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> the only way to become a billionaire is by exploiting people Here's a slightly different take on this idea: The only way to become a billionaire is to use l
by mightybyte 6y ago
> the only way to become a billionaire is by exploiting people
Here's a slightly different take on this idea:
The only way to become a billionaire is to use leverage.
I think this is a much more defensible argument. You can't become a billionaire by yourself. You have to have some mechanism of leverage to magnify your impact. Hiring employees is a form of leverage. Using a computer is a form of leverage. Putting your software on a large number of cloud computers is yet an additional form of leverage. The question of whether one is exploiting their employees is a worthwhile question to ask, but it is a completely separate (and much more polarizing) question. I think that leverage is the core kernel of truth lurking within this question.
- threatofrain 6y agoIMO, for this context, leverage is within the realm of individual incentive vs. pressure, not that you "leveraged" your DB's guarantees for worry-free scaling.
- pradn 6y agoYou are turning a moral judgement ("exploiting") to a more mechanical expression ("using leverage"). For critics of billionaires, the moral judgement is the whole point. Whether the "billionaire problem" belongs in the moral realm or in the dispassionate realm of math or economics is an ideological choice.
- mightybyte 6y agoI'm intentionally trying to separate the moral and the mechanical for the purpose of understanding--both understanding the structure of the way the world works and how we can make it better as well as understanding the arguments of those for whom it's ideological. (See also the sibling comment to your by pdonis.)
- pradn 6y agoI see what you mean here, but I think the shift in mode of analysis from moral to scientific blunts the force of the critique.
- kordlessagain 6y agoDoes using leverage not involved skillful means?
- eyelidlessness 6y agoFor this (me) critic of billionaires (the possibility of being one, not the humans who are), it’s not ideological. It’s based on an analysis of leverage (like GP’s comment), where the levers are necessarily some mix of advantage/privilege (feedback loop as discussed all over) and exploitation (not solely as a moral issue, but that issue is inescapable). It’s impossible to be/become a millionaire without access to, and activating, those levers. I don’t care about the moral character of the humans this analysis addresses. I care about the opportunity and moral failure it imposes on others.
- sokoloff 6y agoI don't know if you intentionally switched from billionaire to millionaire, but it seems entirely possible (and even somewhat common) to become a mere millionaire by actions and careers that most would consider virtuous combined with sound saving and investing strategies. I don't know if my parents are actually millionaires or not, but if not, they're not far off and they were both public school teachers whose parents were blue collar steel mill, coal miner, and in nursing. Those are not careers marked by the excessive use of exploitive leverage by the employees.
- convolvatron 6y agoif someone considers making a billion dollars to be some form of social theft, then making a million dollars by giving $100,000 to a fund manager .. may also constitute social theft for that critic.
- eyelidlessness 6y agoTheft isn’t a word I used. I intentionally used the words advantage, leverage and exploitation the way I did for a reason. Using your example, a billionaire doesn’t hand 1,000 more dollars to a hedge fund manager and get 1,000 times more wealth amplification. They hire a team of accountants and lawyers to do 1,000 times that base amplification each. Making 100k and having a stock based retirement plan is an open drainage from the wealth factory, it definitely has access to the same levers, but it’s effectively the equivalent of a pension, just managed in the marketplace according to marketplace rules. That earning category is basically the automobile manufacturer lead/plant manager of our generation, the only difference is there’s more people who get that slice. People in this role largely don’t have the capacity to even think about increasing their leverage, they just get “benefits” and call it a night. People who become billionaires have an entirely different approach. Their work is split between using whatever leverage they have access to, and whatever affords greater leverage. It’s mathematically the only way (given current dollar valuation) that you can get that many dollars.
- mightybyte 6y agoAnother interesting perspective... The term "using leverage" is often used in a creditor / debtor relationship. But it's funny how the term works because in that setting "using leverage" is usually associated with the debtor being the exploited one in the relationship. More generally, in a given exploitive relationship it's not always obvious who is exploiting who.
- somethoughts 6y agoYes - perhaps PG should have added qualifiers along the lines of "YC originated billionaires" versus attempting to cover all billionaires that have ever existed. It seems somewhat naive to say that every person with a billion in their bank account has built something and always is the best allocator of capital. Oil and Gas billionaires leverage the fact that society hasn't figured out how to factor in negative environmental externalities. Consumer Staples billionaires leverage their supply chain monopolies and labor monopolies. The original tech billionaires leveraged their early knowledge of computers/internet. Web 2.0/3.0 billionaires leverage the fact that society hasn't figured out how to appropriately regulate stuff that's similar but slightly different from their old school regulated counterparts (i.e. Uber, Airbnb). In general, leveraging technology capabilities seems less exploitive than leveraging human/environmental resources/lack of regulation.
- somethoughts 6y agoAs a follow-up thought - perhaps when Forbes makes its Billionaires List, instead of a basic sort ranked by on net worth, Forbes should incorporate Environmental, Social and Governance (a.k.a. Triple Bottom Line accounting) like factors similar to those starting to be used for Equity investing [1] and do a final ranking based on ESG x net worth. [1] https://en.wikipedia.org/wiki/Triple_bottom_line https://en.wikipedia.org/wiki/Triple_bottom_line
- known 6y agoAnd may be with https://en.wikipedia.org/wiki/Triarchy_%28theory%29 https://en.wikipedia.org/wiki/Triarchy_%28theory%29
- mightybyte 6y ago> In general, leveraging technology capabilities seems less exploitive than leveraging human/environmental resources. I see what you're getting at here, but I don't know that I completely buy it. Case in point: privacy. I guess it depends on how one defines exploitive.
- 6y ago
- pdonis 6y ago> I think that leverage is the core kernel of truth lurking within this question. I like this idea, because it focuses the ethical/moral/policy question on something that seems to me to be much more tractable: what kinds of leverage should society allow you to use, and to what extent?
- amelius 6y agoUsing leverage is one aspect. Another is persuading people (e.g. to invest in you), and this game can be dishonest. And in our system winner-takes-all holds: even if you are only 1% better than anyone else, you receive the full 100% of rewards. One route to becoming a billionaire seems to go like this: you persuade a group of investors to make a pile of money that's so big that you can corner a market. Which is often true. But is it fair to the people already in this market? And is it fair that it makes you a billionaire?
- BurningFrog 6y agoOK, I'll step up and say it: I have no idea what "leverage" means in this text. From context I can tell it's something bad. I understand "leverage" in mechanics. I also understand that in "corporate-talk" it's just a synonym to "use".
- mightybyte 6y agoI'm using a generalization of the mechanics definition of "leverage" (https://en.wikipedia.org/wiki/Lever https://en.wikipedia.org/wiki/Lever). A mechanism by which a small input can result in a larger output.
- BurningFrog 6y agoOK. By that definition leverage is a wonderful thing everyone should use!
- jdbernard 6y agoNo, the lever is amoral, the way it is wielded is the result of moral choice. Using debt as leverage enables people to own their own homes. Using technology as leverage enables goods and evils: widespread communication, widespread surveillance, wealth inequality (being discussed here).
- pm90 6y agoSlavery was leveraging the forced labor of other humans. Leverage is not always "wonderful".
- BurningFrog 6y agoFitting slavery into "A mechanism by which a small input can result in a larger output" feels like a stretch. But I agree that there is moral and amoral leverage. I of course only love the moral kind.
- 6y ago