Very basic politics #5: why the rich tend to get richer

Whenever one talks of raising taxes and increasing benefits, a lot of people have this quite understandable reaction: “Why should people who work hard to earn money give it to people who don’t?”

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But there is a good reason that every civilised country in the world[1] has a progressive tax system — one where people with high incomes pay a higher proportion of that income in tax[2]. It is that, other things being equal, there is a tendency for rich people to become richer and poor people to become poorer — and progressive tax systems are intended, at least, to ameliorate that tendency and prevent it from running wild.

But why does this tendency exist?

Suppose you come to me and offer me a gamble. We toss a fair coin. If it comes up heads, you give me £10, but if it comes up tails, I give you £8.

I will accept that gamble, because I stand to win more than lose. The expected value of the gamble is £1 — that is, 0.5 × £10 + 0.5 × -£8. If we played the same game a thousand times, it is a mathematical near-certainty that I will come out almost exactly £1000 ahead.

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Now suppose you offer me the same gamble, but this time the payoffs are much higher: I could win £1M, or lose £800k. This time, there is simply no question to be answered. I don’t have £800k, so I can’t play the game. Even if you improved the payoffs so I could win £10M for a gamble of “only” £800k, it makes no difference: I simply can’t buy in.

The intermediate case is more interesting. Suppose you offered me a version where I could win £10k or lose £8k. This gamble, I could just about afford to take, if I wanted to strongly enough and was prepared to make sacrifices. But even though I could play this game, I won’t — because at my level of wealth, losing £8k would mean a lot more to me than winning £10k. The £10k win would make me happy, but the £8k loss would make me much more unhappy.

Now the world is full of gambles with a very good, reliable chance of paying off. We call them investments. And the problem is, you only get to benefit from them if you’re already wealthy. The best investment in Britain for the last couple of decades has been property in London. (We bought an end-of-terrace three-bedroom house in Bermondsey for £75k when we married in 1993. According to Zoopla, its present value is almost exactly ten times that. The flat we moved out of in 2005 is now worth 2.2 times what we got for it[3].) But property speculation is a game for people with hundreds of thousands of pounds to spare.

At the other end of the socioeconomic scale, of course, there are lots of ways poor people tend to get poorer — not just in the passive sense of missing out on opportunities to get richer, but in ways like being charged by their banks when they go overdrawn, suffering the costs of moving home if they can’t make the rent, and so on.

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Here is why this is a problem: the distribution of wealth in any economy is an inherently unstable situation. Any given family will tend to get increasingly wealthy (if it’s already wealthy) or increasingly poor (if it’s already poor). Over time, if left to its own devices, a society will tend towards extreme bifurcation into a wealthy elite and a poverty-stricken underclass.

And that, in the end, is not in anyone‘s interests. A society consisting only of rent-collectors and wage-slaves lacks a middle class — which will mean in the end that it lacks all sorts of important professions: doctors, lawyers, merchants, researchers. Ultimately of course a deep enough divide between Haves and Have-Nots leads to revolution — which is very bad for the Haves and rarely works out well for the Have-Nots, either.

So to avoid that scenario, we have some degree of wealth redistribution: taxation and benefits — which in the broad sense includes not only direct cash payments, but also the public provision of infrastructure like universal health-care and education that the rich have less need of, as they can buy those things privately.

To be 100%, the goal of such redistribution is not, and never has been, to make everyone equally wealthy — no-one wants that, even though Jeremy Corbyn’s political opponents often like to mischaracterise his position in that way. Every sane political observer recognises that some degree of wealth inequality is not only inevitable, but actively desirable — as an incentive to work, to innovate, to create wealth that will benefit broader society.

The question is how much inequality we are happy with. In the 1980s, the managing director of a big company would likely earn about ten times that company’s average salary; now it’s more likely to be about a hundred times. Is that good? Is it bad? On this question, much political philosophy hangs, including taxation policy.

My big problem with our present Conservative government — well, one of my many problems with them, but let that pass — is that they are happy to tolerate, or even sustain, a much higher level of inequality than I think is good for society. And I think that 90% of people on the street would agree with that, if the question were taken in isolation. But admittedly, that does raise the question of why so many of them vote for a Conservative party that is quite up front about its intentions.

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Notes

[1] Does every civilised country in the world have a progressive tax system? I can’t think of one that doesn’t, but let me know if I missed one. (On the other hand, I could always go ahead and define a civilised country as one that has a progressive taxation system.)

