I used to live in an upper middle class area, and a worrying number of the people were very polished thieves. They spent an unholy amount of time fighting over inheritances with other family members and over property boundaries with neighbours. When they worked - inevitably as land owners, landlords, upmarket real estate agents, investment advisors, lawyers, company directors, horse breeders, and so on - they'd always pad their bills and expenses, inflate their prices, and cheat on their taxes.

Were they "successful" - in the sense of being very comfortably off? Of course they were.

Did they try to marry their own? Naturally - out of snobbery and opportunism if for no other reason.

Were they admirable human beings or truly productive members of society? Not noticeably. Between the drink and drug problems, the predictable infidelities and ensuing dramas, and the polished and educated facade hiding feral greed and entitlement, they looked good from the outside - not so much from the inside.

If you don't own shares/stocks to any significant extent your labour goes to supporting these people. They make a lot of money from "investments" and pretend this is a glorious, noble, and risky social service. In fact they're simply skimming money from the top of the economy into their own pockets - effectively wasting it when it could be put to work doing something innovative for future generations.

Attacking "Billionaires" is easy to do, but its the wrong target. A "wealth tax" will probably make a pretty good bandaid, but for a real solution here, we need to think harder about fixing the root cause - that skimming strategies are dominant in the first place. In other worse, say we pass a high tax. Great. Except it doesn't change the best action for people(rich or poor): make money by skimming. So now instead of having an unequal society of skimmers, we end up with a more equal society of skimmers.

Way too much capital right now is devoted to skimming: marketing/advertising, legal/accounting, real estate, and finance have ballooned. The largest tech companies in the world are ad companies. Lawyers and accountants spent significant time on tax avoidance. Real estate is run on speculation and bubbles. Finance is now more about about the short term rather than long term value investing. It didn't used to be the case, but in the modern world, the margins on these departments make them better ways to spend our time and resources to get money. I wish I had a mental model of things good enough to suggest what the right fix would be, but as a random guess, I'd rather see taxes on the industries above than a tax on billionaires.

Edit: in retrospect this rant went overboard. Wealth tax/higher taxes on extreme wealth are probably still needed as part of the plan. Easy to get carried away with rants lol!

If you think they are skimming money, then there has to be a way to offer the same services cheaper (without the skimming). So instead of complaining, do it. What's your excuse?

Of course crooks exist. Most people are not crooks, though. And especially the professionals you mention may have problems to persist. Like the shoddy dentist will be busy with lawsuits presumably.

I still prefer those "private crooks" to people feeding on government money (not meaning people on social security, but people in useless jobs paid for with taxpayer money).

Of course psychopaths exists. Most people are not psychopaths, though. And especially the CEOs you mention may have problems to persist.

I still prefer those "CEO psychopaths" to people feeding on government money (people in useless jobs paid for with taxpayer money).

https://www.washingtonpost.com/news/on-small-business/wp/201...

I personally think that the "successful pyschopaths" meme is also way overblown, but I don't really know. I think being a psychopath is actually a deficiency, not a super power. Also in business I think people who help other people tend to be more successful overall than the stereotypical ruthlessly selfish people.

Edit: I think you added the link later on, that cites 21% of CEOs to be psychopaths? I would wait for replication on that one. It reminds me of another thing I read where reading about economics allegedly turned people into psychopaths (which is of course bullshit - just because you learned about rational decisions, as perhaps most CEOs do at some point, doesn't mean you are a psychopath). I suspect the questionnaire or the study they used to determine the "21%" number may in fact be motivated by politics.

What if they are skimming money precisely because they made it difficult to offer the same services cheaper?

No, it isn't. For intelligence, in adulthood, it clearly isn't. For harder to measure skills, current estimates are at around half and half, but the error is mostly in the environment category. So much general-population variance is genetic (and that's only amplified at the highest skill levels - you need great 'cultural and social influence', but also great genes, lol)

> Did they try to marry their own? Naturally - out of snobbery and opportunism if for no other reason.

fun fact, the trait that shows the most assortative mating is intelligence. curious!

> I used to live in an upper middle class area, and a worrying number of the people were very polished thieves.

and I know a worrying number of lower class thieves. '20% of rich people are grifters' doesn't impune rich people as a whole, any more than Tony the crack money launderer impunes poors.

I think it was in The Meritocracy Trap that spoke to how this is a relatively recent phenomenon that is exacerbates wealth inequality. Previously it appears to have intermarriage between social classes

> For example, Björklund and Jäntti (2012) estimated using Swedish data that shared environmental and genetic factors explain 40–60% of inequality in a number of productive traits, including cognitive and non-cognitive skills, schooling and long-run earnings.

https://www.researchgate.net/publication/333090512_Heritabil...

Assuming that this paper holds up, then at around half of lifetime earnings would be attributable to environment.

Also, speaking purely of heritability factors is a little reductive. Two parents that lack a particular phenotype that, say, is fit for wage growth in our contemporary economy, may have offspring that does. Similarly those fit to succeed in the economy today, may not be in the future if the stressors change.

For instance, we could say that the heritability of intelligence among the children of suburban Chicago families in a particular income bracket is 70%, but not that the heritability of intelligence in general is 70%.

The most informative studies in this area are usually of twins-separated-at-birth, but the datasets aren't very large.

The children of two collage graduates have collage graduate genes and a collage graduate upbringing. It’s no surprise they’re (we’re) overrepresented in collages.

Genes are determined before college. And education doesn't change genes.

You're glossing over the role of other personality traits in success. And yes, environmental factors are hugely important to those as well, but often in complex ways.

For example, food insecurity during childhood has an enormous impact on an individual's ability to delay gratification. While there is certainly quite a bit that parenting can do to make that even worse, there isn't a lot that can be done to make it better.

The one thing you can do that won't be harmful is basically funding genetic selection research, e.g. lowering the cost of IVF embryo selection. This is relatively morally palatable (esp. compared to e.g. eugenics) but will actually have the desired effects.

> just that even taking what you've said about fundamental human preferences at face value it is not inevitable that it stay this way

You're not wrong, but funding education is _expensive_, and education is only part of the puzzle, access is another large part of it, and so are the social norms you develop. My family and I grew up in "poverty-lite", and while I did manage to get into a great college, the adjustment was quite difficult. In high school I would show up to regional science fairs, and would often come in 2nd or 3rd place, and would lose to kids who used their high school's teacher's Masters thesis as a science project (for reference, in my school nobody even had a Masters degree.) Socially, I grew up very different from them. Where I grew up, you kept your head down and got in line. Disputes were aired out publicly, and often descended to fistfights if you were under 21. Textbooks were expensive, and my school often couldn't afford enough for everyone. I was constantly begging the librarian to borrow math books, but I never could because we didn't even have enough copies for the students in the actual class, let alone me, an interested kid.

For my college peers money was never an issue. I used my good grades to become a TA as soon as I could, and I worked as many hours as I could so I could pay rent and make expenses while my friends seemed to have endless amounts of time to go to social hangouts and parties, which certainly blocked the connections I could make.

