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This is an argument PG uses, and one I keep seeing crop up in discussions about his post. It's malarkey! Wealth didn't just appear in Bill Gates bank account—it

This is an argument PG uses, and one I keep seeing crop up in discussions about his post. It's malarkey! Wealth didn't just appear in Bill Gates bank account—it came from people less wealthy than him buying his company's products. It's indirect, but wealth accumulation at the top necessarily comes from those below them.

tomhoward 11y ago
wealth accumulation at the top necessarily comes from those below them That's the fixed pie fallacy [1], which is the biggest source of misapprehension in this whole debate. In a healthy economy, entrepreneurs get rich when their customers get rich, in the form of an improved standard of living. Apple, Microsoft, Google, Ford, Samsung, Southwest Airlines are all examples of companies that have become successful because they made the lives of ordinary (and in some cases, low-income) people vastly better through, respectively, affordable computers, software, knowledge, cars, phones/televisions and air travel. In some cases, they enabled many more people to become financially richer too (eg, the many people who now make a very good living writing software). And that's not to mention the flow on effects like medical discoveries made possible by the use of computers, and lower cost manufacturing parts and processes thanks to the automotive industry that benefit more niche industries. In all these cases, the income captured by the entrepreneurs is a small fraction of the benefit they deliver to society. This is not to say that there are no negative effects from the activities of these companies or the related income disparities (job losses, housing affordability, environmental harms, etc). But this is the key point: attack the negative effects, not the generators of the innovations from which we all benefit. [1] https://mises.org/library/why-larry-summers-doesn%E2%80%99t-understand-economic-inequality https://mises.org/library/why-larry-summers-doesn%E2%80%99t-...
punee 11y ago
What happens to people's wealth when they buy products from Bill Gates's company?

tomhoward 11y ago

wealth accumulation at the top necessarily comes from those below them That's the fixed pie fallacy [1], which is the biggest source of misapprehension in this whole debate. In a healthy economy, entrepreneurs get rich when their customers get rich, in the form of an improved standard of living. Apple, Microsoft, Google, Ford, Samsung, Southwest Airlines are all examples of companies that have become successful because they made the lives of ordinary (and in some cases, low-income) people vastly better through, respectively, affordable computers, software, knowledge, cars, phones/televisions and air travel. In some cases, they enabled many more people to become financially richer too (eg, the many people who now make a very good living writing software). And that's not to mention the flow on effects like medical discoveries made possible by the use of computers, and lower cost manufacturing parts and processes thanks to the automotive industry that benefit more niche industries. In all these cases, the income captured by the entrepreneurs is a small fraction of the benefit they deliver to society. This is not to say that there are no negative effects from the activities of these companies or the related income disparities (job losses, housing affordability, environmental harms, etc). But this is the key point: attack the negative effects, not the generators of the innovations from which we all benefit. [1] https://mises.org/library/why-larry-summers-doesn%E2%80%99t-understand-economic-inequality https://mises.org/library/why-larry-summers-doesn%E2%80%99t-...

punee 11y ago

What happens to people's wealth when they buy products from Bill Gates's company?