11 ms·

On that note: the most offensive economic inequality isn't the 1% vs. the 99%, which successful startup founders would find themselves on the wrong side of. It

On that note: the most offensive economic inequality isn't the 1% vs. the 99%, which successful startup founders would find themselves on the wrong side of. It's more about the 80 individuals with more wealth than half the world's population [1] – which, yes, does include "startup founders" such as Gates, Ellison, Bezos, Zuckerberg, Page & Brin, etc. But the vast majority of successful startup founders aren't in this group. Even if they were, the proposals are to keep people from becoming quite as obscenely wealthy, as you've pointed out. [1] http://fivethirtyeight.com/datalab/meet-the-80-people-who-are-as-rich-as-half-the-world/ http://fivethirtyeight.com/datalab/meet-the-80-people-who-ar...

pluckytree 11y ago
Why is that more offensive? What if they were all startup founders or created companies that made profound and positive change? At what point is the cross-over between being reasonably and unreasonably wealthy? If they have too much money and give most of it away, is that better than continuing to create new ventures that could make a difference? This economic inequality feels similar to racism. Why should a very wealthy person be pre-judged to be worse than others without knowing the whole picture? You seem to be singling out startup founders as being OK, it’s just the others that are bad? Sure, income distribution is unequal, but it doesn’t have to turn into villifying those at the top of the heap.
- deleted 11y ago
  [deleted]
- hwillis 11y ago
  https://i.ytimg.com/vi/rMhvYeQPOcE/maxresdefault.jpg https://i.ytimg.com/vi/rMhvYeQPOcE/maxresdefault.jpg People with more money pay taxes at a lower rate than people without. It's very easy to pick obvious cutoffs where people are wealthy to the point of absurdity compared to their "peers".
  - ghufran_syed 11y ago
    The chart you presented doesn't show the value created, just the value captured by a given segment. Wouldn't that be an important consideration? It's estimated that innovators, the group that Dr Graham is talking about, only capture around 2% of the value they create, with the rest going to society [1]. That's the whole point of the essay, that maybe reducing the 'absurd' levels of wealth will also lead to reduction in the levels of value creation that society currently benefits from. [1] http://www.nber.org/papers/w10433 http://www.nber.org/papers/w10433
- GavinMcG 11y ago
  > Why should a very wealthy person be pre-judged to be worse than others without knowing the whole picture? Who said anything about judging them? Bill Gates is obviously a good person. That has nothing to do with whether or not we as a society want to allow unlimited financial returns for success in business.
- geofft 11y ago
  These sorts of discussions always go downhill because they very quickly turn into defending (and attacking) people as if their identity is inextricably linked to their wealth, which means that policy discussions are read (and sometimes written) as personal attacks. Can we do better than that, please? I don't see a claim that any of these folks are bad people for their money. Gates, for instance, is doing extraordinary good in the form of philanthropy; it's a stretch to imagine that the "offensive economic inequality" is a judgment of his character (although you may be correct that parent's choice of word "offensive" was risky). There are grounds to criticize his richness based on the anti-competitive actions of Microsoft in the '90s, but his richness per se isn't valid grounds to condemn him. What is to blame, what is "offensive," is a society that allows people to become fantastically wealthy like this. What would the harm for society be if, through whatever means, it was much more difficult to become this wealthy? Maybe it is high taxes on the ultra-rich, maybe it is an unwillingness to allow high CEO salaries, maybe it is a serious estate tax, etc. Is it really true that Gates, Zuckerberg, Page, Brin, etc. were motivated primarily by money to found Microsoft, Facebook, Google, etc.? If they had a 99% marginal tax rate once they have assets of $500M (on any form of gaining wealth), would we have a weaker Microsoft or Facebook or Google doing less good for the world because they wouldn't be working as hard? Would the good done to people on the lower end of the scale not outweigh any possible harm here? That seems hard to imagine. And it is precisely because these people could be less rich that the comparison to racism feels ill-placed. A society biased against people of a particular race cannot make existing people cease being of that race, and preventing new people of that race would be grossly immoral. A society biased against billionaires can in good conscience make fewer people billionaires, and it can even prevent hereditary billionaires without any particular immorality (although I think most of the people on that list are self-made).
  - marcoperaza 11y ago
    In a capitalist system, you become wealthy by creating value for people in mutually beneficial and consensual transactions. Tax discourages that kind of value creation. You can try to hide this effect by using really large numbers (they'll still have $500M!) but that's deceptive because, even if their motivation wouldn't have been affected (which I disagree with), these uber-wealthy people are the exception, not the norm. You can't base a tax system on taxing them alone.
- tremon 11y ago
  Because those 80 people don't exist in a vacuum. Consider that there are probably tens of thousands of people required to facilitate the profound changes these few people made. This includes people in the food production chain, education (and as such, textbook publishers and paper manufacturers), and product manufacturing. I'm not even including the scientific advancements that made their change possible. So yes, there is offense in the inequal distribution, when one unique snowflake controls 1% of the world's purchasing power, while roughly 1% of the world's population was required to make that power possible. Whether that offense is moral or evitable is a separate question, but I understand why people frame it as an offense.
  - SapphireSun 11y ago
