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What’s Wrong with Inequality?

Entrepreneur Vision Concept

Do you, the reader, own any Apple products? Are there Dell computers in your office, or at home? Have you purchased anything on Amazon in the past month?

It’s a question worth asking considering all the present hysteria about wealth inequality.  Figure that Apple co-founder Steve Jobs died worth billions, Michael Dell is worth $20 billion, and Amazon founder Jeff Bezos is one of the five richest men in the world.

Their enormous wealth has surely increased wealth inequality in a substantial way, but can anyone seriously say they wish all three had been layabouts? Or on the dole? Inequality would surely be greatly reduced, but so would our living standards be.

More realistically, it’s safe to say that while views differ on the subject of inequality, when presented with the individuals whose wealth has expanded the gap between rich and poor, most would say we want a great deal more of these wildly enterprising people.  Life would be unrelentingly bleak without the super-rich and the staggering innovations that made them rich.

Bain Capital founding partner Edward Conard plainly agrees.  In his new book, The Upside of Inequality: How Good Intentions Undermine the Middle Class, Conard’s stated goal is to “puncture popular myths about inequality and the economy.” As Conard correctly sees it, we need to “stop blaming the success of the 1 percent and embrace the upside of inequality: faster growth and greater prosperity for everyone.”

Conard’s argument is a very important one when we stop to consider the present debate about the wealth gap.  Democrats, despite being funded by incredibly talented coastal elites whose capitalistic advances have so greatly improved our lifestyles, employ horrifying rhetoric about how “something must be done” by government to shrink the divide between rich and poor.  Lest we forget, inequality warrior Bernie Sanders nearly wrested the Party’s presidential nomination from Hillary Clinton.

What’s important is that Republicans aren’t much better.  While they talk a big game about the importance of economic growth, they cower before inequality; usually hiding behind statistics to allegedly “prove” that it’s really not grown much.  And then when inequality rose even under President Obama, they used this happy truth to besmirch his governance.  A more realistic response would have been for Republicans to cheer on a rising wealth gap that signaled successful GOP blockage of some of the former president’s worst ideas.  Republicans will never admit it, but their basic desire to reduce taxes and regulations, open up trade, and stabilize the dollar, would lead to massive increases in wealth, and by extension, inequality.  An already great U.S. would be spectacular under such a scenario.

Not asked enough is what’s so bad about inequality in the first place? Conard asks, and correctly notes that those whose economic exploits lead to greater inequality “improve the future.” Yes, they do.  We need more of the 1 percenters who get that way by virtue of turning yesterday’s rich-man’s luxuries (the original computer cost over $1 million, the first mobile phone $3,995, and laser printer $17,000!) into common goods.

More broadly, we need to ask ourselves some basic questions: is the NBA worse off because LeBron James is a better player than anyone in the league? Is the NFL worse off because Tom Brady and Aaron Rodgers are much better passers than Matt Schaub and Mark Sanchez? Were we hurt because the Beatles made appealing music that consumers bought in droves, thus rendering the Fab Four indescribably rich? In an economy of individuals, and that’s the only kind of economy, we’re all constantly in search of the path that will enable our own inequality relative to others.  Inequality is ultimately about freedom and happiness.  As Conard explains it, as opposed to it signaling theft, “Rising income inequality is the by-product of an economy that has deployed its talent and wealth more effectively than that of other economies – and not from the rich stealing from the middle and working classes.” Absolutely.

Notable here is that the above speaks to an aspect of Conard’s book that is informative, but also perhaps superfluous.  It’s not insulting the author to say that he comes from the world of numbers, so while he doesn’t hide from the undeniable societal and economic good that springs from inequality, the technocrat in him seemingly couldn’t resist showing how income statistics revealing a growing income gap are rather overstated.

Addressing the inequality hysteria of Thomas Piketty and Emmanuel Saez, Conard bolsters his point about the good of inequality by noting that in the highly unequal United States, “incomes have grown as fast as, or faster than, other high-wage economies.” Logically so.  Income is a function of investment, and the more wealth there is, the more investment there’s going to be.

Conard adds that the income stats that transfix the Pikettys of the world ignore “the fact that an increasing number of workers live alone instead of in families with more than one worker.” Conard’s greater point is that the view suggesting increased wealth concentration at the top deprives workers at the bottom is “mistaken.” So true, but when those who see the undeniable good of wealth creation reduce what is beautiful (see the advances of Jobs, Dell, Bezos, the highly compensated genius of James, Brady and Paul McCartney) to numbers, they needlessly shift the terms of the debate to the lefty playing field.  It’s better to state what’s true: in an economy of individuals, inequality is the goal of all individuals.  Thank goodness unique skills are rewarded so handsomely in the United States.

