6 ms·

> disproportionate contributions Do you really argue that the people in the top 0.01% are contributing to society at a rate hundreds or thousands of times high

by blunte 7y ago

> disproportionate contributions Do you really argue that the people in the top 0.01% are contributing to society at a rate hundreds or thousands of times higher than the rest of the people? And in the case of heirs, such as the Walton family, are they contributing so vastly more than the guy who mows people's lawns during the day and cooks their dinners in a restaurant at night? Or how about the Renaissance folks. They (whether fully legally or secretly illegally) reap huge rewards yearly, certainly using some advantages and situations most people do not have access to. Are they likewise contributing to society so much more than the average person? Oh wait, let's talk nurses and schoolteachers. They pretty clearly contribute very heavily to society, and they get paid pretty poorly. Are they really contributing less, by factors of tens or hundreds, than Larry Ellison?

isoskeles 7y ago
The comment was referring to 1%ers, not 0.01%ers.
hailwren 7y ago
Why should it be a linear relationship? If talent is normally distributed then supply should decrease exponentially. Assuming that a company can afford it, wouldn't this make a linear demand produce an exponential forcing on salary?
- mistermann 7y ago
  I think the main point of contention here is how everything is divvied up at the end of the day. What you are discussing (supply & demand, and the specific outcomes that occur) I think can be fairly described as the result of pure nature itself, whereas the article is also taking into consideration ~"society's opinion" on how the fruits of what people produce should be distributed.
ci5er 7y ago
> Oh wait, let's talk nurses and schoolteachers. They pretty clearly contribute very heavily to society, and they get paid pretty poorly. Are they really contributing less, by factors of tens or hundreds, than Larry Ellison? On an individual basis, leveraged through his organization - I think that it is objectively clear that the answer is: yes.
stale2002 7y ago
> Do you really argue that the people in the top 0.01% are contributing to society at a rate hundreds or thousands of times higher than the rest of the people? Yes. That is because of of the impact of their actions. Let's take the example of a CEO of a major company. The difference between a good CEO, and a great CEO might only change the value of a company by 1%. But 1% of a 100 billion dollar company, is 1 billion dollars. So if you are effecting a large enough company or area, then only being a little bit better than everyone else, turns out to be massively valuable, and therefore this value needs to be incentivized.
- mistermann 7y ago
  > Yes. That is because of of the impact of their actions. If you consider a measurement of their financial compensation to be proportional to their contribution to society. In reality, the actual impact of their actions is unknown - such things are beyond our ability to measure, we can only speculate. > therefore this value needs to be incentivized Technically, it doesn't need to be incentivized. Life would carry on if it wasn't, perhaps even with a better outcome. It is not possible to know what the outcome would be.
  - stale2002 7y ago
    > such things are beyond our ability to measure, we can only speculate. Ok then. But that doesn't support the argument that compensation is too high. Maybe it isn't high enough, and should be even higher! I can use your unknown argument to support even higher compensation, just as much.
    - mistermann 7y ago
      > Ok then. But that doesn't support the argument that compensation is too high That is true, but I made no argument. You on the other hand, seemed to be explaining that such arguments are wrong, at least as I understood you. > I can use your unknown argument to support even higher compensation, just as much. Just as much, which is precisely zero. You seem to be claiming that they are producing value, that needs to be compensated. You have no evidence, yet you speak as if you do.
6gvONxR4sf7o 7y ago
>Oh wait, let's talk nurses and schoolteachers. They pretty clearly contribute very heavily to society, and they get paid pretty poorly. Are they really contributing less, by factors of tens or hundreds, than Larry Ellison? I've been thinking about this lately. A schoolteacher generates huge value for dozens of people per year. A CEO of a big firm may generate tiny value for millions or billions of people per year. If the schoolteacher is generating a thousand times more value for each of their students than the CEO does for each of their customers, then the CEO still generated a ton more value to humanity. My napkin math is that teachers make about $200B/year in the U.S. (3.2M teachers * $60k/year). The top 0.01% seems to make about $100B/year (16k families * $7M/year). So we're in a situation where yes teachers make more value than the 0.01%, but they also earn almost twice as much. (To be fair, it seem reasonable that teachers should earn more than 2x more, but that's a separate conversation). The scale factor is a weird one for fairness. If someone's value to others is the value per person (X) times the number of people (Y), it seems like our society or technology or something is set up so that it's much easier to maximize X*Y by making Y huge and lowering X than it is to make X huge and lower Y. You can make your firm serve a million times more people, but you can't teach a million times better. Framed this way, no wonder a "value" maximizing world is getting less personal and more corporate as people lower X wherever they can to explode Y.
