> Rents have surged in recent years, driven by tourism, foreign investment and a shortage of affordable housing. The cost of housing now consumes one of the largest shares of disposable income in the European Union
My impression is that where housing is expensive, there will be complaints of unaffordability (obviously), but also vice versa, that where there is unaffordability, housing always seems to be a large component (at least in "the west").
in most places basic food (rice and beans or an equivalent) is cheap. Services can usually be skimped on. Transportation can usually be flexible (new car / cheap used car / transit / bike). Housing costs seem to be relatively non-flexible though.
I wouldn't be surprised if Greece has strong NIMBY factors.
>I wouldn't be surprised if Greece has strong NIMBY factors.
No doubt. You see it in tourism economies the world over.
Cheap services + cultural/historical novelty + nice climate make tourism highly viable -> tourism becomes outsized part of economy -> those enriched by peddling tourism write the rules to their benefit -> it becomes all but illegal to develop any other industry, build housing, etc, etc because all this activity winds up punitively regulated lest someone do something that scared away the tourists.
You are right that it's due to housing but in my opinion most of unaffordability comes from immense pressure due to tourism. Housing situation is better outside the touristy areas (and Athens). If anything Greece has seen massive housebuilding up until the economic crash in the early 10s. I remember block of flats appearing left and right in most major cities in a span of months. They still do but in a lot of cases they are almost exclusively short-term lets (again especially in tourist hubs). Why let a flat for €500 monthly when you can charge €150 per night? It's maddening.
Somehow the economic indicators feel the same as looking at crypto.
> Between 2009 and the trough of the bailout years in 2016, average household wealth fell by roughly 35%
35% of the land didn't disappear and I'm guessing 35% of the buildings didn't disappear... So what changed was the measurements... GDP values seem even shadier.
The article gives a dozen reasons why people in Greece feel poor. Housing is just one of them. A big one, perhaps, but there are many others in the article.
It's interesting that housing is the one that all the HN commenters pick out to comment on. It's probably the most universal complaint, the one that's easiest to sympathize with from halfway around the world.
I wouldn't be surprised if Greece has strong NIMBY factors.
It's one of the oldest civilizations in existence. Combine the trend of NIMBYism building up over time, with most every city being an archeological site, and one of the least stable economies in Europe, and you aren't getting much housing investment.
It's wild how much housing is a big issue but local government with direct control, choose to do nothing. I know of a rural area where folks are upset about housing prices, there's no lack of space, they just do not zone more housing. They simply don't do it ... and the locals are happy to blame outsiders and seemingly wallow rather than really address it.
Granted it's not all zoning, new houses won't be super cheap, but it's a start.
As Ray Dalio has mentioned, you should measure results on how it impacts the bottom 51% of the people (the majority) it's a lot more illustrative than looking at the average.
Yep. I'm not an economist but my social democratic common sense would tell me to look at the bottom 10% income bracket and see how they're doing.
Incidentally these people are the best economic citizens because if you give them money they'll spend every cent of it because they need to buy food and energy, use health care and pay rent.
In other words if a rich person gets a million they (if they're sane) spend a fraction of it and put the rest in assets, stock market, property, etc. If you give 1000 poor people each 1000e every cent will go into local economy immediately.
The capitalist response to that would be that the investment in companies is better because it makes everyone richer in the long term by increasing overall wealth.
I'm not sure I buy it but it's an effect to consider.
That does sometimes happen - investment does cause development. The mistake is to assume that's always what happens, and that everybody can benefit from the development.
The benefit is uncertain whenever anybody spends money on anything beyond survival. If you go around asking investors "are you using that money properly and beneficially", for consistency you also have to nag the poor with the same question. Should you put a bet on a horse? Is it really necessary that you visit anybody far away? What's the benefit in dyeing your hair? In both cases, you'd be enforcing arbitrary wisdom instead of acknowledging your fallibility.
Capitalism has spent the last 10 years burning billions on the metaverse and crypto with apparently no repercussions for those involved so I think their credibility as custodians of wealth is questionable.
Capitalism also spent the last 10 years burning billions to create affordable electric cars, reliable regular spaceflight, efficient delivery of everything everywhere, and the (well, probably) greatest technological invention in human history. This is not a complete list.
Should we perhaps look at the top 51% instead? Why pick one perspective over the other?
I’m not familiar with Dalio outside some weird pseudo-academic paper he wrote where he attempts to provide a new grand theory of economics based on “transactions”, but I would be interested to hear this perspective supported.