Additionally, Piketty and Saez can’t have it both ways.  Their view, one discredited by Conard, is that inequality brings great harm to those who are middle class or poor, and then they play with income statistics (similarly discredited by Conard) to “prove” their thesis.  The problem for them, and this is something Conard didn’t touch on, is that market signals belie both their pessimism and their statistics.  Lest we forget what Piketty and Saez regularly remind us, the U.S. is easily one of the most unequal countries in the world, yet during periods of booming growth (exactly when inequality is growing the most) that same U.S. is showered with immigrants (legal and illegal) eager to boost their economic circumstances.  But if Piketty and Saez were correct, border crossings into the U.S. would plummet amid the growth.

Notably, the above market signal speaks to a serious flaw in the book that Conard perhaps doesn’t truly believe.  More on this in a bit, but to read Conard is to often read an author arguing with himself.  He correctly notes that economic growth is a good thing, rising inequality and rising wages are an effect of growth, but they’re also logically a magnet for the world’s strivers at all levels.  Yet Conard writes that a “near-unlimited supply of low-skilled, low-wage workers – both offshore and immigrant – has put downward pressure on lesser-skilled wages relative to higher skilled wages.” Really? The author can’t have it both ways, and once again, he may not want to.  The simple point here is that immigrants wouldn’t rush into the United States for persistently lower wages; wages constantly reduced by what he describes as a “near-unlimited supply” of new entrants. What this tells us is that the more human capital, the better for workers of all stripes.  If that weren’t so, immigrants wouldn’t see the U.S. as attractive in the first place.

As for the notion that offshore workers push down U.S. wages, this is belied by Conard’s own odd focus on how low-skilled U.S. workers are harmed by “trade deficits.” Such a view is contradictory.  It’s contradictory firstly because increased labor force division is the certain driver of increased specialization that boosts individual productivity in the first place.  Adam Smith had it right long ago with a pin factory that he wrote about in The Wealth of Nations.  And then if the supposed “trade deficit” is rising in the U.S., that’s a signal of growing acquisitiveness on the part of American consumers; the point being that if a globalization of the labor force were actually pressuring U.S. wages downward, the logical result would be reduced imports into the United States, not more.  We can only import insofar as we’re already productive, and surging imports into the U.S. signal broad American gain from a globalized work force that has pushed Americans into better, and more highly-paid work.

Furthermore, trade deficits are merely an accounting fiction.  All trade balances; our “deficit” in trade is a direct result of enormous foreign investment inflows that spring from our export of shares in our world-leading companies.  The export of shares doesn’t count in the calculation, but this export, one driven by foreign investment, is a bullish signal for the U.S. economy.  Conard wouldn’t wholly disagree with this, but he argues that a lot of the foreign inflows are to purchase U.S. Treasuries.  No doubt there’s some truth to the latter, but this just speaks to how much bigger our alleged “deficits” in trade would be absent all the government spending.  Indeed, if Washington weren’t wasting so much of our precious wealth, more of it would be reaching entrepreneurs on the way to even more innovation.  This would prove an even greater magnet for global investment, and would logically drive up the accounting abstraction that is the “trade deficit” even more.  What Conard bemoans in Upside is rather bullish.

Conard’s focus on low wages, presumably his way of appeasing those who dislike his proper elevation of inequality, needlessly confuses the book’s message.  Worse, it’s not true.  His belief that immigrants have increased low-wage work stateside ignores the feverish automation taking place among businesses.  What this reminds us is that contrary to the popular view about low wages being a lure for investment, the real truth is that low-wage workers are very expensive.  Their slight wages speak to low productivity, high turnover, tardiness, etc.  The U.S. is a magnet for immigrants and investment precisely because it’s a place where the low-skilled can increasingly boost their productivity on the way to higher wages.

