You can’t simply declare a zero-sum situation to not be, and then expect your study participants to believe you.
That’s what this study did:
> In studies 1 to 5, participants read various equality-enhancing policies that would provide additional resources (e.g., salary and jobs) to a disadvantaged group (e.g., Latino Americans, people with a disability, women, and ex-felons) without changing the resources provided to the advantaged ingroup (e.g., white Americans, people without a disability, men, and non-felons).
Where, exactly, does the money to pay for their additional salary and jobs come from?
In an imaginary situation where the total money supply is distributed (unevenly) across all citizens, then yes, the situation is technically zero-sum.
But that’s not really how things work. Between investments, purchasing power, ability to afford higher quality goods, etc. the wealthy have significant additional advantages that make the system far from zero-sum.
But even in the imaginary setup, it’s non-linear in terms of quality of life. That is, wealth redistribution can have a huge positive effect on the poor and an insignificant negative effect on the wealthy.
Resource redistribution is pretty zero sum in reality. Investments are kinda gray, they (usually) have long term positive gains, but come with short-term costs and opportunity costs.
I don't know what "the wealthy have [...] advantages that make the system far from zero-sum" is supposed to mean or how purchasing power is supposed to factor into this.
You can say that redistributing resources is just despite that, but the author framing it as a 'win-win' situation that advantaged groups are just too ableist/racist/sexist to accept is absurd.
To be clear, I’m not defending the study, but rather the notion that the situation is zero-sum.
> I don't know what "the wealthy have [...] advantages that make the system far from zero-sum"
I list examples of two positive-sum advantages for those with significant capital:
1. capital control enables collection of value from production. You might say that advantage comes with risk and is therefore it balances out. But the opportunity to invest in the first place is an advantage, and if done wisely, the risk of investment negatively impacting quality of life can be minimized.
2. Positive feedback effects of having capital, such as buying a more reliable car which ultimately saves you money.
“Purchasing power” was the wrong wording. I meant something closer to “leverage”.
In a supply constrained economy (which USA currently is, can see this from inflation), the supply of goods is zero sum. The government printing more money and giving to other people makes the money you have worth less, so even if the government gave you as much money as before you will now effectively get less from the government.
The "economy is not zero sum" argument comes from other parts. If you work harder and produce more goods than before, then that is not zero sum, since you added goods and therefore didn't reduce the worth of others money. But this is a very different scenario.
Also agree that production isn’t zero-sum. But those with capital can extract value from production through investments, making capital accrual a compounding advantage.
Quantitative easing is an irrelevant bandaid. What's your answer to preventing people from amassing ever greater division of labor coupons that they don't need?
Ah yes the mythical government monery printing fairytale. Have you ever considered that negative yields are normal and that money cannot reprrsent negative yields directly and therefore must let the unit of account change as the bandaid for what is simply a technical problem?
Oh right I also forgot that people have an inherent desire to lie to themselves. They would rather see the value of their money erode without their knowledge than see their money disappear (at a slower rate) but maintain its value.
By the way. A lot of economic activity appears to just monetize what is or was already there. Like hoe real estate keeps getting more expensive.
Sorry to burst your bubble but money is very unevenly distributed and it is usually distributed away from where it is needed the most because the economic system is set up to subsidize the owning class. Because the rich are powerful interest groups they get to vote money into their pockets redistributing money away from the general population who then demands money into its pockets via welfare to cancel out the unfairness.
You could argue that the rich are bribing the government to get more money and then the government must bribe the rest of the population so they look away from an obviously morally questionable political system.
Why does this matter? Jobs are not a fixed pie of resources; productive jobs will pay for their own salary. Providing prioritized job training to those expected to benefit the most from it - which may well include Latino Americans, people with a disability, women, and ex-felons - can easily create jobs out of nothing.
While productive jobs will pay for their own salary, any business is still operating with a fixed amount of resources and thus a set number of employees it can hire for the time. Therefore (high paying) jobs are in fact a zero sum resource
The Fed and Congress are still beholden to the actual economy, the gods of prices will ruthlessly sprinkle inflation all over if there is too much fairy dust in the hands of people.
In the actual actual economy, the magic castle buys almost half of the Treasury bonds issued by the government; and when you give free money to people who can't meet all their basic needs, they spend all of it, which causes a cascade throughout the economy of taxable transactions, which reimburses the government for most if not all of the money it laid out.
Yes, that's why people who harp about debt-to-GDP ratio are usually ignorant of the fiscal multiplier. That said not all spending is the same. Spending on reforms or infrastructure that people benefit from (so things that help to make structural changes in the economy eg. by decreasing income inequality) has a large fiscal multiplier, spending on yet another useless thing (let's say paying Amazon - by giving it a tax break - to move its HQ from A to B) does nothing.
