How rich was Steve Jobs when he started out? Yet, he ended up one of the richest, and his company has the highest capitalization of all. That sounds like "the poor get richer..." Maybe it should be, "the SMART get richer, and the DUMB get poorer." Why aren't the railroads the greatest transportation companies around? Because they thought they were in the railroad business, not the transportation business. How dumb could they be? Why isn't Xerox the most valuable company on the planet? They invented GUI and the mouse, but Apple and Microsoft and others took advantage of it, while Xerox gave it away. So, even though the railroads and Xerox are still around, they are mere shadows of what they could have been. "The rich" don't say the same, and neither do "the poor." They are constantly shifting, with the poor today becoming the rich tomorrow, and vice versa. Inequality, looked at as a static condition, is off the rails from the start. Economics is DYNAMIC, not static, and anyone complaining about inequality needs to get a life, which means get off his ass and apply himself to eliminating inequality in his neck of the woods by working and innovating.

Correct...get out there and do it...do something. Invent somethin...my 1st and 2nd patents were built upon a hand crafted prototypes and they both sold.
However, the original question is how the rich get richer which in turn the poor get poorer...that's the question I answered.

Uh yeah! Weren't both Edison and Carnegie absolutely "dirt poor" at early ages. My point is they both rose from their "poorness" (is that a word?) and created wealth. They rose.. I guess you are just too far over my head. People who accumulate wealth of any size generally do so by trading units of what the originally own: their lives and what comes from their lives which is their creative (courage) thinking. A body in motion tends to stay in motion. You find a way to "make" a dime, you continue that effort. You generate "discretionary" wealth, you place it in motion. But you may eat basic food to reserve regular $$ that you also invest. The he average fellow, it may not be discreationary, it may be the daily staple. It may be a 10 year old Ford instead of the new Lincoln. . But YOU know this, I don't have to explain. .
Now what different things do the "poor" do. Do they think the same creative thoughts (and actually pursue their ideas?) Do they report to a job, rinse and repeat? Do they take strategic risks? No, playing the lottery does not count. By the way, the lottery is "the Poor Man's Tax".
Sure, any $$ strategically placed can produce new personal wealth. Ok, that is a given. but I believe someone who starts with nothing and creates a marketable widget may be doing so without discretionary income, they are doing the CORRECT things that will return them wealth.
* I guess another question could be: "would the "poor" reap the same return if they duplicated what the "rich" did? If yes, why don't they? If the answer is no, then we should ask, are their legislative hurdles that forcibly keep you from duplicating the prosperous actions.. If there are , we should remove the hurdle, if there is no legislative law, then we should ask "Why are you bitchin"?

Thanks alot!. I just discovered Bill Whittle had to continue with four others. Now I'm addicted.
Thanks alot!

You missed something...the (already) rich (-cause the created value) get richer because they have MORE discretionary income...to invest.
Don't know about you but I don't have enough "Discretionary" income to invest...but I might have provided the rich use their discretionary income to invest in a business near me and I get a better job there OR they invest in a business idea I have...then just watch me invest THEN!
Laughing........................................................
Edison and Carnegie either had investors or borrowed from a bank...PS...I think the central bankers turned Rockefeller into a mean bastard...something happened...because he didn't start out that way.

"OldAgedDude" Richer because they have "discretionary income"? I was indeed inviting opinion.
This is not an unusual conception. But I have to ask, it you cannot be rich without first having "riches", how do we explain Edison or Carnegie?
And of course, theft no matter which color collar you wear is theft.
How do the "poor" of today's standards compare with, say, the "poor" of Vanderbilt's day?

I hear he's coming to connecticut, I'm tempted to attend only to shout during a silent moment:
HEY BERNIE...WE'VE ALREADY RUN OUT OF OTHER PEOPLE'S MONEY!

The rich get richer because they have more discretionary income to invest...stocks, bonds, business ventures, etc. The poor get poorer mainly because of government intervention; other ways the poor get poorer are when new technology interrupts the system and everyone has to reshuffle. The rich at that time, if they paid attention either invested in the tech or adjusted their investments in other ways, otherwise they lose also.
As for the corrupt rich, those that inherited or stole their riches...they stayed rich and the politicians that made them rich.

By some definitions, inequality has indeed increased. But that is the wrong argument: people must understand that inequality is a good thing.

Oh, and speaking of "propaganda" you might like this one from Bill Whittle, too...

https://www.youtube.com/watch?v=hKq43...

Bill Whittle (search youtube) addressed that for the US... in his examples, it's just not true at all...

https://www.youtube.com/watch?v=Okebm...

Enjoy!

... or "Hear here!" ?

Yep... but don't try to explain that to Bernie....

http://www.plusaf.com/homepagepix/_cu...

http://www.economist.com/news/books-a...

,,, recently read that over breakfast... no definitive 'answers' but some interesting perspectives.... to wit:

"Mr Milanovic suggests that both are mistaken. Across history, he reckons, inequality has tended to flow in cycles: Kuznets waves. In the pre-industrial period, these waves were governed by Malthusian dynamics: inequality would rise as countries enjoyed a spell of good fortune and high incomes, then fall as war or famine dragged average income back to subsistence level. With industrialisation, the forces creating Kuznets waves changed: to technology, openness and policy (TOP, as he shortens it). In the 19th century technological advance, globalisation and policy shifts all worked together in mutually reinforcing ways to produce dramatic economic change. Workers were reallocated from farms to factories, average incomes and inequality soared and the world became unprecedentedly interconnected. Then a combination of forces, some malign (war and political upheaval) and some benign (increased education) squeezed inequality to the lows of the 1970s."

Anyone like to chime in on: "The Rich get Richer, while the Poor get Poorer"
* What do you really think and why?

Yes, something about Kool Aide comes to mind.

We are seeing this in Venezuela in real time. They are the richest oil reserved country as I understand it, but cant get the oil out of the ground !!!!!

When those that have no understanding of the fundamentals of economics are in charge disaster is inevitable.

What an excellent article for Galt's Gulch! There are around 20 pages or so (if I remember correctly) in AS where John Galt relates exactly what happened at the Twentieth Century Motor Company. F. A. Hayek also shows in "The Road to Serfdom" how Central Planning works - i.e., it doesn't.

From the ant and grasshopper fable to the most complex of economic theories the same thing always comes about in any economic system devised except the socialistic ones. Since the Federal Reserve System is actually a descendant of socialism in its more disguised form, it tends to skew the results. But the basics of human endeavor are always the same. The smart one do better than the not-so-smart. The harder workers do better than the not-so-hard workers. The smart hard workers have the best chance of being at the top of the pyramid. But one must always keep in mind that each human is a variegated as a rainbow with a hundred colors.

The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of miseries.

- Winston Churchill

Or maybe here Hear? laughing

That largely ignored lesson was learned in Jamestown.

So since this is a forum about knowledge, anyone care to hazard a guess about why the Pareto observation seems to keep cropping up?

I like wealth inequality. That means that if I work harder and smarter I can make more than the people who dont work. If everyone is equal, its depressing and a good reason to just not work at all.