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I'm repeatedly miffed that these articles admire rich people for giving money away, but they never recognize the good that they do for society in making the mon

I'm repeatedly miffed that these articles admire rich people for giving money away, but they never recognize the good that they do for society in making the money in the first place. There's almost an implicit assumption that business is a necessary evil that we have to endure to enjoy the goodness of philanthropy.

bayareaguy 19y ago
Making money is not the same as creating wealth. I generally admire people more for the wealth they create than the money they accumulate.
- curi 19y ago
  the way to accumulate money is: you create wealth. you give it to other people in exchange for money -- for promises to pay you back in wealth later. then accumulating money means you don't call in those promises, you just hold on to them. as long as you do that, other people got wealth you created, and you haven't gotten anything back yet. (well of course you spent some money, but the more you accumulate, the less you've asked in return for what you did)
  - bayareaguy 19y ago
    That's what I would call first-order wealth (i.e. basic goods or services). It's the equivalent of the fish you give (or perhaps sell) that allows someone to eat for a day. Getting rich that way is a matter of knowing how much to charge and how much to spend so that you accumulate a surplus. The problem with this kind of "wealth" is that it doesn't have much of a network effect. I admire second-order wealth creators more. This kind of wealth is the knowledge you give (or sell) when you teach someone to fish. This creates the possibility of more first-order wealth without significantly diminishing the seller's wealth (unless the value of the knowledge itself is directly related to its scarcity). The guy in the original article is clearly a first-order rich guy. While I applaud him for helping worthy causes, I'd admire him more if he were a creator of second-order wealth, perhaps by starting a YC-like company which would help start new companies in that industry.
    - curi 19y ago
      Look at amazon, ebay, and walmart -- very useful things to have. Selling lots of 'first-order' goods, cheaply, helps a lot of people tremendously. It's not clear to me how to judge which is better, but it is clear to me that both are awesome.
      - bayareaguy 19y ago
        While Walmart is basically a ruthlessly efficient first-order company, I'd say eBay is more of a second-order company since it sells a sales-enhancing service and Amazon is somewhere in between since it does both.
    - mhb 19y ago
      Since money is fungible, the distinction you suggest is not meaningful. The money that a person saves by buying less expensive goods from a "first-order" business might very well be spent on training or other self-improvement. If a "first-order" business is better at its business than it would be at a "second-order" business, then, due to comparative advantage, everyone will be better off with the "first-order" business saving people money that they can spend on "second-order" businesses, your admiration for the latter notwithstanding.
- mynameishere 19y ago
  Making money is not the same as creating wealth. If you are referring to the fed or anybody who happens to having a high-end printer with a 20 dollar TIFF loaded, yeah.
TheTarquin 19y ago
I disagree that one needs an implicit assumption that "business is a necessary evil" to admire what people like Feeney do. One simply needs to believe that charity is a virtue. Virtue on such a large scale as this is admirable. Regardless of what one things of capitalism, wealth-creation, etc. one can still admire Mr. Feeney for his philanthropic activities.
- byrneseyeview 19y ago
  The problem here is that when Feeney made his money, he had a good idea of what people wanted -- it was what they were willing to pay for. He's basically saying that after a lifetime of listening to what people want, he's going to second-guess them and decide for himself. This may be charitable, but it's also arrogant.
  - Xichekolas 19y ago
    He's basically saying that after a lifetime of listening to what people want, he's going to second-guess them and decide for himself. This may be charitable, but it's also arrogant. I am completely missing how you are making this leap. After reading the article, it seems like the whole point was that this guy wasn't an arrogant prick... paranoid about people seeing him eat grilled cheese sandwiches maybe... but not arrogant. Would you rather he keep his money? Or are you taking issue with his choice of where to donate it?
    - byrneseyeview 19y ago
      Look, if people come to you and say "I would give you $5 if you did X, and $1 if you did Y," it's clear that they value X about five times as much as Y. Feeney is the guy who spends his career doing X superlatively well, until he's accumulated huge sums of money, then starts spending that money on subsidizing people who do Y. This sounds to me like a rich guy manipulating prices in order to accomplish his unpopular goals. The fact that people would rather spend money on what he sells than give money to the causes he supports is a signal, and it's a signal he's ignoring. It's very easy to understand this in a simpler economy. Imagine that farmers consume coffee and soybeans, and they can grow coffee or soybeans. Different farmers have different preferences, which they express by swapping soybeans for coffee or vice-versa. Assume these cost the same amount to produce, and the ratio of their prices should tell each farmer what to plant: if the market price for one unit of soybeans is two units of coffee, a smart farmer will just grow soybeans, and swap some for coffee when he wants coffee. In this case, Feeney is an incredibly productive farmer, who grows an insane amount of soybeans, sells some for coffee, but just keeps on accumulating the rest. Deciding that he is tired of taking from the community and wants to give something back, he announces that he will trade his soy for coffee at a 1:1 ratio. What does this accomplish? It's 'charitable' because it helps the poor coffee farmers -- but it's also manipulating the market to give people an incentive to do something unproductive (ie. grow coffee) instead of something productive (grow soybeans). What a jackass! If he just kept growing more soybeans (or maybe even started growing corn, or trading his bean-pile for assets like land) he would have made all the farmers better off. As it is, he's a market manipulator who tweaks price signals so people produce more of what they don't want. This is shameful.