[2] Do people with high incomes pay a higher proportion of that income in tax? That is certainly the idea. In practice, rich people will often hire high-priced tricksy lawyers who will identify loopholes that will allow them a legally acceptable way out of paying the tax that (I would argue) they morally owe. This is course is just one more way in which the rich tend to get richer.

[3] I fully recognise and freely acknowledge that I am on the wealthy half of this equation. The very fact that I can talk about properties we used to own in London makes that point. Nevertheless, I am in very much favour of more of my own wealth being redistributed downwards.

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39 responses to “Very basic politics #5: why the rich tend to get richer

  1. Well said Mike; I hadn’t really thought about, and even if an over-simplication, it makes a great example device.

  2. You don’t even need a biased game. All you need is one side having limited resources. Suppose you go to a casino and play a simple game. You put down your money and toss a fair coin. Heads, you win twice your stake. Tails, you you lose your stake. The obvious strategy is to keep doubling your stake until you win. The obvious problem is that you only have so much money to stake. This is why most casinos have a house limit on wagers, since there are often strategies like this that always win and the house doesn’t want winners who win too much.

    Your argument about the middle class is important. Rich people just don’t spend all that much money in the aggregate despite their apparent extravagance. The money they do spend tends to go towards low labor content goods like London real estate or shares in a corporation, so the money doesn’t tend to trickle down. The real economy tends to get hollowed out and that limits growth. There have been some very interesting articles published on this relating labor’s share of the economy with growth potential, and we’ve been up against the limit lately as labor’s share has continued its decline.

    I often hear the argument that people should not have to pay taxes because it is their money. Now, I don’t know what money they are talking about, but the stuff here in the states is plastered with “United States of America”, which is a name our local government uses, and is signed, in replica, by some government functionary. It usually has a picture of a dead president on it. The last time I was in the UK, the money was surprisingly similar with the names changed and different pictures of different government type people on it. That isn’t your money. If you think it is, that’s the pernicious influence of using your credit or debit card for everything. I think money is an excellent government service, and am more than glad to pay for it. In fact, if I had more, I’d be willing to pay extra.

  3. Thanks, Kaleberg. You make an important point (which I missed on this occasion, though I have touched on it before) that when money concentrates in the hands of a wealthy minority, much of it is effectively removed from the economy — which is another reason why increasing inequality is bad news.

    And the idea that “I shouldn’t have to pay taxes because it’s my money” is surely too ignorant and stupid even to bother spilling pixels debunking.

  4. Pingback: Very basic politics #3: where has all the money gone? | The Reinvigorated Programmer

  5. “The question is how much inequality we are happy with.”

    I think that is the wrong question. It is much more important to scrutinise how we support our most vulnerable and unfortunate than it is to look at relative incomes.

    Indeed, I’d accept even greater absolute inequality if it meant a larger portion of society felt a sense of security that they will continue to be able to meet their basic needs and a sense of inclusion and opportunity rather than marginalisation. Who cares how wealthy a few people are, isn’t what matters is how poor very many people are? eg. if allocating a full percent of all human productivity to making Rupert Murdoch immortal meant no parent ever had to choose to go hungry in order to provide for their child, we should probably do it.

  6. I agree, jcs — that is what the notion of “economic inequality” is grasping towards. But of course, minimising inequality in itself is no more important than maximising GDP. The purpose of both is to allow us to give everyone a good standard of living.

  7. But you already do give away some of your “wealth” as I can testify.

  8. Right; but there’s not much my little contribution alone could do. But if others earning what I do were taxed to an equivalent level, it would be a game-changer.

  9. “if allocating a full percent of all human productivity to making Rupert Murdoch immortal meant no parent ever had to choose to go hungry in order to provide for their child, we should probably do it.”

    Yes I agree that’s a likely-sounding scenario.

  10. Well, it doesn’t matter whether it’s likely or not. This is a thought-experiment.

  11. Surely it could have a little bit of nodding acquaintanceship with reality! If I said “If you dressed up all summer like the pink elephant from the Banana Splits, it would snow the next Christmas Day?”, would you spend time considering that?

  12. Of course! The point of a thought-experiment is that you can use an extreme example to demonstrate a concrete point. To go back to one I used on this very blog a while back, when Margaret Thatcher died, a lot of people said she should be given credit for the strength of her convictions, on the basis that anyone with strong convictions deserves credit for them. My thought-experiment was this: Hitler had strong convictions, did he deserve credit for them? The answer (at least I think) is “no”; so the general assertion is disproved by counter-example, and so I am not obliged to give Thatcher credit because of it.