Mentioned earlier was Conard’s propensity to argue with himself.  This likely speaks to a live mind constantly evolving thanks to new information, but for the purposes of Upside, it arguably speaks to Conard’s editor doing a lousy job of editing.  The examples are many, but at one point Conard notes happily that “in today’s knowledge-based economy, companies can scale to economy-wide success with little need for capital.” Yes, they can, and that’s why there’s a growing number of billionaire founder/CEOs with very few employees.  But a few pages later, Conard contends that “It’s illogical for a CEO managing five employees to earn the same pay as one managing fifty thousand employees.” Why is it illogical for a CEO to earn enormous sums for creating immense value with very little in the way of capital? Furthermore, Conard’s initial assertion was that today’s knowledge-based economy assures more and more highly paid CEOs overseeing fewer and fewer employees.

At another point the author observes that Silicon Valley is “on fire.  Google, Facebook, Amazon, and Apple have increased investment to $60 billion per year in 2014 from less than $10 billion in 2000.” Great stuff, but a few pages later a downcast Conard laments that “we don’t see cash-rich technology companies like Google, Facebook, Apple and Microsoft stretching to invest their cash in product development….Quite the opposite, we see these companies hoarding cash and buying back their shares.  That’s odd behavior if the returns are superior.” Yes, it is, but more odd is that a few pages before Conard wrote of a technology industry “on fire,” with its brightest lights investing with great gusto.

A few pages later Conard observes that “Given the plethora of start-up related risks, assets that reduce risk, such as teams of properly trained talent, proven supervision, an infrastructure for commercializing innovations, and synergies with existing businesses, are more valuable than they otherwise would be.” A free lunch for anyone who can decipher what was doubtless well meaning, but also incomprehensible.  Conard was ill served by his editor, and that’s not fair to the author.  In a paragraph about the difficulties “retiring baby boomers” may bring to the U.S., Conard adds the non-sequitur that “China looms as a growing existential threat to our national security,” only for the author to conclude in the same paragraph that “Embracing ultra-high-skilled immigration is America’s best shot avoiding permanent damage from these otherwise unsolvable problems.” Ok, wise minds can debate what the burden of retirees will be, but what does it have to do with China possibly looming as an existential threat?

Where Upside proves most disappointing concerns Conard’s comfort with anti-freedom answers to the growth question.  He writes that “America needs to replace the current ethos, which discourages students from learning practical skills, with one that insists that talented people have a moral obligation to put their talents to full use serving their fellow man.” Without getting into what skills will be most beneficial in an economy marked by constant evolution, what makes America the most prosperous country on earth is an ethos driven by fierce individualism that frees its people to do as they wish.  Lest we forget, entrepreneurs generally achieve by virtue of doing that which the established have dismissed, yet Conard apparently wants human action to be controlled based on a “moral obligation” that would be a creation of the establishment.

And while he properly talks up the good of reduced tax burdens throughout Upside, Conard calls for national solutions that include “training the next generation of students” as though the innovation that leads to inequality can be trained.  And by whom?

Conard’s better conclusion is that “It’s disingenuous to measure growth for the one lucky success while ignoring the fate of the other ninety-nine who didn’t succeed.” Yes, the inequality that is undeniably great for everyone papers over the many who pursued similar stabs at greatness, only to fail.  Why do we penalize the few who succeed? That seems to be Conard’s broad, and very important point, but it’s sadly suffocated at times in a book that is more about an author arguing with himself than one that proves what is true: the upside to inequality is immense.

Reader Discussion

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on March 06, 2017 at 13:13:19 pm

A simple question;

Why are not Gates, Bezos, Dell, Jobs, etc considered "robber barons"?

Their predecessors, Carnegie, Morgan, Rockefeller were.

Hmmm! What could be the difference. Political persuasion, perhaps?

Also, a bit haughty of the author to assert that "low wage earners" are tardy, un-serious and basically a burden upon the otherwise productive elements in the economy. Having managed hundreds of such workers, I can attest that that is manifestly not the case. Then again, recognition of their *value* presupposes some familiarity with these people and a basic understanding of the *technical skills* they bring to bear on economic endeavors.

Now as for "moral obligation", one may argue that capitalism, properly understood / practiced, i.e., a nexus of socio-economic interrelationships that yields many positive outcomes, is itself a moral system. As for obligations, all members of a polity have (and by right, ought to accept) *obligations* toward their fellow citizens.

If, however, the essayist is here decrying the type of moral obligations favored by the Leftist members of the Administrative State, and imposed upon the citizenry without their consent, in an effort to produce select / specific outcomes deemed proper by the minions of the Admin State, then, Yep, the point is well taken.

Perhaps, a little clarity would be in order.