Over the years I've made a handful of friends in tech who grew up in a similar income bracket as mine, and they remain comforting to me because even now, I have a hard time relating to the average Silicon Valley tech worker whose life started in upper-middle class gated suburbs.

Really?

You’re 16 years old, you’ve a high IQ and a passion for programming.

Your parents are alcoholics. You don’t have nice clothes. You don’t have perfect manners because it’s just not the world you live in.

How do you get to the university admissions interview in the next town? How will you compete against the mannerly, well turned out student with no record of truancy. All you have is a high IQ and a passion. Will that cut it?

> incentives

Actors are sometimes irrational, you can’t rely on incentives.

The absolute best will usually find their way out. I think a society should optimize for beyond those who are just in the vanishing tail of the curve

Not to mention the role his familial connections had in his landing that sweetheart deal with IBM.

He got business connections with IBM, he is a skilled negotiator, he got an expensive education paid by his parents, founded his own business with his parent's money (do you have a $150k allowance?) and knew intelligent but "poor" people who were even more skilled than him who he then could hire to actually do the important work.

In short, he was born a billionaire.

[0] https://en.wikipedia.org/wiki/86-DOS

Sure, you will be able to point to many people who have managed to do it. But many, many others have tried and failed - through no fault of their own.

At the same time, do you think the average income of a given internet business--let alone the segment that are run by solo entrepreneurs in their basement with just a computer and a $5 droplet--compares positively to the salary of the average CS graduate? Because we're talking about inequality, not asking "can poor people possibly make money online?"

The fact that the internet has made things better does not mean the problem is solved.

Even if you fail (and you probably will) what you learn from it will position you much better when trying again. It often takes multiple failures before making it work. (Even Gates/Allen had business failures before starting Microsoft.)

> does not mean the problem is solved.

Most people don't recognize opportunity because it comes disguised as hard work :-)

This kind of can’t-do attitude really saddens me. I see it all the time in these discussions about wealth inequality.

But what about advertising? Branding? Anything that a $5 droplet can do, someone else's product can probably do too -- you don't have the tech advantage. Do you stand out with UX? By doing the legwork yourself? All of these take manpower, and that means capital.

It's not the website that costs money to make; it's making that website profitable.

The idea that someone somewhere can probably maybe might be able to make this work does not make the case that people have opportunity.

But if you have a library nearby, that can take care of a lot of the concerns you’re talking about. Before the pandemic, I frequently worked out of one. Your hypothetical 16 year old likely has a suitable spot at their school.

You really don’t need an existing network to get a business started. You can find initial users on Internet forums, or reach out to people on LinkedIn.

There are quite a lot of successful small saas startups that took no funding. Are you familiar with microconf? The business of software conference?

It might seem rare if you don’t know anybody doing it, the knowledge isn’t evenly distributed. Doesn’t mean it is rare.

Ideally, but in reality public education is not an equalizer like that. Wealthy parents give their students advantages that school can't provide in our society: e.g. upper class culture and habits, resources for extra education, connections, etc.

Even the institutional bits aren't equal: local property tax based funding mechanisms mean richer people live in better-resourced school districts than poorer people, with better educational opportunities.

Here's a slightly different take on this idea:

The only way to become a billionaire is to use leverage.

I think this is a much more defensible argument. You can't become a billionaire by yourself. You have to have some mechanism of leverage to magnify your impact. Hiring employees is a form of leverage. Using a computer is a form of leverage. Putting your software on a large number of cloud computers is yet an additional form of leverage. The question of whether one is exploiting their employees is a worthwhile question to ask, but it is a completely separate (and much more polarizing) question. I think that leverage is the core kernel of truth lurking within this question.

Using your example, a billionaire doesn’t hand 1,000 more dollars to a hedge fund manager and get 1,000 times more wealth amplification. They hire a team of accountants and lawyers to do 1,000 times that base amplification each.

Making 100k and having a stock based retirement plan is an open drainage from the wealth factory, it definitely has access to the same levers, but it’s effectively the equivalent of a pension, just managed in the marketplace according to marketplace rules. That earning category is basically the automobile manufacturer lead/plant manager of our generation, the only difference is there’s more people who get that slice. People in this role largely don’t have the capacity to even think about increasing their leverage, they just get “benefits” and call it a night.

People who become billionaires have an entirely different approach. Their work is split between using whatever leverage they have access to, and whatever affords greater leverage. It’s mathematically the only way (given current dollar valuation) that you can get that many dollars.

(See also the sibling comment to your by pdonis.)

The term "using leverage" is often used in a creditor / debtor relationship. But it's funny how the term works because in that setting "using leverage" is usually associated with the debtor being the exploited one in the relationship.

More generally, in a given exploitive relationship it's not always obvious who is exploiting who.

Oil and Gas billionaires leverage the fact that society hasn't figured out how to factor in negative environmental externalities. Consumer Staples billionaires leverage their supply chain monopolies and labor monopolies.

The original tech billionaires leveraged their early knowledge of computers/internet. Web 2.0/3.0 billionaires leverage the fact that society hasn't figured out how to appropriately regulate stuff that's similar but slightly different from their old school regulated counterparts (i.e. Uber, Airbnb).

In general, leveraging technology capabilities seems less exploitive than leveraging human/environmental resources/lack of regulation.

[1] https://en.wikipedia.org/wiki/Triple_bottom_line

I see what you're getting at here, but I don't know that I completely buy it. Case in point: privacy. I guess it depends on how one defines exploitive.

I have no idea what "leverage" means in this text. From context I can tell it's something bad.

I understand "leverage" in mechanics. I also understand that in "corporate-talk" it's just a synonym to "use".

Sure. But even setting aside whether the ability to use it is evenly distributed, the availability of resources to be leveraged definitely isn't, so the rich get richer even with relatively passive strategies.

But I agree that there is moral and amoral leverage. I of course only love the moral kind.

In the case of the founder, as I have mentioned, hiring someone gives them leverage. But conversely, a person taking a job with a large company gives the employee leverage. For instance, as a Google software engineer, you have the ability to command huge amounts of computing hardware that Google has at its disposal. Different roles may have varying degrees of ability to leverage the corporation's scale to their purposes but it's certainly a very real thing for many roles.

Same reason they might get them to start out?

Wall Street originally was built to trade shares in corporate plantations.

Many plantations did not get going with ethnicity-based slave labor, it was voluntary indenturement as a result of extreme inequality relative to the royal shareholders of these non-free-enterprise corporations, i.e. economic slavery as a foundation for the lowest-class labor force to begin with.

It's a slippery slope from there, keeping them down on the farm.

Don't forget the American colonies were founded by (royal) multinational corporations for the benefit of multinational corporations.

But B.Franklin and those guys came along and wanted independent non-royal corporations, and the next thing you know, it's the USA on the Eastern Seaboard with its well-developed ports and united plantations.

And they were trading shares right there in Manhattan, on that previously underutilized street with the characteristic old wall.

Otherwise not much had changed from how they did it in London, or it would have been an even more difficult transition.

Imagine what it was like under bondage when a downturn or business model failure pressured a worker to tend 5 acres instead of 2. When 2 was already quite tiring and not very rewarding.

