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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

by 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.

by fsloth 11y ago

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.