Take a country like Sweden for example everyone is reasonably well off (if not exactly thriving) since income inequality is quite low. At the same time wealth inequality is extremely high since the rich pulled the ladder after them and there are hardly any options for the middle class to accumulate much wealth. In turn that probably doesn’t help productivity and innovation that much. Why work harder if you won’t get anything in return? Which is a general vibe vibe in Scandinavian work culture.
Then again they (well Denmark at least since a petrostate like Norway doesn’t count and Sweden hasn’t been stellar and the Danish government is hellbent on turning the EU into a fascist dystopia so maybe its not a price worth paying..) are doing quite well economically compared to most other European countries.
Ray Dalio created one of the most successful hedge funds ever and as he calls himself "a professional capitalist." The guy even helped with launching the Chickent McNugget (advising McDonald's with Poultry futures)
If you look at the top 51% things are going extremely well, but as this article shows it can hide a lot. I loved his explanation of how the economic machine works: https://www.youtube.com/watch?v=PHe0bXAIuk0 his book Principles is pretty good too.
This is not quite the same as the median: it is possible for the bottom 50% to improve but for the median to stay the same (i.e. imagine if everyone in the bottom 50% suddenly equaled the best of them). But the median is a lot better than the mean for not being distorted by large changes in the top and bottom percentiles.
This seems to tacitly assume that the outliers on either side have equivalent weight with respect to whatever is being investigated, while the explicit premise behind this proposal is that in this case they do not.
Considering how skewed tax participation is, this would be a very one sided view. Just tax the top 49% more, no matter what's their current level of taxation, and redistribute to the lower 51%. It'll always make this criteria look like a success.
Problem is, this creates systemic effects. If you look longer term, a society that does this will end up a lot poorer than one that doesn't. Even for the bottom 51% you were optimizing. Because there are two variables to control: the redistribution, and the actual productivity. If you just focus on splitting wealth, you stop growing wealth.
Growing wealth on the other hand will make everybody richer, including the botton 51%. Simply participating in a richer economy has advantages. Plus the smaller redistribution percentage will actually end up bigger in absolute terms.
> If you look longer term, a society that does this will end up a lot poorer than one that doesn't.
Got data to back that up?
(On the serious level, I'm really curious; But on the polemic level I'll call BS - I highly doubt there ever was such a period in any capitalist country ever)
A theory of land, housing, and open-economy failure: how a non-reproducible asset absorbs global savings, breaks wage-price adjustment, and hollows out the productive economy.
I live here. Few facts: normal salary €1000 per month; houses €150–200–300k; house prices are rising because of foreign investors; seasonal workers from the philippines earn €500+ per month.
Officially, it's a 6-day working week - 48 hours (!)
The tourism economy requires only cheap labour, ideally buying all the properties and bringing in seasonal workers. That's sad.
While income taxes are low for the majority ( the salaries are low anyway) the indirect taxing is the way the Greek Goverment managed to recover.
The prices of everyday goods rose (sometimes more than double) and the profits from VAT(24%) with them.
High duties on fuel + fuel price went up, combined with rent prices (living far away from your workplace) => longer work commute, bad infrastructure and older vehicles ( no money to buy a fuel efficient one when you are poor)
Liberalization of the energy market forced by EU which lead to extreme prices.
(new companies that don't produce anything got in the middleman position with only goal higher profits)
In summary, everything has been and continues to be done at the expense of the majority (low-wage earners), while making them even poorer.
- Quality of life continues to get worse thanks to rising global temperature.
- Everything else worth doing is still fairly terrible compared to better-off EU neighbors since tourism remains the economic staple. That strangles any other economic programs from working.
- Average is one of the worst ways to measure wealth (use Median)
- Wealth is typically tied up in illiquid assets (e.g. housing), making people feel trapped or anchored to a place that may not be economically mobile (e.g. rural)
Because, to the surprise of literally nobody who's ever been on the receiving end of these sorts of policies they cook up in far away think tank offices and the ivory towers of academia, there's a million ways to make the number go up that doesn't actually make normal people any better off.
Yeah, its all inequality. Most people are going to be renters forever in my hometown and the government has absolutely no plan to fix it. People will just be pushed farther and farther away from where they work and will have longer and longer commutes because it is impossible to pay to live close to work with the salaries they're making.
> Most people are going to be renters forever in my hometown and the government has absolutely no plan to fix it
This seems to be the plan basically everywhere though. Yes, some countries still have a ladder for average people to own property and find success, but the global trend seems to be that this possibility is shrinking for the vast majority of people
That's what happens when average people have to compete with real estate conglomerates for housing though
> Most people are going to be renters forever in my hometown and the government has absolutely no plan to fix it. People will just be pushed farther and farther away from where they work and will have longer and longer commutes because it is impossible to pay to live close to work with the salaries they're making.
