3 ms·

Misleading. Likely intentionally so. Top 1% mostly comes from artificially scarce markets and pyramid schemes: lawyers (with intentional bottlenecks on supply a

by ckip 9y ago

Misleading. Likely intentionally so. Top 1% mostly comes from artificially scarce markets and pyramid schemes: lawyers (with intentional bottlenecks on supply at the associate level and a pyramid scheme to make partner), doctors (with intentional barriers in both requiring unrelated undergrad study and the hazing style apprentice model), elite university professors (pyramid scheme with grad students and post docs; salaries are now typically above $200k, reaching a million), executives (pyramid scheme based on connections and kickbacks), finance, etc. The only domain requiring unique productive skills is doctors... The rest is all market manipulation.

deleted 9y ago
[deleted]
ataturk 9y ago
What is hidden from us nearly all the time is that above the "rich" like Gates, Zuckerberg, Bezos, etc. are the ultra wealthy top of the pyramid. If you want to understand how the world truly works, take a look at those people, what they are involved with, whom they are inter-married with and what power they hold over all of us. Realizing that even guys like Carlos Slim are only halfway to the top was eye opening to me. How dare we "working rich" attempt to hold on to any pittance allowed us. Just to be clear--I completely agree with your post. The people making bank in the mid-tier of "wealthy" do it via lobbying and other "can't lose" tricks, manipulation, as you say. My advisor in grad school was pulling in at least $200K in the late '90s. That's almost 20 years ago now.
gbacon 9y ago
Where did you find your stats on distribution (“mostly”)? The article mentions other professions without the supply limiting that physicians and attorneys enjoy. “Typical firms owned by the top 1-0.1 percent are single-establishment firms in professional services (e.g., consultants, lawyers, specialty tradespeople) or health services (e.g., physicians, dentists),” Smith et al. write. “A typical firm owned by the top 0.1 percent might be a regional business with $30M in sales and 150 employees, such as an auto dealer, beverage distributor, or a large law firm.” Engineering-services firms also fit this description. Specialty tradespeople include plumbers, electricians, and lawn care and to belong to this cohort, they are running more substantial operations than solo self-employed: at least $3-10M top line and twenty or more employees.
- deleted 9y ago
  [deleted]
- sharemywin 9y ago
  Don't forget the franchise systems.
  - gbacon 9y ago
    Excellent point. Some franchise terms require significant net worth and have six-figure fees, but that is not the case across the board. I have heard that Chick-fil-A’s franchise fee is only $5,000 but also that they are very selective. Subway’s initial fee is in the $10-15k range[0] with the cost to open between $100-300k, and the company will provide and help with financing. [0]: http://www.subway.com/en-us/ownafranchise/franchisingfaqs http://www.subway.com/en-us/ownafranchise/franchisingfaqs
- ckip 9y ago
  I find my stats in studies with much more robust methodology. Here is a reference chain: https://www.nytimes.com/2017/11/17/upshot/income-inequality-united-states.html https://www.nytimes.com/2017/11/17/upshot/income-inequality-... Tldr: "Almost all of the growth in top American earners has come from just three economic sectors: professional services, finance and insurance, and health care, groups that tend to benefit from regulatory barriers that shelter them from competition. The groups that have contributed the most people to the 1 percent since 1980 are: physicians; executives, managers, sales supervisors, and analysts working in the financial sectors; and professional and legal service industry executives, managers, lawyers, consultants and sales representatives."
jacques_chester 9y ago
> The only domain requiring unique productive skills is doctors... The rest is all market manipulation. The difference between you and I is that I trust experts to be experts. I'm also aware, because I studied law, that "oh it's a supply-side cartel" is basically a myth. Anyone who can rub two braincells together to singe their fingers can find a lawschool that will take them in (after all, that's what I did). There are more grads than openings, year after year. Lawyers are expensive because the stakes for fucking up are potentially very high and the good ones are in high demand. Same with medicine.
- te_chris 9y ago
  Yep, the thing big clients are buying from big law firms is their liability insurance, not their super-unique law expertise.
  - jacques_chester 9y ago
    I think it's a lot of things. Any lawyer is insured to the level that makes sense for their work, so at some level that's really not a differentiating factor. A lot of it comes down to things as varied as depth of bench, using their famous letterhead as a club, familiarity and traditional relationship, old boy's network and so on and so forth. But it's still silly to give a one-conspiracy-fits-all account of the legal world.
    - te_chris 9y ago
      I should've been more explicit, I meant against bringing it in-house. My partner is an experienced commercial real estate lawyer so, really, I'm just reflecting her view - she's worked on both sides, in-house and private practice. The only reason, in her experience, that companies don't bring that sort of work in-house is insurance and the hassle of liability being worn by the law firm rather than the company. Also, it allows the client (i.e. manager at the client) to have someone to blame when it all goes tits up.
  - barry-cotter 9y ago
    This is really excessively cynical. Any law firm can buy liability insurance, not all law firms have the kind of legal expertise of Cravath, Swaine and Moore or Slaughter and May. They don’t have unique expertise but they have extremely rare, expensive and reliable expertise available in quantity and on demand. When the stakes if a contract goes to court are in the billions you do not skimp on mere millions in legal fees.
restuijs 9y ago
The tasks of physicians don't require unique skills, in the sense that there is no other route to obtaining those skills. What they do requires skill, but often they are skills that could be and are acquired by different means, but are prevented from use by the arbitrary educational structure required by regulation. Physicians too benefit from the artificial benefits of rent seeking.
- JoeAltmaier 9y ago
  Permitting physicians to practice without certification has historically been a mess. That's why the rules are there. To filter quacks and con men.
  - GFischer 9y ago
    Agreed, but it definitely could be argued that the pendulum has swung way to the other side, and that many diagnoses and procedures that could be performed by someone with 1 or 2 years of education are performed at a substantially higher cost and inconvenience by doctors. Maybe an equivalent to the lawyer's "bar exam" without the degree requirement? http://www.slate.com/blogs/business_insider/2014/08/02/states_that_allow_bar_exams_without_law_degrees_require_apprenticeships.html http://www.slate.com/blogs/business_insider/2014/08/02/state...
    - TheOtherHobbes 9y ago
      It could be argued, but that argument would be incorrect, because leaving diagnosis to untrained individuals unrealistically favours "obvious" - but wrong - shallow diagnoses over less obvious deeper diagnoses. You could argue that doctors aren't great at deep diagnoses either, and unfortunately that seems to be true. But they're still likely to better than someone who lacks the experience or knowledge to understand why a shallow diagnosis may be misleading or limited. Law is a different problem. Lawyers are paid to be persuasive, using some knowledge of law as a foundation for rhetoric. Specialist lawyers are likely to have access to useful domain-specific professional networks. But a lot of law is relatively menial (but expensive) form-filling. The very specific and self-contained skills used to handle routine property transfers, wills and probate, and so on, can easily be handled by paralegals. Medicine doesn't have those nice clean silos. If someone has abdominal pain, the range of possible causes is huge, and often very dependent on an extended medical history.
deleted 9y ago
[deleted]
stanleydrew 9y ago
> The only domain requiring unique productive skills is doctors Most doctors I know are simply information routers. Unless you're talking about surgeons I don't see what makes medicine more uniquely productive than, say, legal work.
- ckip 9y ago
  Medicine contributes to economic output. Most legal work takes away from it.
alexasmyths 9y ago
Doctors and Executives are not 'pyramid schemes' in any sense of the word, and profs at elite universities represent a very small economy. 'Management' is a skill, not a 'market manipulation' and a very difficult skill at that. Most of these 1% work huge numbers of hours, typically had to work pretty hard through school, and are smart and talented people - even if there is shifty stuff here and there, and a lot of 'born in the right family luck'. I don't know any successful people who are fools who just lucked out through life. They're all pretty amazing.
- ckip 9y ago
  Management is a skill. Moving up the totem pole to executive at increasingly senior levels is political games. It's a skill, but not one that contributes to economic output. Founders excluded, of course.

by ckip 9y ago

deleted 9y ago

[deleted]

ataturk 9y ago

What is hidden from us nearly all the time is that above the "rich" like Gates, Zuckerberg, Bezos, etc. are the ultra wealthy top of the pyramid. If you want to understand how the world truly works, take a look at those people, what they are involved with, whom they are inter-married with and what power they hold over all of us. Realizing that even guys like Carlos Slim are only halfway to the top was eye opening to me. How dare we "working rich" attempt to hold on to any pittance allowed us. Just to be clear--I completely agree with your post. The people making bank in the mid-tier of "wealthy" do it via lobbying and other "can't lose" tricks, manipulation, as you say. My advisor in grad school was pulling in at least $200K in the late '90s. That's almost 20 years ago now.

gbacon 9y ago

Where did you find your stats on distribution (“mostly”)? The article mentions other professions without the supply limiting that physicians and attorneys enjoy. “Typical firms owned by the top 1-0.1 percent are single-establishment firms in professional services (e.g., consultants, lawyers, specialty tradespeople) or health services (e.g., physicians, dentists),” Smith et al. write. “A typical firm owned by the top 0.1 percent might be a regional business with $30M in sales and 150 employees, such as an auto dealer, beverage distributor, or a large law firm.” Engineering-services firms also fit this description. Specialty tradespeople include plumbers, electricians, and lawn care and to belong to this cohort, they are running more substantial operations than solo self-employed: at least $3-10M top line and twenty or more employees.

deleted 9y ago
[deleted]
sharemywin 9y ago
Don't forget the franchise systems.
- gbacon 9y ago
  Excellent point. Some franchise terms require significant net worth and have six-figure fees, but that is not the case across the board. I have heard that Chick-fil-A’s franchise fee is only $5,000 but also that they are very selective. Subway’s initial fee is in the $10-15k range[0] with the cost to open between $100-300k, and the company will provide and help with financing. [0]: http://www.subway.com/en-us/ownafranchise/franchisingfaqs http://www.subway.com/en-us/ownafranchise/franchisingfaqs
ckip 9y ago
I find my stats in studies with much more robust methodology. Here is a reference chain: https://www.nytimes.com/2017/11/17/upshot/income-inequality-united-states.html https://www.nytimes.com/2017/11/17/upshot/income-inequality-... Tldr: "Almost all of the growth in top American earners has come from just three economic sectors: professional services, finance and insurance, and health care, groups that tend to benefit from regulatory barriers that shelter them from competition. The groups that have contributed the most people to the 1 percent since 1980 are: physicians; executives, managers, sales supervisors, and analysts working in the financial sectors; and professional and legal service industry executives, managers, lawyers, consultants and sales representatives."

