An interesting thesis on inequality....the yard sale model.

[Blansky]

At the heart of basically every country is the concept of inequality and how and why.

This theory is rather interesting. Try not to get political but keep it theoretical. We should be adult enough to do that.

https://pudding.cool/2022/12/yard-sale/

[Maleg]

Some of the assumptions seemed inherently flawed.

[Mifune]

we, as individuals, are not unique, nor are we equal... and people should stop attempting to be so.

to try and do so is to suffer from narcissism.

I am nothing.

[JoeJoeBobo]

Originally Posted by Mifune

we, as individuals, are not unique, nor are we equal... and people should stop attempting to be so.

to try and do so is to suffer from narcissism.

I am nothing.

It’s our uniqueness that makes us unequal on the playing field of life!

[330ci]

Pareto made similar observations about wealth distribution in the 1890s.

The biggest problem with this model is it ignores the fact that people don't just give away their money. They spend it on heavily depreciating assets and lose their purchasing power as a result.

Every purchase we make is ultimately an investment in ourselves. That coffee that makes you feel good is far less a waste than a $60 shirt to impress others that will resell for $10 when you're done. When I started looking at where the most value was lost in my life, I just started to cut back on those things. And even when I buy something used, I look at where its made, the components used, how it compares to current equipment and where its at in relation to its cheapest sale price to the public. Anything made in USA, EU, or UK is going to hold its value far better than anything from Asian countries due to the value of labor, cost of taxes and limited production of products. I do my best to not buy anything made in China and I'm generally happier with my purchases as a result.

Then people speculate, had that guy sold his omega, taken his $50 loss and bought something worth $250 with the 150 he could've easily worked his way out.

When I spend $150 garage saling I expect $600 or so in inventory. When I purchase stuff, I want to be able to sell it to another dealer for profit if I need to move it quick. Otherwise markets don't always move in your favor and certain items are tough to move if you're not a specialist.

Like my bike is $15k retail, I paid $1,400 shipped to my door. My max loss is going to be $1,400 but the original owner likely took $10k+ in depreciation. I'll likely net a small profit or break even due to the fact that a New Pinarello Dogma with super record is still $15k-20k and the secondary market prices are probably still not any less than what I paid a few years ago. Meanwhile someone else with $1,400 to blow on a bike might have gone into the bike shop and bought a $1,400 bike that they would only be able to sell for $700 in a few years. To me riding a 10 year old Pinarello Dogma seemed like a better purchase than a brand new entry level bike. But not everyone follows that line of logic.

Same reason I have a 20yr old BMW and 15 year old mustang. Outright purchasing both cars costs about the same as the down payment for a lease agreement of a current model.

People need to learn to live within their means and spend money wisely.

One observation I did notice, is that people with more money always make out better than people with less money. And I see this to be true. All the dealers I sell too are wealthy local business owners that specialize in the materials I find for them. Their spread might be 50% on the best day though where I'm usually doubling my money at a minimum. They just have so much that they don't need their money to work as hard as I do. They have millions piled up. I don't.

The sad reality is most people would be lucky to be at $0 though, most people seem to be negative money these days.

[DocHorton]

There's nothing wrong with inequality, IMO. The world is not meant to have everyone be equals financially. And even if we were, people would still make poor decisions and squander it.

If we took the entire worlds wealth and distributed it to every person equally, in probably 4-5 generations we would be back in a similar spot with rich and poor. Part of it is genetic, most is hard work, a little luck, wisdom, smart decisions, utilizing opportunities, and a significant part is having the stones to take appropriate and calculated risks. Some people get it, some don't. Such is life.

[JoeJoeBobo]

Originally Posted by DocHorton

There's nothing wrong with inequality, IMO. The world is not meant to have everyone be equals financially. And even if we were, people would still make poor decisions and squander it.

If we took the entire worlds wealth and distributed it to every person equally, in probably 4-5 generations we would be back in a similar spot with rich and poor. Some people get it, some don't. Such is life.

A potential thesis to your query is being considered in San Francisco currently.

[brandrea]

That’s it … every member of TRF gets an equal share of Chewie’s wealth

[DocHorton]

Originally Posted by JoeJoeBobo

A potential thesis to your query is being considered in San Francisco currently.

Quite possibly one of the worst places in America to give it a go, but I can't wait to see the train wreck.

I think of it this way....put 1000 folks on an island with nothing but the clothes on their backs, a few rudimentary tools, and some sort of currency. Does anyone really think in even 20 years they will all still have a similar amount? Or even that they would all fall within 15-20% of each other? I don't.

