A thread on thinking in systems and inequality (all Taleb inspired)
'Who' constitutes quintiles needs to be taken into account.
As long as inequality is dynamic and class mobility is not zero, inequality is fine (feature not bug).
People get rewarded disproportionately for creating enormous wealth and generate large surpluses for others at the same time.
This is good for everyone.
- true equality is equality of probability (not outcome)
- skin in the game prevents the system from rotting (by removing elements that fail)
"Static inequality is a snapshot view of inequality; it does not reflect what will happen to you I the course of life."
"Dynamic (ergodic) inequality takes into account the entire future and past life."
"You do not create dynamic equality just by raising the level of those at the bottom, but rather by making the rich rotate –or by forcing people to incur the possibility of creating an opening."
"The way to make society more equal is by forcing (through skin in the game) the rich to be subjected to the risk of exiting from the one percent."
"Dynamic equality assumes Markov chain with no absorbing states
Our condition here is stronger than mere income mobility.
Mobility means that someone can become rich. The no absorbing barrier condition means that someone who is rich should never be certain to stay rich."
"Dynamic equality is what restores ergodicity, making time and ensemble probabilities substitutable."
Read about time and ensemble probabilities here: