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> You are making some wild assumptions that require evidence. Specifically, you need to prove that the reason rich people are rich is because they "have proven

by darawk 8y ago

> You are making some wild assumptions that require evidence. Specifically, you need to prove that the reason rich people are rich is because they "have proven themselves capable of efficiently allocating capital", as opposed to (or at least independent of) other factors, such as luck, inheritance, etc. I'm not making any assumptions. In aggregate, by definition, wealthy people are better at allocating capital than non-wealthy people. Yes, not all wealthy people are good at it. But in general, they are. That's why they're wealthy. The fact that exceptions exist is irrelevant to my point. > You also need to prove that the way the rich allocate resources, even when "efficient" (i.e. provides the most return) is actually good for society as a whole, and not just the rich. Do you have evidence that the way the poor allocate additional capital is more socially useful?

maxxxxx 8y ago
What will these rich capital allocators do when nobody has money to buy their stuff? We need people to produce things and we need people who buy things. Both of these roles are equally important. Considering how housing and other asset prices are going up and companies like Apple are sitting on billions of dollars it seems there are a lot of rich people who don't know how to invest their money productively.
- darawk 8y ago
  > What will these rich capital allocators do when nobody has money to buy their stuff? We need people to produce things and we need people who buy things. Both of these roles are equally important. Considering how housing and other asset prices are going up and companies like Apple are sitting on billions of dollars it seems there are a lot of rich people who don't know how to invest their money productively. Totally agree. To be clear, i'm not advocating either narrative, just pointing out that both sides have one. I think they're both important. You need efficient allocators productively allocating capital...and you need them to have the capital to do it with. You also need consumers, with the buying power to make the capital allocators allocations work. The debate ends up being around what the right mix is, and I don't know the answer to that, simply pointing out that it's not a one-sided narrative of "give poor people money!" or "give rich people money!".
  - maxxxxx 8y ago
    How about "Give working people more money"? Maybe if they had some capital they could allocate it for something useful too. When I look at the money that's being thrown around in SV I have my doubts that the professional allocators are doing a good job.
    - darawk 8y ago
      I'm not disagreeing with you. You need both.
deleted 8y ago
[deleted]
zanny 8y ago
Its a generally well documented trend that once rich it becomes difficult to actually fall out of wealth. I'd definitely love some unbiased research in how much better these purported rich people are better at allocating capital. Because I can easily start naming microeconomically selfish ways of managing capital that the wealthy practice on the regular that it is no way economically beneficial to the parent economy - offshore tax havens, tax loopholes, real estate bubbles, buying politicians and policy to harm liberty, investing in companies that themselves offshore, launder, and hide their capital outside of the economy. Businesses in the US are magnitudes wealthier today than they were forty years ago but the standard of living has at best remained stagnant for the last 20 (depending on locality, there are substantial regional swings). Money is flush in the upper echelons of society but it has provably and demonstrably not resulted in economic prosperity for the whole nation.
- darawk 8y ago
  > Its a generally well documented trend that once rich it becomes difficult to actually fall out of wealth. I'd definitely love some unbiased research in how much better these purported rich people are better at allocating capital. Huh? The fact that they're rich is proof. > Because I can easily start naming microeconomically selfish ways of managing capital that the wealthy practice on the regular that it is no way economically beneficial to the parent economy - offshore tax havens, tax loopholes, real estate bubbles, buying politicians and policy to harm liberty, investing in companies that themselves offshore, launder, and hide their capital outside of the economy. Sure, but they had to get rich in the first place. > Businesses in the US are magnitudes wealthier today than they were forty years ago but the standard of living has at best remained stagnant for the last 20 (depending on locality, there are substantial regional swings). Money is flush in the upper echelons of society but it has provably and demonstrably not resulted in economic prosperity for the whole nation. Yes, its been very unevenly distributed. How do you think that relates to the question at hand?
  - maxxxxx 8y ago
    "Sure, but they had to get rich in the first place." That can be achieved by being born with the right parents, not necessarily by doing intelligent things.

by darawk 8y ago

maxxxxx 8y ago

What will these rich capital allocators do when nobody has money to buy their stuff? We need people to produce things and we need people who buy things. Both of these roles are equally important. Considering how housing and other asset prices are going up and companies like Apple are sitting on billions of dollars it seems there are a lot of rich people who don't know how to invest their money productively.

darawk 8y ago
> What will these rich capital allocators do when nobody has money to buy their stuff? We need people to produce things and we need people who buy things. Both of these roles are equally important. Considering how housing and other asset prices are going up and companies like Apple are sitting on billions of dollars it seems there are a lot of rich people who don't know how to invest their money productively. Totally agree. To be clear, i'm not advocating either narrative, just pointing out that both sides have one. I think they're both important. You need efficient allocators productively allocating capital...and you need them to have the capital to do it with. You also need consumers, with the buying power to make the capital allocators allocations work. The debate ends up being around what the right mix is, and I don't know the answer to that, simply pointing out that it's not a one-sided narrative of "give poor people money!" or "give rich people money!".
- maxxxxx 8y ago
  How about "Give working people more money"? Maybe if they had some capital they could allocate it for something useful too. When I look at the money that's being thrown around in SV I have my doubts that the professional allocators are doing a good job.
  - darawk 8y ago
    I'm not disagreeing with you. You need both.

deleted 8y ago

[deleted]

zanny 8y ago

Its a generally well documented trend that once rich it becomes difficult to actually fall out of wealth. I'd definitely love some unbiased research in how much better these purported rich people are better at allocating capital. Because I can easily start naming microeconomically selfish ways of managing capital that the wealthy practice on the regular that it is no way economically beneficial to the parent economy - offshore tax havens, tax loopholes, real estate bubbles, buying politicians and policy to harm liberty, investing in companies that themselves offshore, launder, and hide their capital outside of the economy. Businesses in the US are magnitudes wealthier today than they were forty years ago but the standard of living has at best remained stagnant for the last 20 (depending on locality, there are substantial regional swings). Money is flush in the upper echelons of society but it has provably and demonstrably not resulted in economic prosperity for the whole nation.

darawk 8y ago
> Its a generally well documented trend that once rich it becomes difficult to actually fall out of wealth. I'd definitely love some unbiased research in how much better these purported rich people are better at allocating capital. Huh? The fact that they're rich is proof. > Because I can easily start naming microeconomically selfish ways of managing capital that the wealthy practice on the regular that it is no way economically beneficial to the parent economy - offshore tax havens, tax loopholes, real estate bubbles, buying politicians and policy to harm liberty, investing in companies that themselves offshore, launder, and hide their capital outside of the economy. Sure, but they had to get rich in the first place. > Businesses in the US are magnitudes wealthier today than they were forty years ago but the standard of living has at best remained stagnant for the last 20 (depending on locality, there are substantial regional swings). Money is flush in the upper echelons of society but it has provably and demonstrably not resulted in economic prosperity for the whole nation. Yes, its been very unevenly distributed. How do you think that relates to the question at hand?
- maxxxxx 8y ago
  "Sure, but they had to get rich in the first place." That can be achieved by being born with the right parents, not necessarily by doing intelligent things.