My cousin is a .01%-er. My father's brother, due to a position of political power he held in the late 1970's, met and married a woman who is an heir to an American old-money family. (if i were to name them, you would know. If you listen to NPR for more than an hour, you will hear their name mentioned as a donor)
The contrast is insane, since my entire family is Appalachian coal mining stock. She NEVER visits, so the only time I see her is by visiting her at one of the many properties she has in the various 'global elite' cities.
She has an apartment which takes up 3 entire floors of a building which overlooks the East River in Manhattan (in the "50's" of the street numbers, but I won't name the street for anonymity purposes). She is almost never there, perhaps once a year. She has an equally large aparment in London. She has a mansion in Greenwich, Connetticutt. She rents out none of these properties. They are all left vacant for her to use at a whim. She isn't very educated (despite the efforts of her mother, her friends and her see little use in education. They have everything already.) and once had a major cocaine problem, along with half of her friends. I've met most of them, and attended parties at THEIR vacant-most-of-the-year apartments too.
I love my cousin, but she and her friends are parasites, sucking off of economic rent, delegating the management of their huge hoards of capital to investment bankers in their social circles. They produce nothing, but buy huge amounts of property on a whim wherever is "hip" and then leave it artfully furnished, beautiful, and vacant 11.5 months out of the year.
The old-money lifestyle is _designed_ to sit back, enjoy, and let the investment bankers handle the rest- exactly what she's doing so they're not parasites, they're living an elite's way of life. If you would get closer to her she would produce a lot of good times and memories. Just because you will travel, stay in the house and read more doesn't mean someone is going to sit down and become an inventor / iterator like you. Her view is that the whole world is working for her, and drugs are her way of coping with what she's missing. What's wrong with that? A decent amount of the elites believe that, what are you going to do- sit there and be proud of your humble life- right? Chill. There's no point of being envious and no point for me being an apologist but if it bothers you so much become one of her investment bankers.
1) I'm not envious, and somehow you take my disapproval of the elites wasting valuable space as envy. It is not. If I express disapproval at someone who dumps toxic waste in a river, do I envy them also?
2) Your comment made zero contribution to the conversation. Do you think I haven't hung out with my cousin and had a good time? I have. This changes nothing. Every person on the planet is capable of "producing good times and memories." She is also capable of taking her wealth and helping people at levels of magnitude that the rest of us can't, yet she does nothing. I don't envy, I observe and draw my conclusion that she spends zero hours a day working and 24 hours a day worrying about herself. Spending 1 hour a day running a charity would still allow her to "sit back, enjoy" and help people at the same time.
"She is also capable of taking her wealth and helping people at levels of magnitude that the rest of us can't, yet she does nothing."
This is a fact stated from a point of view of a clear philosophy - that the powerful/resourceful people have to use their power/resources for the good of humanity. All it takes for her (and alike) is not to share this philosophy and prefer let's say, a more hedonistic one. Let's enjoy the philosophical diversity, shall we? ;)
In some type of way you're longing for her money to change the world. I hope, instead, you long to change her mind, convince her that she needs to start donating. That was the point of me commenting, for you to treat this as a reminder to call her and put your perspective down. Not in casual way, she won't take you seriously. Throw a form of guilt, cause obviously that's what she needs. Value your principles man. She's your cousin and she has the potential to change herself and the world. Understand that power. I wish one of my distant cousins were like this. Her elite world view would come down to Earth at least once a month. Don't take it the wrong way.
It's not possible to criticize the ultra-rich (for any reason) without being accused of being envious, however. It is literally the first response you'll get on any forum: "You're just envious."
> The old-money lifestyle is _designed_ to sit back, enjoy, and let the investment bankers handle the rest- exactly what she's doing so they're not parasites, they're living an elite's way of life.
Just because it is the latter doesn't mean its not also the former.
It's not really envious or wrong to say that people like this contribute nothing to the world, yet by accidents of birth get to enjoy the fruits of everyone else's labour.
Bitcoin proponents: this is the world deflationary currencies lead to. All the wealth owned by a few, passed on from generation to generation. And you can even cut the investment bankers out of the loop, thanks to the risk free return on just keeping money under your mattress and the constantly falling prices.
This is the world deflationary currencies lead to--referring to the real world where inflationary currencies reign? Seeing how inflation doesn't prevent mis-allocation of resources, I don't see how this example is a good argument against deflationary currencies.
Even in a world of inflationary currencies, there are supply-limited assets like real estate in Manhattan or Paris. The phenomenon you see with respect to those assets: hoarding, little incentive to risk assets by putting them to use, young people pushed out simply for being unlucky enough to be born later, dynastic wealth, etc, are just what happens when you have assets that are tightly limited in supply and appreciate just by virtue of one's holding on to them.
The question is: why on earth would you want to make more things behave that way?
This is not an argument against crypto-currencies, by the way. One can imagine an inflationary bitcoin after all.
Hoarding real estate in Manhattan or Paris only works as long as those assets continue to appreciate in value. Assuming demand for those properties is always increasing, how would you propose to put a curb on their prices?
As far as making a currency behave this way, I would say it's entirely unprecedented to have a currency that is both deflationary and infinitely divisible. The incentive to hold on to the currency may be strong, but there will always be incentive to take risks for even greater gains. Just look at how ASICMINER shares have risen.
As long as the overall economy continues to grow, Manhattan real estate continues to appreciate.
Infinite divisibility is irrelevant. That's not the problem. The problem is that the first people on the scene (I.e. Old people) end up with all the wealth.
There's no easy way to sell one square foot or one square inch of Manhattan property. First movers will always be at a competitive advantage in nearly any endeavor.
That theory seems awfully simplistic. Or on the other hand, perhaps the whole world is deflationary, because it is a limited resource. So the the bleak future you depict is inevitable.
Or on the other hand, perhaps the whole world is deflationary, because it is a limited resource.
That's flatly untrue, however. The world is not a limited resource. That's even true of real estate. Back when Silicon Valley was becoming great it was a backwater where the Establishment assholes didn't want to live (hence cheap land). The value of things is a product of their relationships to other things, and the pool of total value increases as the configuration of things improves.
It's much more accurate for me to point at the OP's story and say "this is the world that inflationary currency leads to". Because clearly we're living under inflationary currencies, and clearly wealth inequality is a big issue.
The rich aren't stupid. They own inflation-proof assets like real estate and stocks. It's the poor who get continually squeezed on their meager cash savings and hand-to-mouth wages. It's the poor who rent instead of own, who get burned by housing inflation.
We would have a much stronger middle class if it was possible to build a nest egg simply by putting money in the bank. Instead, everyone is pushed into much riskier investments in an effort to beat inflation, where unsophisticated investors are easy prey.
Your cousin and her friends aren't parasites for delegating the management of their wealth to professionals. They'd be idiots not to get first-class lawyers, tax advisors, accountants, estate managers, and investment advisors to run their private wealth.
They don't "produce nothing". These professionals are investing their capital and the world is wealthier as a result.
They are parasites because they are spending money (that they didn't earn by producing anything) in an inefficient manner. That three floor apartment could house many people, instead it is wasting a very rare commodity in NYC: housing. I'd be much more sympathetic if she actually spent time in that apartment. She produces no wealth and destroys wealth through inefficiency - good use of the word "parasite".
Usually I'm the one who is defending the wealthy from unfair attacks online, but in this case I don't understand your argument.
I understand and I'm sympathetic to what you're saying. It's a bit counterintuitive, but I'll try to elaborate more on the points you've made:
> They are parasites because they are spending money
Parasites are people who take from the system; she's contributing by putting money into it.
> (that they didn't earn by producing anything)
The source of her money is irrelevant to the question of how she should spend it. What difference does it make how she got it? One dollar is perfectly interchangeable with another, and the fungibility of money makes it one of the most neutral substances on earth.
> in an inefficient manner.
She's buying luxury properties, probably spending a token amount to fund her lifestyle, and letting professionals manage the rest. That's may be a pretty efficient allocation of capital for her situation.
> That three floor apartment could house many people, instead it is wasting a very rare commodity in NYC: housing.
Nowhere in Manhattan are there many people getting together to split a three-story penthouse apartment. Her properties are fundamentally different from a regular one- or two-bedroom apartment. This is difficult to articulate, but living in a penthouse in Manhattan isn't a right.
> I'd be much more sympathetic if she actually spent time in that apartment.
Again, why does it matter how she's using the apartments? If she owns more than a few luxury properties and it doesn't make sense to rent them out (to who?), then she necessarily is using them in an "inefficient" manner, since she can only be at one place at a time.
> She produces no wealth and destroys wealth through inefficiency - good use of the word "parasite".
Again, when she's spending "inefficiently", she's contributing to the system.
Parasites are people who take from the system; she's contributing by putting money into it.
Unless she owns a fractional-reserve bank, she probably just moved the money around, while taking wealth from the system, which is what "spending money" means.
By your argument, a thief who spends the spoils of his crime is contributing to the system!
The source of her money is irrelevant to the question of how she should spend it.
Not in a discussion about ethics, it's not.
One dollar is perfectly interchangeable with another, and the fungibility of money makes it one of the most neutral substances on earth.
Red herring; nobody is arguing about the particular dollars she owns, but the amount of them.
She's buying luxury properties, probably spending a token amount to fund her lifestyle, and letting professionals manage the rest. That's may be a pretty efficient allocation of capital for her situation.
Efficient for whom? For her? Why is she the only one who matters?
Again, when she's spending "inefficiently", she's contributing to the system.
How is putting money in the system by itself a (positive) contribution? Should we applaud counterfeiters?
«They are parasites because they are spending money (that they didn't earn by producing anything) in an inefficient manner. That three floor apartment could house many people, instead it is wasting a very rare commodity in NYC: housing. I'd be much more sympathetic if she actually spent time in that apartment. She produces no wealth and destroys wealth through inefficiency - good use of the word "parasite".»
You know, when I tried to picture what you implied to be the right and correct resource use I come up with Bangladesh life-style - many people living in a small area, not a lot of space wasted. If I think more about it, the entire american life-style resonates in opposition with your objections. In fact, all the american-dreamers long to what she is and what she has, don't they?
The contrast is insane, since my entire family is Appalachian coal mining stock. She NEVER visits, so the only time I see her is by visiting her at one of the many properties she has in the various 'global elite' cities.
She has an apartment which takes up 3 entire floors of a building which overlooks the East River in Manhattan (in the "50's" of the street numbers, but I won't name the street for anonymity purposes). She is almost never there, perhaps once a year. She has an equally large aparment in London. She has a mansion in Greenwich, Connetticutt. She rents out none of these properties. They are all left vacant for her to use at a whim. She isn't very educated (despite the efforts of her mother, her friends and her see little use in education. They have everything already.) and once had a major cocaine problem, along with half of her friends. I've met most of them, and attended parties at THEIR vacant-most-of-the-year apartments too.
I love my cousin, but she and her friends are parasites, sucking off of economic rent, delegating the management of their huge hoards of capital to investment bankers in their social circles. They produce nothing, but buy huge amounts of property on a whim wherever is "hip" and then leave it artfully furnished, beautiful, and vacant 11.5 months out of the year.