living sounds said:
This is not the issue. Today the rate of return on capital is greater than economic growth. This can be summed up in that you get richer by having money, not by working. This is unsubstainable. Also corporations and people have gained the system. There is no justification for the 180 million $$ Rex Tillerson gets for leaving the company.
More wealth bashing?
Rex Tillerson started out as a civil engineer at Exxon in 1975 and worked his way up the corporate ladder creating wealth (from his intelligent work effort).
Preventing the high performers among us from being rewarded for that performance will just discourage high performance.
For long-term stability the system needs application of negative feedback (= highly progressive taxation) in order to remain stable. Otherwise the current positive feedback mechanisms (the more money you have the more you make, by investing it, lobbying, gaming the system) leads to an explosion (economic crisis, war). This has happened before and will happen again.
I consider some regulation a useful NF mechanism to prevent the excesses of unfettered capitalism, but wealth creation is generally a good thing, we should want more of that, not less. Too much regulation can hurt small business and benefit big business who can absorb the costs and pass them along to consumers.
Do you have any specific advice...? I am making some return from investing my personal capital I accumulated from decades of paid employment, into the stock market, but returns there were never high enough for me to just stop working.
A meritocratic system that rewards more intelligent hard-working people is a great theoretical goal, but it has nothing to do with today's actual system. Trump's own record is a standout example.
Who decides who are the deserving hard working people, who should get wealth transfers from those with more money than they have? Free markets rewarding results (value created) appear to be more equitable in such allocations. Zukenberg at facebook created value from a product that millions of people want. Under your hypothetical meritocracy how would future Zukenbergs fare? Would we have the same modern technology we presently enjoy, under a government managed economy (history suggests no, China may be worth watching, but I sure wouldn't want to live there)?
This is a very popular screed, older than I am, and is the foundation behind several populist revolutions.
As I have said before we are looking at this incorrectly. The fraction of the world population in deep poverty is shrinking. We are on a path to wiping out world wide poverty. Globalization and automation are dramatically changing the playing field for modern employment (don't tell your kids to be truck drivers, maybe drone pilots). As I have said before education is important, and people need to learn how to create value (plumbers and welders create value too). We already have a very progressive tax system. Using your negative feedback reference, applying even more negative feedback to wealth creation will leave the world with less wealth creation.
These arguments are older than some of us reading this. Of course the weakest among us need some help from society but increased entitlements over the last several years is just a disincentive to work for many able bodied citizens (workforce participation is down). We would all like to live off somebody else's work effort but that is not sustainable (nor is borrowing to pay for government spending). The golden goose can get throttled and stop laying those golden eggs.
JR