As for inequality - it would appear that it is simply an "outcome" of growth; it will not be defeated / eliminated. Efforts by the Admin State and their academic / media cohorts to convince us of the grave "injustice" of it while unsuccessful will, however, continue until such tine as they have managed to impose THEIR moral obligations upon us - or we simply tell them to "buzz off."

Yet, it should also be noted that, contrary to the rosy picture painted by the essayist, the non-salutary effects of this globalization induced growth fall disproportionately upon that very same class that the author dismisses as "tardy and unproductive." Thus, we come back to "obligations" - what if any are they? Is the obligation to some Smithian / Lockean construct of economic theory? Or is there some obligation to advance the overall interests of a nation state and its citizenry.

I don;t pretend to know. But such questions should be addressed when attempting to assess the propriety of a system / practice / theory.

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gabe
on March 06, 2017 at 14:37:35 pm

Oops, forgot:

I would more readily characterize the Gates / Dell / Jobs trio as "robber barons" than Ole Rocky. Carney and Morgy as the latter at least employed American citizens and helped propel the US forward as an industrial titan, whereas the former proposes open borders, unlimited unskilled immigration (for their own Baron-like profits) and has helped convert the US into a marketplace for social media / advertising.

Which of these groups advanced national interests more?

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gabe
on March 06, 2017 at 15:12:52 pm

"A few pages later Conard observes that “Given the plethora of start-up related risks, assets that reduce risk, such as teams of properly trained talent, proven supervision, an infrastructure for commercializing innovations, and synergies with existing businesses, are more valuable than they otherwise would be.” A free lunch for anyone who can decipher what was doubtless well meaning, but also incomprehensible."

Let the engineer in the audience respond to that. (That would be yours truely.) I live with this every day.

The problem with innovation is that it generally takes a tak of sloppiness. Innovative programs are experimental in character and their solutions are generally suboptimal in their first attempts. Future iterations of the program improve it and optimize the initial solution.

In the software world, most programming costs go to fixing bugs, not developing new product. Improvements in future iterations are slowed down by poor early designs. Better quality control process used at the beginning of the creation of the solution can substantially reduce the cost of future bug fixes and accelerate future improvements.

New solutions are not always developed with other existing businesses in mind. For future projects this means modifying the already sloppy program to work with the external business. The costs of modification can be high, especially given the character of the innovation.

Innovators accept a certain amount of sloppiness as a cost of being first to market, since first to market gains an economic and financial advantage.

My experience with software technicians is that we don't use highly effective development techniques. The techniques are well known, but programmers just don't use them. To address that, training is necessary. For effective development techniques to take root, management must be knowledgeable about those techniques. In most cases management is not, so the program languishes.

There are lots of room for improvement in the standard US development process. In some countries such as India the knowledge of how to develop software faster and more accurately is being instilled into their software engineering culture. Their development processes are often superior to US processes, both in terms of quantity of change and quality. The US is today playing catch-up with India.

If that is what Conard was getting at, he is absolutely right, although I'm not completely sure what the problem is with our "infrastructure for commercializing innovations." The existing infrastructure is completely free market and it works fine.

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Scott Amorian
on March 06, 2017 at 17:09:42 pm

Why do we penalize the few who succeed?

Who is penalizing who?

I agree with the thesis (embraced by all here, I believe) that robust capitalism tends toward ever greater growth and ever greater inequality, and that efforts to villainize the rich are largely misguided. And I am happy to praise most rich people for getting rich.

I’m also happy to tax them.

And just as I think it inappropriate to villainize the rich, I think it inappropriate to characterize taxation as a penalty (except, perhaps, in the case of some excise taxes.) Villainy is not required to explain the circumstances of the rich, nor is a desire to punish necessary to explain the purpose of taxation.

Addressing the inequality hysteria of Thomas Piketty and Emmanuel Saez, Conard bolsters his point about the good of inequality by noting that in the highly unequal United States, “incomes have grown as fast as, or faster than, other high-wage economies.” Logically so. Income is a function of investment, and the more wealth there is, the more investment there’s going to be.

Well, perhaps aggregate income is a function of investment, but wages tend to be a function of supply and demand. As we’ve discussed, many trends have combined to cause the supply to grow relative to demand. So even if aggregate income is growing, it does not necessarily follow that this income accrues to labor.

[T]he income stats that transfix the Pikettys of the world ignore “the fact that an increasing number of workers live alone instead of in families with more than one worker.”