[Tools]

Originally Posted by DocHorton

. . .
I think of it this way....put 1000 folks on an island with nothing but the clothes on their backs, a few rudimentary tools, and some sort of currency. Does anyone really think in even 20 years they will all still have a similar amount? Or even that they would all fall within 15-20% of each other? I don't.

I expect that in your example there would be leaders, innovators, and workers. There would also be followers and those who contribute little to nothing to the island's betterment.

The idea that all would benefit equally from the work and innovation of those leaders and workers has led to the collapse of more than a few islands throughout history.

Reducing society/civilization to random winners and losers who only flip a coin for their worth is a faulty model.

[JoeJoeBobo]

Originally Posted by Tools

I expect that in your example there would be leaders, innovators, and workers. There would also be followers and those who contribute little to nothing to the island's betterment.

The idea that all would benefit equally from the work and innovation of those leaders and workers has led to the collapse of more than a few islands throughout history.

Reducing society/civilization to random winners and losers who only flip a coin for their worth is a faulty model.

Correct because in a meritocracy for there to winners there must also be losers. A world were everyone gets a participation medal is doomed to collapse.

[Star Ferry]

I think they're correct that initial differences in repeat games are magnified. If we both show up to a casino with $1000, and I initially lose $1000, then I'm done. But if I start winning and building up my bankroll, and then later lose $1000, that may not be a big deal. And you see that play out qualitatively over people's lives, with small initial advantages in schooling or parenting snowballing over time into huge disparities.

Since an economy is a complex system with countless components and interactions, physicists could probably do a better job than the traditionally trained economists we have now (who are hardly better than fortune tellers and consistently wrong).

From a practical perspective, though, and regardless of whether they're mostly created by luck or by hard work and talent, I don't think the existence of super rich people is the existential problem it's often presented as.

Yes, it's extremely dumb and demoralizing that a lady who inherited Walmart money and did no work can be worth $60 billion, but even in the absence of the super rich, (1) a lot of people still wouldn't want to work or follow rules at all, and (2) a lot of people will still spend every dollar they get, no matter what, which makes it impossible for them to accumulate wealth no matter how much you give them.

I don't see how removing billionaires solves all these problems. And if we're talking about self-made billionaires, well most people aren't even playing the same game as them. The "losers" in their game are Stanford grads whose startups struggled to raise any venture capital, skilled real estate investors sadly wiped out by a credit crunch, people whose private equity fund or hedge fund fizzled out with little fanfare, or bio-pharma folks whose clinical trials didn't work out or couldn't be funded. Your Average Joe isn't even flipping the coin.

[cartesian Product]

Redistribute this.

[superdog]

Originally Posted by Mifune

we, as individuals, are not unique, nor are we equal... and people should stop attempting to be so.

to try and do so is to suffer from narcissism.

I am nothing.

Agreed.

Agree 100%!!

[EEpro]

We need to focus on equal treatment under the law before the elite geniuses who receive unequal treatment focus on redistribution and equal outcome schemes to cement their power and further entrench themselves in our lives.

Equality (more specifically equity which is now used to describe equal outcomes) is a Marxist dogwhistle. Feels good. Doesn't work.

[JoeJoeBobo]

Originally Posted by EEpro

We need to focus on equal treatment under the law before the elite geniuses who receive unequal treatment focus on redistribution and equal outcome schemes to cement their power and further entrench themselves in our lives.

Equality (more specifically equity which is now used to describe equal outcomes) is a Marxist dogwhistle. Feels good. Doesn't work.

Even Greta Thunberg sees the ridiculousness of the Elite DEF get together in Switzerland and these are the same people who used here when it suited them.

At least they help fly the high end escorts of the world to their next destination Super Bowl 2o23 in Az

[DocHorton]

Originally Posted by Tools

I expect that in your example there would be leaders, innovators, and workers. There would also be followers and those who contribute little to nothing to the island's betterment.

The idea that all would benefit equally from the work and innovation of those leaders and workers has led to the collapse of more than a few islands throughout history.

Reducing society/civilization to random winners and losers who only flip a coin for their worth is a faulty model.

Bingo!

A guy told me one time..."Success has a way of following the same people around." I believe it.

[SDGT3]

I want my 10 minutes of time from reading that back. The example posted by the OP is flawed in so many ways. The so called "Yard Sale" example in the financial world is called "Sequence of Returns Risk" which basically says that if you have losses early, it's hard to make them up later while if you have wins early, it's easier to coast.

The assumptions made in the example cited is that it doesn't account for human capital, choices in life or any other reality based variants. It's simply assumes everyone is equal.

There's a reason why most lottery winners and professional athletes are broke within 3 years of hitting the jackpot or retiring. I'm a big believer of those who have means have it for a reason and those who luck into it eventually don't.

[cartesian Product]

We are promised equality of opportunity not equality of outcome.

[mountainjogger]

Originally Posted by brandrea

That’s it … every member of TRF gets an equal share of Chewie’s wealth

Let's agree that you get half of Chewies wealth and I get half. We can then hire Chewie to manage our money.

[brandrea]

Originally Posted by mountainjogger

Let's agree that you get half of Chewies wealth and I get half. We can then hire Chewie to manage our money.

This works for me

Sent from my SM-G960W using Tapatalk

[pickettt]

The necessity to compete shouldn't be tampered with.

[Easy E]

Originally Posted by brandrea

That’s it … every member of TRF gets an equal share of Chewie’s wealth

I’m here for that.

[OverGeared]

Originally Posted by cartesian Product

We are promised equality of opportunity not equality of outcome.

Unfortunately we get the illusion of equality of opportunity, not the reality.

[Rock]

People are, through no fault of their own (except maybe choosing the wrong parents) born with vastly different levels of intelligence, common sense and opportunity.
The suggestion that this can be "equalised" is nonsense.
The best we can do as a civilised society is to make provision for the less able/fortunate members of society to have access to a basic level of subsistence - i.e. Welfare - and to provide opportunities for them to improve their status where possible.
It would also be nice if the poor and the rich (particularly business entities) were treated equally under the law. (I just watched the Netflix - Bernie Madoff doco)

[Moondoggy]

Little off topic but I like this one

A guy owns a hotel and his childhood friend is in town with his construction business. They meet up and he wants to give his friend business by having these major CEOs stay at his hotel but first he wants to inspect it. The hotel owner agrees and the construction owner, out of courtesy gives him $100 in advance for allowing him to inspect.

The hotel owner runs down to the head maintenance guy and gives him the $100 and says clean extra tonight.

The maintenance guy goes to the hardware store to pay off $100 debt for supplies on tab.

The hardware store owner goes to the bar across the street and pays off a $100 tab the was from the night before.

The bar owner gives the $100 to a prostitute for services rendered the night before.

The prostitute goes back to the same hotel and pays off her $100 debt for allowing the owner to let her rent a room in advanced.

The construction owner goes back to the hotel owner and says the hotel is clean, but the rooms are too small for these CEOs, he is going to stay elsewhere. The hotel owner gives him back the $100 that was paid in advanced.

What happened here?

[INC]

Originally Posted by Moondoggy

What happened here?

Debt clearance in a barter system.

[INC]

Originally Posted by Blansky

This theory is rather interesting. Try not to get political but keep it theoretical. We should be adult enough to do that.

I think this theory deliberately leaves out the main condition to achieve this result: the players must play until one of them goes broke.

In real life, it doesn't work that way. It works like this: who wants to get back the losses in the same way as it was made, they will necessarily lose everything. This is what happens in Las Vegas, or with lottery winners. They are the ones who can't handle money and therefore will surely lose everything because they don't believe that they can't get their lost money back.

The bottom line is this: The loss cannot be recovered. Even this strategy is wrong! The loss must be written off and your game must be restarted, but in such a way with which it's possible to win. And if there is no way to win, you have to exit from the game. But the humans not works this way Therefore are two classes of the people, the loosers and the winners. And as it was singed a long time ago:

"The winner takes it all".

And yes, upon this we should remember the ancient Ferengi Rules Of Acquisition:

"45. Profit has limits. Loss has none."

So even the above mentioned game is not the best example for the human behaviour, but a perfect proove for this wisdom

[Moondoggy]

Originally Posted by INC

Debt clearance in a barter system.

It’s a reasonably good analogy based off the example, I personally cannot find the barter component.

Clue - we are not looking for academic, macro/micro economic, co-efficient of determination analysis here. I like to apply the KISS principle.

I personally think I have a good rationale but as always I am not looking to scream it out without a definitive answer.

[Moondoggy]

Originally Posted by Rock

People are, through no fault of their own (except maybe choosing the wrong parents) born with vastly different levels of intelligence, common sense and opportunity.
The suggestion that this can be "equalised" is nonsense.
The best we can do as a civilised society is to make provision for the less able/fortunate members of society to have access to a basic level of subsistence - i.e. Welfare - and to provide opportunities for them to improve their status where possible.
It would also be nice if the poor and the rich (particularly business entities) were treated equally under the law. (I just watched the Netflix - Bernie Madoff doco)

I think it’s called “lucky sperm”. Actually I read your post wrong but their is a thing as lucky sperm.