I apologize for the long post.
JohnRoberts said:
Wealth re-distribution is not even a zero sum game because a fraction of that wealth is consumed as handling costs. At the end of the transaction we collectively end up with less wealth.
I don't see how that is true at all unless we disconnect goods from services. I think it's debatable whether that makes sense. We further more have to disregard "trickle" effects, be they up or down. So if "money" = "wealth", then nothing is lost, it just ends up elsewhere. The cost of redistributing part of the wealth is a service which has its own value (the redistribution deemed necessary) and thus isn't a loss. Further more the redistributed portion ends up getting used in the market, as well as the money that is a "transaction cost". Computers and software is bought, buildings are paid for, wages are doled out; all of that ends up in the market place. Money changes hands, it doesn't disappear, and thus if the money paid for the good = its value (wealth) then nothing is lost.
There is however an interesting twist to what you imply which I think is a bit ironic...
JohnRoberts said:
Indeed wealth accumulation might literally be re-distribution, if you accumulated it from a poker game. When we create wealth from scratch, we are not re-distributing it because it did not exist before. When apple tuns a few bucks worth of silicon into a thousand dollar phone or watch, they did not redistrubte wealth they created it.
The term "wealth re-distribution" calls it wealth on purpose as code for capital or money that well to do (rich) people have, that is taken to give to less well off people. (class warfare).
But this is part of the problem - semantics is. Because the terms used, "wealth re-distribution" and "class warfare", are loaded terms because of their usage. But if you analyze the terms in and by themselves you see how the "load" doesn't follow from the terms themselves actually.
Now, obviously it seems pointless of me to point that out if it's just semantics because after all we could just choose a different word then and you'd have still made your point. My point however is actually that the language we use, and how we use it, affect our thought processes. In this case the "negative" use of those terms serve to imply that moving wealth from the lower classes to the higher is not only not "class warfare" since it isn't "redistribution", but it's the way it is supposed to be in society. We know that that's the way it is supposed to be because the terms are negatively loaded, and thus the opposite is implied.
In other words; I understand how the terms are used, and I'm pointing out their meaning without context in order to illuminate that what they imply when used is actually NOT something we should strive for.
JohnRoberts said:
I'm inclined to think of wealth as earned not distributed. A quid pro quo transaction, not a quid pro nada.
But here we can go back to the top of the post and look at what I said earlier; the distinction between goods and services. Let's look at a hypothetical example:
I "create" a widget that you want to buy. You determine it to be worth $100, which is what you pay me. Out of the $100 there are taxes to be paid which for the purpose of this point will be for redistribution. So $15 of the $100 are redistributed whereas another $10 are "transaction costs". Now, as you imply in your post, the "transaction costs" do not equal wealth or "earning" or creation of "wealth". In fact, they even create a loss in wealth for 'us collectively'.
Now, take a moment to consider what happened though: Someone in the government "managed wealth". They took part of the wealth in our transaction (the $100) and put it elsewhere, and while doing so also keeping a part for themselves as compensation for the costs of the transaction, right? And that equals a $10 loss in wealth for society, right? You and I on the other hand presumably earned our wealth - you through some means and me by actually producing/creating the widget. The government didn't, they just took the $10 and redistributed the $15.
Here's the problem though: What's the difference between the government doing that and a player on the financial market? If I get paid for moving money (or stocks etc) around between different corporations and individuals, am I not simply performing a service that moves wealth from point A to point B (redistributing it) while charging a fee to do it - just like the government? Of course I am. And neither me nor the government "created" any wealth in the process. Both of us were a "transaction cost". See what I'm getting at?
JohnRoberts said:
It is technological advancements that have furthered productivity, and we'd have made those advancements regardless of the system chosen.
Opinions vary... Technological advances do not happen by chance or randomly. While the old saw is that "necessity is the mother of invention", in my experience laziness is the true mother of invention. The farm tractor was invented because farmers were tired of walking behind mules.
Over several decades I've had my share of "regular" jobs and always found myself looking for ways to do things better. faster, easier.... While I will concede while in the military I was less motivated to push the envelope, but in normal jobs I was using my left over brain power to figure out better ways to do stuff.
Although my military experience was different than yours I actually agree with the above. I'd just add that the desire to be more effective so one can be more lazy or get more stuff is neutral to the system chosen, and that technology still has been the main driving force in the increasing rate of increase of production. We can want and desire all we want that there would be a faster way to build a car, but computers and robots really made productivity go 'off the charts'.
JohnRoberts said:
And for the latter it matters because why would a low-income earner give a rats ass about increased GDP if he sees no benefits from it. And so if real wages are dropping all while the top fraction of the population that is already revoltingly wealthy keeps increasing its wealth then it really means absolutely nothing for a society (other than that it's a problem).
I don't expect entry level jobs to ever be more than the bottom rung on the employment ladder. A first foothold to gain useful work experience from, to prove you can show up on time and follow orders. Then to move on up the ladder to more demanding jobs as high as you can.
Burger flippers are jobs for wet behind the ears teenagers, or mature semi-retired workers on their way back down the back side of the ladder.
If heads of households have no other viable option than working at Macdonalds the fix is not to price macdonalds out of business but arrange temporary income assistance for the truly needy with job specific training for jobs that pay better.
My point was simply that total wealth as a concept is of little meaning to those at the bottom. If the richest 10% lost 50% of their wealth they'd still be incredibly wealthy. If only a fraction of that loss led to an increase of wealth for the bottom 50% then I think it could be argued that that would be better - or at the very least that's how many at the bottom would perceive it. So total wealth isn't all that it's cracked up to be exactly because of how it is distributed. If the king in a monarchy keeps accumulating wealth through conquest the cost of which is paid by the people, but his increased wealth is bigger than that cost, then the 'economy' in that kingdom is doing better when looked at superficially and nationally - but of course the people would see a problem with it.
Further more the system itself doesn't permit everyone becoming the top 1%, and the very mechanism that doesn't permit it perpetuates the segregation. So we can all say that those at the bottom just need to roll up their sleeves or get an education, state-sponsored or not, but the truth is that if tomorrow everyone was equally capable making always equally good decisions the system wouldn't yield equal wealth anyway.
JohnRoberts said:
This is hard and a little messy but the easy answers are wrong...
How do we know that?