- lostdog 7y ago
  You are giving the CEO credit for everything positive that the company does. Shouldn't some of the credit go to the workers? Not to mention, many companies are a net negative to society.
  - 6gvONxR4sf7o 7y ago
    No I'm not giving the CEO credit for everything positive that the company does. I said the CEO may generate tiny value for millions or billions of people. As a thought experiment, imagine a CEO of company making $5B/year of nebulous undefined "value" with 250M customers (roughly Spotify-ish?). That company's "value" per customer is about $20/year. Compared to a teacher, I think this company's impact per "customer" rounds basically to zero. Suppose the CEO is able to raise that "value" by 0.14%. Compared to the workers, it's still basically zero. Being less than three cents per customer per year, it's truly absurd compared to any teacher's impact per student per year. But it increases the company's $5B/yr by about $7M/yr. This is a CEO who creates (relatively speaking) practically none of the value of the firm, which in turn creates (relatively speaking) practically no value per customer, and yet because they just have so many customers the CEO has created $7M/year of value in this thought experiment. That's the average 0.01% household income. Small value over many people just seems to have more range than large value over few people.
ben_w 7y ago
Here’s a counter-argument I’d like to try out. I don’t know how good this one is, but… The value that you add depends on what you do. First example: someone who manufactures useful widgets is useful to society roughly in proportion to the number of widgets they make — this is probably non-linear diminishing return of usefulness with more production, but I think in practice we can ignore that most of the time for simple manufacturing jobs. The range here is small, perhaps only a factor of 2-10. Second example: an inventor who makes a machine that makes it easier to make those widgets. Their value to society could be as much as “difference in number of widgets produced by everyone combined, totalled over a period which is hard to even estimate”, unless that number is so large that diminishing returns is relevant. Unlike the people who actually make the widget, it’s reasonably likely for the person who invents a widget-making-machine to reqch this point. You might even get some extra problems from technological unemployment - short term or long term, it’s still a problem - or the waste of overproduction. It isn’t as simple as saying “Tim Berners-Lee is as valuable as the entire internet”, because of all the work of other people that built on his, but even a single invention can benefit society to the tune of billions. Third example: an entrepreneur who recognises a problem in the world and creates a solution. A new type of widget, or whatever. In an optimistic case, they might hire people that would otherwise be unemployed. I’m not saying this always happens - and “wealth creator” as a term seems to be used to describe people that get rich by moving money around rather than just those who get rich by doing what I describe here - but that it could happen means it’s worth keeping track of. I would argue that creating a thousand new jobs is at least as valuable to society as the cost of a thousand unemployed people, though almost certainly not as valuable as the wages those thousand earn in the new jobs, because that would be double-counting. This could still easily be worth millions per year. Fourth example: Management. Most work is done by teams, and a manager who can make their team 10% more productive is worth as much to society as that productivity boost, summed over the entire team. I will acknowledge that management can be bad as well as good, so the sort of manager which makes everyone in the team resign (a friend mine recently left such a team because of such a manager) is worth negative their combined productivity. I can easily believe that Bezos has been an enormous force multiplier because of all the other retailers that have not grown like Amazon. I can believe that Musk is great for SpaceX and entirely average for Tesla, because of how well SpaceX is doing and how averagely Tesla is doing. How much is SpaceX worth? How much is reducing launch costs by a factor of three worth? I’m not sure, but it’s a lot, and SpaceX succeeded where all the other launch providers — and their, I assume, equally smart engineers — failed. — As a separate point, I totally agree with your implicit claim that productivity != income.
AndrewKemendo 7y ago
The questions you ask are effectively asking that the markets use the Labor Theory of Value [1] to price labor (and this goods) rather than the way labor is priced currently which is a form of Supply and Demand [2]. The current form of global capitalism doesn't really have a direct corollary to the LTV pricing mechanism. [1] https://en.wikipedia.org/wiki/Labor_theory_of_value https://en.wikipedia.org/wiki/Labor_theory_of_value [2] https://en.wikipedia.org/wiki/Supply_and_demand https://en.wikipedia.org/wiki/Supply_and_demand

by blunte 7y ago

isoskeles 7y ago

The comment was referring to 1%ers, not 0.01%ers.

