What if There Were No Poor Among Us?

[_Drifting]

Didn't Stalin experiment with this type of thing...

[_canpakes]

Trying to educate you as to why the cake and slices analogy of a free market economy is a strawman and a red herring is probably futile, but suffice it to say that in an economy such as that in the U.S., at least considering all of its attributes that represent the unhampered market working basically without distortions and destructive mutations introduced through various forms of state interventionism, wealth is not "shifted" from the poor to the rich. The rich invest in productive economic activities and create jobs.

It is an incomplete analysis to regard the free market as if it just appeared one day without considering all of the factors that helped to shape it and its players, as if pretending that all wealthy individuals ended up at their station in life through the same means.

Sometimes, timing is everything, and wealth is 'created' and compounded through little or no 'productive economic activity' or 'job creation' on the part of the now-wealthy individual... rather, it is achieved by accumulating or manipulating a finite resource, as Buffalo's cake analogy suggests.

Land, as an example, is a finite resource. As well as an asset itself, it contains other assets (timber, gold, water, etc.). For a period of time in this nation we gave away 160-acre blocks of free land to anyone who was interested, with very little in the way of requirements imposed in order to keep it forever. We don't do that anymore. Considering the major role of real estate in creating what generally constitutes wealth in America today, that was a bit of a 'game changer' for the families that ended up within that opportunity (their 'slice' of a limited amount of 'cake').

http://en.wikipedia.org/wiki/Homestead_Act

At a certain point, wealth - having been accumulated by any means - can simply beget more wealth through leveraging and investment; neither activity requires 'productive economic activities' or 'job creation' to generate additional wealth, as can be observed with commodity markets.

[_asbestosman]

At a certain point, wealth - having been accumulated by any means - can simply beget more wealth through leveraging and investment; neither activity requires 'productive economic activities' or 'job creation' to generate additional wealth, as can be observed with commodity markets.

I go back and forth on that. I mean, I see individuals strike it rich by dumb luck. I see others get rich by a combination of luck and skill. However, I can also see wealth from investment as the reward for investigating which companies are most likely to turn a better profit. The reward is then justified on the basis of providing information to markets. While secondary differential markets such as futures can be used to increase leverage and hence risk, they can also be justified as a means to limit one's exposure to risk. Either way I don't see risk as inherently wrong. In fact I think it makes sense to reward risk--up to point.

[_canpakes]

At a certain point, wealth - having been accumulated by any means - can simply beget more wealth through leveraging and investment; neither activity requires 'productive economic activities' or 'job creation' to generate additional wealth, as can be observed with commodity markets.

I go back and forth on that. I mean, I see individuals strike it rich by dumb luck. I see others get rich by a combination of luck and skill. However, I can also see wealth from investment as the reward for investigating which companies are most likely to turn a better profit. The reward is then justified on the basis of providing information to markets. While secondary differential markets such as futures can be used to increase leverage and hence risk, they can also be justified as a means to limit one's exposure to risk. Either way I don't see risk as inherently wrong. In fact I think it makes sense to reward risk--up to point.

Basically, I agree with this, but I also see 'risk' as a part of everything anyway, be it an investment using leverage or in crossing a street. Greater risk is not always linearly associated with greater reward for an individual or society. Likewise, the act of investing does not necessarily imply any particular risk level at all and is not always related to the potential or eventual reward.

In the end, having invested in something does not, to me, necessarily demand that any reward of increased wealth be considered 'deserved' any more so than 'wrong'.

[_Droopy]

No one said that total wealth was static. That's your strawman.

But it IS finite, and it has been undeniably shifting upwards for years.

In a free market society, wealth is not finite, and never can be unless government decree and policies intended to see to it that no more wealth is produced enforce finite, zero sum cake economic conditions. No more demonstrably and palpably false assertion could possibly be made.

Secondly, the claim that "wealth" is "shifting upwards" is unintelligible. What Bluff actually means by this I'm sure he'll eventually tell us.

[_Droopy]

Are the giving up of a substantial amount of individual economic and political rights a justifiable price to pay for the elimination of poverty, if the same outcome can be achieved without incurring that price?

Hmmm. Let me think about that one. Droopy asked if price P is justifiable for oucome O when outcome O can be achieved at lower cost. Hmm. Is it justifiable to buy a computer for $1000 if I can buy the same computer for $500? Gee, I dunno. I give up.

Probably your best bet, at this point.