[emphasis mine]
I somewhat disagree: at least during the COVID-19 times the government did have a plan to partially fix it: At that time there were a lot of discussions whether work from home will be there to stay or not.
If it would have stayed, that would have partially solved the problem (not for everybody, but for a substantial subset of people):
Since people can live at places where rent or the price of houses is much lower, companies can pay smaller salaries, but employees (after subtracting the cost of living) still have more money. In other words: both sides get their slice of the pie: employers can decrease salaries while employees still have more money.
Unluckily, when COVID-19 was over, companies decided they basically want people to come back to to office (working from home should be an exception).
Renting itself isn't inherently the problem if you have very strong tenant rights. Imagine renting came with all the rights of owning except the money flowed differently (like a perpetual mortgage) - that'd be pretty okay, actually. It is within the power of a government to enable something like that.
But renting is a problem if there's no asset at the end of it.
Even if rents were capped at half what a mortgage for the same property is, you still are in a position that once the asset of the house is paid off the landlord now has an asset that earns income without labour.
And the inverse.
Regardless of what you earn (to a point, even into higher income brackets), if you do not put it into an asset that can house you, and you stop earning, you cannot live without reducing your overall capital.
So rental means a lack of opportunity to reduce your labour dependent income over time (important as you age), and a reduced ability to weather negative life events.
It can work (and did in some places in Western Europe for a while) if housing stock is mostly state owned and/or communal. Of course that introduces some other issues
Its more likely you'll continue to own the place than the government making something like that, that would hurt real estate owners. Renting is fine if you're on your prime years, making money and enjoying life, once you're on your way down, old and likely less employable, renting becomes an issue as you'll likely not make as much money anymore but the rents never go down.
I've seen many parents and grandparents of friends having to live on scraps and decide between healthcare and rent because they just can't make ends meet anymore.
For the young folks that can't buy because they can't save its even worse, they'll be indentured servants for as long as they're useful for the labor force and will then be thrown into the bin.
The way this wealth inequality is so common around the world. makes me wonder if the next time the pitchforks come out, it will be some kind of global uprising. Perhaps accelerated by social media. Or are the elite better able to control the masses in this age?
>
The way this wealth inequality is so common around the world. makes me wonder if the next time the pitchforks come out, it will be some kind of global uprising. [...] Or are the elite better able to control the masses in this age?
I rather believe that the individual problems in each country are very different (even though you summarize them by "this wealth inequality is so common around the world"). Additionally, it often happens that the interests of people in one country are antagonistic to the interests of people in another country, so I don't believe that people from different countries will club together, and have common wishes.
Should a country implement some very nationalist policies that serve the interests of the not so well-off people in its own country, but will be against the interests of other countries and their people?
Think of the uprise of right-wing, nationalist parties in many European countries that often present themselves as "the new worker parties", i.e. they intend to implement policies that are good for the workers in their own country, but on the other hand make it very clear that they have not the interests of people of other EU countries in mind.
These kinds of policies are exactly what I meant by "distractions", those policies tend to help the wealthy far more than workers, and then those same policies are turned towards the workers when there aren't any more immigrants to hurt
> that the individual problems in each country are very different
When it comes to housing prices and general cost of living the patterns are extremely similar in most Western countries. Especially after covid and the infinite money hoses..
Remember the plurality of the rich are working off asset loans on paper wealth. Those credit lines get cut by an event, that triggers an asset sell off which creates a vicious cycle.
You’re posting this like it’s a counterpoint, but it further highlights how disgusting the situation is. We have people becoming trillionaires while 10% of the world’s population is considered to be in extreme poverty. It’s ‘less bad’ than in the past but it’s still absolutely horrifying.
Possibly. If they invested their money into something more societally productive and/or the government took their money to do that or they weren’t allowed to accumulate enough surplus wealth in the first place. Of course the last two options have been a bit problematic historically.
Inequality is inherently bad but a certain level is needed as it comes with non-inherent good, like promoting useful economic activity.
Some people will say "what about the people with one leg? Should we cut off everyone's left leg so we're equal?" - it is bad that they have one leg while everyone else has two, but nobody except a certain satirical film actually suggested doing that.
So what? That seems entirely tangential. Unless your point that economic inequality inherently accelerates technological progress (which seems valid at least to some extent)?