A fair point: To the extent that we analyze data per household, we will want to compensate for the fact that we generally have fewer people per household than in the past. This accounts for part of the apparent growth in inequality. But there’s still a lot left.

Conard’s greater point is that the view suggesting increased wealth concentration at the top deprives workers at the bottom is “mistaken.”

This is trickier.

First, whatever the merits of this view about wealth concentration, I’m not aware that it reflects the views of either Piketty or Saez.

But second, the US is currently undergoing a populist spasm arguably triggered in part by growing inequality. The strategy proposed for addressing this problem is protectionism, embargoing outside goods and labor. Constricting the supply of unskilled labor may have some effect in raising wages—but it may also have the effect impairing various trades that would generate benefits that would accrue predominantly to the upper classes. In this convoluted sense, there may be a trade-off between the returns at the top of the income scale and returns at the bottom. At least, the populists think so.

I argue that protectionism tends to be an inefficient way to redistribute wealth from the top to the bottom, and we’ll incur a dollar of forgone GDP for each dime of redistribution. But still, a dime is a dime.

Thank goodness unique skills are rewarded so handsomely in the United States.

1. How important is it to reward unique skills highly? Imagine Superman were to offer his services to the market. Once the price for his services reached the point where it motivated him to spend every waking hour employed, what purpose would be achieved by driving the price higher? It would merely allocate his services to whoever had the highest demand—but we could have achieved that same outcome at a lower price without resulting in any reduction in number of hours worked.

True, generally a high price signal would motivate more people to enter the market. But we’ve stipulated that we’re talking about unique skills, so there are no other people able to enter this market. There’s just one Superman. So Superman would simply soak up rents on his unique talents, deriving benefits well above what is required to get him to produce at his fullest potential.

2. Now let’s look at the returns for this high-tech gajillionaires. I don’t begrudge them their gajillioins. But I don’t see the social utility, either. Think of all the accomplishments of history. All the works of genius. All the achievements of valor. And none of these people throughout history required the kind of returns earned by our high-tech gajillionaires in order to be productive.

Unlike the case of Superman, the gajillionaires probably don’t have unique skills. They just have rare skills. So a high price for their services will help signal to others to get into the same game. That’s socially useful.

But while it is social useful for the gajillionaires to get paid handsomely, it is not necessary for them to receive all of those gajillions. They only need to receive enough compensation to ensure that they don’t turn from their currently productive pursuits to some next-most-productive pursuit. All the rest is just rent, and we could tax it away.

Piketty and Saez can’t have it both ways. Their view, one discredited by Conard, is that inequality brings great harm to those who are middle class or poor….

[T]he U.S. is easily one of the most unequal countries in the world, yet during periods of booming growth (exactly when inequality is growing the most) that same U.S. is showered with immigrants (legal and illegal) eager to boost their economic circumstances. But if Piketty and Saez were correct, border crossings into the U.S. would plummet amid the growth.

Is this a fair characterization of the Piketty and Saez hypothesis, or a caricature?

After all, I would expect people to move to the US if they think they can achieve better circumstances than they currently live in. Thus, the relevant points of comparison would be the labor markets where they currently live, and the labor market they would anticipate in the US (with some adjustments for risk). In contrast, I think of Piketty and Saez focusing on intra-national inequalities. But then, they’ve written a lot of stuff, and I can’t claim to be an expert on all of it. Did Piketty and Saez really address international labor market arbitrage?

Notably, the above market signal speaks to a serious flaw in the book that Conard perhaps doesn’t truly believe. More on this in a bit, but to read Conard is to often read an author arguing with himself. He correctly notes that economic growth is a good thing, rising inequality and rising wages are an effect of growth, but they’re also logically a magnet for the world’s strivers at all levels. Yet Conard writes that a “near-unlimited supply of low-skilled, low-wage workers – both offshore and immigrant – has put downward pressure on lesser-skilled wages relative to higher skilled wages.” Really? The author can’t have it both ways, and once again, he may not want to. The simple point here is that immigrants wouldn’t rush into the United States for persistently lower wages; wages constantly reduced by what he describes as a “near-unlimited supply” of new entrants. What this tells us is that the more human capital, the better for workers of all stripes. If that weren’t so, immigrants wouldn’t see the U.S. as attractive in the first place.