    I think the biggest issue is that we are ignoring that a difference of degree is a difference in quality. Once a small number of rich people have more power than almost every one, our society is controlled in a non-representative way - an oligopoly. Imagine if one rich person earned all the money in a country. That would be a very bad situation on many levels from concentration of power, to the induction of universal poverty. The question is, how far towards that extreme can you go while discouraging the bad effects? PG has many good points, but there was a major study that showed that US policy is mainly controlled by the preferences of the wealthy, even when the majority of the population disagrees. That doesn't sound like representative government. http://journals.cambridge.org/action/displayAbstract?fromPage=online&aid=9354310 http://journals.cambridge.org/action/displayAbstract?fromPag... I don't think we should discourage the vast majority of entrepreneurs, but we should make it harder to get and maintain wealth once you move into the tens or hundreds of millions in assets or income, and past a certain number of billions, possibly blocked. I'm not sure what to do about people leaving the country once they reach that level though so that last part is probably not a good solution, but in spirit we shouldn't let a few people have too much unelected power. They're not just buying new shirts. The problem with wealth is that you can leverage the fact that people like one aspect about you (your ability to provide some business service) into another domain where they don't have to like you so much.
    - mbgaxyz 11y ago
- wfo 11y ago
  There is nothing wrong with the people who have wealth, it is with people having so much wealth. Wealth is economic power; we split power in the government so it is not hyper concentrated in on person for very, very good reasons taught to us by history (power begets more power and corrupts, etc). Similarly we should be trying to split economic power. There's nothing wrong with someone having a lot of money; but there is something wrong with a person having more wealth than most of the nation combined. It's an enormous amount of concentrated power which is inherently bad in and of itself, whether it's used for good or ill currently. And the primary method people use to get and keep this money is through exploitation and abuse generally of workers, tax systems, etc. Which is just icing on the cake beyond the original problem of wealth concentration. Also we have the notion that people are being paid 300, 400, 1000 times as much as their employees. This is a lie; one person generally isn't worth 1000x as much as another. There are thousands of others who would be able to replace any person in any job with similar results. The money they get is through the manipulation of their wealth, power, and connections to make more, and the Rand-esque 'great man' fallacy where Americans assume industry is driven but supermen and women at the top who truly deserve what they are getting, and not primarily as a collective effort. When a company succeeds, where should the profits of that success go? The wealthy have up until now succeeded in enforcing a deeply capitalist system where all of the profits go to the wealthy and the least possible earnings are divvied up to the peasants who beg and struggle to be allowed to earn from their labor at all.
  - natrius 11y ago
    I don't think we need to split economic power. I just think the people need to be able to reject economic power over them when they believe it is being misused. That's hard today because economic power is invisible. We can make it visible, then people can decide how they want to let economic power influence their lives. This is merit capitalism. http://meritcapitalism.com/ http://meritcapitalism.com/
marcoperaza 11y ago
>"More wealth than half the world's population" That's such a disingenuous statistic. A huge number of people, including a huge number of very well off people, have a negative net worth due to debt. I don't have a car payment or a mortgage, so I have more wealth than at least 30% of America, over 100 million people, combined! It's disappointing to see that FiveThirtyEight has now become just another outfit twisting the truth for their political agenda. I expected better from them.
- baddox 11y ago
  Are we talking about net worth, or income? I thought we were talking about income initially.
  - marcoperaza 11y ago
    I'm just talking about the statistics that GavinMcG was citing. We were talking about income inequality, but the sensationalist statistic he cited is not.
- deleted 11y ago
  [deleted]
- GavinMcG 11y ago
  It's one metric. And yes, one of its weak points is that my student loans making me less wealthy than the debt-free homeless person is (of course) not the whole story. But that's one narrow slice. On the scale of 80 people with billions upon billions vs. half of everyone else, it's hardly a disingenuous statistic.
  - marcoperaza 11y ago
    The only reason to use net-worth for such a statistic is to have demagogic sound bites. Most people have negative or very low self-worth because of totally normal and serviceable debt, regardless of whether they're poor or well off. Net worth, i.e. wealth, ignores future earning potential, which is most people's main asset. Repeating the statistic again doesn't change that.
rayiner 11y ago
I disagree. Those people having a lot of wealth doesn't affect ordinary people much at all. The inequality that affects ordinary people is the kind that drives up housing prices and drives out long-time residents, or those that bid uo healthcare or educational costs. The thousands of Facebook employees making six figures contribute more to inequality in practice in their communities than Zuckerberg.
- mikeash 11y ago
  At that level it ceases to be about things like housing costs, and starts to be about how the whole country is run. Wealth brings power. Look at that list and you'll see a lot of people who are screwing with the political system for their own benefit.
deleted 11y ago
[deleted]
dmoo 11y ago
Is there any danger that such levels of inequality reach a tipping point where the have nots band together and say why don't we take some of that for us. We have the numbers to either change the law or take by force. Such things are not unknown in history...
- hackerboos 11y ago
  Nick Hanauer believes so... https://www.ted.com/talks/nick_hanauer_beware_fellow_plutocrats_the_pitchforks_are_coming https://www.ted.com/talks/nick_hanauer_beware_fellow_plutocr...
- zo1 11y ago
  I'd argue it's been happening at a stead pace already. It happened at a "manageable" level when progressive taxation came into place for example. Sin taxes, luxury taxes, property taxes, estate taxes, emigration/exit taxes... All of these things are arguably a form of "have nots band[ing] together and say[ing] why don't we take some of that for us."

