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Hi Danny and James,
Let's think about this analogy:
A group of people live on an island with plenty of food and many coconut trees
. Climbing up a tree and picking a coco nut doesn't take away anything from
the others. Those who are fit enough to climb a tree gracefully give away 20%
to 25 % of the nuts they harvest to the spectators who were watching them.
Imagine following rule would be enforced :
Anybody who picks coco nuts has to give away 1/3rd to 1/2 to those who appear
to have no coco nut.
Does anybody from this mailing list belief that overall supply of harvested
coco nuts will increase? Or, that those who didn't get enough coco nuts under
the old habit would now get more?
Or does anybody think, that a skilled climber would train himself to pick more
nuts in less time?
The same applies to $, Pounds, Euros etc.
Franz
----- Original Message -----
From: James W Mickens
To: Daniel Reeves
Cc: Kevin Lochner ; Dave Morris ; improvetheworld Æ umich.edu ; reeves
-hayos Æ umich.edu ; reeves-kalkman Æ umich.edu
Sent: Tuesday, September 04, 2007 10:51 PM
Subject: Re: mind the gap
> And I don't think you clarified what James is saying. He said that more
> real wealth to billionaires does directly hurt poor people. I'd like to
> hear the chain of causality he has in mind.
According to Graham, "wealth is not money. Money is just a convenient way
of trading one form of wealth for another. Wealth is the underlying
stuff---the goods and services we buy." The underlying stuff, the goods
and services, are constrained resources. For example, using a wealth
resource in one way often prevents its use in a different way; real estate
that is used to build a library can't be used to build a sports stadium .
Wealth is also constrained by the rate at which it can be produced. There
are a finite number of automobiles that can be produced per month. There
are a finite number of hours that doctors can spend treating patients.
These figures may improve over time, but they will still be finite. This
means that many types of wealth are scarce. Ergo, distribution matters . In
particular, skewed wealth distributions directly hurt poor people because
there is a finite amount of wealth for everyone to share, and giving a
unit of wealth to one person is equivalent to taking it away from someone
else. Thus, the Daddy Model of Wealth is not totally broken. Wealth is not
money, but many types of wealth *are* constrained by natural limits.
A society's wealth can grow over time, but it will never be infinite.
Thus, there will never be enough wealth to maximize everyone's utility .
But given diminishing utility returns on wealth accumulation, sound public
policy should ensure that wealth imbalances do not grow too large.
~j
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Hi
Danny and James,
Let s
think about this analogy:
A
group of people live on an island with plenty of food and many coconut trees .
Climbing up a tree and picking a coco nut doesn t take away anything from the
others. Those who are fit enough to climb a tree gracefully give away % to 25
% of the nuts they harvest to the spectators who were watching them. Imagine
following rule would be enforced:
Anybody who picks coco nuts has to give away 1 /3rd to
1/2 to those who appear to have no
coco nut.
Does
anybody from this mailing list belief that overall supply of harvested coco
nuts
will increase? Or, that those who didn't get enough coco nuts under the old
habit would now get more?
Or
does anybody think, that a skilled climber would train himself to pick more
nuts
in less time?
The
same applies to $, Pounds, Euros etc.
Franz
----- Original Message -----
From:
James W
Mickens
To: Daniel Reeves
Cc: Kevin Lochner ; Dave Morris ; improvetheworld Æ umich.edu
; reeves-hayos Æ umich.edu ; reeves-kalkman Æ umich.edu
Sent: Tuesday, September 04, 07 10:51
PM
Subject: Re: mind the gap
> And I don't think you clarified what James is
saying. He said that more > real wealth to billionaires does
directly hurt poor people. I'd like to > hear the chain of
causality he has in mind. According to Graham, "wealth is not money .
Money is just a convenient way of trading one form of wealth for another .
Wealth is the underlying stuff---the goods and services we buy." The
underlying stuff, the goods and services, are constrained resources . For
example, using a wealth resource in one way often prevents its use in a
different way; real estate that is used to build a library can't be used
to build a sports stadium. Wealth is also constrained by the rate at which
it can be produced. There are a finite number of automobiles that can be
produced per month. There are a finite number of hours that doctors can
spend treating patients. These figures may improve over time, but they
will still be finite. This means that many types of wealth are scarce .
Ergo, distribution matters. In particular, skewed wealth distributions
directly hurt poor people because there is a finite amount of wealth for
everyone to share, and giving a unit of wealth to one person is equivalent
to taking it away from someone else. Thus, the Daddy Model of Wealth is
not totally broken. Wealth is not money, but many types of wealth *are*
constrained by natural limits. A society's wealth can grow over time ,
but it will never be infinite. Thus, there will never be enough wealth to
maximize everyone's utility. But given diminishing utility returns on
wealth accumulation, sound public policy should ensure that wealth
imbalances do not grow too large . ~j
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