Meanwhile here in the actual actual world, we've seen that inflation is caused by wars and botched pandemic responses, not taking care of disadvantaged people.
... I'm not exactly sure what are you trying to communicate. I'm absolutely for spending more on things that help disadvantaged people, but still, fundamentally that means more people needed to work helping disadvantaged people and less everywhere else to avoid inflation. (See NAIRU.)
There was already a pretty serious inflation in many places that did pretty serious lockdowns (for example Germany), well before the war.
And since the developed economies are very intertwined it's no surprise that the CPI curve for the US looks very similar.
And the likely causes are:
- the shift of spending from services to products during the pandemic
- plus overloaded the logistics networks which further increases costs
- the unexpectedly large stimulus bills
- not enough people getting the vaccine in time & no new vaccine version released to target new variants (so boosters are becoming less and less effective)
> I'm not exactly sure what are you trying to communicate.
When I read your response to my post, my Spidey Sense warned me that you might be trying to use the excuse for not helping the disadvantaged that is always trotted out... that we can't afford it. I tried to point out that the opposite is the case, that we can't afford not to help, and your mention of inflation is a red herring.
> more people needed to work helping disadvantaged people and less everywhere else to avoid inflation.
Don't need to hire people. Just send money on the magic castle's flying carpet. Extra credit: see Affordable Care Act, whose opponents swore would trigger massive inflation
> There was already a pretty serious inflation in many places that did pretty serious lockdowns
Pandemic response was a multidimensional challenge that went beyond lockdowns, and was botched in many of those dimensions.
> the shift of spending from services to products
Dunno about this, seems to me that much of product inflation was due to
> overloaded... logistics networks
Botched pandemic response
> unexpectedly large stimulus bills
Size was not the problem, but distribution. Botched pandemic response
there's a lot of slack in a lot of publicly funded sectors (from education, defense spending, research to various other social programs), where ACA style laws could help cut out rent-seeking intermediaries/vendors/other-artificial-bottlenecks (for example a pretty large chunk of public spending is going for buildings, their maintenance, transportation, energy costs, and so on, which all are high because of bad/missing/inefficient infrastructure, which is kept in that way because by lobbying and other kinds of selfishness)
but simply increasing the money supply and giving money to people to spend on healthcare will push prices up. (which also immediately means that the money that was just handed over to someone who needed to buy healthcare services gets less of it.)
just like you keep saying botched response... I keep saying botched spending :) yes, both can be true at the same time.
"Where, exactly, does the money to pay for their additional salary and jobs come from?"
From the first paragraph of the Introduction to the article:
"Racial inequality costs the U.S. economy an estimated $16 trillion in lost gross domestic product (GDP), failing to hire job seekers with a criminal history results in an annual loss of $78 billion in U.S. GDP, and the persistent gender pay gap restrains the global economy by about $160 trillion"
Those are extremely bold claims — the assertion that disagreement is a misperception even more so.
Is it a misperception of reality that I believe their proposals would decrease overall economic efficiency, not increase it?
The situations they presented are zero-sum. To believe otherwise, you’d have to share their (unsupported, unstated-to-participants) premise that resulting efficiency gains would offset the additional cost that came out of your own pocket to enforce equality of outcome.
US GDP is about a quarter of that, about 24T. So an estimated reduction in efficiency of 40% (40T -> 24T). Seems high, but maybe not laughably so, to me
digging down to the cited source on US GDP point, honestly seems pretty reasonable
> We discover that closing racial gaps is a pareto improvement to both the U.S. economy and society. If racial gaps for Blacks had been closed 20 years ago, U.S. GDP could have benefitted by an estimated $16 trillion. If we close gaps today, the equivalent add to the U.S. economy over the next five years could be $5 trillion of additional GDP, or an average add of 0.35 percentage points to U.S. GDP growth per year and 0.09 percentage points to global GDP growth per year.
> If racial gaps for Blacks had been closed 20 years ago
A gap is an interval, meaning a spread of outcomes is inevitable in narrowing.
This statement assumes the gap to be closed by raising Black wealth to that of Whites. That's sloppy.
What if the gap is closed by bringing both populations to the median? What if the gap is closed by bringing both populations down to the Black standard?
All three of these are equality of outcome. If there's an argument why the best of these outcomes should be presumed, it hasn't been made.
Failing to hire cats costs the economy another $2.5 quadrillion, and failing to employ birds - $450 quadrillion. The good thing is nobody can disprove these claims.
