stake of the profits that the upper classes have. With this in mind, is it any surprise that there is increasing social inequality? If the poor have less to give to production and the rich have more to give then the rich will get richer and poor will get poorer.

What are peoples thoughts on this?
#14772857
Suntzu wrote:There may be other factors such as ability/intellect.

Yes but there are able/intellectual people in every class. A clever working man will become a mechanic instead of a road sweeper. A clever investor will tend to pick more profitable enterprises to invest in than a stupid investor who will tend to lose his money. So being clever helps for earning more than stupid people regardless of your class. Edward Smith is asking why investing appears to be increasingly more lucrative than working.

The reduction in barriers to international trade is a factor I would think. Moneymen have a much larger pool of investment opportunities now than in previous times, they also have much greater opportunities for hiding their earnings from the taxman. Working people are also more mobile than in previous times but not to the sane extent as money because it is still the case than money can cross borders more easily than people. They also have virtually zero ability to protect their earnings from taxmen.

BTW I think the thread is mis-titled? Surely we are talking about economic inequality not social inequality. Social status does not have very much to do with wealth.
#14772862
I had tried to cover this saying that the middle class have the enterprise aka the more intelligent would be the people running the companies. That would mean their interests are still being protected to some extent, but I think what you are saying is very largely true. The people who are more intelligent take the better paying job (mechanic) but at the end of the day they are still having a lower input to production than they would a few decades ago.

It appears that we are reaching a cross roads in that, ether money is going to have to become less fluid or people become more! Popularist vs socialism in other words.
#14772865
The people who are more intelligent take the better paying job (mechanic) but at the end of the day they are still having a lower input to production than they would a few decades ago.


I believe this applies to many of the moderately intelligent. The very intelligent, I have known, select their jobs based upon their interest and not economics. The economic model of society is of no importance to them.
#14776644
edward.smith wrote:In basic economics, as I’m sure you all know, there are 4 key factors of production, land, labour, enterprise, and capital.

How is enterprise different from the labor of entrepreneurs?
Broadly speaking, the different social classes control these factors; the lower classes control the labour; the middle classes control the enterprise and the upper classes control the land and capital.

I don't see how the middle class controls enterprise. Entrepreneurs arise in all classes.
However, in the past few decades’ improvements in technology have been automating manual jobs which reduces the need for labour but increases the need for capital.

But capital is produced by labor.
This means that the stake which the lower classes have in production is reducing and so, naturally, their stake of the profits will reduce. However, the requirement for capital is also increased, thus increasing the stake of the profits that the upper classes have.

No, that's not how it works. As Henry George proved in "Progress and Poverty" over 100 years ago, increased population and capital accumulation lead to larger contributions to production from labor and capital, but larger exactions from landowners. The Law of Rent takes production from the workers and capital providers who produce it and gives it to the landowner who contributes nothing. This relationship is the fundamental source of economic and social injustice and inequality.
With this in mind, is it any surprise that there is increasing social inequality? If the poor have less to give to production and the rich have more to give then the rich will get richer and poor will get poorer.

The landowner qua landowner does not give anything to production. He only owns a legal entitlement to TAKE from production. As a general rule, the more labor and capital contribute to production, the higher the fraction of production taken by landowners in return for nothing.
What are peoples thoughts on this?

Like almost everyone, you could read Henry George to advantage.
#14776653
edward.smith wrote:In basic economics, as I’m sure you all know, there are 4 key factors of production, land, labour, enterprise, and capital. Broadly speaking, the different social classes control these factors; the lower classes control the labour; the middle classes control the enterprise and the upper classes control the land and capital. However, in the past few decades’ improvements in technology have been automating manual jobs which reduces the need for labour but increases the need for capital. This means that the stake which the lower classes have in production is reducing and so, naturally, their stake of the profits will reduce. However, the requirement for capital is also increased, thus increasing the stake of the profits that the upper classes have. With this in mind, is it any surprise that there is increasing social inequality? If the poor have less to give to production and the rich have more to give then the rich will get richer and poor will get poorer.

What are peoples thoughts on this?


In advanced economics, you learn about attention economy, matching, and signaling. Wealth doesn't come from what you do. It comes from how you network with others around you. The most wealthy are those who communicate the most clearly, have the greatest compatibility, and use their attention spans most efficiently without noisy interference.
#14776665
Dubayoo wrote:In advanced economics, you learn about attention economy, matching, and signaling. Wealth doesn't come from what you do.

More accurately, it doesn't come from what you contribute. It does largely come from what you own.
It comes from how you network with others around you. The most wealthy are those who communicate the most clearly, have the greatest compatibility, and use their attention spans most efficiently without noisy interference.

Nonsense. Wealth almost always comes from privilege -- specifically, being legally entitled to take more than you contribute -- and the wealthiest are those who own the most such entitlements.
#14778386
Dubayoo wrote:More accurately, you can own nothing.