I actually think that free market competition has been the main driving force behind human progress for quite a while now. The issue is that the “winning condition” of capitalism results in the complete subversion of that process. So it’s always a balance.
Free market competition is the opposite of capitalism though. Free market competition means that markets are free, but capitalism means that markets are controlled by the richest.
They inseparable, though? i.e. every market participant is incentivized to accumulate as much “capital” in any way they can. Competitors keep them in check which leaves a bigger share to consumers. Historically that has not been a stable system and at some point one or a couple of companies end up winning and there is no one to prevent them from doing anything they want.
It's only been a stable system as long as the richest were only rich enough to keep doing what they're doing in the marketplace, and not rich enough to buy or become the marketplace. That is one reason excessive inequality is destructive to society.
It is no problem if the best snack vendor can afford to buy the biggest snack truck. In fact that should be encouraged so we can have more of the best snacks. It's also no problem if he can afford a mansion. He deserves it for working so hard on snacks. It's bad if he can do anything that negatively affects his competitors, like buying the adjacent stands to leave empty, buying up all the snack ingredients so nobody else can get them, bribing the market manager, or making a law that all snacks must be french fries.
Has it? If you take a global perspective since the Industrial Revolution it seems some parts of the world excelled at the cost of some other parts (through exploitation and expropriation of land, people and goods). Poverty may have been effectively eliminated in the west and north, not so much in the east and south.
Gotta love HNers who never read articles and use it as a soapbox:
"The scale of the destruction that followed the debt crisis was extraordinary. Between 2009 and the trough of the bailout years in 2016, average household wealth fell by roughly 35%, wiping out more than a third of Greek families' assets"
...
"The labour market has improved markedly since the darkest years of the crisis, with unemployment falling sharply and the informal economy shrinking. But structural weaknesses remain deeply embedded. Long-term unemployment, low participation in the workforce and a high reliance on self-employment continue to shape opportunities and outcomes"
----
Tl;dr - Greek households still haven't recovered from the Eurozone and Greek Debt crisis.
I think that median household disposable income is a much better way of looking at this than GDP.
2014 is the turn. The US gained shale, isolationism is possible, Trump 2 is created by the general (true) perception that things were good under Trump 1. The European war starts and China is left to dominate Asia.
Seems like housing again:
> Rents have surged in recent years, driven by tourism, foreign investment and a shortage of affordable housing. The cost of housing now consumes one of the largest shares of disposable income in the European Union
My impression is that where housing is expensive, there will be complaints of unaffordability (obviously), but also vice versa, that where there is unaffordability, housing always seems to be a large component (at least in "the west").
in most places basic food (rice and beans or an equivalent) is cheap. Services can usually be skimped on. Transportation can usually be flexible (new car / cheap used car / transit / bike). Housing costs seem to be relatively non-flexible though.
I wouldn't be surprised if Greece has strong NIMBY factors.
>I wouldn't be surprised if Greece has strong NIMBY factors.
No doubt. You see it in tourism economies the world over.
Cheap services + cultural/historical novelty + nice climate make tourism highly viable -> tourism becomes outsized part of economy -> those enriched by peddling tourism write the rules to their benefit -> it becomes all but illegal to develop any other industry, build housing, etc, etc because all this activity winds up punitively regulated lest someone do something that scared away the tourists.
> (at least in "the west").
It is the same in the east - it is either housing, or housing related tax.
You are right that it's due to housing but in my opinion most of unaffordability comes from immense pressure due to tourism. Housing situation is better outside the touristy areas (and Athens). If anything Greece has seen massive housebuilding up until the economic crash in the early 10s. I remember block of flats appearing left and right in most major cities in a span of months. They still do but in a lot of cases they are almost exclusively short-term lets (again especially in tourist hubs). Why let a flat for €500 monthly when you can charge €150 per night? It's maddening.
> Why let a flat for €500 monthly when you can charge €150 per night?
Isn't a tax the obvious solution here?
Why are prices up even though population is down over the past ten years? Did everybody decide to move to the city or something?
Somehow the economic indicators feel the same as looking at crypto.
> Between 2009 and the trough of the bailout years in 2016, average household wealth fell by roughly 35%
35% of the land didn't disappear and I'm guessing 35% of the buildings didn't disappear... So what changed was the measurements... GDP values seem even shadier.
The article gives a dozen reasons why people in Greece feel poor. Housing is just one of them. A big one, perhaps, but there are many others in the article.
It's interesting that housing is the one that all the HN commenters pick out to comment on. It's probably the most universal complaint, the one that's easiest to sympathize with from halfway around the world.
