In order to ensure that this thread continues to meet TL standards and follows the proper guidelines, we will be enforcing the rules in the OP more strictly. Be sure to give them a re-read to refresh your memory! The vast majority of you are contributing in a healthy way, keep it up!
NOTE: When providing a source, explain why you feel it is relevant and what purpose it adds to the discussion if it's not obvious. Also take note that unsubstantiated tweets/posts meant only to rekindle old arguments can result in a mod action.
Not sure if you read my post in its entirety or not. I want to know whether the total compensation per phone for apple is higher or lower in that situation. Does ATT pay apple the difference? Or does apple just take a hit on the phone price? Is that reflected in the "average sales price per phone?" It sure doesn't seem like it.
On September 23 2014 09:19 IgnE wrote: I'm just pointing out that I asked for a breakdown with material costs and you gave me one with component costs. Now you are just repeating yourself. Most materials in an iphone come from countries with very cheap labor.
Yeah I don't have the materials breakdown, but as I pointed out, the materials breakdown is irrelevant to the discussion. If you think you have some info that's relevant to the discussion - show it.
After listening to that podcast which only mentions at the end the $10-65 range off-handedly and looking at that graphic you linked I am still skeptical that these numbers are exact. The graphic says the average sale price of an iphone is $536. Do people really pay that much for an iphone? Aren't people paying between $200-300 for them? Is the average sales price for all iphones being between $500-$600 (as seen in the graphic and as seen in a google search for "average iphone sales price") the actual compensation to apple for each iphone? Or just those purchased separately without a plan? If only those without a plan are counted what percentage of iphones does that count as? If it's all iphones does that mean that the price is subsidized by carrier payments to apple in exchange for contracts (if thats the case then apple's profit margins are substantially padded by network monopoly margins)? When you originally said $65 that seemed like a lot to me based on what I assumed most people pay, i.e. $200-300.
Yes, carriers subsidize the price of Apple iPhones.
In recent years, Americans have been spared the sticker shock of paying full price for a new iPhone because wireless operators offered upfront discounts approaching $500 a phone.
On September 23 2014 12:13 IgnE wrote: Not sure if you read my post in its entirety or not. I want to know whether the total compensation per phone for apple is higher or lower in that situation. Does ATT pay apple the difference? Or does apple just take a hit on the phone price? Is that reflected in the "average sales price per phone?" It sure doesn't seem like it.
This is a pretty common business school case study, of whether Apple should recognize the revenue of iPhones entirely up front or if they should recognize it over the life of a contract. But to my knowledge, Apple gets the full price of each iPhone eventually, although they give discounts to sellers like AT&T because they buy in bulk.
On September 23 2014 09:22 IgnE wrote: Demand doesn't go up if the overall wages don't go up . . . 80% pay x 1.25 times as many workers still = the same total wages. Then you talk about underemployment and it's evils. Like I said, your analysis is schizophrenic.
So what? Those that want to work go from 0 or 20 hours a week to 40 and those at 40 get a day off while total wages remain the same. Those industries that need 40 hours a week will pay more for hours 33-40. Those people that want to climb the social ladder will get another day to separate themselves. Win-Win-Win for everyone. And STILL the middle class budget will be the same ratios. 1/3 shelter, 1/3 other needs, 1/6 wants, and 1/6 savings.
Edit: Hmmm maybe the France's failure with the workweek refutes my point, ok then, 40 hours makes the most sense then. Until some other jurisdiction figures out how to accommodate the economic shift from labour to capital I guess we're stuck with what works. Any ideas that I could read up on?
Communism confiscating wealth and income failed in Eastern World. Socialism attacking wealth and income failing in France and Venezuela. Social capitalism seems to work best in Scandinavia and Canada, which is kind of my position lol.
You have no idea what you are talking about. You keep bringing up this idiotic budget split, as if workers having their hours slashed from 40 to 32 per week can just pay their landlords less, buy less food, pay less insurance, etc. You also seem to be operating under the delusion that to get a certain job all you have to do is want it.