And with the shareholders up on Wall Street having financial control, when the market comes back nicely the shareholders recover even more nicely if little or none of the prosperity is intentionally returned to the now much-more-productive & hard-working laborers.

Simply because the system is made to extract from bonded laborers, and they are the lowest-hanging fruit when shareholder returns need to be maintained during a downturn.

Wall Street volatility gives some of them the chance to rinse and repeat each time before their big wigs get repowdering.

For real major upsets or windfalls the banks can go further and adjust the terms on their notes to most strongly leverage the situation.

The mint can change the value of its legal tender notes in response too, so far only periodic devaluation for the dollar, no two-for-one splits in your favor or anything like that for you wage-earners even in the best of times.

If every citizen were generously issued two new dollars for every old dollar you had in liquid cash at the time, you can expect to continue working for the same dollar pay as before and have the same debt payments to minimize upset, but who would benefit most anyway?

Don't even think about a reverse split which is severely in your disfavor by comparison.

Better get accustommed to what a dollar won't buy any more now, a change in value either way and you'll be worse off.

Turns out dilution of certificates is the most effective if not expedient way to overcome liberty & justice for all.

If you're going to be a billionaire anyway, build something with real value added that's more than worth it for as many people as possible, with enough success to completely commit to avoiding significant negative consequences.

That's what billionaires are supposed to be there for.

None of that fake stuff.

Gag me with a silver spoon if you can't build anything real of widespread benefit, plus avoid negative outcomes with all that money.

Something that would help would be more benevolent billionaires willing to pay whatever it takes to bypass our current crooked political parties. There simply still exists the same need to admit only the most ethical to Washington (or preferably a new capitol) before Wall Street can be expected to deviate from the plantation model these parties sustain.

Looks to me like pg has built YC to be more worthwhile than not, even if every company has not created value itself.

One measure of success is the increased number of opportunites for upcoming entrepreneurs to have an open-ended upside if they are ambitious and can build a scalable system.

Often this can be leveraged to exponential growth by wise application of capital, without the need for involvement of destructive greed of any kind.

Depending on where in the food chain the food for growth comes from, some businesspeople are bound to make better billionaires than others, especially if they can avoid harmful wealth extraction from the most vulnerable workers and populations, and substitute responsible value creation with resulting widespread prosperity instead.

Works best when you build something people really want and always give them more than their money's worth.

I like this idea, because it focuses the ethical/moral/policy question on something that seems to me to be much more tractable: what kinds of leverage should society allow you to use, and to what extent?

One route to becoming a billionaire seems to go like this: you persuade a group of investors to make a pile of money that's so big that you can corner a market. Which is often true. But is it fair to the people already in this market? And is it fair that it makes you a billionaire?

It is true that there are other, more reasonable beliefs.

But what it is is that it’s basically impossible to accumulate that amount of wealth through work. Instead, you have to be able to capture the difference between the value of someone else’s work and what you pay them to do it. And you have to do that at scale. So Jeff Bezos has figured out how to pay people $X and make $X $Y off their labor, pocket a significant portion of that $Y and do it for the hundreds of thousands of people that work for Amazon. Nowhere in this argument is anyone saying that this practice should not be allowed or that he’s done something wrong. But what people are saying is that the narrative that billionaires built their wealth themselves is false and that they should be taxed heavily in recognition of the fact that they built their wealth off of the work of others.

The billionaires Paul identifies and helps create are no different, other than the possible exception that they rely on market’s expectation of future exploitation of workers’ value rather than having actually done it already. Paul would never fund a founder who wanted to divide all profits among employees. Therefore, based on that single fact alone, he is identifying future billionaires based on their willingness to exploit their workers...to pay them less than the value of their work.

Some guy delivering stuff in a garage is not going to be nowhere near as productive as an Amazon worker.

The crucial bit that people miss is that it is capital, goodwill and organisation allows employees to generate so much money in the first place.

Basically the sum is greater than its parts.

If you want to know where profit comes from(assuming a well functioning market) in a modern economics point of view, look into Subjective theory of value and marginal economics.

He's definitely right that it is valuable to society that people who have such insights are given the opportunity to build their solutions. We all win from being in a society where more of our needs are met.

What's perhaps slightly more dubious is the idea that, by bringing that insight, the person who has it deserves to own a billion times more of a vote in how our society is run than the average person.

Because that's what wealth, what a dollar, is: it's a voting share in how society spends its time and resources. As the owner of a dollar, you get to decide whether people spend their time growing and picking and shipping some plants and making them into some bread and then putting together a sandwich for you, or if you'd rather they dig up some rocks, extract some silicon from them, imprint it with complicated patterns, and then construct it into a device you can put in your pocket that lets you see photographs of influencers.

The pg thesis here is that instigating an idea, creating something that doesn't exist, is not inherently exploitative. That is true.

But what is perhaps arguable is, that in delivering on that original founder's vision, one which attracts many of those votes for how society should spend its time from many people, and thus accumulates billions of dollars of revenue - that many people other than the original founder end up creating the organization and building the factory and working the machines and writing the software and actually serving the customers to make that solution real - a bunch of people other than the founder are involved, and... well, if you choose to structure the rewards of that organization so that all those billions of votes in the future of society accrue to the founder, while only thousands of them accrue to the people who do the work of making it happen... that it's possible to construe that distribution of rewards as maybe slightly exploitative?

The average person has $60k-ish a year. There is nobody out there with 60 trillion.

Regardless, the billionaire has to actually spend the money to get goods and services from the market. While his/her needs will dwarf an individual, they are still just a drop in the bucket compared to the middle class. This is why all of the largest companies/product markets/etc all cater to the middle class.

The only way billionaires can actually get leverage on how society is run is through direct monetary influence of politicians, but that’s going to happen whether the average income is $60k or $200k.

But anyway, whether it’s a billion times more or merely a million times more, the difference is still staggeringly huge.

If you have a dollar, how many more do you need to make a billion? About a billion.

If you have a million dollars, how many more do you need to make a billion? About a billion.

But not for all aspects of society. Pre-democracy, kings and royalties get to make these choices. But in western democracies, you at least have an unalienable vote which is independent of your economic output. This vote means that no matter how many billions get spent, this vote is up to your own decision.

-- Adam Smith, Wealth of Nations, Book 1,Chapter 5 https://en.wikisource.org/wiki/The_Wealth_of_Nations/Book_I/...

The marginal revolution happened in economics and a lot of those problems disappeared. A lot the things they couldn't explain suddenly could be using marginal economics and subjective preferences.

Marx simply didn't have the modern tools we have now. In fact if he was around afterwords it is likely he would never came up with Marxian LTV.

Frankly the only reason for it's popularity now, is because of it's association with communism. It provides the moral basis for it. As a result you've had a lot of people desperately trying to get it work in modern economic models as well without much luck.

But you can critique market economics using marginal theory of value. It just means markets have failures, not they are morally wrong at the core.

My own view is that the entire value discussion is tremendously muddled, confuses multiple issues, and is used to justify or support any number of spurious or specious arguments, generaally over policy.

The marginalists mistake price for value. Most orthodox economics does likewise.

