4 ms·

I am not sure if the story of "creating" wealth is correct. When I look at people like Bezos or Gates I am not sure they created as much as they were able to ga

I am not sure if the story of "creating" wealth is correct. When I look at people like Bezos or Gates I am not sure they created as much as they were able to gain a larger share of a market. I think without them we would have been fine and other players would have been in the market. So I think to some degree they took wealth from others. I also don't believe that the top 1% (or pick another number) are creating more wealth than they did 50 years ago which then would justify them taking ever larger shares of the economy for themselves. I think to a large degree modern mature economies are pretty fixed with very even overall growth so it comes down to distributing the gains in a fair way.

WalterBright 6y ago
> are creating more wealth than they did 50 years ago But they are - this is due to the huge productivity gains brought about by the application of computers. For a small example, in the 1960's and 70s, my dad was writing a book, using a typewriter. Every set of revisions meant typing the book over again (to get a clean manuscript). My mom helped out, spending hours and hours banging out a new manuscript. I still feel bad for her doing that boring, numbing work, but that's how things were in those days. In the 90s, my dad used a text editor to make revisions and just pushed a button to print out a clean manuscript. Not only that, his computer was cheaper than his old typewriter was. Despite it being cheaper, the computer company got rich off of this. It also took my dad far, far less time to create a new book. It didn't sell well, but the computer company hardly stole their wealth from my dad. P.S. The typewriter was also a big productivity gain over what went before - laboriously drawing each letter by hand. Companies made a lot of money selling typewriters, and that was wealth they created.
- throwaway34241 6y ago
  I think GP’s point is that Bill Gates is not rich because he invented word processing, or because word processing would never have become popular without his help. A big part of Microsoft’s success is network effects, where they are able to maintain market share because compatibility with their software is highly valued (because of their large existing market share). As technologies develop there often seems to be a window of opportunity where some players are too early (the technology isn’t ready yet) and some are too late (where big companies have become relatively entrenched). Companies with the right timing may be able to capture most of the value but I don’t think that means they are totally responsible for the productivity gains.
  - WalterBright 6y ago
    The big value Microsoft brought to the table was standardization. You could write one version of your app and it would work on millions of computers and be compatible with everyone else. The 8 bit and mainframe world at the time was anything but that. Unsurprisingly, somewhere north of 90% of programming was done for DOS.
    - spaetzleesser 6y ago
      If MS hadn’t done it I bet somebody else would have done it. It’s also not clear if the dominance of Microsoft was good for the industry and the overall world. Maybe they actually suppressed wealth that others would have been able to create.
- spaetzleesser 6y ago
  My point was about the top 1% creating more wealth or not. I think society as a whole is creating more wealth with many people contributing. But somehow we ended up with a situation where there top 1% percent are taking an increasing share of that wealth.
  - WalterBright 6y ago
    > there top 1% percent are taking an increasing share of that wealth. Here's where framing comes into play. Let's reframe your statement as: "there top 1% percent are creating an increasing percentage of that wealth." "taking" implies some pie someone is taking a bigger slice of that they had no hand in creating.
    - spaetzleesser 6y ago
      I doubt that the top 1 percent are creating more wealth than the top 1 percent did forty years ago. But somehow a bigger share of wealth is going to them now in a system that has been shaped by them. So I think they are “taking” more than they used to.
      - nickpp 6y ago
        If you doubt the top 1% are creating more wealth than 40 years ago, what makes you believe the bottom 99% do?
ericd 6y ago
The creation of Google, for example, has added immeasurably to the wealth of the world. Ditto spreadsheets, operating systems. Thanks to Amazon, I waste a tiny fraction of the time my parents historically did shopping, since I don’t have to run to the store basically ever. I’m taking a free university course from one of the top people in the field in between bottle feedings, thanks to YouTube. The economy is not a fixed pie, at all.
- lotsofpulp 6y ago
  > The creation of Google, for example, has added immeasurably to the wealth of the world. Google and other software advancements have offered amazing utility to everyone, freeing up people to do other tasks by reducing many hours spent on previously tedious tasks. However, unless there is opportunity for the people who used to perform the obviated tasks to produce something others will value, then all of the wealth that was added will only show up in the profits of Google and other capital owners who benefit from decreased labor costs. It is possible that previous technological advances obviated people slowly enough that it does not result in their labor’s value being reduced so abruptly. But what happens if it occurs in the course of 5 to 10 years? Certainly, the previously valuable travel agents, secretaries, cashiers, retail employees, etc experience a drop in demand for their labor, so unless they are able to offer the market something else, their value has dropped precipitously.
  - WalterBright 6y ago
    > However, unless there is opportunity for the people who used to perform the obviated tasks to produce something others will value, then all of the wealth that was added will only show up in the profits of Google and other capital owners who benefit from decreased labor costs. An effective search allows all kinds of businesses to exist that couldn't have before. It's similar to while cars replaced horses and the horse industry, it created far more industry that couldn't have existed before.
    - lotsofpulp 6y ago
      It depends if the displaced people can benefit from the ability to create or participate in the newly created business opportunities. For example, I can now search for real estate listings without talking to any agent or broker. Used to be someone needed to be paid to keep their ear to the ground and alert you if possible deals. Now, a lot of that is automated, and even if an agent or broker is required, 1 can probably do the work of 5 or 10. What are those displaced agents and brokers going to do? Learn how to program and make a website showing 3D tours of the house? Even that only needs 1 or 2 solitons. Point being that while long term change can be positive, the short term turbulence can be negative for many. I posit it’s the reason for so much of the political turmoil these days, but that’s a different discussion.