Yeah I admitted it was a bad idea to have an extra leisure day. The budget split is that the economy will always normalize so the labor can consume what is produced. Assets and consumer goods will fall to accommodate the reduced purchasing power of the middle class. Not saying that's a good idea anymore though as deflation is just as bad a hyperinflation.
On September 23 2014 09:22 IgnE wrote: Demand doesn't go up if the overall wages don't go up . . . 80% pay x 1.25 times as many workers still = the same total wages. Then you talk about underemployment and it's evils. Like I said, your analysis is schizophrenic.
So what? Those that want to work go from 0 or 20 hours a week to 40 and those at 40 get a day off while total wages remain the same. Those industries that need 40 hours a week will pay more for hours 33-40. Those people that want to climb the social ladder will get another day to separate themselves. Win-Win-Win for everyone. And STILL the middle class budget will be the same ratios. 1/3 shelter, 1/3 other needs, 1/6 wants, and 1/6 savings.
Edit: Hmmm maybe the France's failure with the workweek refutes my point, ok then, 40 hours makes the most sense then. Until some other jurisdiction figures out how to accommodate the economic shift from labour to capital I guess we're stuck with what works. Any ideas that I could read up on?
Communism confiscating wealth and income failed in Eastern World. Socialism attacking wealth and income failing in France and Venezuela. Social capitalism seems to work best in Scandinavia and Canada, which is kind of my position lol.
You have no idea what you are talking about. You keep bringing up this idiotic budget split, as if workers having their hours slashed from 40 to 32 per week can just pay their landlords less, buy less food, pay less insurance, etc. You also seem to be operating under the delusion that to get a certain job all you have to do is want it.
Yeah I admitted it was a bad idea to have an extra leisure day. The budget split is that the economy will always normalize so the labor can consume what is produced. Assets and consumer goods will fall to accommodate the reduced purchasing power of the middle class. Not saying that's a good idea anymore though as deflation is just as bad a hyperinflation.
It will suck to live in the time between the economic downturn and untill the economy normalizes. The macroeconomic ideas lacks short term and transition economic depth. Eventually we are all dead as Keynes says. Not that classic Keynes is a long term solution.
But if a transition is several years long, that will brutalize certain more exposed people. Just seeing the world from a sufficiently high flying jet will lose sight of what happens on the ground.
On September 22 2014 23:58 2primenumbers wrote: Pikketty is a big fraud that uses models based on normalized statistical assumptions for real-world predictions, and the real-world has nothing to do with normalized statistical distributions. Pikketty is a big fraud!
You wanting him to be a fraud is different from him actually being one. He did not use any models, but empirical data and assumption on a possible scenario based on those data. It's a fact that capital is rising.
Well he's not a fraudster, but the FT did poke some holes in his empirical data sets (source). They're a bit picky, but still worthwhile noting.
Also, Piketty's charts on wealth accumulation (capital as % of GDP) are almost entirely driven by increases in housing prices. If you either ignore that, or if you use a different valuation method (value from rents), capital as a percent of GDP doesn't really begin to rise again after WW2 (source).
As for Marx, it seems that Piketty refutes Marx as much as anything. Marx wrote about capital growing faster than the economy, leading to a fall in profit (tendency of the rate of profit to fall). But Piketty insists that the rate of profit has and will remain constant.
The FT critics are so stupid I'll not adress them - they basically poke some data problem (which work has none ?) that do not question Piketty's point at all but they somehow think it's enough to question his entire work.
About housing prices, what makes housing irrelevant as a capital ? Not entirely true btw, there is also a great increase in other type of capital (financial assets).
You didn't read Piketty's book maybe, but he basically says that the tendency of the rate of profit to fall is false but is a good intuition, then goes in length about how Marx was most likely in the right track but didn't have any statistics.
FT critics aren't stupid. Like I said, they're a bit picky, but if you can't completely dismiss them just because you want to.