hailwren 7y ago

Why should it be a linear relationship? If talent is normally distributed then supply should decrease exponentially. Assuming that a company can afford it, wouldn't this make a linear demand produce an exponential forcing on salary?

mistermann 7y ago
I think the main point of contention here is how everything is divvied up at the end of the day. What you are discussing (supply & demand, and the specific outcomes that occur) I think can be fairly described as the result of pure nature itself, whereas the article is also taking into consideration ~"society's opinion" on how the fruits of what people produce should be distributed.

ci5er 7y ago

> Oh wait, let's talk nurses and schoolteachers. They pretty clearly contribute very heavily to society, and they get paid pretty poorly. Are they really contributing less, by factors of tens or hundreds, than Larry Ellison? On an individual basis, leveraged through his organization - I think that it is objectively clear that the answer is: yes.

stale2002 7y ago

> Do you really argue that the people in the top 0.01% are contributing to society at a rate hundreds or thousands of times higher than the rest of the people? Yes. That is because of of the impact of their actions. Let's take the example of a CEO of a major company. The difference between a good CEO, and a great CEO might only change the value of a company by 1%. But 1% of a 100 billion dollar company, is 1 billion dollars. So if you are effecting a large enough company or area, then only being a little bit better than everyone else, turns out to be massively valuable, and therefore this value needs to be incentivized.

mistermann 7y ago
> Yes. That is because of of the impact of their actions. If you consider a measurement of their financial compensation to be proportional to their contribution to society. In reality, the actual impact of their actions is unknown - such things are beyond our ability to measure, we can only speculate. > therefore this value needs to be incentivized Technically, it doesn't need to be incentivized. Life would carry on if it wasn't, perhaps even with a better outcome. It is not possible to know what the outcome would be.
- stale2002 7y ago
  > such things are beyond our ability to measure, we can only speculate. Ok then. But that doesn't support the argument that compensation is too high. Maybe it isn't high enough, and should be even higher! I can use your unknown argument to support even higher compensation, just as much.
  - mistermann 7y ago
    > Ok then. But that doesn't support the argument that compensation is too high That is true, but I made no argument. You on the other hand, seemed to be explaining that such arguments are wrong, at least as I understood you. > I can use your unknown argument to support even higher compensation, just as much. Just as much, which is precisely zero. You seem to be claiming that they are producing value, that needs to be compensated. You have no evidence, yet you speak as if you do.

6gvONxR4sf7o 7y ago

>Oh wait, let's talk nurses and schoolteachers. They pretty clearly contribute very heavily to society, and they get paid pretty poorly. Are they really contributing less, by factors of tens or hundreds, than Larry Ellison? I've been thinking about this lately. A schoolteacher generates huge value for dozens of people per year. A CEO of a big firm may generate tiny value for millions or billions of people per year. If the schoolteacher is generating a thousand times more value for each of their students than the CEO does for each of their customers, then the CEO still generated a ton more value to humanity. My napkin math is that teachers make about $200B/year in the U.S. (3.2M teachers * $60k/year). The top 0.01% seems to make about $100B/year (16k families * $7M/year). So we're in a situation where yes teachers make more value than the 0.01%, but they also earn almost twice as much. (To be fair, it seem reasonable that teachers should earn more than 2x more, but that's a separate conversation). The scale factor is a weird one for fairness. If someone's value to others is the value per person (X) times the number of people (Y), it seems like our society or technology or something is set up so that it's much easier to maximize X*Y by making Y huge and lowering X than it is to make X huge and lower Y. You can make your firm serve a million times more people, but you can't teach a million times better. Framed this way, no wonder a "value" maximizing world is getting less personal and more corporate as people lower X wherever they can to explode Y.