pluckytree 11y ago

Why is that more offensive? What if they were all startup founders or created companies that made profound and positive change? At what point is the cross-over between being reasonably and unreasonably wealthy? If they have too much money and give most of it away, is that better than continuing to create new ventures that could make a difference? This economic inequality feels similar to racism. Why should a very wealthy person be pre-judged to be worse than others without knowing the whole picture? You seem to be singling out startup founders as being OK, it’s just the others that are bad? Sure, income distribution is unequal, but it doesn’t have to turn into villifying those at the top of the heap.

deleted 11y ago
[deleted]
hwillis 11y ago
https://i.ytimg.com/vi/rMhvYeQPOcE/maxresdefault.jpg https://i.ytimg.com/vi/rMhvYeQPOcE/maxresdefault.jpg People with more money pay taxes at a lower rate than people without. It's very easy to pick obvious cutoffs where people are wealthy to the point of absurdity compared to their "peers".
- ghufran_syed 11y ago
  The chart you presented doesn't show the value created, just the value captured by a given segment. Wouldn't that be an important consideration? It's estimated that innovators, the group that Dr Graham is talking about, only capture around 2% of the value they create, with the rest going to society [1]. That's the whole point of the essay, that maybe reducing the 'absurd' levels of wealth will also lead to reduction in the levels of value creation that society currently benefits from. [1] http://www.nber.org/papers/w10433 http://www.nber.org/papers/w10433
GavinMcG 11y ago
> Why should a very wealthy person be pre-judged to be worse than others without knowing the whole picture? Who said anything about judging them? Bill Gates is obviously a good person. That has nothing to do with whether or not we as a society want to allow unlimited financial returns for success in business.
geofft 11y ago
These sorts of discussions always go downhill because they very quickly turn into defending (and attacking) people as if their identity is inextricably linked to their wealth, which means that policy discussions are read (and sometimes written) as personal attacks. Can we do better than that, please? I don't see a claim that any of these folks are bad people for their money. Gates, for instance, is doing extraordinary good in the form of philanthropy; it's a stretch to imagine that the "offensive economic inequality" is a judgment of his character (although you may be correct that parent's choice of word "offensive" was risky). There are grounds to criticize his richness based on the anti-competitive actions of Microsoft in the '90s, but his richness per se isn't valid grounds to condemn him. What is to blame, what is "offensive," is a society that allows people to become fantastically wealthy like this. What would the harm for society be if, through whatever means, it was much more difficult to become this wealthy? Maybe it is high taxes on the ultra-rich, maybe it is an unwillingness to allow high CEO salaries, maybe it is a serious estate tax, etc. Is it really true that Gates, Zuckerberg, Page, Brin, etc. were motivated primarily by money to found Microsoft, Facebook, Google, etc.? If they had a 99% marginal tax rate once they have assets of $500M (on any form of gaining wealth), would we have a weaker Microsoft or Facebook or Google doing less good for the world because they wouldn't be working as hard? Would the good done to people on the lower end of the scale not outweigh any possible harm here? That seems hard to imagine. And it is precisely because these people could be less rich that the comparison to racism feels ill-placed. A society biased against people of a particular race cannot make existing people cease being of that race, and preventing new people of that race would be grossly immoral. A society biased against billionaires can in good conscience make fewer people billionaires, and it can even prevent hereditary billionaires without any particular immorality (although I think most of the people on that list are self-made).
- marcoperaza 11y ago
  In a capitalist system, you become wealthy by creating value for people in mutually beneficial and consensual transactions. Tax discourages that kind of value creation. You can try to hide this effect by using really large numbers (they'll still have $500M!) but that's deceptive because, even if their motivation wouldn't have been affected (which I disagree with), these uber-wealthy people are the exception, not the norm. You can't base a tax system on taxing them alone.