The argument isn't that housing is irrelevant as capital, it's that housing is different enough from other forms of capital to deserve a closer look. For example, a house, unlike a factory, doesn't produce a stream of income for its owner. The exception to that is if the house is rented out, which is where the different valuation method comes into play (value from rent).
From the paper, here's capital in France broken down by components. The increase is due to housing:
I'm not sure what point you are trying to make about financial assets. Are you trying to double count?
"False but a good intuition" is still false.
Piketty changed his data the day after and basically answered FT's critics.
The paper you quoted consider that inequalities in housing are irrelevant - it's a point of view. The OFCE beg to differ here, in french. Here is a resume in english (click). Just a point, for the paper you quoted, an increase in the value of housing is not relevant for inequalities. Take a second to think about it : if someone has a house in New York at 1 000 000 dollars value and that see an increase in value of say 10% per year for a decade, while another guy has house in a shitty city at 100 000 dollars value and see same increase in 10 % per year for a decade, do you think inequalities between the one that own the house in New York and the one that own the house in the shitty city did not increase ?
The paper you linked think not :
First, what inequality would there be if each household owned one painting and kept it throughout its lifetime? The wealthiest households might own a pricey Manet or Kandinsky. The poorest might own a painting by a local artist. Now, if the price of art increased uniformly, would this contribute to an explosion of inequality in the sense of a divergent and exponential accumulation of capital? The answer is clearly it would not
That's a pretty particular view on inequalities...
False because he couldn't refine doesn't mean he is completly false. Sorry if you wanted Marx to give you a "law" in an age where statistics were almost inexistant while even modern economy have no law at all.
Piketty changed his data... because the FT is stupid?
The paper I cited actually does consider housing to be relevant with regards to inequality.
However, we would like to make it very clear that we do not deny that the rise in housing price has had real consequences on access to housing and inequality.
At issue is not the role of housing on inequality. At issue is the role that house price valuation plays on the 'capital accumulation' story that Piketty writes about. If you do not understand what I mean, I can elaborate.
Also, in your example inequality does not rise. The ratio between the $1,000,000 house and the $100,000 house is 10:1. Ten years later, the values are $2,357,948 and $235,795 respectively and the ratio between the two is still 10:1.
FT is stupid, a minor data error changed a second later that has no incidence whatsoever on the core point of view of a book is not a valid critic.
I don't know why you talk about a ratio. In the first scenario the difference between the two (the inequality in capital assets) is 800 000 $, in the second it's 2 000 000 $, that's a flat increase in inequalities. Again, that's considering the increase in house value is homogeneous between a shitty town and new york, and that everybody has a house. Now if you take into consideration revenu, and thus the amount of work to acquire a house, it's pretty clear. As you say they don't deny it.
The OFCE respond to other type of critics coming from the paper, I'm just not going to bother playing a nitpick game with you on a book that basically state what everybody knows, which is that inequality have risen.
Sure it's a valid critique. Data should be as accurate as possible.
Each person receive proportionally the same increase in wealth, hence inequality didn't rise. All you're doing is inflating the numbers.
You seem to also be confused at the housing situation. Renting is a possibility, so you have to take that into account. What Piketty's data doesn't show is that as housing prices have risen, renting has become a better value. The value of owning a home isn't captured by the owner. Now, in theory, you could sell the house and go rent, and capture the value that way but that rarely happens in real life.
This is only true if all other income and all other price rise according to the same ratio, which is obviously not the case (you've heard about a 10% inflation nowadays ? lol). It is not an inflation, it is a flat increase in value : the relative price of the two goods stays the same, which is the ratio you gave (you can buy as many house 1 with house 2 before and after the increase), but that does not mean the capital gain between the two are equal (the increase in goods you can buy with house 1 is ten times the increase in goods you can buy with house 2, with no inflation during the time of the increase, which is an expression of the rising inequality). It's exactly the problem Piketty's talking about : capital (capital / income ratio remember ?) is increasing per opposition to income (which is also another reason why he compare the rate of return on capital assets to growth...).