Furthermore, poverty as I understand it is largely a relative thing. We live better than many wealthy people of the past due to our technology and knowledge. Indoor plumbing is a wonder thing. As time progresses, the standard of living increases as does the baseline for poverty.

Exactly correct, but not relevant to the question at hand.

[_Droopy]

It is an incomplete analysis to regard the free market as if it just appeared one day without considering all of the factors that helped to shape it and its players, as if pretending that all wealthy individuals ended up at their station in life through the same means.

Who assumed this?

Sometimes, timing is everything, and wealth is 'created' and compounded through little or no 'productive economic activity' or 'job creation' on the part of the now-wealthy individual... rather, it is achieved by accumulating or manipulating a finite resource, as Buffalo's cake analogy suggests.

I have no idea what you're talking about here at all. By what other means is wealth created than by productive economic activity?

Land, as an example, is a finite resource. As well as an asset itself, it contains other assets (timber, gold, water, etc.). For a period of time in this nation we gave away 160-acre blocks of free land to anyone who was interested, with very little in the way of requirements imposed in order to keep it forever. We don't do that anymore. Considering the major role of real estate in creating what generally constitutes wealth in America today, that was a bit of a 'game changer' for the families that ended up within that opportunity (their 'slice' of a limited amount of 'cake').

Somewhere in the area of 95% of the North American continent is undeveloped land. Land, or course, is finite, but so vast that that point of finitude is all but useless to practical or theoretical economic argument save as a hypothetical thought experiment. In any case, no one has gone without a house in the U.S. due to any shortage of land.

At a certain point, wealth - having been accumulated by any means - can simply beget more wealth through leveraging and investment; neither activity requires 'productive economic activities' or 'job creation' to generate additional wealth, as can be observed with commodity markets

Then I'm sure you can provide a practical, real world example of how wealth begets wealth without actual production of goods and commodities.

At the outset we must first ask a question as to your definition of the term "wealth."

[_asbestosman]

Exactly correct, but not relevant to the question at hand.

The question at hand deals with poverty, does it not? If so, I would think the standard by which this is measured is very relevant to the question at hand. It's like you said,
At the outset we must first ask a question as to your definition of the term "wealth."

Does the same not hold for "poverty?"

[_canpakes]

Who assumed this?

I haven't seen acknowledgment of this come in to the conversation otherwise. Consider my mention of it as a proactive exploration.

I have no idea what you're talking about here at all. By what other means is wealth created than by productive economic activity?

Speculation is one method. Monopolization of assets is another.

Somewhere in the area of 95% of the North American continent is undeveloped land.

That does not address the point. At issue was the fact that - for a time - land was deeded to anyone simply for the asking. This no longer happens. The rules have changed, but the transfer of and increase in wealth created by that past gifting of land persists.

Perhaps you know of where this opportunity remains in place and where individuals can still simply claim 160 acres of land for free, say, along the coast in California or Oregon. If so, you should probably not wait to move on that opportunity. ; )

In the meantime, acquisition of this property, and the increase in wealth over time that resulted from it, is not necessarily dependent upon 'productive economic activity' by its owner or anyone else. Yet it has nearly universally contributed to 'wealth' nonetheless.

Land, or course, is finite, but so vast that that point of finitude is all but useless to practical or theoretical economic argument save as a hypothetical thought experiment. In any case, no one has gone without a house in the U.S. due to any shortage of land.

Another misdirect. Is the cost of real estate today the equal of what it was when it could be acquired in comparatively massive amounts for free?

Then I'm sure you can provide a practical, real world example of how wealth begets wealth without actual production of goods and commodities.

To repeat - Speculation is one method. Monopolization of assets is another.

Today, there is quite a bit of activity surrounding both, and neither require 'productive economic activity' or 'job creation' to create wealth for some individuals.

At the outset we must first ask a question as to your definition of the term "wealth."

We can pick a source for a definition that we can both agree upon. I'd typically start with a relatively accessible and well agreed-upon definition such as -

wealth
n.
1.
a. An abundance of valuable material possessions or resources; riches.
b. The state of being rich; affluence.
2. All goods and resources having value in terms of exchange or use.
3. A great amount; a profusion: a wealth of advice.

But we can consider any other definition as well.

[_Chap]

If one is rich, does that mean that one became rich by creating wealth?

If the answer to the above statement is 'not necessarily', is it possible to make any estimate of the proportion of rich people in the US (let us say, the richest 1%) who became rich mainly through creating wealth?