tremon 11y ago
Because those 80 people don't exist in a vacuum. Consider that there are probably tens of thousands of people required to facilitate the profound changes these few people made. This includes people in the food production chain, education (and as such, textbook publishers and paper manufacturers), and product manufacturing. I'm not even including the scientific advancements that made their change possible. So yes, there is offense in the inequal distribution, when one unique snowflake controls 1% of the world's purchasing power, while roughly 1% of the world's population was required to make that power possible. Whether that offense is moral or evitable is a separate question, but I understand why people frame it as an offense.
- SapphireSun 11y ago
  I think the biggest issue is that we are ignoring that a difference of degree is a difference in quality. Once a small number of rich people have more power than almost every one, our society is controlled in a non-representative way - an oligopoly. Imagine if one rich person earned all the money in a country. That would be a very bad situation on many levels from concentration of power, to the induction of universal poverty. The question is, how far towards that extreme can you go while discouraging the bad effects? PG has many good points, but there was a major study that showed that US policy is mainly controlled by the preferences of the wealthy, even when the majority of the population disagrees. That doesn't sound like representative government. http://journals.cambridge.org/action/displayAbstract?fromPage=online&aid=9354310 http://journals.cambridge.org/action/displayAbstract?fromPag... I don't think we should discourage the vast majority of entrepreneurs, but we should make it harder to get and maintain wealth once you move into the tens or hundreds of millions in assets or income, and past a certain number of billions, possibly blocked. I'm not sure what to do about people leaving the country once they reach that level though so that last part is probably not a good solution, but in spirit we shouldn't let a few people have too much unelected power. They're not just buying new shirts. The problem with wealth is that you can leverage the fact that people like one aspect about you (your ability to provide some business service) into another domain where they don't have to like you so much.
  - mbgaxyz 11y ago
wfo 11y ago
There is nothing wrong with the people who have wealth, it is with people having so much wealth. Wealth is economic power; we split power in the government so it is not hyper concentrated in on person for very, very good reasons taught to us by history (power begets more power and corrupts, etc). Similarly we should be trying to split economic power. There's nothing wrong with someone having a lot of money; but there is something wrong with a person having more wealth than most of the nation combined. It's an enormous amount of concentrated power which is inherently bad in and of itself, whether it's used for good or ill currently. And the primary method people use to get and keep this money is through exploitation and abuse generally of workers, tax systems, etc. Which is just icing on the cake beyond the original problem of wealth concentration. Also we have the notion that people are being paid 300, 400, 1000 times as much as their employees. This is a lie; one person generally isn't worth 1000x as much as another. There are thousands of others who would be able to replace any person in any job with similar results. The money they get is through the manipulation of their wealth, power, and connections to make more, and the Rand-esque 'great man' fallacy where Americans assume industry is driven but supermen and women at the top who truly deserve what they are getting, and not primarily as a collective effort. When a company succeeds, where should the profits of that success go? The wealthy have up until now succeeded in enforcing a deeply capitalist system where all of the profits go to the wealthy and the least possible earnings are divvied up to the peasants who beg and struggle to be allowed to earn from their labor at all.
- natrius 11y ago
  I don't think we need to split economic power. I just think the people need to be able to reject economic power over them when they believe it is being misused. That's hard today because economic power is invisible. We can make it visible, then people can decide how they want to let economic power influence their lives. This is merit capitalism. http://meritcapitalism.com/ http://meritcapitalism.com/