The second part is not important to me. Renting has not risen (as much) in France because ... yeah income haven't (offer and demand ?) and also the possible increase in renting is controlled by the state (which didn't allow a huge increase in the later days, because obviously increase in income is too low). But the simple increase in housing value is still an increase : it's like a capital income in another form (which is also part of the reason why Piketty substituted capital income with capital / income ratio). You cannot put aside the fact that housing increase and that yes not only you can sell the house, but also it gives you a service (that you would have to pay for in other situation) that's not necessarily possible to evaluate from a monetary perspective. The increase in people staying in their parent's house for a time in France is an expression of that inequality in capital, and the increase in labor time needed to pay yourself a house is the direct cause of that - which goes back to the inequalities between labor income and capital.
On September 22 2014 23:58 2primenumbers wrote: Pikketty is a big fraud that uses models based on normalized statistical assumptions for real-world predictions, and the real-world has nothing to do with normalized statistical distributions. Pikketty is a big fraud!
You wanting him to be a fraud is different from him actually being one. He did not use any models, but empirical data and assumption on a possible scenario based on those data. It's a fact that capital is rising.
Well he's not a fraudster, but the FT did poke some holes in his empirical data sets (source). They're a bit picky, but still worthwhile noting.
Also, Piketty's charts on wealth accumulation (capital as % of GDP) are almost entirely driven by increases in housing prices. If you either ignore that, or if you use a different valuation method (value from rents), capital as a percent of GDP doesn't really begin to rise again after WW2 (source).
As for Marx, it seems that Piketty refutes Marx as much as anything. Marx wrote about capital growing faster than the economy, leading to a fall in profit (tendency of the rate of profit to fall). But Piketty insists that the rate of profit has and will remain constant.
The FT critics are so stupid I'll not adress them - they basically poke some data problem (which work has none ?) that do not question Piketty's point at all but they somehow think it's enough to question his entire work.
About housing prices, what makes housing irrelevant as a capital ? Not entirely true btw, there is also a great increase in other type of capital (financial assets).
You didn't read Piketty's book maybe, but he basically says that the tendency of the rate of profit to fall is false but is a good intuition, then goes in length about how Marx was most likely in the right track but didn't have any statistics.
FT critics aren't stupid. Like I said, they're a bit picky, but if you can't completely dismiss them just because you want to.
The argument isn't that housing is irrelevant as capital, it's that housing is different enough from other forms of capital to deserve a closer look. For example, a house, unlike a factory, doesn't produce a stream of income for its owner. The exception to that is if the house is rented out, which is where the different valuation method comes into play (value from rent).
From the paper, here's capital in France broken down by components. The increase is due to housing:
I'm not sure what point you are trying to make about financial assets. Are you trying to double count?
"False but a good intuition" is still false.
Piketty changed his data the day after and basically answered FT's critics.
The paper you quoted consider that inequalities in housing are irrelevant - it's a point of view. The OFCE beg to differ here, in french. Here is a resume in english (click). Just a point, for the paper you quoted, an increase in the value of housing is not relevant for inequalities. Take a second to think about it : if someone has a house in New York at 1 000 000 dollars value and that see an increase in value of say 10% per year for a decade, while another guy has house in a shitty city at 100 000 dollars value and see same increase in 10 % per year for a decade, do you think inequalities between the one that own the house in New York and the one that own the house in the shitty city did not increase ?
The paper you linked think not :
First, what inequality would there be if each household owned one painting and kept it throughout its lifetime? The wealthiest households might own a pricey Manet or Kandinsky. The poorest might own a painting by a local artist. Now, if the price of art increased uniformly, would this contribute to an explosion of inequality in the sense of a divergent and exponential accumulation of capital? The answer is clearly it would not
That's a pretty particular view on inequalities...
False because he couldn't refine doesn't mean he is completly false. Sorry if you wanted Marx to give you a "law" in an age where statistics were almost inexistant while even modern economy have no law at all.