Using the rational model somebody will only purchase something when it's price is below how much the person values the object.

It's related to consumer surplus. To make it measurable we use money as an approximate judge to work out much somebody values it. But the market price and how much somebody values something are different things in marginalism at the core.

But yes, costs, price, and value are three distinct, though connected, concepts.

I hate the term wealth creator as well. But it certainly is possible to create to wealth. If you take things that people don't value that much, use them in a way to provide something that people do value. You have created wealth.

In much debate and discussion I see "market value" substituted for "value". Often the implication is a vague one, as withmuch equivocation. pg's argumentventures there.

Keep in mind that Smith, Ricardo, and Marx each commit this error, including in the Smith passage I quoted. So do the Marginalists, or at leaast most of them.

Mariana Mazzucato may be an exception. (I've just discovered her, still going through her work.)

https://www.ted.com/talks/mariana_mazzucato_what_is_economic...

There couldn't be consumer surplus without it. I don't know how you could be marginalist and believe market price = value for user.

You're ignoring the fact that capital has most of the systemic advantages such as various information asymmetries, and thus reaps most of the rewards.

Capital also exerts quite a lot of influence to ensure that labor markets don't get too tight (eg. economic policies that target unemployment rates that aren't "too low") that might somewhat counter capital's negotiating advantage.

And when that still isn't enough of an advantage, colluding to limit the mobility of labor among competitors is absolutely on the table, because even if caught the consequences aren't particularly severe.

There's no objective way to say how much "work" is worth - only subjective. This subjective measure is given by the market rate. And in a functioning free market, this should give you consensus as to what some "work" is worth.

> the one to found the country ... people are so unwilling to apply the same analysis to corporate hierarchy.

to have found the country, he could've asked to be a dictator. The problem is that the founding is based on the principle of equality (at least at the time, of men...). So if he chose to turn around and take that equality away, everyone would just reject his founding. People in the country are attracted to the idea of equality, not to the guy named Washington.

However, a business does not start on the same premise - that of equality and rights (for all employees). The business started by the business owner is based on the premise of pay for work. That's as far as the relationship goes.

Anyone (in the USA) can start a business on a different principle - no one will stop you other than natural forces like competitiveness! And i think some businesses do that - a family business for example, which shares the work, and shares all the profits between them (and don't hire employees).

Nothing except not having the capital to do it.

> There's no objective way to say how much "work" is worth

Fortunately I explicitly said at the beginning that my argument wasn't going to involve talking about the value of work at all.

> everyone would just reject his founding

Literally every country up until that point except perhaps Athens had been a dictatorship of some sort. Democracy doesn't just happen -- you have to make it happen. There was no presupposition that everyone should have equal rights before then; that was the innovation of it. There's no reason why that same innovation couldn't be extended into industry.

> Anyone can start a business on a different principle

And anyone can start a country on a different principle. But you have to have a lot of resources to do so, and unless you found it on equality, it'll be terrible for most of the inhabitants. So, given that we have a government to regulate society, I see no reason to let people found businesses based on principles which will lead to such gross wealth inequality.

That's how a lot of countries are governed but it doesn't actually have to be the case. There are places where there are more businesses than employers which gives more power to employees. A lot of export driven economies are basically based around the principle that workers in those countries are cheaper than any other country. Governments introduce policies that reduce the purchasing power of employees over time.

>What we wind up with is a system where business owners have substantially more money than workers, purely as a product of the fact that they can use their power to make this happen.

Yeah the real problem is that governments love to listen to what businesses have to say at the expense of workers.

So when the dinner bill comes and you are given the power to choose how much to tip a waiter/waitress, do you exploit them by not giving them all of the money you can afford?

When shopping for a car, do you look for the dealer with the highest markup knowing how tough care salesman have it and pay asking price?

But frankly, I'm not interested in moralizing individual's actions at all. I'm not interested in going "oh Jeff Bezos is a BAD PERSON for X Y and Z." I think that's silly. I want to use the legislative system to raise is taxes and put his money to better ends whether he likes it or not. Whether Jeff Bezos is "good" is entirely irrelevant.

it doesn't. that capital was built by labor.

Is it morally wrong?

> Is it morally wrong?

Not per-se, but as the denominations grow, society is structured to privatize most of the upside of that risk, while socializing the downside, but at the lower end of the scale the reverse takes hold.

In other words, even aside from the way the ratio between CEO and average employee pay has ballooned over the past fifty years, upper management gets bonuses when the company does well, labor gets downsized when the company does poorly.

Another way this plays out is that if you owe the bank a few hundred thousand dollars and the company you work for goes out of business, you have a problem. If you owe the bank a few hundred million dollars and the company you work for goes out of business, the bank has a problem.

Profit is simply value extracted from workers.

As opposed to the arbitrage of the subjective preferences of multiple actors. The modern interpretation of how value can just appear.

Those workers who got a return on capital delayed consumption now, for more consumption later. That's a preference. I don't think that's a bad thing. But you can see how over a long time it can generate massive inequality.

But I don't think the fundamental mechanisms of how this occured is particularly exploitive.

Where as LTV pretty much just says it your just stealing value.

but ltv on its own provides no such judgement, it simply describes the material relationship.

Marginal economics explains and models a lot things we see in reality.

I'm much more likely to believe a model that has predictive ability.

https://hn.algolia.com/?dateRange=all&page=0&prefix=true&sor...

https://news.ycombinator.com/newsguidelines.html

Expecting that is how you convince a large subset of folks to never bother with said deconstruction, and ultimately let bad ideas roam free and otherwise get adopted by impressionable / gullible minds.

Snark is there to suggest the reader go do their own research.

In a context like this, snark doesn't encourage people to "go do their own research" or save "impressionable / gullibile minds", nor is that really what people care about. (If it were, they'd expend energy doing those things in a way that might actually work.) Rather, its function is to vent one's own frustrations by translating them into concentrated language. The effect this has on community is to pollute it with fumes.

This is destructive of the ecosystem, unless one is happy with a single species, the snark, consuming all the others. Therefore we all need to find better ways of self-regulating and containing our frustrations. Then we can address other people in a way that has a chance of connecting with them.

As for flagging, what thread are you referring to?

And we all know that nobody is going to "go do their own research" because you snarkily disagreed with them. People do research when you make it easy for them to do, not when you drive-by insult them with an unreasonable reply. Drawing conclusions without providing reasons is literally being unreasonable.

There are billions of people with bad opinions on the internet. Nobody is forcing you to educate all of them. If you decide to try, it's predictable that you will at some point become tired of repeating yourself. At that point, you have two choices:

A) take a break

B) post crappy comments and justify it by saying you're tired

The result is that I have no reason to believe you, or to even understand your point. Because you've essentially made no point.

Marx never defined the terms about value rigorously, so it can be whatever people want it to be.

I know all about socially necessary value, etc and all hacks people have applied to it over the years. There are tons of interpretations about it.

It still has zero predictive ability in the real world.

Subjective preferences explains where profit comes from with much greater predictive ability. And models real world phenomenon we see.