marcoperaza 11y ago

>"More wealth than half the world's population" That's such a disingenuous statistic. A huge number of people, including a huge number of very well off people, have a negative net worth due to debt. I don't have a car payment or a mortgage, so I have more wealth than at least 30% of America, over 100 million people, combined! It's disappointing to see that FiveThirtyEight has now become just another outfit twisting the truth for their political agenda. I expected better from them.

baddox 11y ago
Are we talking about net worth, or income? I thought we were talking about income initially.
- marcoperaza 11y ago
  I'm just talking about the statistics that GavinMcG was citing. We were talking about income inequality, but the sensationalist statistic he cited is not.
deleted 11y ago
[deleted]
GavinMcG 11y ago
It's one metric. And yes, one of its weak points is that my student loans making me less wealthy than the debt-free homeless person is (of course) not the whole story. But that's one narrow slice. On the scale of 80 people with billions upon billions vs. half of everyone else, it's hardly a disingenuous statistic.
- marcoperaza 11y ago
  The only reason to use net-worth for such a statistic is to have demagogic sound bites. Most people have negative or very low self-worth because of totally normal and serviceable debt, regardless of whether they're poor or well off. Net worth, i.e. wealth, ignores future earning potential, which is most people's main asset. Repeating the statistic again doesn't change that.

rayiner 11y ago

I disagree. Those people having a lot of wealth doesn't affect ordinary people much at all. The inequality that affects ordinary people is the kind that drives up housing prices and drives out long-time residents, or those that bid uo healthcare or educational costs. The thousands of Facebook employees making six figures contribute more to inequality in practice in their communities than Zuckerberg.

mikeash 11y ago
At that level it ceases to be about things like housing costs, and starts to be about how the whole country is run. Wealth brings power. Look at that list and you'll see a lot of people who are screwing with the political system for their own benefit.

deleted 11y ago

[deleted]

dmoo 11y ago

Is there any danger that such levels of inequality reach a tipping point where the have nots band together and say why don't we take some of that for us. We have the numbers to either change the law or take by force. Such things are not unknown in history...

hackerboos 11y ago
Nick Hanauer believes so... https://www.ted.com/talks/nick_hanauer_beware_fellow_plutocrats_the_pitchforks_are_coming https://www.ted.com/talks/nick_hanauer_beware_fellow_plutocr...
zo1 11y ago
I'd argue it's been happening at a stead pace already. It happened at a "manageable" level when progressive taxation came into place for example. Sin taxes, luxury taxes, property taxes, estate taxes, emigration/exit taxes... All of these things are arguably a form of "have nots band[ing] together and say[ing] why don't we take some of that for us."