Piketty changed his data... because the FT is stupid?
The paper I cited actually does consider housing to be relevant with regards to inequality.
However, we would like to make it very clear that we do not deny that the rise in housing price has had real consequences on access to housing and inequality.
At issue is not the role of housing on inequality. At issue is the role that house price valuation plays on the 'capital accumulation' story that Piketty writes about. If you do not understand what I mean, I can elaborate.
Also, in your example inequality does not rise. The ratio between the $1,000,000 house and the $100,000 house is 10:1. Ten years later, the values are $2,357,948 and $235,795 respectively and the ratio between the two is still 10:1.
FT is stupid, a minor data error changed a second later that has no incidence whatsoever on the core point of view of a book is not a valid critic.
I don't know why you talk about a ratio. In the first scenario the difference between the two (the inequality in capital assets) is 800 000 $, in the second it's 2 000 000 $, that's a flat increase in inequalities. Again, that's considering the increase in house value is homogeneous between a shitty town and new york, and that everybody has a house. Now if you take into consideration revenu, and thus the amount of work to acquire a house, it's pretty clear. As you say they don't deny it.
The OFCE respond to other type of critics coming from the paper, I'm just not going to bother playing a nitpick game with you on a book that basically state what everybody knows, which is that inequality have risen.
Sure it's a valid critique. Data should be as accurate as possible.
Each person receive proportionally the same increase in wealth, hence inequality didn't rise. All you're doing is inflating the numbers.
You seem to also be confused at the housing situation. Renting is a possibility, so you have to take that into account. What Piketty's data doesn't show is that as housing prices have risen, renting has become a better value. The value of owning a home isn't captured by the owner. Now, in theory, you could sell the house and go rent, and capture the value that way but that rarely happens in real life.
This is only true if all other income and all other price rise according to the same ratio, which is obviously not the case (you've heard about a 10% inflation nowadays ? lol). It is not an inflation, it is a flat increase in value : the relative price of the two goods stays the same, which is the ratio you gave (you can buy as many house 1 with house 2 before and after the increase), but that does not mean the capital gain between the two are equal (the increase in goods you can buy with house 1 is ten times the increase in goods you can buy with house 2, with no inflation during the time of the increase, which is an expression of the rising inequality). It's exactly the problem Piketty's talking about : capital (capital / income ratio remember ?) is increasing per opposition to income (which is also another reason why he compare the rate of return on capital assets to growth...).
The second part is not important to me. Renting has not risen (as much) in France because ... yeah income haven't (offer and demand ?) and also the possible increase in renting is controlled by the state (which didn't allow a huge increase in the later days, because obviously increase in income is too low). But the simple increase in housing value is still an increase : it's like a capital income in another form (which is also part of the reason why Piketty substituted capital income with capital / income ratio). You cannot put aside the fact that housing increase and that yes not only you can sell the house, but also it gives you a service (that you would have to pay for in other situation) that's not necessarily possible to evaluate from a monetary perspective. The increase in people staying in their parent's house for a time in France is an expression of that inequality in capital, and the increase in labor time needed to pay yourself a house is the direct cause of that - which goes back to the inequalities between labor income and capital.
Inequality is about the division of resources. In the scenario you gave, the division stayed the same. One person had ~90% of the wealth and the other person had ~10%. That stayed true throughout time. It doesn't matter that person 1's wealth increased by an absolute value that exceeded person 2's increase. What matters is that they each received a proportionally equal increase. Your logic is both inconsistent with conventional inequality measures as well as common sense. A society with one person owning $100 and other owning $1 is more unequal than a society with one person owning $100,000 and another owning $98,000.
Also, when I said all you did was inflate the numbers, I meant that all you did was make them bigger. I was not referring to the economic term inflation.
This part is important:
But the simple increase in housing value is still an increase : it's like a capital income in another form (which is also part of the reason why Piketty substituted capital income with capital / income ratio).