It's one of the oldest civilizations in existence. Combine the trend of NIMBYism building up over time, with most every city being an archeological site, and one of the least stable economies in Europe, and you aren't getting much housing investment.
It's wild how much housing is a big issue but local government with direct control, choose to do nothing. I know of a rural area where folks are upset about housing prices, there's no lack of space, they just do not zone more housing. They simply don't do it ... and the locals are happy to blame outsiders and seemingly wallow rather than really address it.
Granted it's not all zoning, new houses won't be super cheap, but it's a start.
There's no paradox here. Distribution of wealth matters. Rich got richer and everyone else didn't. Simple as that.
As Ray Dalio has mentioned, you should measure results on how it impacts the bottom 51% of the people (the majority) it's a lot more illustrative than looking at the average.
Yep. I'm not an economist but my social democratic common sense would tell me to look at the bottom 10% income bracket and see how they're doing.
Incidentally these people are the best economic citizens because if you give them money they'll spend every cent of it because they need to buy food and energy, use health care and pay rent.
In other words if a rich person gets a million they (if they're sane) spend a fraction of it and put the rest in assets, stock market, property, etc. If you give 1000 poor people each 1000e every cent will go into local economy immediately.
Bottom 10% are outliers though. Bottom 50% is much more reasonable.
Treatment of bottom 10% and treatment of bottom 50% are both interesting metrics, but for very different reasons, and they are often contradictory.
The "bottom 50%" is a measure of how well you make it possible for everybody to succeed without extraordinary help.
The "bottom 10%" is a measure of extraordinary help.
The capitalist response to that would be that the investment in companies is better because it makes everyone richer in the long term by increasing overall wealth.
I'm not sure I buy it but it's an effect to consider.
That does sometimes happen - investment does cause development. The mistake is to assume that's always what happens, and that everybody can benefit from the development.
Oh I agree with you. I suspect it happens less than is the conventional wisdom, but I might be wrong.
The benefit is uncertain whenever anybody spends money on anything beyond survival. If you go around asking investors "are you using that money properly and beneficially", for consistency you also have to nag the poor with the same question. Should you put a bet on a horse? Is it really necessary that you visit anybody far away? What's the benefit in dyeing your hair? In both cases, you'd be enforcing arbitrary wisdom instead of acknowledging your fallibility.
Not quite. In some cases we’re certain there’s no benefit.
Capitalism has spent the last 10 years burning billions on the metaverse and crypto with apparently no repercussions for those involved so I think their credibility as custodians of wealth is questionable.
Capitalism also spent the last 10 years burning billions to create affordable electric cars, reliable regular spaceflight, efficient delivery of everything everywhere, and the (well, probably) greatest technological invention in human history. This is not a complete list.
But yeah. Ugh, capitalism.
You mean the EVs and spaceflights that were funded by government subsidies?
This sounds a lot like trickle down economy. It did not really help anyone other than capital owners.
Should we perhaps look at the top 51% instead? Why pick one perspective over the other?
I’m not familiar with Dalio outside some weird pseudo-academic paper he wrote where he attempts to provide a new grand theory of economics based on “transactions”, but I would be interested to hear this perspective supported.
Edit: samiv above answered my question
Well, if you're looking at the bottom X%, then you can be confident that the rest of the population are in a better position.
Technically yes but its not that straightforward.
Take a country like Sweden for example everyone is reasonably well off (if not exactly thriving) since income inequality is quite low. At the same time wealth inequality is extremely high since the rich pulled the ladder after them and there are hardly any options for the middle class to accumulate much wealth. In turn that probably doesn’t help productivity and innovation that much. Why work harder if you won’t get anything in return? Which is a general vibe vibe in Scandinavian work culture.
Then again they (well Denmark at least since a petrostate like Norway doesn’t count and Sweden hasn’t been stellar and the Danish government is hellbent on turning the EU into a fascist dystopia so maybe its not a price worth paying..) are doing quite well economically compared to most other European countries.
Ray Dalio created one of the most successful hedge funds ever and as he calls himself "a professional capitalist." The guy even helped with launching the Chickent McNugget (advising McDonald's with Poultry futures)
If you look at the top 51% things are going extremely well, but as this article shows it can hide a lot. I loved his explanation of how the economic machine works: https://www.youtube.com/watch?v=PHe0bXAIuk0 his book Principles is pretty good too.
The median is usually used for this; it throws away outliers on both sides.
This is not quite the same as the median: it is possible for the bottom 50% to improve but for the median to stay the same (i.e. imagine if everyone in the bottom 50% suddenly equaled the best of them). But the median is a lot better than the mean for not being distorted by large changes in the top and bottom percentiles.