The problem with just taxing it all away to prevent him from being a billionaire is the money is tied to control of the company, so it's equivalent to saying nobody can build a business bigger than some arbitrary limit. Which is equivalent to saying nobody can build a business with more than a certain arbitrary number of employees. Where would any of us work if that were the case? It's not at all a given that you would get millions of new small and medium businesses that would completely make up for that gap you'd have from lopping off every big company at a couple billion dollar market cap. The world is just not zero-sum like that as much as progressives might (either deceptively, or obliviously) pretend that it is.

> Paul would never fund a founder who wanted to divide all profits among employees

While YC might not recommend a founder take literally 0% equity, they are hugely supportive of founders giving more equity to employees and keeping less for themselves and have done a lot to move the industry in that direction https://blog.samaltman.com/employee-equity

Yes. That's generally what "no billionaires" policies are focused on. But "market power" is still a useful consideration.

Jeff Bezos is rich because his ownership stake (stock shares) are worth a lot of money on the stock market. He did not get paid out profits (amazon doesn’t pay dividends). There is nothing here than even makes sense to ‘return’ to the employees.

Meanwhile searching products on Amazon is still a shitshow and it's generally not possible to disable third party listings.

The difference was in the songs the Beatles created. The Beatles created those songs, not the laborers who pressed the records.

Or take Stevie Nicks, who google reports is worth $100m. Are the stage hands who set things up for a concert creating that wealth for her? Nope. Those stage hands could do exactly the same for my unrecognized musical talent, I could pay them the same, and would lose gigantic amounts of money.

Is Stevie exploiting those stage hands? If she is, then wouldn't those stage hands doing the exact same work for me be exploiting me for my foolish money?

Bottom line is people are entitled to what they can negotiate for. They don't give it back if their employer loses money, so why would they be entitled to what their employer made?

Sounds about right. Meanwhile the owners of the capital are free to make money off the float (and pay capital gains rates on those profits).

This implicitly assumes that "the value of someone else's work" is independent of the context in which that work is done.

The reason Jeff can pay someone less than the value (to Jeff) of that person's work is that, somewhere other than Amazon, that person's work would be less valuable.

The reason is Jeff must pay someone less than the value they bring is because that's the only way for a business to make a profit. If you pay me $100, and I add exactly $100 of value to your business, then you're no better off than if you hadn't hired me at all.

Not really, since no one is arguing that this worker-capital relationship should change. That the synergy exists is a good thing.

But the tax burden of the two groups is what’s at issue. On the one side, you have the “they built it, they should keep it” folks. On the other side are those that believe they built it on a foundation of societal investments and the work of others and should pay most of it back in taxes. No one is arguing that they didn’t built something of value.

> If you pay me $100, and I add exactly $100 of value to your business, then you're no better off than if you hadn't hired me at all

Ahh the refrain of the myopic capitalist. In your hypothetical situation, we’re all better off because I’ve gainfully employed someone, added purchasing power to the overall economy and added value to the world since, presumably, the customers who paid me $100 received something they value above $100. To whatever small degree, putting $100 in the hands of my employee who will then spend it also creates more purchasing power for my own customers as that money circulates through the economy.

This is one of the problems with such an individualistic view of capitalism...it utterly disregards benefits that are not directly seen by the individual. We don’t have to become socialist or communist to start to provide greater emphasis on the contribution of workers and society as a whole. We can keep the market forces that allow for efficient allocation of capital while putting policies in place that provide for those who aren’t at the top of hierarchies and whose contributions are less unique. This isn’t about preventing businesses like Amazon from existing, it’s about ensuring that the people who work for Amazon can live a comfortable and dignified life and that Jeff Bezos should only be fabulously wealthy instead of obscenely wealthy.

Maybe this would be better stated as "...since many of us are not arguing that...".

That's... getting rather close to the definition of Market Socialism, actually (depending on how much greater the emphasis is). It's certainly firmly within the range of Social Democracy (which USAian conservatives would happily label as 'socialism').

$10-20 an hour is better than minimum wage and a few years ago I worked a labor job that "only" paid $12.00/hr.

Is Jeff Bezo's personal net worth the causation behind someone not being able to support a family?

What about Zuckerberg, what is the average salary of a FB employee? If its above a certain amount is that a "moral" billionaire?

I would argue that pursuit of profits can lead to bad things for employees... but I never understood going after billionaires when their wealth is almost exclusively because they created a company worth billions. If that were the case, everyone making minimum wage should have seen their salaries skyrocket when these billionaires lost great %'s of their wealth over the last year.

I personally see rent/CoL being the problem. I don't know of solutions but I do feel going after billionaires is just a waste of energy. I'm a bit bias as my work has some crossover with "wealth and finance" (trading stocks) but all too often these ideas about "taxing rich people" just blow up and leave everyone worse off.

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

TL;DR, they tax each trade on the market. It makes a fraction of what it was projected to make and never comes close to making more than they did before by just taxing the capital gains (profit from trading). Its an idea I've seen showing up more and more.

I am not sure why you feel that "taxing rich people" makes everyone worse off. 60 years ago a man with a high school diploma could support a middle class life for a family of 4. Taxes on the highest earners were much higher than they were today. 60 years before that there was no federal income tax and people worked 14 hour days in dangerous conditions while Carnegie and Rockefeller amassed wealth on scales not seen until today.

But yes I agree with you that a tax on each market trade is lol stupid. But I think it is a straw-man argument along with setting the tax rate at 100%.

Tax rates were higher but there were far more deductions. The effective rate was similar to that of today.

60-70 years ago a man with an HS diploma could support a family due to massive demand for labor. This was mainly because America was the economic engine that provided for the reconstruction of the world after WW2. Go back another 15 years to pre-WW2 and shit was pretty bleak even with high taxes.

> You mention FB. With network effects, it is inevitable that there will be a few large dominate social media companies. If it wasn't Zuckerberg it would have been someone else.

It was someone else, it was MySpace and Friendster and other trashy shit. Facebook brought a vastly better user experience that seems mundane in retrospect but it won because it was so much better. Like it or not, Facebook did innovate a lot early on and had a unique, clean, consistent experience. They made social media mainstream. It was not a given this would happen.

My impression is more that FB won because of Zuck's talent/luck/vision for weird acquisitions (instagram, whatsapp) that paid off in ways nobody foresaw. Facebook was by no means the clear winner then, and I would argue most of it's success since then has been first-mover in global markets. FB engagement has been in decline in the US for years.

I think this is a fundamental feature a winner take all/most market. FB beat out myspace and happened to win, but if not them it would have been someone else. 5 billion internet connected social animals is the value, not the app that facebook built.

>Do you think they should be? I cannot think of a reason... but I do understand what you mean.

I don't think they should be because I don't think billionaires should exist. But I do think the value they created was much bigger than the value Zuck created. They were better at creating value than capturing it.

>I don't see how the two are related though. There were a lot of things different about back then vs today. I would like to see the focus be on rent and CoL as I see those as way more of a problem than if Jeff Bezos has $50b or $100b. (his wealth has fluctuated like crazy with covid and divorce).

