Topic: Wealth distribution, and tragedy of the commons. - page 4. (Read 755 times)

You are wrong.No money can "just sit around" in the banks.The banks are giving loans and investing that money to make profits and pay interest rates(which are very low,by the way).The amount of fiat money in circulation is constantly increasing,causing increased inequality and inflation.
There's no such thing a "fair wealth distribution". This is some utopian leftist idea.
Most of the rich people have skills,talents,education,inherited property and assets,motivation and will power.
If you impose higher taxes over them,they will still be rich,while if you increase the government aid for the poor,they might become lazier than before and more dependent on the government.
The tax system can't create equality.

The wide gap between the rich and the poor is usually a direct result of a divide in other areas like education and access to opportunities. The poor usually don't have access to education or to acquire a skill, this already puts them at a disadvantage, as the opportunities they are qualified for becomes limited and low paying, keeping them within their class range.
The rich on the other hand can access the best level of education, putting them in a privileged group on which they can leverage for support and get connected to even better opportunities. Reason why people would spend lots of money to get their wards into Ivy league schools as it helps to build their network.

Access to education would improve their management abilities.
Wealth distribution would not work by simply taking from the rich and giving to the poor, it's also an unsustainable idea. The society can rather be built to give people from different classes equal opportunities and help close the gap

Locked up bitcoins reduces the supply and at equal demand this increases the value of Bitcoin rather than deflating it.

The products bought by the rich is of a certain quality, and if they improved spending it would affect brands who provide such quality, whose owners are likely also in the rich bracket. It may open up more lower class jobs, but they are usually underpaid and overworked. The workers at iPhone factories would benefit little from rise in Apple stocks, but guess who would...

I agree. If today all the money in the world is confiscated and then immediately distributed back to them evenly, as early as tomorrow there is already rich and poor. That is how the reality of humanity works.

And so I am not a fan of wealth redistribution but I am always in favor of mechanisms which somehow bridge the gap. I simply cannot fathom the wrong side of the human race when people burn millions on gambling tables, shoes, signature handbags, toilet bowls, and so on while their fellow humans can barely eat even once a day, and on scant food devoid of any nutrition.  

Anyway, spending drives up the fiat economy. It helps money revolves around. But I don't think that is different with a Bitcoin-based economy. Businesses will only thrive when people are buying. The more the people are hoarding, regardless if it's fiat or Bitcoin, the more the economy shrinks.  

The difference, however, is that hoarding will inflate the value of that limited Bitcoin while fiat will continue to lose it.

Money is divided unequally among people causing some to be rich, others in the middle class well-off but not not rich and others in poverty. Due to the richest people now having tens of billions of dollars, compared to the richest ones a century or so ago, the social divide has become so great that people are calling for rich people's money to be broken up, and distributed to the poor. Their assumption is that if everyone has the same amount of money then there will be no more poverty, hunger and homelessness. But here is why this plan won't work for most people.

A lot of people, especially those in poverty and this includes the poor in third world countries as well, are reckless with money management, due to never learning how to manage money (for they never had any money to manage in the first place), and spend all their money on cigarettes, entertainment, and commodities that drain people's wallets over time. Then there are some people who gamble their money away. Then you have other people who'll buy a sports car or a ship or a fancy house on credit and are unable to repay their debts so they keep paying large amounts of money every time period, lose more and more money and eventually become insolvent. So if you distribute money to these kind of people, they will end up becoming poor again quickly. The rich people with money taken from them still know how to make big money, so the cash flow from the poor to the rich becomes POOR PEOPLE --> MERCHANTS --> OTHER MERCHANTS --> RICH PEOPLE, rich people will be rich again, poor people will be poor again, and the middle class perhaps a little better than they were before.

• Wealth distribution to poor people --> most become poor again
• Wealth distribution to middle class --> most become better off
• Wealth distribution *from* rich people --> most become rich again

How all this relates to the tragedy of the commons is that that theory emphasizes that if each person collects more good for themselves, then it deteriorates the common good for everyone involved.

A lot of rich people's money is just sitting around in banks not being sold, invested or traded with. This removes money from circulation just like how bitcoins get lost or locked up, but unlike in bitcoin where theoretically this scenario deflates prices, idle money inflates prices because there are less sellers and buyers.

So I think a solution to the social divide problem is to make rich people spend their money more, so that it goes back into the world economies.