jacques_chester 9y ago

> The only domain requiring unique productive skills is doctors... The rest is all market manipulation. The difference between you and I is that I trust experts to be experts. I'm also aware, because I studied law, that "oh it's a supply-side cartel" is basically a myth. Anyone who can rub two braincells together to singe their fingers can find a lawschool that will take them in (after all, that's what I did). There are more grads than openings, year after year. Lawyers are expensive because the stakes for fucking up are potentially very high and the good ones are in high demand. Same with medicine.

te_chris 9y ago
Yep, the thing big clients are buying from big law firms is their liability insurance, not their super-unique law expertise.
- jacques_chester 9y ago
  I think it's a lot of things. Any lawyer is insured to the level that makes sense for their work, so at some level that's really not a differentiating factor. A lot of it comes down to things as varied as depth of bench, using their famous letterhead as a club, familiarity and traditional relationship, old boy's network and so on and so forth. But it's still silly to give a one-conspiracy-fits-all account of the legal world.
  - te_chris 9y ago
    I should've been more explicit, I meant against bringing it in-house. My partner is an experienced commercial real estate lawyer so, really, I'm just reflecting her view - she's worked on both sides, in-house and private practice. The only reason, in her experience, that companies don't bring that sort of work in-house is insurance and the hassle of liability being worn by the law firm rather than the company. Also, it allows the client (i.e. manager at the client) to have someone to blame when it all goes tits up.
- barry-cotter 9y ago
  This is really excessively cynical. Any law firm can buy liability insurance, not all law firms have the kind of legal expertise of Cravath, Swaine and Moore or Slaughter and May. They don’t have unique expertise but they have extremely rare, expensive and reliable expertise available in quantity and on demand. When the stakes if a contract goes to court are in the billions you do not skimp on mere millions in legal fees.

restuijs 9y ago

The tasks of physicians don't require unique skills, in the sense that there is no other route to obtaining those skills. What they do requires skill, but often they are skills that could be and are acquired by different means, but are prevented from use by the arbitrary educational structure required by regulation. Physicians too benefit from the artificial benefits of rent seeking.

JoeAltmaier 9y ago
Permitting physicians to practice without certification has historically been a mess. That's why the rules are there. To filter quacks and con men.
- GFischer 9y ago
  Agreed, but it definitely could be argued that the pendulum has swung way to the other side, and that many diagnoses and procedures that could be performed by someone with 1 or 2 years of education are performed at a substantially higher cost and inconvenience by doctors. Maybe an equivalent to the lawyer's "bar exam" without the degree requirement? http://www.slate.com/blogs/business_insider/2014/08/02/states_that_allow_bar_exams_without_law_degrees_require_apprenticeships.html http://www.slate.com/blogs/business_insider/2014/08/02/state...
  - TheOtherHobbes 9y ago
    It could be argued, but that argument would be incorrect, because leaving diagnosis to untrained individuals unrealistically favours "obvious" - but wrong - shallow diagnoses over less obvious deeper diagnoses. You could argue that doctors aren't great at deep diagnoses either, and unfortunately that seems to be true. But they're still likely to better than someone who lacks the experience or knowledge to understand why a shallow diagnosis may be misleading or limited. Law is a different problem. Lawyers are paid to be persuasive, using some knowledge of law as a foundation for rhetoric. Specialist lawyers are likely to have access to useful domain-specific professional networks. But a lot of law is relatively menial (but expensive) form-filling. The very specific and self-contained skills used to handle routine property transfers, wills and probate, and so on, can easily be handled by paralegals. Medicine doesn't have those nice clean silos. If someone has abdominal pain, the range of possible causes is huge, and often very dependent on an extended medical history.

deleted 9y ago

[deleted]

stanleydrew 9y ago

> The only domain requiring unique productive skills is doctors Most doctors I know are simply information routers. Unless you're talking about surgeons I don't see what makes medicine more uniquely productive than, say, legal work.

ckip 9y ago
Medicine contributes to economic output. Most legal work takes away from it.

alexasmyths 9y ago

Doctors and Executives are not 'pyramid schemes' in any sense of the word, and profs at elite universities represent a very small economy. 'Management' is a skill, not a 'market manipulation' and a very difficult skill at that. Most of these 1% work huge numbers of hours, typically had to work pretty hard through school, and are smart and talented people - even if there is shifty stuff here and there, and a lot of 'born in the right family luck'. I don't know any successful people who are fools who just lucked out through life. They're all pretty amazing.

ckip 9y ago
Management is a skill. Moving up the totem pole to executive at increasingly senior levels is political games. It's a skill, but not one that contributes to economic output. Founders excluded, of course.