    Surely jcs’s thought-experiment has a similar quality? Hypothesis: all more-equal states are better then all less-equal states. Thought-experiment: a less-equal state that is in fact better. Conclusion: the hypothesis is falsified.

  13. No, there’s no comparison because your example is a comparison. The other example had an implied causality – if we made things work better for rich people, surely it would end up making them a bit better for everybody else. But all it is is magical thinking. Rupert Murdoch immortal = no world hunger is magical thinking, just as much as fancy costume – snow at Christmas is magical thinking. Just like all free market arguments try to get away from actual examples as soon as they can, because they know it’s not exactly their strong suit.

  14. David Starner

    Phule’s Company (1990), by Robert Asprin has a not at all prescient scene where the incredibly rich protagonist in the far future has the stunning ability to … buy things online! The reason I bring it up is because it’s only possible in reality because a huge number of people can do it. A store could simply not afford to put every item in their catalog online with pictures unless people were buying, and not just the incredibly rich. Same thing for the technology; these nice cell phones we all carry around and the cellular networks that support them only exist because a billion people subsidize the building of cell towers everywhere and the writing of code for every little problem anyone could want. A world with extreme income inequality is a world where instead of iPhone 7s, the rich are carrying around very limited satellite phones or cell phones that only work in small, restricted areas.

  15. I’m not with you at all, Gavin. jcs’s words were “eg. if allocating a full percent of all human productivity to making Rupert Murdoch immortal meant no parent ever had to choose to go hungry in order to provide for their child, we should probably do it”. Not “Allocating a full percent of all human productivity to making Rupert Murdoch immortal would mean no parent ever had to choose to go hungry in order to provide for their child, therefore we should probably do it.”

    I do not believe jcs was advocating the discredited notion of trickle-down economics. But I will bow out of this subthread at this point — if you still feel that is what he or she was doing, I will leave it for jcs to mount a defence.

  16. Excellent point, David!

  17. Do the poor really get poorer?

    Absolutely no one in Britain today is as poor as the poorest in, say, 1850. Indeed, there are very few who are poorer than even the rich of 1850; I, with my tiny house that has a fridge-freezer, a gas pipe, electric lights, and

    It seems to me that it in fact is not true that the rich get richer and the poor get poorer. Indeed that would be technically impossible, as the poorest you can be is to have nothing, and you can’t get poorer than that.

    What actually seems to happen is that everybody gets richer, but the rich get richer faster than the poor get richer, widening the gap between them. But the poor don’t get poorer: they just get richer less fast.

    It’s as if you imagine the rich in a Ferrari and the poor just behind them in a Lada. As they both set off, the rich go faster, so the gap between the two cars grows; but the poor aren’t going backwards, just forwards a lot less quickly.

    Anyway, personally, I don’t think that a tax system should be set up in order to transfer wealth from rich to poor. I think that

    (a) the purpose of a tax system is to get the government the money it needs to perform its functions, like training and equipping an army, maintaining the country’s infrastructure (roads, flood defences, etc), and so on.

    (b) one of those functions is providing a social safety net for those who, through no fault of their own, fall on hard times.

    (c) it makes sense, when raising revenue, to raise more from the rich than the poor for the simple reason that the rich have more to give (and indeed this is the case: in 2014 the top 3,000 earners paid more tax than the bottom 9 million

    And that taken together, these mean that there will inevitably be a redistribution from rich to poor through that tax system; however, this is a by-product, not the purpose of the system, and that should always be borne in mind when addressing the tax system

    Basically, tax is not about punishing the rich, evening the field, or reducing inequality: it’s about ensuring the government has the money to do its duties, which include the social safety net.

  18. Oh, and with regards to rich rich getting richer through investments, it must be remembered that the things the rich invest in are not coin tosses or casino games but in companies and business ventures, and that if these succeed then by definition it is because they have produced something people want, ie, they have produced value.

    So if a rich person invests £800,000 and ‘wins’ back £1,000,000, then that means that many more times that value must have been created by the investment, benefiting all of us.

    For instance they may have invested in Amazon, and thanks to their investment, e can now all order our Christmas presents while sitting at our desks.

    We want rich people to have the money to invest and we want them to keep making investments, because that’ how society develops new stuff. Otherwise we’d be like the Soviet Union, which had no rich people [although it did have a lot of inequality: just compare the standards of living of an ordinary citizen, and a politburo member] and therefore invented nothing new the entire time it was in existence.

  19. “Otherwise we’d be like the Soviet Union, which had no rich people”

    Well I suppose that would explain why, at the Yalta conference, Stalin had to borrow a fiver off Churchill so he could get a sandwich for his lunch.

    (Every day, another step deeper into post-truth politics…)

  20. They officially had no rich people. Officially, a politburo member was exactly the same as a steelworker.

    As I pointed out in my parenthesis, the reality was rather different from the rhetoric.

  21. So is it…

    A: ”the Soviet Union… had no rich people”

    …or…

    B: ”They officially had no rich people… the reality was rather different from the rhetoric.”

    (By which I assume you mean they did have rich people, but pretended not to?)

  22. H: You are right, of course that the rising tide of technological progress lifts all boats. Over long timescales, the growth in wealth of whole countries does mean that the nature of poverty in those countries becomes less grinding. But over short timescales — and specifically, in the lives of individuals — yes, absolutely, the poor get poorer. See for example 5 Things Nobody Tells You About Being Poor for some of the mechanisms that make it so.

  23. They had no people with lots of money in their bank accounts. So nobody was ‘rich’ in that sense.

    However, they had people who abused their government positions, in order to live lifestyles of luxury unimaginable to their compatriots. So in that sense they were ‘rich’.

    By which I assume you mean they did have rich people, but pretended not to?

    You could, simplistically, put it like that, yes. They had people who lived like they were rich, but they did it by spending the government’s money, not their own (having your own money was tightly regulated in the USSR). Effectively they had no money of their own, but unlimited expense accounts.

    So in effect you had all the bad parts of rich people (living lives of luxury off the work of others) but none of the good parts (having their own money to be able to invest in companies and business ventures that might create value).

  24. The things the rich invest in are not coin tosses or casino games but in companies and business ventures, and that if these succeed then by definition it is because they have produced something people want, ie, they have produced value.

    That is not true at all. Plenty of “successful” businesses creste nothing at all, and do nothing but collect rents. At the peak of that particular mountain of course are patent trolls, but they are far from alone.

  25. But over short timescales — and specifically, in the lives of individuals — yes, absolutely, the poor get poorer

    Ah, but if we’re talking about individuals, then it’s no longer true that the rich always get richer, either. Lots of people who start out rich make bad investments, or are swindled by their accountants, or are just caught holding lots of stock in a market sector which suddenly becomes irrelevant, and end up either ruining themselves, or managing to live their lives comfortably but passing nothing along to their children beyond what a normal middle-class family would have.

    The idea that ‘the rich get richer’ doesn’t work on an individual level: individually, some rich people get richer, some maintain their wealth, and some become quite spectacularly poorer. It only works on a population level: it’s true that ‘the rich’ as a class, get richer (though who exactly is in that class changes).

    So you can’t really claim that both ‘the rich get richer’ and the poor get poorer’ are true, if you’re using a different comparison base for each (the class in terms of the former, the individual in terms of the latter). You have to use the same basis of comparison, if you’re to say anything meaningful.

  26. So let’s see if I have this right? There’s no material difference because there’s a bunch of (effective) rich people who can treat state coffers as their own (effective) private bank account? So in other words if the state coffers go up in value so, automatically, does their expense fund? But they wouldn’t do anything to make those state coffers go up, despite the fact they’d directly benefit and before anybody else did, because… well, why, exactly? Because of some strange enabling magic held in the creation of a formal private bank account?

    All of this is by the by, of course, because…

    ”…therefore invented nothing new the entire time it was in existence.”

    …is blatant nonsense. Really, Sputnik was nothing new? In fact in the Fifties and early Sixties the Soviet Union was winning the space race, and there was a general concern in the West that it could out-compete them overall. Also, it had a huge black market, to the extent there effectively was a private sector, it just wasn’t officially recognised as such. And black markets deal in cash, not promissary notes. Having cash was a real concern if you lived in the Soviet Union.

    What’s interesting here is that a market fundamentalist would parrot a Stalinist argument (“the Soviet Union… had no rich people”) and only abandon it when pressed. Because for both of them the Soviet Union has only a totemic value. For the Stalinist it’s really existing socialism, so any criticisms of it are to be dismissed as beside the point. For the market fundamentalist it’s held to be the negative to their positive, an example of all that’s wrong in the world. There’s the same strange emphasis on delcaring a thing and there then being that thing. Declare socialism and you have socialism. Declare a free market and unfettered competition and, hey presto, it appears. The actual historical Soviet Union, the thing that people had to live under, is for both an inconvenience best disregarded.