You can use other quantiles if you want.
This seems to tacitly assume that the outliers on either side have equivalent weight with respect to whatever is being investigated, while the explicit premise behind this proposal is that in this case they do not.
Considering how skewed tax participation is, this would be a very one sided view. Just tax the top 49% more, no matter what's their current level of taxation, and redistribute to the lower 51%. It'll always make this criteria look like a success.
Problem is, this creates systemic effects. If you look longer term, a society that does this will end up a lot poorer than one that doesn't. Even for the bottom 51% you were optimizing. Because there are two variables to control: the redistribution, and the actual productivity. If you just focus on splitting wealth, you stop growing wealth.
Growing wealth on the other hand will make everybody richer, including the botton 51%. Simply participating in a richer economy has advantages. Plus the smaller redistribution percentage will actually end up bigger in absolute terms.
> If you look longer term, a society that does this will end up a lot poorer than one that doesn't.
Got data to back that up?
(On the serious level, I'm really curious; But on the polemic level I'll call BS - I highly doubt there ever was such a period in any capitalist country ever)
Sometimes I think economists don't know what a median is.
or mathematically speaking ... use the median instead of the arithmetic mean.
<https://rentierblackhole.com/>
"The Rentier Black Hole"
A theory of land, housing, and open-economy failure: how a non-reproducible asset absorbs global savings, breaks wage-price adjustment, and hollows out the productive economy.
Feel poor??? Man... this is some prime ragebait title.
I live here. Few facts: normal salary €1000 per month; houses €150–200–300k; house prices are rising because of foreign investors; seasonal workers from the philippines earn €500+ per month.
Officially, it's a 6-day working week - 48 hours (!)
The tourism economy requires only cheap labour, ideally buying all the properties and bringing in seasonal workers. That's sad.
While income taxes are low for the majority ( the salaries are low anyway) the indirect taxing is the way the Greek Goverment managed to recover.
The prices of everyday goods rose (sometimes more than double) and the profits from VAT(24%) with them.
High duties on fuel + fuel price went up, combined with rent prices (living far away from your workplace) => longer work commute, bad infrastructure and older vehicles ( no money to buy a fuel efficient one when you are poor)
Liberalization of the energy market forced by EU which lead to extreme prices. (new companies that don't produce anything got in the middleman position with only goal higher profits)
In summary, everything has been and continues to be done at the expense of the majority (low-wage earners), while making them even poorer.
I could see this was bad reporting right away. Average wealth? Per-capita gdp? Pointless. Give me the decile values, or just show the histogram.
In no particular order:
- Per capital GDP still awful
- Quality of life continues to get worse thanks to rising global temperature.
- Everything else worth doing is still fairly terrible compared to better-off EU neighbors since tourism remains the economic staple. That strangles any other economic programs from working.
Also in that bucket:
- Average is one of the worst ways to measure wealth (use Median)
- Wealth is typically tied up in illiquid assets (e.g. housing), making people feel trapped or anchored to a place that may not be economically mobile (e.g. rural)
The idea that the answer to this question would not be intuitive to pretty much anyone that participates in an economy is a genuine shock.
"It is difficult to get a man to understand something, when his salary depends upon his not understanding it!" -Upton Sinclair
Because, to the surprise of literally nobody who's ever been on the receiving end of these sorts of policies they cook up in far away think tank offices and the ivory towers of academia, there's a million ways to make the number go up that doesn't actually make normal people any better off.
At this point, I'd settle for not being better off. It'd be a helluva lot better than everything getting worse.
We need to eat the fucking rich. Bnch of parasitic fuckwads.
Same with Brazil or Portugal or Angola. Full of billionaires with poor people.
Yeah, its all inequality. Most people are going to be renters forever in my hometown and the government has absolutely no plan to fix it. People will just be pushed farther and farther away from where they work and will have longer and longer commutes because it is impossible to pay to live close to work with the salaries they're making.
> Most people are going to be renters forever in my hometown and the government has absolutely no plan to fix it
This seems to be the plan basically everywhere though. Yes, some countries still have a ladder for average people to own property and find success, but the global trend seems to be that this possibility is shrinking for the vast majority of people
That's what happens when average people have to compete with real estate conglomerates for housing though
> Most people are going to be renters forever in my hometown and the government has absolutely no plan to fix it. People will just be pushed farther and farther away from where they work and will have longer and longer commutes because it is impossible to pay to live close to work with the salaries they're making.