Owning your own home does not generally give you capital income. A home that rises in value has to be monetized somehow in order for it to generate an income for you. Are you going to take out a loan on it, a loan which isn't free? Are you going to sell it and rent? What happens if a lot of people try to sell?
Salient to the discussion of what Piketty says and means is that he did an interview at Econtalk. You can listen to the podcast or they have a transcript at the link.
What about the capital you save in not having to rent a place for you to occupy? If you own your own home you may not be getting capital income but how would the saving from not having to rent be figured into it?
President Barack Obama warned on Tuesday that the world’s climate is changing at a faster pace than efforts to address it, issuing a forceful appeal for greater international cooperation on carbon caps.
"Nobody gets a pass," Obama declared. "We have to raise our collective ambition."
The president’s plea was made during the United Nations Climate Summit in New York, attended by leaders from both the political and business worlds and aimed at galvanizing support for a global treaty to be finalized next year. Obama said that the United States is doing its part and that it will meet a goal to cut carbon pollution by 17 percent from 2005 levels by 2020. He also announced modest new U.S. commitments to help other countries address climate change challenges.
But Obama's strongest remarks came as he sought to unify the international conclave behind actions to reduce global warming.
"The alarm bells keep ringing, our citizens keep marching," he said. "We can't pretend we can't hear them. We need to answer the call. We need to cut carbon emission in our countries to prevent worse effects, adapt and work together as a global community to tackle this global threat before it is too late."
anyway considering a great portion of top level 'labor' income is misclassified as labor rather than what it truly is, a capital share, all of this is silly. you have to be oblivious to not recognize the higher capital return vs labor.
On September 24 2014 09:59 IgnE wrote: What about the capital you save in not having to rent a place for you to occupy? If you own your own home you may not be getting capital income but how would the saving from not having to rent be figured into it?
That's more or less the methodology used in the paper I cited.
On September 24 2014 10:59 oneofthem wrote: anyway considering a great portion of top level 'labor' income is misclassified as labor rather than what it truly is, a capital share, all of this is silly. you have to be oblivious to not recognize the higher capital return vs labor.
Labor often gets classified as capital, rather than the other way around. You have it backwards.
Nearly three-quarters of the public (72%) now thinks religion is losing influence in American life, up 5 percentage points from 2010 to the highest level in Pew Research polling over the past decade. And most people who say religion's influence is waning see this as a bad thing.
Perhaps as a consequence, a growing share of the American public wants religion to play a role in U.S. politics. The share of Americans who say churches and other houses of worship should express their views on social and political issues is up 6 points since the 2010 midterm elections (from 43% to 49%). The share who say there has been “too little” expression of religious faith and prayer from political leaders is up modestly over the same period (from 37% to 41%). And a growing minority of Americans (32%) think churches should endorse candidates for political office, though most continue to oppose such direct involvement by churches in electoral politics.
On September 24 2014 10:59 oneofthem wrote: anyway considering a great portion of top level 'labor' income is misclassified as labor rather than what it truly is, a capital share, all of this is silly. you have to be oblivious to not recognize the higher capital return vs labor.
Labor often gets classified as capital, rather than the other way around. You have it backwards.
sure thing jonny. there's the replacement level value for a manager over and above a fellow manager. then there's the positional value of the manager generated by the nature of the hierarchy and decision system. gotta distinguish between the two
This is just embarrassing as an American. Like how proudly ignorant can people possibly be...? Blows my mind that there are enough like minded ignoramuses to elect these schmucks...
I feel like the glass of water example is better addressed as if it were a serious proposal.
You're right, if all the ice on earth were somehow contained within a giant glass of ice water then the levels would not significantly rise when the ice melted and thus the containment would be successful. Unfortunately when climate scientists looked into this solution they found that the costs involved in constructing such a glass, along with limitations in the materials and the logistics of moving the ice presented insurmountable problems. Still, I welcome the outside the box thinking of the Senator.
EPT
![[image loading]](https://dl.dropboxusercontent.com/u/72070179/Capital%20France.PNG)