Conard’s remarks seem straightforward to me: In the absence of immigration, with a constant labor supply, as the economy heats up and demand for labor increases, we’d expect to see an increase in the price of labor. Instead, this raise gets undercut by an increase in supply, provided by workers who come to the US because the compensation is better than in their native lands. The resulting wage for low-skilled labor is “persistently lower” than the wages for skilled labor in the US, even if it is not lower than the wages for unskilled labor outside the US. And there is a sufficient barrier to entry to maintain a modicum of arbitrage between the labor market prices inside and outside the US.

What am I missing?

As for the notion that offshore workers push down U.S. wages, this is belied by Conard’s own odd focus on how low-skilled U.S. workers are harmed by “trade deficits.” Such a view is contradictory. It’s contradictory firstly because increased labor force division is the certain driver of increased specialization that boosts individual productivity in the first place. Adam Smith had it right long ago with a pin factory that he wrote about in The Wealth of Nations. And then if the supposed “trade deficit” is rising in the U.S., that’s a signal of growing acquisitiveness on the part of American consumers; the point being that if a globalization of the labor force were actually pressuring U.S. wages downward, the logical result would be reduced imports into the United States, not more. We can only import insofar as we’re already productive, and surging imports into the U.S. signal broad American gain from a globalized work force that has pushed Americans into better, and more highly-paid work.

His belief that immigrants have increased low-wage work stateside ignores the feverish automation taking place among businesses. What this reminds us is that contrary to the popular view about low wages being a lure for investment, the real truth is that low-wage workers are very expensive. Their slight wages speak to low productivity, high turnover, tardiness, etc. The U.S. is a magnet for immigrants and investment precisely because it’s a place where the low-skilled can increasingly boost their productivity on the way to higher wages.

Again, Conard’s comments seem easier to understand than Tamny’s protestations.

I sense that Tamny is relying on Say’s Law—the idea that supply inevitably creates its own demand. I believe that Piketty, Saez, and Conard are all calling that thesis into question. As we’ve previously discussed, various dynamics—including immigration, globalization, and automation—have combined to moderate the growth in demand for unskilled labor relative to supply, and this has suppressed wage growth. Maybe we can say that this has led to “labor force division”—if you want to characterize the decline in labor force participation as it’s own division. (“I’m part of the growing percentage of American workers developing a specialized expertise in taking disability!”) But I think most people would characterize it as a supply of workers who have mysteriously failed to generate their own demand. Perhaps Say’s Law is one more of those Obama regs that Trump has repealed….

Now, maybe we’d say that this labor surplus hasn’t generated its own demand because artificial restraints on the market mechanism, such as the minimum wage. But to acknowledge that, we’d have to acknowledge that wages are in fact going down, the very hypothesis Tamny has sought to deny.

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nobody.really
on March 06, 2017 at 17:29:48 pm

The problem with innovation is that it generally takes a tak of sloppiness. Innovative programs are experimental in character and their solutions are generally suboptimal in their first attempts. Future iterations of the program improve it and optimize the initial solution.

In the software world, most programming costs go to fixing bugs, not developing new product. Improvements in future iterations are slowed down by poor early designs. Better quality control process used at the beginning of the creation of the solution can substantially reduce the cost of future bug fixes and accelerate future improvements.

New solutions are not always developed with other existing businesses in mind. For future projects this means modifying the already sloppy program to work with the external business. The costs of modification can be high, especially given the character of the innovation.

Innovators accept a certain amount of sloppiness as a cost of being first to market, since first to market gains an economic and financial advantage.

I’m blessed with never having to undergo Six Sigma training. This is a discipline for squeezing inefficiency out of a very mature process. It’s also a discipline for killing all innovation, because innovation is necessarily sloppy. And over time, after you’ve squeezed the tube of toothpaste perfectly flat, it becomes a ritualized discipline for showing fealty to the manager’s love of Six Sigma.

Someone needs to do a Six Sigma project to demonstrate how much an organization could save by abandoning Six Sigma after a year….

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nobody.really
on March 06, 2017 at 18:35:34 pm

nobody:

"Perhaps Say’s Law is one more of those Obama regs that Trump has repealed…"

Luvv'd it! OMG, had not heard of Syas Law in a generation.

Good stuff.And I do not understand, like you, how Tamny could ignore the fact that low skilled wages could be lower in immigtrants home country. Yep, *wages* in the aggregate, and in certain segments, are either going down or dormant.
Earnings, (CEO wealth from options are to be included) on the other hand are growing and cash is sitting idle. Host of reasons for this, of course.