[emphasis mine]
I somewhat disagree: at least during the COVID-19 times the government did have a plan to partially fix it: At that time there were a lot of discussions whether work from home will be there to stay or not.
If it would have stayed, that would have partially solved the problem (not for everybody, but for a substantial subset of people):
Since people can live at places where rent or the price of houses is much lower, companies can pay smaller salaries, but employees (after subtracting the cost of living) still have more money. In other words: both sides get their slice of the pie: employers can decrease salaries while employees still have more money.
Unluckily, when COVID-19 was over, companies decided they basically want people to come back to to office (working from home should be an exception).
This was the central reason why this plan failed.
Renting itself isn't inherently the problem if you have very strong tenant rights. Imagine renting came with all the rights of owning except the money flowed differently (like a perpetual mortgage) - that'd be pretty okay, actually. It is within the power of a government to enable something like that.
But renting is a problem if there's no asset at the end of it.
Even if rents were capped at half what a mortgage for the same property is, you still are in a position that once the asset of the house is paid off the landlord now has an asset that earns income without labour.
And the inverse.
Regardless of what you earn (to a point, even into higher income brackets), if you do not put it into an asset that can house you, and you stop earning, you cannot live without reducing your overall capital.
So rental means a lack of opportunity to reduce your labour dependent income over time (important as you age), and a reduced ability to weather negative life events.
It can work (and did in some places in Western Europe for a while) if housing stock is mostly state owned and/or communal. Of course that introduces some other issues
Paying to consume something continually isn't inherently wrong. We do that with food. If you like, you could offset it with UBI.
A separate concern is who should receive the money and how we morally justify that, since they didn't produce anything or work to earn it.
Its more likely you'll continue to own the place than the government making something like that, that would hurt real estate owners. Renting is fine if you're on your prime years, making money and enjoying life, once you're on your way down, old and likely less employable, renting becomes an issue as you'll likely not make as much money anymore but the rents never go down.
I've seen many parents and grandparents of friends having to live on scraps and decide between healthcare and rent because they just can't make ends meet anymore.
For the young folks that can't buy because they can't save its even worse, they'll be indentured servants for as long as they're useful for the labor force and will then be thrown into the bin.
My way down began at about 23. I think most people's does but they don't all realize it. I'm now 33. It's only a question of how quickly.
I suppose if it comes to that, I'll find a way to sacrifice my then-worthless life for the greater good. And it will be sad, but important.
The way this wealth inequality is so common around the world. makes me wonder if the next time the pitchforks come out, it will be some kind of global uprising. Perhaps accelerated by social media. Or are the elite better able to control the masses in this age?
> The way this wealth inequality is so common around the world. makes me wonder if the next time the pitchforks come out, it will be some kind of global uprising. [...] Or are the elite better able to control the masses in this age?
I rather believe that the individual problems in each country are very different (even though you summarize them by "this wealth inequality is so common around the world"). Additionally, it often happens that the interests of people in one country are antagonistic to the interests of people in another country, so I don't believe that people from different countries will club together, and have common wishes.
> Additionally, it often happens that the interests of people in one country are antagonistic to the interests of people in another country.
I find this honestly kind of difficult to believe, except when it comes to distractions by the people who want to stay in power
Just to give one class of examples:
Should a country implement some very nationalist policies that serve the interests of the not so well-off people in its own country, but will be against the interests of other countries and their people?
Think of the uprise of right-wing, nationalist parties in many European countries that often present themselves as "the new worker parties", i.e. they intend to implement policies that are good for the workers in their own country, but on the other hand make it very clear that they have not the interests of people of other EU countries in mind.
These kinds of policies are exactly what I meant by "distractions", those policies tend to help the wealthy far more than workers, and then those same policies are turned towards the workers when there aren't any more immigrants to hurt
> that the individual problems in each country are very different
When it comes to housing prices and general cost of living the patterns are extremely similar in most Western countries. Especially after covid and the infinite money hoses..
Nah, it will be triggered by a debt crisis.
Remember the plurality of the rich are working off asset loans on paper wealth. Those credit lines get cut by an event, that triggers an asset sell off which creates a vicious cycle.
So the pitchforks will be the poors forming a mutual fund and busting/pump dumping the riches stocks?
Capitalism optimization: make the rich richer making the poor poorer
Influence will be distributed similarly, regardless of political system: (Pareto Principle) https://en.wikipedia.org/wiki/Pareto_principle
You live in the most privileged period in human history.
https://ourworldindata.org/explorers/poverty-explorer?tab=li...