The two are fundamentally related. Gdp per capita is higher now than it was in the 60s, yet the median person is no better off. That can only be explained through how the wealth distribution has changed between now and then. Whether Jeff Bezos is worth 50B or 100B doesn't matter too much. The issue is that the wealthiest are capturing a larger percentage of income now than they did 60 years ago. I don't view our age as being more innovative than a time where we invented the atom bomb and went to the moon and other cool shit. And we paid for it with taxes! Jeff Bezos isn't more innovative than those guys, he is just having his workers piss in bottles to squeeze out every last cent. It is a return to the bad old days of Rockefeller.

>I would consider that beyond a straw man.

Did not realize that Yang supported it, learn something new everyday. Would like to hear his reasoning beyond the short blurb on his website as he has always struck me as deep thinker.

What do you feel is the "solution" ?

>I don't think they should be because I don't think billionaires should exist. But I do think the value they created was much bigger than the value Zuck created. They were better at creating value than capturing it.

How much do you think they should be worth and why? I have some ideas, however I think it just comes down to the fact that some things are more easily monetizable than others. I don't think that's necessarily a problem.

>That can only be explained through how the wealth distribution has changed between now and then.

How do you come to this conclusion? I feel there are more factors than any one person can point to for the reason why people are "worse off"

>The issue is that the wealthiest are capturing a larger percentage of income now than they did 60 years ago.

Is it income? I still fail to see how Bezos, Musk, Zuckerberg, Gates etc. Having an ownership in their respective billion dollar companies makes the average person worse off.

> I don't view our age as being more innovative than a time where we invented the atom bomb and went to the moon and other cool shit.

It depends on what you view as "innovative" - by this logic, I fail to see how going to the moon helped the average person. I can agree with the sentiment though.

>Jeff Bezos isn't more innovative than those guys, he is just having his workers piss in bottles to squeeze out every last cent.

I don't think Jeff Bezos is a billionaire because of this. Stuff like that certainly happens at other places, you just don't hear about it because its not as interesting. These aren't billion dollar companies by a long shot. Poor working conditions aren't exclusive to billion dollar companies. I'm not defending it though, that is terrible. I've worked in a warehouse and thankfully I never had anything like that happen but I did see some questionable things.

>Did not realize that Yang supported it, learn something new everyday. Would like to hear his reasoning beyond the short blurb on his website as he has always struck me as deep thinker.

I feel you. I really liked him. Still do I suppose, its just I do algotrading and I was shocked to see all that about "profitable algorithms" - I don't think he personally wrote that but I guess he has to be responsible for what is on his site. I will have to see if he's ever been asked about it directly.

A shocking amount of people seem to think they know how "wall street" works... I don't even know and would be silly to pretend but I do know that trying to eradicate "profitable algorithms" and imposing FTTs would be disastrous. That is what I'm worried about in regard to "going after billionaires". I'm not an economist though, so I can't pretend to know what will or will not happen. All I know is that the same principals when applied to "wallstreet" or trading in general always end in disaster and only end up hurting the "average person" indirectly.

I'm bias though, as I've personally worked on a few things that were only possible because it was funded by wealthy people with an idea. To me I hardly see a difference if their company is worth $100m or $1b. I suppose it affects how many projects they can realistically start... but eh.

Something like mandatory equity contributions to the company pension fund would probably work.

There are examples where a group of people came together and decided to share in the profit or loss of a venture, and worked on it as employees (REI is a popular US outdoor equipment company that was started this way).

Amazon seems to have chosen a path where instead of asking individual employees to take a loss or break even for 20 years, they paid their employees while the company absorbed those losses and scaled.

The "billionaire" bit here seems arbitrary. Bezos is a billionaire because he owns a lot of shares because he didn't have a lot of cofounders. If he had started Amazon with 20 different cofounders then he (probably) wouldn't be a billionaire. Either way, the concept of exploiting labor for profit doesn't impact his billionaire status.

I'd be open to having a separate discussion around what it means to "exploit" labor, but on this topic I think moving the conversation from the concept of billionaire founders to how the system oppresses those that fall below a certain income would be more productive.

I don't know why Paul funds or doesn't fund certain founders, but if I were Paul I would be funding those founders that I believe can start companies that will eventually have stock collectively worth a lot of money. From the stories I've read - most of the founders that Paul funded DO plan on splitting their profits amongst all their employees - purely by virtue of when he invests in a company, the founders usually were the only employees. If I was Paul my dream would be that a company started by a small group of initial founders would be able to get big without having to "exploit" (or hire) any people at all.

It is the company’s structure accounts for the majority of the value created by that engineer’s work. So, how is it exploitation to give them less than the total profit created?

Except that billionaire founders also persist in flattering themselves that their company "only hires the best". If that were true, FAANG salaries for ICs ought to be even higher than they are, and competition between them for employees would be cutthroat rather than collegial.

As it is, they are competing for employees as a group with the rest of the industry, more so than with each other, so the truth is a mixture: individual employees matter more than their compensation actually reflects, and the company the employee is embedded in matters a great deal too (enough so that we only ever see a randomly occurring concentration of high quality employees producing innovative products and services when that group is more-or-less the whole org: a startup. Inside a larger org, such groups only flourish deliberately).

But it’s not. I can put shit into boxes in my yard and put them on a truck but that doesn’t mean I’m providing the same value as the Amazon worker. Labor has no value on its own. You have to do work that is useful for someone to generate value and identifying the useful work (i.e. connecting the participants) is a big part of that value.

Not at all. I have no doubt that Jeff Bezos, for example, works very hard. The difference is not whether or not a person works, but what they work on.

Another poster upthread (mightybyte) suggested viewing this in terms of leverage: how much is the impact of your work magnified? I think this is a very fruitful way of looking at it; see my post upthread in response.

So are you saying that there should be a higher tax for a person who profits off the labor of someone else?

Surely the person who constructed the system (that gave opportunity to the other individual they’re profiting off of) added some benefit to the other individual as well, otherwise wouldn’t the other individual work for himself or elsewhere?

Or is the argument that there is always a moral cap on how much profit a person can make off someone else?

That difference is attributed to the company, not the laborer. Now whether that is because of “monopolistic forces” or because the company is truly “better managed” is up for debate.

So just because your labor is worth $X to your employer doesn’t mean all of it can be attributed to you. It would be inaccurate to believe that they owe you exactly $X, and anything less would be exploitation.

Why not? He explains what YC is looking for in a founder, and I don't see "what will the founders do with the profits" mentioned at all.

This is the textbook definition for how wealth is created, and it's exactly what's supposed to happen in every transaction in the marketplace.

You buy an apple for $1 and it brings you $1.10 in value. You have captured the difference between its value to you and its value to the seller, and the ten cents is wealth that didn't exist before.

This also works for the seller, who sold her apple for $1 even though it only cost her $0.95. She captures five cents of the wealth created by the transaction.

Wealth is created because things have contextual value. It's the same when we exchange our labor for money. They wanted our labor more than the money. We wanted the money more than the time. Win/win for both of us.

