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Zanthius
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Why we should not strive for complete economic equality
« on: May 10, 2018, 08:45:07 pm »



https://www.archania.org/governance/#Some_economic_inequality_might_be_useful_to_optimize_productivity_and_efficiency
« Last Edit: May 12, 2018, 01:14:00 am by Zanthius » Logged
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Re: Why we should not strive for complete economic equality
« Reply #1 on: May 11, 2018, 02:11:51 pm »

5 or 10 Million USD would put you well out of the same economic stratum as almost everyone. Just saying.
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Zanthius
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Re: Why we should not strive for complete economic equality
« Reply #2 on: May 11, 2018, 04:46:52 pm »

5 or 10 Million USD would put you well out of the same economic stratum as almost everyone. Just saying.

Do you think I should use a different interval in my example? Write it in a different way? Or just exclude the example?

I actually put it quite high, because I kinda wanted to say that we can tax the rich people more, without it hurting them much.
« Last Edit: May 11, 2018, 04:49:12 pm by Zanthius » Logged
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Re: Why we should not strive for complete economic equality
« Reply #3 on: May 11, 2018, 05:07:50 pm »

I see. Maybe I'd point out the economic result that the utility of money is logarithmic, and take some derivatives, or something?
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Re: Why we should not strive for complete economic equality
« Reply #4 on: May 11, 2018, 11:13:31 pm »

I see. Maybe I'd point out the economic result that the utility of money is logarithmic, and take some derivatives, or something?

Are you sure it is logarithmic? My intuitive understanding about how the value of 1 USD decreases according to how wealthy people are, would be something like "utility=utility+1/utility".

But when I look upon the graphs, the logarithmic function seems to be more in accordance with my intuition....



« Last Edit: May 11, 2018, 11:26:57 pm by Zanthius » Logged
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Re: Why we should not strive for complete economic equality
« Reply #5 on: May 11, 2018, 11:59:53 pm »

That second one can't be right. That expression yields a constant utility value of infinity, and also doesn't use money. I assume you mean Utility = A*Money + B/Money (for some A with units utils per money and B with units utils*money)

Plus, it's shaped all wrong. Once you have enough, money does get less useful, but that other expression just keeps going up. I would not suffer particularly if I lost $20 (indeed, that could well have occurred without my noticing). If I were on the streets, I would DEFINITELY miss it. Your expression covers that side… but In the other direction, if I were to lose $2k, that would hurt. On the other hand, someone with even just ten times as much money as me would have to work to notice a loss like that. And there's some amount that would hurt them but be insignificant to someone more wealthy, and so on.

Logarithm covers that in a scale-free way. X + 1/X does not.
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Re: Why we should not strive for complete economic equality
« Reply #6 on: May 12, 2018, 01:13:42 am »

Logarithm covers that in a scale-free way. X + 1/X does not.

Okay. I have added this section now:



https://www.archania.org/governance/#The_utility_of_money_seems_to_decrease_with_wealth
« Last Edit: May 12, 2018, 03:03:52 pm by Zanthius » Logged
Zanthius
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Re: Why we should not strive for complete economic equality
« Reply #7 on: May 13, 2018, 06:12:59 pm »



https://www.archania.org/governance/#Money_as_the_balance_between_individuals

Do you agree with this? I don't understand why this simple understanding isn't more prevalent among economists, and so on.

I feel kinda unsure about if this really is true since I can't find many other people claiming the same.

This seems so obvious though, that I feel like it must be true. Am I missing something?
« Last Edit: May 13, 2018, 11:34:00 pm by Zanthius » Logged
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Re: Why we should not strive for complete economic equality
« Reply #8 on: May 14, 2018, 01:26:03 am »

How do you end up with a negative situation like that? No one having money at all would be a serious beyond-wowza-broken economic situation of a liquidity trap.
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Zanthius
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Re: Why we should not strive for complete economic equality
« Reply #9 on: May 14, 2018, 09:00:17 am »

How do you end up with a negative situation like that? No one having money at all would be a serious beyond-wowza-broken economic situation of a liquidity trap.

Well, lets imagine that Person B, Person C, and Person D got some horrible disease. For example cancer.

Now, Person A invents a medicine against cancer, and uses this medicine to heal Person B, Person C, and Person D.

In the first graph, they all pay him 3 units of money, so Person A gets 9 units of money. In the second graph they all owe him 3 units of money.

My point is that the 2 situations are more or less identical. Person A doesn't necessarily care if they pay him or owe him money. Especially not if they are trustworthy individuals, but the value of money is also to some degree based upon communal trust.
« Last Edit: May 14, 2018, 09:17:19 am by Zanthius » Logged
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