1) Resources provided to the advantage grouped may not be utilized effectively. You can reallocate the crates without anyone in the advantaged group noticing
2) Resources invested in the future can be done so to remove systemic barriers that lead to disadvantages. Next time the fence needs maintenance or replacement, just replace it with one that doesn't need crates
3) Another way to say #2 is if you commit to EVALUATING the status quo and trying to understand the reasons for inequality (as opposed to just assuming that the world is inherently hierarchical and just which is the more traditionalist approach), you can identify policies that exist that continue to perpetuate disadvantages. And that if you just remove them, you will reveal additional resources. (e.g. stop sentencing certain races more harsher for the same crimes as other races)
What I envision in the 4th panel is that less people want to pay to sit at the benches, the players get paid less, players leave for other opportunities, and downward spiral starts. Eventually there are no more professional games because there are no money to support it.
Perhaps I am too pessimistic, but I think even with healthcare or housing when the barrier is broken down the system would segregate into two. A public option (no/little barrier) and a luxury (pay to play) option. Which in this analogy is analogous to another ballpark for professional baseball teams being built with taller fences and more expensive tickets.
People propose hypothetical situations as part of a question all the time and then you're asked to try and come up with an appropriate answer for that situation. Opting to discard the hypothetical and answer based on your worldview is of course something you're free to do.
You really can't conceive of any possible way that disadvantaged groups could be given more resources? Have you heard of gold mines? Oil wells? Stock markets? Resources are "created" all the time. A harsh and immediate refusal to even consider a hypothetical scenario like this indicates a lack of imagination on your part, not a failure on the part of the researchers.
> People propose hypothetical situations as part of a question all the time and then you're asked to try and come up with an appropriate answer for that situation. Opting to discard the hypothetical and answer based on your worldview is of course something you're free to do.
Nobody is discarding the hypothetical, just confronting the unstated and unsupported assumptions upon which it is predicated.
> You really can't conceive of any possible way that disadvantaged groups could be given more resources?
As an aside — membership in groups based on race, gender, or disability says nothing about an individual’s disadvantage.
Resource redistribution based on identity group is, in of itself, an inherently biased and discriminatory proposal.
> Resources are "created" all the time.
… and inequitably distributing newly created resources disadvantages the identity groups you choose to selectively marginalize.
> A harsh and immediate refusal to even consider a hypothetical scenario like this indicates a lack of imagination on your part, not a failure on the part of the researchers.
My imagination is quite capable of encompassing what the researchers believe about their hypotheticals, and why they’re wrong.
My imagination is further capable of encompassing why they believe that the disagreement of the majority of their study subjects represents a misperception of reality, as opposed to a recognition of the flaws inherent in both their ideology and work.
Imagine a society where people born in March are discriminated against. People are reluctant to give them jobs, pay them less, don't want them as tenants etc.
Do you believe the people born in the other eleven months would do better in such a society?
If that example isn't obvious enough, imagine removing the state of Colorado from the US. Is that good for Illinois?
Obviously not, because, on average, people contribute as much as they take (by definition). For every job-taker, there is a consumer spending enough to make that job worthwhile. Removing people for arbitrary reasons just shrinks the economy.
It seems like it would be good for non-March people, I'm not sure why the opposite is "obvious". For example if you're applying for an apartment and the other potential tenant is born in March, you'd an advantage even if you have a lower credit score- assuming we live in our current supply-constrained world, where housing is very zero-sum.
For a more extreme example, think of a situation where everyone born in March is sold into servitude, but only people born in February are allowed to own them. Is this good for people born in March? Obviously not. Is it good for people born in February? Absolutely, they'd be able to financially benefit from their newfound privilege. Is it good for people born in the other 10 months? Probably not, people born in March would skew the market for remaining jobs
> Imagine a society where people born in March are discriminated against. People are reluctant to give them jobs, pay them less, don't want them as tenants etc.
> Do you believe the people born in the other eleven months would do better in such a society?
Having an exploitable underclass can absolutely improve the standing of the rest of a society.
Whether it’s a long-term advantage depends on whether the cost (ethical, and lost contributions of the marginalized subclass) exceeds the benefits.
This also has no relevance to the study; what you’re asking involves questions of equality of opportunity, not attempting to engineer equality of outcome.
> If that example isn't obvious enough, imagine removing the state of Colorado from the US.
Makes you think how much better would the social science studies be if they hired more diverse (i.e. not only left wing progressive) scientists who could point out those errors and inconsistencies to the authors of the paper.