If you don't want to become wealthy.
If people like you, then you become wealthy.

No, that's just nonsense. I know lots of wealthy people that people don't like, and lots of people who aren't wealthy that people do like.
That's what privilege is.

No, it most certainly is not. Privilege (from the Latin for "private law") is a legal entitlement to benefit from the uncompensated abrogation of others' rights.
#14778401
Truth To Power wrote:More accurately, it doesn't come from what you contribute. It does largely come from what you own.

Nonsense. Wealth almost always comes from privilege -- specifically, being legally entitled to take more than you contribute -- and the wealthiest are those who own the most such entitlements.


At root, it's caused by politics that do not work according to the democratic equation, that is to say that politicians do not represent the 'majority' once elected, on the contrary, that's where the 'democratic' deficit comes in, the established fact that politicians modus operandi is to further the narrow self-interest of their own members & a minimum number of 'outsiders' that are used to gain 'sympathy' for from greater numbers of the gullible populace.

An example of 'privilege' where politicians perpetuate such privileges, is that of Additional Pensions Contributions Relief, which amounts to £40 BILLION per year in foregone tax revenue.

That money should not be 'discounted 'from high earners tax liabilities, they do not need taxpayers money to feather their retirement nest through tax breaks, it should be abolished, what really annoys me is that the Labour Party idiots support it & the effects from it that cause deeper social, economic divisions in the country.

Inequality could be reduced by opportunity for all, but it's not, because, when it comes to paying taxes, the rich\better-off get discounts from tax breaks, thus exacerbating divisions in the country.
#14780408
Truth To Power wrote:If you don't want to become wealthy.

No, that's just nonsense. I know lots of wealthy people that people don't like, and lots of people who aren't wealthy that people do like.

No, it most certainly is not. Privilege (from the Latin for "private law") is a legal entitlement to benefit from the uncompensated abrogation of others' rights.


Yea, you live in a fantasy lalaland.

You can be hated by 99% percent of people in the world and still be privileged because those in power like you. I never said everyone has to like you.

Likewise, the question is where those legal entitlements come from which proves my point above. If lawyers, judges, and other authorities approve of you, it doesn't matter whether others like you or not.

It doesn't really matter who you know or don't know either. We're not talking about your personal life here.
#14780409
Nonsense wrote:At root, it's caused by politics that do not work according to the democratic equation, that is to say that politicians do not represent the 'majority' once elected, on the contrary, that's where the 'democratic' deficit comes in, the established fact that politicians modus operandi is to further the narrow self-interest of their own members & a minimum number of 'outsiders' that are used to gain 'sympathy' for from greater numbers of the gullible populace.

An example of 'privilege' where politicians perpetuate such privileges, is that of Additional Pensions Contributions Relief, which amounts to £40 BILLION per year in foregone tax revenue.

That money should not be 'discounted 'from high earners tax liabilities, they do not need taxpayers money to feather their retirement nest through tax breaks, it should be abolished, what really annoys me is that the Labour Party idiots support it & the effects from it that cause deeper social, economic divisions in the country.

Inequality could be reduced by opportunity for all, but it's not, because, when it comes to paying taxes, the rich\better-off get discounts from tax breaks, thus exacerbating divisions in the country.


I actually strongly disagree with this because the nature of democracy is to take advantage of dividing and conquering people's attention spans as well as their paranoia and laziness in refusing to stand up for each other against oppression. The "majority" is really just how people's common sense is that others won't stand up for them, so they don't stand up for others. It's the bystander effect at the end of the day.

You can create opportunity for all, but it will still get squandered because of this basic problem. People can pursue opportunities but still be preyed on and forsakened because of this bystander effect of common sense. Unless you address the underlying ideology of the people such that they have a sense of vigilance to stand up for each other, none of it will ever matter.
#14780612
Dubayoo wrote:Yea, you live in a fantasy lalaland.

I am correct.
You can be hated by 99% percent of people in the world and still be privileged because those in power like you. I never said everyone has to like you.

It has nothing to do with "liking," that's just silliness. Privilege is THE LAW. The police don't enforce someone's privileges because they "like" them. The do it because government pays them to do it.
Likewise, the question is where those legal entitlements come from which proves my point above.

No, it proves mine. They come from law.
If lawyers, judges, and other authorities approve of you, it doesn't matter whether others like you or not.

No, you are wrong. It has nothing to do with liking or approving of "you." It is determined by the law.
It doesn't really matter who you know or don't know either.

So you are wrong, and you know it.
We're not talking about your personal life here.

We are not talking about "liking" or "approving," either.
#14781844
Dubayoo wrote:No, you're not,

Yes, I most certainly am, and I will thank you to remember it.
and I'm done with you.

