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What about actors? The top 1% of actors make more than the rest of the actors combined. Is this fair? Should we tell Tom Cruise that he needs to take 80% of

What about actors? The top 1% of actors make more than the rest of the actors combined. Is this fair? Should we tell Tom Cruise that he needs to take 80% of his paycheck for the next Mission Impossible movie and redistribute it to the actors that are not well-known and aren't making as much? How about something more relevant, like startups: Should it be fair that only 1% of startups make more than any of the other startups combined? Unicorns like Uber and Airbnb should take their profits and spread them around to startups that failed! Yes, there is inequality, but I don't necessarily a bad thing. It's the natural form of most free marketplaces and systems.

deleted 11y ago
[deleted]
fsloth 11y ago
Inequality happens automatically if there is no control. I.e. someone will have way more than others, and not because they created value and are just capturing portions of it. Exceptional value generating individuals are not the norm, they are the exception. Most money is acquired through luck, inheritance, network effects, rents, and interests on investments.
- ekianjo 11y ago
  > Most money is acquired through luck, inheritance, network effects, rents, and interests on investments. Inheritance -> heavily taxed about everywhere. rents -> you need capital in the first place to secure rents, so it means that somebody has produced some work in the first place to get it. Interests on investment exist to allow your money to be useful to other people trying new things and building their businesses. So it's a positive enabler. Not sure what you were trying to demonstrate.
  - xshift 11y ago
    > rents -> you need capital in the first place to secure rents, so it means that somebody has produced some work in the first place to get it. think he may have meant to refer to rent-seeking in general and not specifically property rentals https://en.wikipedia.org/wiki/Rent-seeking https://en.wikipedia.org/wiki/Rent-seeking either way, your response indicates that you seem to be missing the point...
  - fsloth 11y ago
    Rebuking the notion that all wealth is earned through directly creating value. For instance, the biggest reason top actors in hollywood succeed in capturing so much value is because starting in the late 1970's CAA ([1]) moved leverage in negotiations towards actors, not because they are so much better actors. If talent had less leverage, they would create as much value if they were paid less, but studios and their owners would capture the value. Economy is a wealth creation platform but it does not come with an automatic "fair scoring" system. [1] https://en.m.wikipedia.org/wiki/Michael_Ovitz https://en.m.wikipedia.org/wiki/Michael_Ovitz
- soared 11y ago
  >Most money is acquired through luck, inheritance, network effects, rents, and interests on investments. That is an absurdly huge claim to make without a source.
  - fsloth 11y ago
    This was my interpretation of this graph: http://money.visualcapitalist.com/all-of-the-worlds-money-and-markets-in-one-visualization/?link=mktw http://money.visualcapitalist.com/all-of-the-worlds-money-an... This was recently in HN if I recall so I did not source it in my comment. We can debate what is the value of owning derivatives but I think we can agree it's not anything like the direct value created by actors?
    - soared 11y ago
      Incredibly interesting chart which I hadn't seen, thanks. I don't know if I wholeheartedly agree, but I very clearly see your point.
xshift 11y ago
"the natural form of most free marketplaces and systems" i like how you add that as if it were indisputably a good thing. lol.
tim333 11y ago
Depends on how you define fair but the usual solution is to tax Tom Cruise and let the money subsidise the government expenses (education, health etc) of the struggling actors. That's pretty much how it's worked in the developed world for the last century. You can vary the actual tax and spending according to your political preferences.
Houshalter 11y ago
Well I mean, maybe we should do that. Do you really think Tom Cruise deserves that much money for what he does? Or that the world is better off with that money going to him instead of someplace else? Startups already distribute wealth a lot. Investors invest in many startups in order to get to that 1%. So even though they make a lot of money on Uber, they've also lost a lot of money on 99 other startups you haven't heard of. Some investors do only invest in one startup, but no one is making them do that. So if they lose it is their own fault, and if they win it's only fair. They agreed to enter the lottery, that's a lot different than someone being born poor and stuck there. No one agreed to the lottery of birth.
- digbyloftus 11y ago
  >Do you really think Tom Cruise deserves that much money for what he does? People want to, and agree to, give him that money. What other measure of 'deserve' could there possibly be? >Or that the world is better off with that money going to him instead of someplace else? It doesn't matter. The world will be fine either way. People though? Tom Cruise is a person. The people paying him are people. They evidently think the arrangement is pretty good.