  27. Ah, but if we’re talking about individuals, then it’s no longer true that the rich always get richer.

    Of course it isn’t — and it never was. That is why the title of the piece was “Why the rich tend to get richer” and why I used the words “tend” and “tendency” seven more times in the body of the piece. I am really not sure how I could have been any clearer.

  28. In fact in the Fifties and early Sixties the Soviet Union was winning the space race, and there was a general concern in the West that it could out-compete them overall

    Haven’t you read Red Plenty, by Francis Spufford? You should. It’s all about how the command economy looked for a moment like it was working, but in fact never could. It’s all about historical reality, which is in fact what I was talking about — I don’t know where you got this idea I was being theoretical (or abandoning an argument), because I wasn’t (doing either).

    That is why the title of the piece was “Why the rich tend to get richer” and why I used the words “tend” and “tendency” seven more times in the body of the piece. I am really not sure how I could have been any clearer.

    But even that isn’t true, on the individual level. Individually, the rich don’t tend to get richer an more than anybody else: there are individuals who started off rich and got richer, individuals who started off rich and ended up destitute, individuals who started off poor and ended up poor, and individuals who started off poor and made it rich. As well as the vast mass of people, who end up in pretty much the same place as they started.

    The claim that the rich tend to get richer is only true on a population level. So if you accept you’re using the population level for that, you have to use the population level for your other claim. You can’t switch between population and individual levels depending on which gives you the better sound-bite.

    Well of course I mean you can. Nobody will stop you. But it’s a bit disingenuous.

  29. (and no, Sputnik wasn’t anything new: not to Werner von Braun, anyway. The Soviet Union’s rocket technology never advanced much beyond that of the Nazi scientists they abducted; they never made a shuttle, for example, and never could have. And a black market allows you to trade goods, but the need to stay under the radar means that it doesn’t allow for real innovation: you can’t start a supermarket, let alone an Amazon, in a black market. )

  30. If you ignore the fact that Sputnik was the first artificial satellite because someone dreamed of it before hand, I can come up with any number of inventions scientists in the Soviet Union dreamed of. The ellipsoid method for solving linear problems in polynomial time was created in the Soviet Union, for example. I wouldn’t argue that the Soviet Union was a huge source of innovation, but the blanket statement of no inventions is silly.

    The US’s space shuttle program was a failure; in retrospect, we should have continued launching on Saturn Vs and advanced that technology. It had a 1% catastrophic failure rate (unacceptable for a manned vehicle) and failed to reduce the cost to get materials into orbit. And only in the world where there are Nazis on the moon did the Soviet program not advance beyond the Nazis; the Soviets were threatening to launch nukes around the world, whereas the V2 had an operational range of 200 miles. The Proton rocket was made by the Soviets in 1965, and has been used many times this decade even by Canadian, European and Middle Eastern companies to launch satellites.

    If on the population level, the rich tend to get richer, and the rich and the poor tend to stay in their own groups, then the rich tend to get richer on the individual level. Few of the people who got very rich started as poor, and many of them started as rich. The advantages of having a parent, as Romney recommended and Trump got, giving you a “small” loan to start your own business are hard to overstate.

  31. Pesky facts…

    https://en.wikipedia.org/wiki/Timeline_of_Russian_innovation

    But of course my point isn’t to try and provide SK (or whatever he’s called this week) with counter-facts, as that would be a kind of category error. I mean, he argued Amazon were a force for good in the world, despite the way they ruthlessly exploit their staff, despite their doing their utmost to drive out all forms of competition, despite their receiving more in state aid than they pay in tax because it makes it a bit easier for him to buy his Christmas presents. I mean, a sane and rational conversation is not likely to ensue from that point.

    You could point out that Amazon, and in fact every single on-line retailer, can only exist because the internet was created as a public resource. And it does amuse me that free market fundamentalists spend all their time on-line, on a platform which by it’s very existence refutes all their arguments. But of course they don’t listen to any of that.

    My point is that 2008 is their 1956. In 1956 as Soviet tanks brutually crushed the Hungarian revolt, defences of the USSR finally lost all credibility. Yet some still beligerently stuck to it, treating reality as a tiresome child playing up who was best ignored. Similarly, the financial crisis of 2008 was caused by market deregulation, the very thing free market fundamentalists had been arguing would be a short-cut to perpetual prosperity. Did they take any heed of the way they had so spectacularly crashed and burnt? Of course not! We’re now in a situation where they’re telling us to read their books, and we’re imploring them to look out the window.