Alternatively, maybe they are better educated and clearly understand the nuances of the field more than some random internet forum poster like yourself.
>Where, exactly, does the money to pay for their additional salary and jobs come from?
A group of billionares? Don Ameche and Ralph Bellamy?
You're making the study's point by arguing that helping one group must be a zero sum game that harms another group, even when a hypothetical situation explicitly states otherwise. You just can't get it out of your head. That's how strong the bias is.
It really is the entire point of the study. Ironic.
> A group of billionares? Don Ameche and Ralph Bellamy?
How do you propose to allocate your newly found resources in a way that is not zero-sum?
That's impossible.
Furthermore, if you're proposing to follow the study authors' hypotheticals, and distribute on the basis of sex, race, etc, such distribution would be inherently biased and discriminatory.
The only rational conclusion is the one held by the majority here on YC, the majority of study participants, and myself: the authors are either lying or confused, the hypotheticals are zero-sum, and whatever identity groups that the authors think deserve to be marginalized (men, "white" people, etc) will lose out in their hypothetical resource distribution schemes.
> It really is the entire point of the study. Ironic.
The only thing the study proved that is you start by treating their errant false assumptions as fact, the intended result follows.
>The only rational conclusion is the one held by the majority here on YC.
Not sure when you conducted this survey, but your entire comment directly supports the study by professing exactly the false beliefs it describes. You just call these false beliefs "true" which is, of course, the point.
> Where, exactly, does the money to pay for their additional salary and jobs come from?
Why does anyone pay anyone else to do work for them? If this situation was actually zero-sum, then employees would get paid for a while until companies ran out of money, and then no one would ever get paid again. Fortunately, this is not a zero-sum situation, and people pay other people to do work in order to produce more value for the people paying for the work than they pay for the work.
For example, if I pay you $50 to put together $50 worth of components into a phone, I then go and sell that phone for more than $100. You get $50, whoever sold me the components gets $50, I get my sell price - $100 for the phone, and whoever buys it gets a shiny new phone. Everybody wins.
And it goes further! Everyone who made money takes their money and spends it on things other people have produced via their hard work -- or they invest it with some people for those people to try to make something more of that investment. Or they sit on it and spend it later, because they don't know what they want to spend it on right now. Whatever they do, the entire economy gets some action... eventually.
But let's say I'm kind of racist and sexist and biased in all kinds of ways and not necessarily aware of all the ways in which I'm biased, aka an actual human being. Then I might decide not to even consider hiring some people, because I think they wouldn't be able to do the work, when in reality they might do just fine, but my biases are getting the better of me. Then I might not hire as many people, and so I wouldn't pay as many workers to make phones, and I wouldn't pay for as many phone components, and I wouldn't sell as many phones. Now I am poorer, and the component seller is poorer, and the person I didn't hire is poorer, and someone out there doesn't get a phone. And the economy sees a little less influx of activity from everything we might have done and ended up not doing. Everyone is worse off.
But! If some policies are put in place to encourage me (somehow) to hire people that I might not normally consider due to my biases, then I might change my mind, and everyone wins more again.
So where does the money come from? I might be hanging onto some, hoping to hire some people, but I'm not spending as much as I would if I was hiring people I'm biased against. Or maybe some other companies besides mine hire more people that often face bias, and those companies expand and produce more and their new employees spend more buying all kinds of things (including the stuff my company makes), so my company gets buoyed up and now I have cash to spend to hire more people too. Or maybe I see the policy changes and decide I want to expand my business, so I seek out some investment or take out a loan.
The reason equality -enhancing policies are beneficial to everyone is that they make the total market bigger, faster. Money in a healthy economy doesn't run out and disappear; it flows. And if it flows productively to people who are currently relatively neglected in this regard, then everyone ends up better off, including the people who are not neglected in this regard.
> If this situation was actually zero-sum, then employees would get paid for a while until companies ran out of money, and then no one would ever get paid again.
You may not have noticed it but you just described an economic depression. During a depression people build up excessive amounts of savings which then aren't being spent, that money is quite literally missing from the economy. Companies eventually run out of money and fire their employees. As idle production capacity is being removed the cost of goods goes up again and those savers saved for nothing. So now you have this boom and bust cycle nonsense.
That’s what this study did:
> In studies 1 to 5, participants read various equality-enhancing policies that would provide additional resources (e.g., salary and jobs) to a disadvantaged group (e.g., Latino Americans, people with a disability, women, and ex-felons) without changing the resources provided to the advantaged ingroup (e.g., white Americans, people without a disability, men, and non-felons).
Where, exactly, does the money to pay for their additional salary and jobs come from?