But, and I hate to stretch this analogy to its breaking point, it's more like the overwhelming majority of Americans are apple sellers (read: wage laborers) and they have no way to achieve basic human rights like food, shelter, and baseline medical care without selling their apples. And they can only sell to one buyer at a time as part of an apple contract (employment contract) and if that buyer decides to stop buying from them ("restructuring"), which the buyer may do at any time (right-to-work laws), our apple seller has to go looking for another buyer (job search) which can take months all while their savings dwindle...

So you can see why some people might think this is not the optimal way to structure a society. Or to just put the analogy in its coffin, they might see this situation as more complicated than just a few apple-buyers getting a bargain.

But that’s a dumb generalization. Microsoft wasn’t paying low wages and software people easily found jobs elsewhere but it still made Gates a billionaire.

Warren Buffet gave cash to companies he thought were undervalued and on hard times in exchange for ownership stakes. This worked out more frequently than not and made him wealthy without exploiting any labor (many of these companies paid/pay solid middle class wages).

The Google founders are billionaires and their company has nothing to do with paying for cheap labor and up selling it.

Exploiting labor prices isn’t a business model that pays well enough by itself. In other words, companies that produce billionaires have to be providing more than just labor at a higher price than they paid for it.

Google executives (possibly not the founders personally) colluded with management at competing employers to reduce employee mobility and negotiating power.

The cost of getting caught wasn't much compared to the salary increases they saved. So, yes, the labor wasn't 'cheap' but it also wasn't the fair market value.

You needn't use your real name, of course, but for HN to be a community, users need some identity for other users to relate to. Otherwise we may as well have no usernames and no community, and that would be a different kind of forum. https://hn.algolia.com/?sort=byDate&dateRange=all&type=comme...

Jeff Bezos shouldn't be making 12-figure gains while his warehouse workers are on welfare. Those warehouse workers shouldn't be paying a higher tax rate than he does on their income.

That IS an unquestionably exploitive relationship between a CEO and his employees, even if he isn't personally being an exploitive monster he isn't doing anything about the systemic exploitation he lead the way in creating.

This is pretty much true of any billionaire, regardless of their personality or views.

The existence of billionaires is a economic luxury that should only be afforded once society as a whole has taken care of its people. The co-existence of billionaires and homelessness is an economic failure, especially when some billionaires possess more capital individually than the entire homeless population of this country.

Given the state of consumer indebtedness now, I think our economy is actually underperforming because there is not enough demand due to low wages.

The problem with Fordism is that if you are a manager, there are strong incentives for your firm to defect from paying high wages. If you are the only firm doing this, the consumer economy still hums and you have larger margins. If all the firms do this however, consumers' spending power diminishes over time.

Once the tide has turned, defection becomes a matter of survival as high wage firms become uncompetitive.

Someone like Jeff Bezos has enough market power and technology to turn the tide again like Henry Ford. But he chooses not to.

i think, this is a key point

we are beholden to someone with great power and wealth to be more fair; those who are under them dont have any kind of vote in the matter and therefore have little power to ask for more (whatever that may be)...

Amazon has 1.3M employees in the US and $11B in profit globally.

If you increase the wages at the bottom that pushes everyone up (why would a manager of the warehouse workers make less than the people they manage?).

So if you divide up that $11B in global profit across all 1.3M US workers, you get $8,700 per worker or maybe $500 extra per month after tax. A much appreciated boost by the folks at the bottom, but now global profit is $0.

I’m certainly not arguing against paying warehouse workers more. I’m just saying the “billions in profit” don’t go that far in a company the size of Amazon.

Amazon understands that in the context of organizations it stands to benefit from being seen as the meanest competitor, and that it can get public investment at scale by making this case. The argument isn't that it will hand more money to investors directly, it's that it will attack other things one can invest in, and make those things lose, and therefore it's the safe bet.

In so doing, the adoption of a crazy, aggressive, Spartan attitude among all its workers and management is beneficial, because the easiest way to convince the world you're a psycho axe murderer of a capitalist is to actually be one. In other words, 'making massive profits' isn't the end goal: 'killing other companies' is. And so, the workers do need to be paid that little and treated that harshly because every worker must be first a warrior, willing and able to trade away their health and well-being for the betterment of the company, and this goes all the way to Bezos, whom I'm convinced is going to live a shorter life than a billionaire might otherwise expect, from stress related damage. It's that or go soft and see his company go soft, and I think if he could do that there wouldn't be an Amazon as we know it: people will not follow a leader who doesn't at least pretend to represent what he is leading people towards, and Bezos is leading Amazonians to be warriors and throw themselves into the wood-chipper in order to destroy all competition.

They're paid more than they would be at easier, more civilized jobs. Part of the compensation is this emotional compensation intimately tied up in the American attitude, the cost-less, intangible compensation of knowing you are on the winning team. That is inherent to what Amazon is.

I mean, as an example, billionaires have access to top notch lawyers that lower their tax bill, look at Trump’s recent tax filings for example. Can you reasonably argue that they are not unfairly taking advantage of society, and by extension its people?

What about government lobbying etc. I mean the list goes on.

Personally I think PG just attacks the weakest form of the argument against his view. He obviously benefits from billionaires being created as he is an investor. Getting a large payout is literally the purpose of his job.

No, he does not. He claims he paid $1,850,000 in federal taxes in 2015, do you think his secretary earned that much, let alone paid that much in taxes?

In addition:

“In 2019, Berkshire sent $3.6 billion to the U.S. Treasury to pay its current income tax,” Buffett said in his annual letter to shareholders. “The U.S. government collected $243 billion from corporate income tax payments during the same period. From these statistics, you can take pride that your company delivered 1.5% of the federal income taxes paid by all of corporate America.”

>> What's the point of being the wealthiest nation ever on paper, if there's terrible schools, high infant mortality, and lead in the drinking pipes?

A higher percentage of people graduate from college today than graduated from high school a hundred years ago, infant mortality is 6 per 1000 today vs. 100 per 1000 a hundred years ago, and blood lead levels in children have been reduced so much that it is claimed to be largely responsible for the drop in crime rates since the 1980s.

The point of getting wealthy is that it gives you resources to deal with your problems.

> No, he does not. He claims he paid $1,850,000 in federal taxes in 2015, do you think his secretary earned that much, let alone paid that much in taxes?

I think it was clear that they meant as a fraction of income, not as an absolute value.

[0] - I agree it most likely was; the most likely other option being comically misinformed.

In 2007, 33% didn't kick in until around $200K (married filing jointly) so not bad pay for Omaha.

>> But in reality he's just deflecting from other potential sources of taxes, such as taxing people on wealth vs on income (which someone in his wealth bracket can easily live without).

Given that he has pledged to give away 99% of his wealth either while he is still alive or when he dies, why do you think he is doing that?

Wealthy people wanting to polish their legacy while still directing the use of their wealth from beyond the grave by establishing endowments and non-profit foundations etc. isn't really a new phenomenon, though there is much less emphasis on monumental architecture these days.

I'm not sure if anyone has studied whether such foundations and endowments are particularly efficient allocations of those resources compared to the government (either is in principle less efficient than the market, but the government steps in where society in general judges that markets have failed, and non-profits generally step in where donors, specifically, perceive the government has failed as well, but I'm unsure whether that implies more or less relative efficiency in allocation).