Wise choice. You were about to embarrass yourself even more.
Next time you want to have a conversation with someone, stop being so self-absorbed.

This, from the guy who claimed my objectively correct statement was "fantasy lala land"? :lol:

And don't assume I want to have a conversation with you. I'm only here to correct errors -- like yours -- and I don't care if that leads to a conversation or not.
#14782148
A big problem is commercialism and advertising.

Ad execs and managers are always finding ways to make products look so appealing so people will keep spending like a leaky faucet. I really feel sorry for the ones who see all the pretty commercials and just have to run to the store to buy stuff.

People stupidly believe in all the beautiful images and the sweet words, without thought about what their spending is doing to their finances or their credit score.

I feel fortunate that I have two parents who can see through the ad bullshittery. They instilled in me a desire to use my money wisely and to "save for a rainy day". From my experience, I know that I do not have unlimited funds and that I will need the funds I do have for bills and for my future retirement, and I will need it in cases where I lose my job or I need extended hospital care (been lucky thus far).

My dad never made a lot of money, just enough to keep the family fed and pay for the necessities. He knew how to save up and my mom also understood how to control spending and invest the money for the future. So none of us dress in style or own the latest items, but we are still very happy and healthy. We know who we are and we know that the things we buy do not determine who we are, our actions shape our character.
#14782287
edward.smith wrote:In basic economics, as I’m sure you all know, there are 4 key factors of production, land, labour, enterprise, and capital.


"Enterprise" is not a factor of production.

edward.smith wrote:the different social classes control these factors; the lower classes control the labour; the middle classes control the enterprise and the upper classes control the land and capital.


The higher classes tend to control more capital, but also more productive labor.

edward.smith wrote:However, in the past few decades’ improvements in technology have been automating manual jobs which reduces the need for labour but increases the need for capital. This means that the stake which the lower classes have in production is reducing and so, naturally, their stake of the profits will reduce.


Nonroutine manual taks have actually been relatively safe in recent decades, although that might change in the future (routine manual tasks have mostly disappeared before). It's the routine cognitive taks that have been most affected by computerization. Those tasks were performed by the middle class which consequently lost out.

In the industrialized world the middle class saw their share of the pie shrinking in the past decades, but it depends strongly on the country. It's extreme in the US, while in other countries it is barely noticable.

There are other factors than technological change though which are combined just as important. Like globalization, immigration of low-skilled labor and in particular more and more labor income going to very high earners (i.e. the managerial class).

As for the (slight) increase in capital's share of total income, that is actually a very complex topic. It must not necessarily come from technological change.
#14782483
Wouldn't less labor jobs mean that the ones which are available pay more then less? of course, there is a difference between labor and being lower/working class...

Beside, there's lots of jobs that are not necessarily "needed" but we still have them and business that require these jobs because people like them. I mean pretty soon technology could feasibly replace a lot of jobs, but for things like catering and service, even though there are self automated machines that can handle money, people still do these jobs. So I don't see what the difference is really between this and the lower working classes. There's always a human element that machines or technology can ever really replace. I imagine too that in the far off future there will be some weird religious reason for "robot" wars and people will use all the robots to their own, and crazy revolutionaries/extremists who who want to destroy them all because it makes us lazy and leads to social dysfunction or something. I am not being completely serious, just have a feeling that something weird like that would happen in the future. Either that, or like the Matrix/Terminator would totally happen.
#14783867
NightShadows wrote:Wouldn't less labor jobs mean that the ones which are available pay more then less? of course, there is a difference between labor and being lower/working class...

Beside, there's lots of jobs that are not necessarily "needed" but we still have them and business that require these jobs because people like them. I mean pretty soon technology could feasibly replace a lot of jobs, but for things like catering and service, even though there are self automated machines that can handle money, people still do these jobs. So I don't see what the difference is really between this and the lower working classes. There's always a human element that machines or technology can ever really replace. I imagine too that in the far off future there will be some weird religious reason for "robot" wars and people will use all the robots to their own, and crazy revolutionaries/extremists who who want to destroy them all because it makes us lazy and leads to social dysfunction or something. I am not being completely serious, just have a feeling that something weird like that would happen in the future. Either that, or like the Matrix/Terminator would totally happen.


I'd say historically the economy has always shifted towards labor-intensive sectors once labor in other sectors has been replaced by machines. Agriculture made up ~90% of the economy in the 18th century. Clearly if 90% of the economy would still be agriculture today a much smaller share of total income would go to labor, instead it would go to land/capital owners. Instead agriculture makes up only 1-2% of total GDP today. This is because agricultural production has become much more efficient and we can now spend our income on other goods. What happened to manufacturing is similar, though less extreme.

I don't think the shift MUST happen though. It depends on people's preferences. In general if goods are complementary, people will spend a smaller share of their income on a good when it becomes cheaper (i.e. its production becomes more efficient).

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