    My point in brief, Stalinist-style thinking is not confined to Stalinists.

  32. Silly Gavin! Didn’t you know we’re a post-fact society now!

  33. If on the population level, the rich tend to get richer, and the rich and the poor tend to stay in their own groups, then the rich tend to get richer on the individual level

    No, exactly not. ‘The rich’ as a class, tend to get richer. But the members of that class, on an individual level, shift.

    Say you define ‘the rich’ as, say, those who are in the top decile of wealth. And say they have a standard of living, say, X% above the mean.

    One hundred years later, you find that ‘the rich’, ie, those in the top decile of wealth, have, say, a standard of living 2 x X % above the mean. So ‘the rich’ have got ‘richer’.

    But, only half those in the top decile one hundred years later are the descendants of those who were in the top decile one hundred years previously. So ‘the rich’ have got richer on a population level, but on an individual level, half of them have got poorer, and been replaced by social climbers from the levels below.

    The facts are that on a population level, the rich get richer and the poor also get richer, but not as fast as the rich. This is basically the best that we can do, and it’s pretty damn good.

    I mean, he argued Amazon were a force for good in the world

    Actually I argued they had created value, which they have, for all those whose time is valuable who no longer have to traipse around shops buying their Christmas presents. I don’t know if that makes them ‘a force for good’ but I’d rather live in a world in which Amazon exists than a world in which it doesn’t — wouldn’t you?

  34. And only in the world where there are Nazis on the moon did the Soviet program not advance beyond the Nazis

    I must have missed the cosmonauts on the moon; when was that, again?

  35. David Starner

    The fact is that income inequality in the US is the highest it has been since before the Great Depression. The top 0.1% now holds 9.5% of the income in the US, which is what the 1% held at the low point in the early 1970s. Since it went down from the 1930s to the 1970s and then went back up, it obviously it doesn’t trend invariably in one direction.

    Given that you’ll pounce on a rhetorical flourish and ignore the fact that the Proton rocket invented by the Soviets is still being used to launch payloads, I suppose pointing out Lunokhod 1 and 2 is pointless.

  36. So let’s see if I have this right…

    The Soviet Union did not innovate anything. Well okay, they were the first to launch a satellite into space. But that doesn’t count because it was based on Nazi rocket technology. The American space programme does count, however, despite being based on exactly the same Nazi rocket technology. (With the one name SK cites, Werner von Braun, working directly for them.)

    I gather the difference is all to do with whether rich people have private bank accounts or not. But from there I confess to being a bit befuddled. Does that make the mechanics of a rocket behave in an entirely different way? Or does it overcome the effects of gravity somehow? Marx wrote that under capitalism “all that is solid melts into air”. Could that have something to do with it?

  37. I’d rather live in a world in which Amazon exists than a world in which it doesn’t — wouldn’t you?
    This is a more interesting question than I initially gave it credit for. My instinctive answer is, as it probably should be, “yes, but…” and the question for me is how big that “but…” actually is.
    For instance, Amazon only exists because the infrastructure to support it exists (the mobile phone example is similar.) Would your hypothetical rich person who invested in Amazon and therefore helped Amazon to exist have built a national fibre network in order to enable it to start in the first place?
    Equally, Amazon itself is unsure whether it is a company or a service. Much of what I find on there is supplied by smaller businesses who are using the Amazon infrastructure to reach new customers. But Amazon are controlling both what can be sold that way, and are essentially taxing those people to use the infrastructure (whilst allegedly not necessarily paying all of the equivalent taxes further up the chain, although that’s a different dispute!)
    That sounds like big government to me. Why is it different? And whilst I accept the argument that the consumer has choice because they don’t have to buy from Amazon, there is the risk that they can abuse their position (cf. Rolls Royce being able to bribe the government so that they aren’t charged with bribery…)

    So my “but…” is pretty big. And – as an aside – I don’t really see why government shouldn’t be able to provide the same sort of platform that Amazon does, which allows proper competition (since they are not trying to reinforce their own bottom line – again, not that Amazon are necessarily doing that at the moment, which makes me wonder what they really are.) I’m not remotely suggesting that government should be doing anything other than that, but I do wonder if the service is being confused with competition in this particular instance.

  38. If anyone sees SK (also answers to the name of H), could they tell him I was only joking? Seems he’s spent the last few days dropping apples onto bank statements, then getting perplexed when the didn’t float off into the sky.

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