An interesting case could be made by comparing the *utilization* of the vast wealth acquired by my old school robber baron friends and our modern day equivalents. I suspect that you will find that the Old Boys did a rather dandy job of re-investing in their industries and cross-fertilizing other industries or in Morgan's case financing various industries. Nowadays, we have as a dynamic engine, -advertising / social media, i.e., Facebook, Snap this-snap that, etc etc etc or Amazon which to my mind is nothing but a digital version of Sears-Roebuck Catalog.
Hey, at least Sears would ship you a pre-cut / dimensioned home for ready assembly. Whatcha gunna get from Amazon - cheap shoes made offshore!

Anyway, good comments.

Oh, and BTW: as for taxing the new Robber Barons, - agreed. After all, are they not always saying that they are not taxed enough. (This is usually professed BEFORE their accountant has them out for a drink, I would imagine).
I am happy to let them keep their gains - just don;t posture / virtue signal re: taxes and then go and put it all into tax avoiding schemes such as trusts, etc.

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gabe
on March 07, 2017 at 10:27:46 am

[…] Over at the Library of Law and Liberty, John Tamny reviews Edward Conard’s The Upside of Inequ…. […]

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Some Links - Cafe Hayek
on March 07, 2017 at 15:51:41 pm

I guess it depends on how they got so wealthy. If they sold a service or product that everyone wanted, well everyone is better off with the service or product than the money (or they wouldn't have bought it). But if they got wealthy because they had a friend in government who gave their company a big subsidy, well that doesn't really make anyone other than that one rich person better off. I also fear that some very rich people (or companies) have enough influence, by using the wealth they have, to be able to change the rules to benefit themselves at the expense of everyone else. This is the fear, but it is a hard problem to solve without abolishing freedom of speech. No matter how hard you tighten down campaign finance, you can't stop the really rich person from just buying the newspapers or TV stations. So, money will have an influence (or we will lose a free society by abolishing freedom of speech), so we need another way to try and solve the problem. The only way I see is to have the courts examine such private benefits very closely.

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Devin Watkins
on September 19, 2017 at 00:30:09 am

[…] What’s Wrong with Inequality? John Tamny , Library of Law and Liberty […]

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PowerLinks 09.19.17 – Acton Institute PowerBlog
on September 19, 2017 at 16:03:55 pm

Ya'll smarter than me - I don't know if I'm smart enough to respond but I'm just going to add this in here:

LeBron James plays for the cap of what a player can play for in the NBA I'm pretty sure. Without that salary cap, a small market like Cleveland doesn't have a chance at competing for an NBA championship. Maybe that would make the NBA better - having LA, CHI or NY compete in an epic 7 game nail biter every year? It would be just like El Clasico when the Knicks and Lakers play?

No one argues that LeBron James is being treated unfairly because he's not getting paid what an athlete in the MLB or the La Liga is getting paid, right?

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Ryan Alons
on November 09, 2017 at 12:34:17 pm

[…] than those in other income groups. Vincent Del Giudice and Wei Lu blame automation and robotics. John Tamny says it is a consequence of the explosion in entrepreneurship that has benefited us all. A Tax […]

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Image of How Central Banks Widen Wealth and Income Gaps - Alternative Report
How Central Banks Widen Wealth and Income Gaps - Alternative Report
on November 09, 2017 at 17:46:43 pm

[…] than those in other income groups. Vincent Del Giudice and Wei Lu blame automation and robotics. John Tamny says it is a consequence of the explosion in entrepreneurship that has benefited us all. A Tax […]

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Image of How Central Banks Widen Wealth and Income Gaps – Rio Rancho Tribune
How Central Banks Widen Wealth and Income Gaps – Rio Rancho Tribune
on November 09, 2017 at 22:00:52 pm

[…] than those in other income groups. Vincent Del Giudice and Wei Lu blame automation and robotics. John Tamny says it is a consequence of the explosion in entrepreneurship that has benefited us all. A Tax […]

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Image of How Central Banks Widen Wealth And Income Gaps | ProTradingResearch
How Central Banks Widen Wealth And Income Gaps | ProTradingResearch
on November 09, 2017 at 22:03:35 pm

[…] than those in other income groups. Vincent Del Giudice and Wei Lu blame automation and robotics. John Tamny says it is a consequence of the explosion in entrepreneurship that has benefited us all. A Tax […]