lostdog 7y ago
You are giving the CEO credit for everything positive that the company does. Shouldn't some of the credit go to the workers? Not to mention, many companies are a net negative to society.
- 6gvONxR4sf7o 7y ago
  No I'm not giving the CEO credit for everything positive that the company does. I said the CEO may generate tiny value for millions or billions of people. As a thought experiment, imagine a CEO of company making $5B/year of nebulous undefined "value" with 250M customers (roughly Spotify-ish?). That company's "value" per customer is about $20/year. Compared to a teacher, I think this company's impact per "customer" rounds basically to zero. Suppose the CEO is able to raise that "value" by 0.14%. Compared to the workers, it's still basically zero. Being less than three cents per customer per year, it's truly absurd compared to any teacher's impact per student per year. But it increases the company's $5B/yr by about $7M/yr. This is a CEO who creates (relatively speaking) practically none of the value of the firm, which in turn creates (relatively speaking) practically no value per customer, and yet because they just have so many customers the CEO has created $7M/year of value in this thought experiment. That's the average 0.01% household income. Small value over many people just seems to have more range than large value over few people.

ben_w 7y ago

Here’s a counter-argument I’d like to try out. I don’t know how good this one is, but… The value that you add depends on what you do. First example: someone who manufactures useful widgets is useful to society roughly in proportion to the number of widgets they make — this is probably non-linear diminishing return of usefulness with more production, but I think in practice we can ignore that most of the time for simple manufacturing jobs. The range here is small, perhaps only a factor of 2-10. Second example: an inventor who makes a machine that makes it easier to make those widgets. Their value to society could be as much as “difference in number of widgets produced by everyone combined, totalled over a period which is hard to even estimate”, unless that number is so large that diminishing returns is relevant. Unlike the people who actually make the widget, it’s reasonably likely for the person who invents a widget-making-machine to reqch this point. You might even get some extra problems from technological unemployment - short term or long term, it’s still a problem - or the waste of overproduction. It isn’t as simple as saying “Tim Berners-Lee is as valuable as the entire internet”, because of all the work of other people that built on his, but even a single invention can benefit society to the tune of billions. Third example: an entrepreneur who recognises a problem in the world and creates a solution. A new type of widget, or whatever. In an optimistic case, they might hire people that would otherwise be unemployed. I’m not saying this always happens - and “wealth creator” as a term seems to be used to describe people that get rich by moving money around rather than just those who get rich by doing what I describe here - but that it could happen means it’s worth keeping track of. I would argue that creating a thousand new jobs is at least as valuable to society as the cost of a thousand unemployed people, though almost certainly not as valuable as the wages those thousand earn in the new jobs, because that would be double-counting. This could still easily be worth millions per year. Fourth example: Management. Most work is done by teams, and a manager who can make their team 10% more productive is worth as much to society as that productivity boost, summed over the entire team. I will acknowledge that management can be bad as well as good, so the sort of manager which makes everyone in the team resign (a friend mine recently left such a team because of such a manager) is worth negative their combined productivity. I can easily believe that Bezos has been an enormous force multiplier because of all the other retailers that have not grown like Amazon. I can believe that Musk is great for SpaceX and entirely average for Tesla, because of how well SpaceX is doing and how averagely Tesla is doing. How much is SpaceX worth? How much is reducing launch costs by a factor of three worth? I’m not sure, but it’s a lot, and SpaceX succeeded where all the other launch providers — and their, I assume, equally smart engineers — failed. — As a separate point, I totally agree with your implicit claim that productivity != income.

AndrewKemendo 7y ago

The questions you ask are effectively asking that the markets use the Labor Theory of Value [1] to price labor (and this goods) rather than the way labor is priced currently which is a form of Supply and Demand [2]. The current form of global capitalism doesn't really have a direct corollary to the LTV pricing mechanism. [1] https://en.wikipedia.org/wiki/Labor_theory_of_value https://en.wikipedia.org/wiki/Labor_theory_of_value [2] https://en.wikipedia.org/wiki/Supply_and_demand https://en.wikipedia.org/wiki/Supply_and_demand