WalterBright 6y ago

> are creating more wealth than they did 50 years ago But they are - this is due to the huge productivity gains brought about by the application of computers. For a small example, in the 1960's and 70s, my dad was writing a book, using a typewriter. Every set of revisions meant typing the book over again (to get a clean manuscript). My mom helped out, spending hours and hours banging out a new manuscript. I still feel bad for her doing that boring, numbing work, but that's how things were in those days. In the 90s, my dad used a text editor to make revisions and just pushed a button to print out a clean manuscript. Not only that, his computer was cheaper than his old typewriter was. Despite it being cheaper, the computer company got rich off of this. It also took my dad far, far less time to create a new book. It didn't sell well, but the computer company hardly stole their wealth from my dad. P.S. The typewriter was also a big productivity gain over what went before - laboriously drawing each letter by hand. Companies made a lot of money selling typewriters, and that was wealth they created.

throwaway34241 6y ago
I think GP’s point is that Bill Gates is not rich because he invented word processing, or because word processing would never have become popular without his help. A big part of Microsoft’s success is network effects, where they are able to maintain market share because compatibility with their software is highly valued (because of their large existing market share). As technologies develop there often seems to be a window of opportunity where some players are too early (the technology isn’t ready yet) and some are too late (where big companies have become relatively entrenched). Companies with the right timing may be able to capture most of the value but I don’t think that means they are totally responsible for the productivity gains.
- WalterBright 6y ago
  The big value Microsoft brought to the table was standardization. You could write one version of your app and it would work on millions of computers and be compatible with everyone else. The 8 bit and mainframe world at the time was anything but that. Unsurprisingly, somewhere north of 90% of programming was done for DOS.
  - spaetzleesser 6y ago
    If MS hadn’t done it I bet somebody else would have done it. It’s also not clear if the dominance of Microsoft was good for the industry and the overall world. Maybe they actually suppressed wealth that others would have been able to create.
spaetzleesser 6y ago
My point was about the top 1% creating more wealth or not. I think society as a whole is creating more wealth with many people contributing. But somehow we ended up with a situation where there top 1% percent are taking an increasing share of that wealth.
- WalterBright 6y ago
  > there top 1% percent are taking an increasing share of that wealth. Here's where framing comes into play. Let's reframe your statement as: "there top 1% percent are creating an increasing percentage of that wealth." "taking" implies some pie someone is taking a bigger slice of that they had no hand in creating.
  - spaetzleesser 6y ago
    I doubt that the top 1 percent are creating more wealth than the top 1 percent did forty years ago. But somehow a bigger share of wealth is going to them now in a system that has been shaped by them. So I think they are “taking” more than they used to.
    - nickpp 6y ago
      If you doubt the top 1% are creating more wealth than 40 years ago, what makes you believe the bottom 99% do?

ericd 6y ago

The creation of Google, for example, has added immeasurably to the wealth of the world. Ditto spreadsheets, operating systems. Thanks to Amazon, I waste a tiny fraction of the time my parents historically did shopping, since I don’t have to run to the store basically ever. I’m taking a free university course from one of the top people in the field in between bottle feedings, thanks to YouTube. The economy is not a fixed pie, at all.

lotsofpulp 6y ago
> The creation of Google, for example, has added immeasurably to the wealth of the world. Google and other software advancements have offered amazing utility to everyone, freeing up people to do other tasks by reducing many hours spent on previously tedious tasks. However, unless there is opportunity for the people who used to perform the obviated tasks to produce something others will value, then all of the wealth that was added will only show up in the profits of Google and other capital owners who benefit from decreased labor costs. It is possible that previous technological advances obviated people slowly enough that it does not result in their labor’s value being reduced so abruptly. But what happens if it occurs in the course of 5 to 10 years? Certainly, the previously valuable travel agents, secretaries, cashiers, retail employees, etc experience a drop in demand for their labor, so unless they are able to offer the market something else, their value has dropped precipitously.
- WalterBright 6y ago
  > However, unless there is opportunity for the people who used to perform the obviated tasks to produce something others will value, then all of the wealth that was added will only show up in the profits of Google and other capital owners who benefit from decreased labor costs. An effective search allows all kinds of businesses to exist that couldn't have before. It's similar to while cars replaced horses and the horse industry, it created far more industry that couldn't have existed before.
  - lotsofpulp 6y ago
    It depends if the displaced people can benefit from the ability to create or participate in the newly created business opportunities. For example, I can now search for real estate listings without talking to any agent or broker. Used to be someone needed to be paid to keep their ear to the ground and alert you if possible deals. Now, a lot of that is automated, and even if an agent or broker is required, 1 can probably do the work of 5 or 10. What are those displaced agents and brokers going to do? Learn how to program and make a website showing 3D tours of the house? Even that only needs 1 or 2 solitons. Point being that while long term change can be positive, the short term turbulence can be negative for many. I posit it’s the reason for so much of the political turmoil these days, but that’s a different discussion.