deleted 11y ago

[deleted]

fsloth 11y ago

Inequality happens automatically if there is no control. I.e. someone will have way more than others, and not because they created value and are just capturing portions of it. Exceptional value generating individuals are not the norm, they are the exception. Most money is acquired through luck, inheritance, network effects, rents, and interests on investments.

ekianjo 11y ago
> Most money is acquired through luck, inheritance, network effects, rents, and interests on investments. Inheritance -> heavily taxed about everywhere. rents -> you need capital in the first place to secure rents, so it means that somebody has produced some work in the first place to get it. Interests on investment exist to allow your money to be useful to other people trying new things and building their businesses. So it's a positive enabler. Not sure what you were trying to demonstrate.
- xshift 11y ago
  > rents -> you need capital in the first place to secure rents, so it means that somebody has produced some work in the first place to get it. think he may have meant to refer to rent-seeking in general and not specifically property rentals https://en.wikipedia.org/wiki/Rent-seeking https://en.wikipedia.org/wiki/Rent-seeking either way, your response indicates that you seem to be missing the point...
- fsloth 11y ago
  Rebuking the notion that all wealth is earned through directly creating value. For instance, the biggest reason top actors in hollywood succeed in capturing so much value is because starting in the late 1970's CAA ([1]) moved leverage in negotiations towards actors, not because they are so much better actors. If talent had less leverage, they would create as much value if they were paid less, but studios and their owners would capture the value. Economy is a wealth creation platform but it does not come with an automatic "fair scoring" system. [1] https://en.m.wikipedia.org/wiki/Michael_Ovitz https://en.m.wikipedia.org/wiki/Michael_Ovitz
soared 11y ago
>Most money is acquired through luck, inheritance, network effects, rents, and interests on investments. That is an absurdly huge claim to make without a source.
- fsloth 11y ago
  This was my interpretation of this graph: http://money.visualcapitalist.com/all-of-the-worlds-money-and-markets-in-one-visualization/?link=mktw http://money.visualcapitalist.com/all-of-the-worlds-money-an... This was recently in HN if I recall so I did not source it in my comment. We can debate what is the value of owning derivatives but I think we can agree it's not anything like the direct value created by actors?
  - soared 11y ago
    Incredibly interesting chart which I hadn't seen, thanks. I don't know if I wholeheartedly agree, but I very clearly see your point.

xshift 11y ago

"the natural form of most free marketplaces and systems" i like how you add that as if it were indisputably a good thing. lol.

tim333 11y ago

Depends on how you define fair but the usual solution is to tax Tom Cruise and let the money subsidise the government expenses (education, health etc) of the struggling actors. That's pretty much how it's worked in the developed world for the last century. You can vary the actual tax and spending according to your political preferences.

Houshalter 11y ago

Well I mean, maybe we should do that. Do you really think Tom Cruise deserves that much money for what he does? Or that the world is better off with that money going to him instead of someplace else? Startups already distribute wealth a lot. Investors invest in many startups in order to get to that 1%. So even though they make a lot of money on Uber, they've also lost a lot of money on 99 other startups you haven't heard of. Some investors do only invest in one startup, but no one is making them do that. So if they lose it is their own fault, and if they win it's only fair. They agreed to enter the lottery, that's a lot different than someone being born poor and stuck there. No one agreed to the lottery of birth.

digbyloftus 11y ago
>Do you really think Tom Cruise deserves that much money for what he does? People want to, and agree to, give him that money. What other measure of 'deserve' could there possibly be? >Or that the world is better off with that money going to him instead of someplace else? It doesn't matter. The world will be fine either way. People though? Tom Cruise is a person. The people paying him are people. They evidently think the arrangement is pretty good.