bayareaguy 19y ago

Making money is not the same as creating wealth. I generally admire people more for the wealth they create than the money they accumulate.

curi 19y ago
the way to accumulate money is: you create wealth. you give it to other people in exchange for money -- for promises to pay you back in wealth later. then accumulating money means you don't call in those promises, you just hold on to them. as long as you do that, other people got wealth you created, and you haven't gotten anything back yet. (well of course you spent some money, but the more you accumulate, the less you've asked in return for what you did)
- bayareaguy 19y ago
  That's what I would call first-order wealth (i.e. basic goods or services). It's the equivalent of the fish you give (or perhaps sell) that allows someone to eat for a day. Getting rich that way is a matter of knowing how much to charge and how much to spend so that you accumulate a surplus. The problem with this kind of "wealth" is that it doesn't have much of a network effect. I admire second-order wealth creators more. This kind of wealth is the knowledge you give (or sell) when you teach someone to fish. This creates the possibility of more first-order wealth without significantly diminishing the seller's wealth (unless the value of the knowledge itself is directly related to its scarcity). The guy in the original article is clearly a first-order rich guy. While I applaud him for helping worthy causes, I'd admire him more if he were a creator of second-order wealth, perhaps by starting a YC-like company which would help start new companies in that industry.
  - curi 19y ago
    Look at amazon, ebay, and walmart -- very useful things to have. Selling lots of 'first-order' goods, cheaply, helps a lot of people tremendously. It's not clear to me how to judge which is better, but it is clear to me that both are awesome.
    - bayareaguy 19y ago
      While Walmart is basically a ruthlessly efficient first-order company, I'd say eBay is more of a second-order company since it sells a sales-enhancing service and Amazon is somewhere in between since it does both.
  - mhb 19y ago
    Since money is fungible, the distinction you suggest is not meaningful. The money that a person saves by buying less expensive goods from a "first-order" business might very well be spent on training or other self-improvement. If a "first-order" business is better at its business than it would be at a "second-order" business, then, due to comparative advantage, everyone will be better off with the "first-order" business saving people money that they can spend on "second-order" businesses, your admiration for the latter notwithstanding.
mynameishere 19y ago
Making money is not the same as creating wealth. If you are referring to the fed or anybody who happens to having a high-end printer with a 20 dollar TIFF loaded, yeah.

TheTarquin 19y ago

I disagree that one needs an implicit assumption that "business is a necessary evil" to admire what people like Feeney do. One simply needs to believe that charity is a virtue. Virtue on such a large scale as this is admirable. Regardless of what one things of capitalism, wealth-creation, etc. one can still admire Mr. Feeney for his philanthropic activities.

byrneseyeview 19y ago
The problem here is that when Feeney made his money, he had a good idea of what people wanted -- it was what they were willing to pay for. He's basically saying that after a lifetime of listening to what people want, he's going to second-guess them and decide for himself. This may be charitable, but it's also arrogant.
- Xichekolas 19y ago
  He's basically saying that after a lifetime of listening to what people want, he's going to second-guess them and decide for himself. This may be charitable, but it's also arrogant. I am completely missing how you are making this leap. After reading the article, it seems like the whole point was that this guy wasn't an arrogant prick... paranoid about people seeing him eat grilled cheese sandwiches maybe... but not arrogant. Would you rather he keep his money? Or are you taking issue with his choice of where to donate it?
  - byrneseyeview 19y ago
    Look, if people come to you and say "I would give you $5 if you did X, and $1 if you did Y," it's clear that they value X about five times as much as Y. Feeney is the guy who spends his career doing X superlatively well, until he's accumulated huge sums of money, then starts spending that money on subsidizing people who do Y. This sounds to me like a rich guy manipulating prices in order to accomplish his unpopular goals. The fact that people would rather spend money on what he sells than give money to the causes he supports is a signal, and it's a signal he's ignoring. It's very easy to understand this in a simpler economy. Imagine that farmers consume coffee and soybeans, and they can grow coffee or soybeans. Different farmers have different preferences, which they express by swapping soybeans for coffee or vice-versa. Assume these cost the same amount to produce, and the ratio of their prices should tell each farmer what to plant: if the market price for one unit of soybeans is two units of coffee, a smart farmer will just grow soybeans, and swap some for coffee when he wants coffee. In this case, Feeney is an incredibly productive farmer, who grows an insane amount of soybeans, sells some for coffee, but just keeps on accumulating the rest. Deciding that he is tired of taking from the community and wants to give something back, he announces that he will trade his soy for coffee at a 1:1 ratio. What does this accomplish? It's 'charitable' because it helps the poor coffee farmers -- but it's also manipulating the market to give people an incentive to do something unproductive (ie. grow coffee) instead of something productive (grow soybeans). What a jackass! If he just kept growing more soybeans (or maybe even started growing corn, or trading his bean-pile for assets like land) he would have made all the farmers better off. As it is, he's a market manipulator who tweaks price signals so people produce more of what they don't want. This is shameful.