You’re posting this like it’s a counterpoint, but it further highlights how disgusting the situation is. We have people becoming trillionaires while 10% of the world’s population is considered to be in extreme poverty. It’s ‘less bad’ than in the past but it’s still absolutely horrifying.
How much of that trillion is liquid? If people stopped buying a Tesla, would that somehow help the poor?
Making electric vehicles more mainstream seems like a net-positive to the world.
Possibly. If they invested their money into something more societally productive and/or the government took their money to do that or they weren’t allowed to accumulate enough surplus wealth in the first place. Of course the last two options have been a bit problematic historically.
And yet we are also living in some of the strongest wealth inequality in the last 100 years at least.
https://ourworldindata.org/economic-inequality
This seems to apply much more to certain nations like the US while it drops worldwide in recent decades.
https://ourworldindata.org/explorers/inequality?tab=line&cou...
I would call that holding steady worldwide in the last decade, which honestly is still unacceptable with how much more wealthy the world has gotten
So what? Inequality is not inherently bad.
Inequality is inherently bad but a certain level is needed as it comes with non-inherent good, like promoting useful economic activity.
Some people will say "what about the people with one leg? Should we cut off everyone's left leg so we're equal?" - it is bad that they have one leg while everyone else has two, but nobody except a certain satirical film actually suggested doing that.
That's a pretty strong assertion just throw out like it's obvious
So what? That seems entirely tangential. Unless your point that economic inequality inherently accelerates technological progress (which seems valid at least to some extent)?
You don't think capitalism played a role in eliminating poverty?
No, I implied it did.
I actually think that free market competition has been the main driving force behind human progress for quite a while now. The issue is that the “winning condition” of capitalism results in the complete subversion of that process. So it’s always a balance.
Free market competition is the opposite of capitalism though. Free market competition means that markets are free, but capitalism means that markets are controlled by the richest.
They inseparable, though? i.e. every market participant is incentivized to accumulate as much “capital” in any way they can. Competitors keep them in check which leaves a bigger share to consumers. Historically that has not been a stable system and at some point one or a couple of companies end up winning and there is no one to prevent them from doing anything they want.
It's only been a stable system as long as the richest were only rich enough to keep doing what they're doing in the marketplace, and not rich enough to buy or become the marketplace. That is one reason excessive inequality is destructive to society.
It is no problem if the best snack vendor can afford to buy the biggest snack truck. In fact that should be encouraged so we can have more of the best snacks. It's also no problem if he can afford a mansion. He deserves it for working so hard on snacks. It's bad if he can do anything that negatively affects his competitors, like buying the adjacent stands to leave empty, buying up all the snack ingredients so nobody else can get them, bribing the market manager, or making a law that all snacks must be french fries.
Has it? If you take a global perspective since the Industrial Revolution it seems some parts of the world excelled at the cost of some other parts (through exploitation and expropriation of land, people and goods). Poverty may have been effectively eliminated in the west and north, not so much in the east and south.
How privileged is a period?
Gotta love HNers who never read articles and use it as a soapbox:
"The scale of the destruction that followed the debt crisis was extraordinary. Between 2009 and the trough of the bailout years in 2016, average household wealth fell by roughly 35%, wiping out more than a third of Greek families' assets"
...
"The labour market has improved markedly since the darkest years of the crisis, with unemployment falling sharply and the informal economy shrinking. But structural weaknesses remain deeply embedded. Long-term unemployment, low participation in the workforce and a high reliance on self-employment continue to shape opportunities and outcomes"
----
Tl;dr - Greek households still haven't recovered from the Eurozone and Greek Debt crisis.
Frustraged by the endless prattle about GDP, europoors and Brexit, me and my agent frien's sat (manifested) together and brewed up some alternatives:
https://x.com/AiSimonThompson/status/2070900546119114970/pho...
I think that median household disposable income is a much better way of looking at this than GDP.
2014 is the turn. The US gained shale, isolationism is possible, Trump 2 is created by the general (true) perception that things were good under Trump 1. The European war starts and China is left to dominate Asia.
Also massive influx of money from Europe especially due to the dominance of the US megacorps and the tech sector in general.
Basically you had companies like Google or Meta constantly leeching from everyone while providing approximately zero real value in return.
Greek here. Fake news. Totally fake news. Greece is not Richer. Greeks become poorer every month.
Data says otherwise, over a years-long scale.
"Poor" is a relative concept!
If everyone gets 10x richer, half the people will still be in the poorer half, and will still feel poor in some sense.
This is surely not the only factor in this story, but it's you need to keep it in mind in these discussions.