A quick googling suggest that he pays a lower tax rate than his secretary.

Scenario one: Warren Buffet's secretary (making up some numbers here) makes $50K a year, twice the average salary for a secretary, and pays around 8K income tax, for an effective tax rate of 16%, And Warren Buffet pays $7000 in taxes.

Scenario two: Warren Buffet's secretary (making up some numbers here) makes $50K a year, twice the average salary for a secretary, and pays around 8K income tax, for an effective tax rate of 16%, And Warren Buffet pays $1,850,000 in taxes.

Those two are equally outrageous to you?

IME (including writing the actual SQL queries against a corporate billing system that calculated ideal writeoff amounts every year), corporations evade so many taxes that this amounts to an empty boast. 1.5% of bupkis is bupkis. Supporting the state through income taxes is inherently foolish, and moreover we do it in the most foolish way one could imagine.

I don't if it is the only way to become a billionaire. But the bigger problem is every billionaire is exploiting people.

Imagine you are one of the wealthiest guys in the world. You can either:

- Hire the best financial guys to take care of your equities (although they are the best they look cheap to you).

- Hold a share of the equity of every business you can find in the world.

Either way, if the world is growing, you earn money by lying on the bed all day long. And then you can use the money exchange a large amount of people's labor for your own pleasure, instead of building costly infrastructures for your country for very small returns.

Even if the world is going through a recession, other people would more desperate than you - you would lose part of your money, but people's life would crash, small companies would go broke, most of the entities have to do sub-optimal choices, and you don't have to. Then you can do the purchase and hold even more equities of the world.

In a word, holding extreme large number of equities is exploiting people because they can barely do nothing and enjoy people's labor without any risks.

People oppose billionaires paying low taxes, and the related lack of public investment in bedrock services and infrastructure they need. When a rural area has no hospital, or a city has crumbling roads and transit, yes, people resent enormously wealthy people for whom those are not concerns. People do not, however, oppose their success at building companies that make money.

PG is picking a fight with the least sophisticated form of the anti-billionaire argument (i.e. "billionaires suck"), which is beneath him. I get that it's easier to do that than than argue over how the structural issues that allow massive wealth accumulation also undermine the foundations that markets and societies are built on, but it's really beneath PG to choose such a trite argument to oppose.

> if we just tax Jeff Bezos more then the Water Authority in Flint, MI will somehow become more competent.

That, however, is a strawman. Nobody suggests that at all. People who support more progressive taxation point to things like the New Deal and the strong progressive taxation coupled with public investment in infrastructure and education that propelled the United States forward.

You're making that exact argument in fancier words. "strong progressive taxation coupled with public investment in infrastructure" implies that the problem is not enough money. So take more money from people who have lots of money and let the government spend it.

The US spends more per-pupil on education than almost every other country [1], with worse outcomes in most cases. The corrosion inhibitors that would have prevented the Flint water crisis cost $140 per day. That's not a misplaced decimal point. That's One Hundred and Forty dollars. Do we need to revamp the entire US tax system to come up with a 140 bucks? No. The money is there, what's needed is some competence in how it's applied.

[1] https://www.manhattan-institute.org/issues-2020-us-public-sc...

There are other systems, like where everybody owns everything, but historically when you allow it so one person can own something that someone else has to create it doesn't work out very well. People don't have any incentive to make things if they can just own things that other people make.

Entrepreneurialism is at an all-time low in this low-tax, finance-happy environment, so I don't see how you can conclude that low taxes are good for creativity. It seems like it's been pretty good for concentration - low taxes means more money for acquisitions and buybacks.

You seem to be proposing that taxation is an unalloyed good and that more taxation is always better - that all problems are the result of insufficient taxation. Do you have any actual plan for how to spend all this money you propose to collect in taxes, or do you just want to throw more money at the people who are currently doing a bad job with the money they already have?

> Do you have any actual plan for how to spend all this money you propose to collect in taxes, or do you just want to throw more money at the people who are currently doing a bad job with the money they already have?

Sure, but I'm not running for office, because "small government conservatives" and their presumptions make it absolutely miserable for anyone who would do a good job of it. You can burn the money in a furnace for all I care, as long as the ratio between the richest and poorest goes down substantially.

How does making everyone worse off make things better? For example, inequality skyrocketed in China after they liberalized their economy [0]. Why would it be better for everyone to be equally miserable and starving? I really don't understand this mentality.

[0] https://en.wikipedia.org/wiki/Chinese_economic_reform

(Heck, for all intents and purposes given the high marginal tax rates in many countries and the enormous amounts of waste that those governments are guilty of we're already doing just that, and the last 80ish years of human history have been pretty darn good!)

Am I wrong in sensing that you believe in a bit of #3?

No, it's one possible remedy, and historically it doesn't appear to have worked very well. The fundamental problem with taxation is that governments are even worse than individual billionaires like Jeff Bezos at choosing what to do with large amounts of money.

Another possible remedy is to reduce the power of governments, so there is less value to be captured by influencing them. IIRC pg recommended this fix in one of his (fairly early) essays.

> We won't know what's possible until we stop letting barons write the laws.

If you think taxation stops this from happening, I have some sad news for you.

Citation needed. When Governments had lots of revenue, they assist the population with public services, which tend to benefit the lowest stratum of society the most. But the cumulative effect is to raise the quality of life of society as a whole. There is little evidence that billionaires have that kind of effect on society as a whole (outside of a few notable exceptions like Gates).

Having a billionaire class that has so much resources that they can influence public policy and Government... is an even worse outcome, and could be considered the only reason to dismantle this class. The Government is elected by the people (in a democracy) and having mini-kings is absolutely detrimental to the health of our democracy.

How Effective is Government Welfare Compared to Private Charity? [0]

“[Government] income redistribution agencies are estimated to absorb about two-thirds of each dollar budgeted to them in overhead costs, and in some cases as much as three-quarters of each dollar. Using government data, Robert L. Woodson (1989, p. 63) calculated that, on average, 70 cents of each dollar budgeted for government assistance goes not to the poor, but to the members of the welfare bureaucracy and others serving the poor. Michael Tanner (1996, p. 136 n. 18) cites regional studies supporting this 70/30 split.

“In contrast, administrative and other operating costs in private charities absorb, on average, only one-third or less of each dollar donated, leaving the other two-thirds (or more) to be delivered to recipients. Charity Navigator, www.charitynavigator.org the newest of several private sector organizations that rate charities by various criteria and supply that information to the public on their web sites, found that, as of 2004, 70 percent of charities they rated spent at least 75 percent of their budgets on the programs and services they exist to provide, and 90 percent spent at least 65 percent. The median administrative expense among all charities in their sample was only 10.3 percent.”

Later on Edwards adds: “In fact, the average cost of private charity generally is almost certainly lower than the one-quarter to one-third estimated by Charity Navigator and other private sector charity rating services…” and tells why.

The bottom line: Government spends about 70% of tax dollars to get 30% of tax dollars to the poor. The private sector does the opposite, spending about 30% or less to get 70% of aid to the poor.

[0] https://www.theadvocates.org/2013/06/effective-government-we...

Citation needed.