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Image of How Central Banks Widen Wealth And Income Gaps - Political American
How Central Banks Widen Wealth And Income Gaps - Political American
on November 09, 2017 at 22:26:32 pm

[…] than those in other income groups. Vincent Del Giudice and Wei Lu blame automation and robotics. John Tamny says it is a consequence of the explosion in entrepreneurship that has benefited us all. A Tax […]

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Image of How Central Banks Widen Wealth And Income Gaps -
How Central Banks Widen Wealth And Income Gaps -
on November 09, 2017 at 22:32:45 pm

[…] than those in other income groups. Vincent Del Giudice and Wei Lu blame automation and robotics. John Tamny says it is a consequence of the explosion in entrepreneurship that has benefited us all. A Tax […]

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Image of How Central Banks Widen Wealth And Income Gaps | WarMachines.com
How Central Banks Widen Wealth And Income Gaps | WarMachines.com
on November 09, 2017 at 22:35:33 pm

[…] than those in other income groups. Vincent Del Giudice and Wei Lu blame automation and robotics. John Tamny says it is a consequence of the explosion in entrepreneurship that has benefited us all. A Tax […]

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Image of How Central Banks Widen Wealth And Income Gaps | Real Patriot News
How Central Banks Widen Wealth And Income Gaps | Real Patriot News
on November 09, 2017 at 22:43:38 pm

[…] than those in other income groups. Vincent Del Giudice and Wei Lu blame automation and robotics. John Tamny says it is a consequence of the explosion in entrepreneurship that has benefited us all. A Tax […]

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Image of How Central Banks Widen Wealth And Income Gaps | Investing Daily News
How Central Banks Widen Wealth And Income Gaps | Investing Daily News
on November 10, 2017 at 00:02:24 am

[…] than those in other income groups. Vincent Del Giudice and Wei Lu blame automation and robotics. John Tamny says it is a consequence of the explosion in entrepreneurship that has benefited us all. A Tax […]

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Image of How Central Banks Widen Wealth And Income Gaps | Wall Street Karma
How Central Banks Widen Wealth And Income Gaps | Wall Street Karma
on November 10, 2017 at 04:18:45 am

[…] than those in other income groups. Vincent Del Giudice and Wei Lu blame automation and robotics. John Tamny says it is a consequence of the explosion in entrepreneurship that has benefited us all. A Tax […]

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Image of How Central Banks Widen Wealth and Income Gaps | Heinrichplatz TV
How Central Banks Widen Wealth and Income Gaps | Heinrichplatz TV
on November 10, 2017 at 06:47:03 am

[…] than those in other income groups. Vincent Del Giudice and Wei Lu blame automation and robotics. John Tamny says it is a consequence of the explosion in entrepreneurship that has benefited us all. A Tax […]

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Image of How Central Banks Widen Wealth and Income Gaps – Olduvai.ca
How Central Banks Widen Wealth and Income Gaps – Olduvai.ca
on November 12, 2017 at 16:10:36 pm

[…] than those in other income groups. Vincent Del Giudice and Wei Lu blame automation and robotics. John Tamny says it is a consequence of the explosion in entrepreneurship that has benefited us all. A Tax […]

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Image of How Central Banks Widen Wealth and Income Gaps – Ralston Unlimited News
How Central Banks Widen Wealth and Income Gaps – Ralston Unlimited News
on November 15, 2017 at 14:45:12 pm

[…] than those in other income groups. Vincent Del Giudice and Wei Lu blame automation and robotics. John Tamny says it is a consequence of the explosion in entrepreneurship that has benefited us all. A Tax […]

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Image of How Central Banks Widen Wealth And Income Gaps | YoNews #News
How Central Banks Widen Wealth And Income Gaps | YoNews #News
on January 11, 2018 at 09:35:04 am

[…] than those in other income groups. Vincent Del Giudice and Wei Lu blame automation and robotics. John Tamny says it is a consequence of the explosion in entrepreneurship that has benefited us all. A Tax […]

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Image of How Central Banks Widen Wealth and Income Gaps
How Central Banks Widen Wealth and Income Gaps
on July 09, 2018 at 13:06:54 pm

[…] than those in other income groups. Vincent Del Giudice and Wei Lu blame automation and robotics. John Tamny says it is a consequence of the explosion in entrepreneurship that has benefited us all. A Tax […]

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Image of How Central Banks Widen Wealth and Income Gaps – NewsWars
How Central Banks Widen Wealth and Income Gaps – NewsWars

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