Posted: Mar 14, 2013 10:06 am
Loren Michael wrote:Redistribution only helps if people's consumption patterns allow it to help, and/or the redistribution is such that people can't blow it all at the track, as it were, like going from private, buy-it-if-you-want healthcare to state-sponsored insurance. People can and do make (or take, lol) more and then end up spending even more, paycheck-to-paycheck.
As to how the rich got rich, it depends on the rich person. Two people starting with the same income, time, etc can wind up in extremely different places in very short order though, depending on consumption patterns. These effects build over generations. If I recall correctly, it's extremely rare for people to actually experience upward mobility outside of society-wide growth as in postwar Japan, Korea, US, etc. As such, my understanding is that most current wealth is inherited.
Yes, that is your opinion, that much I understand. You postulated thesis that if people want to get richer they should save more. Thats like saying if people do not want to be obese they should eat less. Fair enough. Granted, US, economy is driven by consumption, I am skeptical to the recommendation that saving more and spending less will become major factor in tackling inequality. Maybe the rich should save less and spend more, what do you say to such idea?
If majority of rich became rich by inheritance, its beyond me how thesis about savings stands. Money makes money. Once I tired it, by putting buch of coins to my locker at work and to my surprise month later there was still the same buch of coins. Made me wonder what makes money if not money? Perhaps some people work, spent time and energy, and some other people make money of such work. Nothing new again, Marx figured it out long time ago.