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It's a classic PG article. Many true facts in there, lots of good analysis with just a few questionable claims thrown in here and there. At the end, there's a m

It's a classic PG article. Many true facts in there, lots of good analysis with just a few questionable claims thrown in here and there. At the end, there's a massive claim that isn't fully stated but implied. "Of course the Gini coefficient is increasing" translated means "income inequality is not a problem". Firstly, Gini coefficient is based on income, not wealth. That isn't stated clearly. Secondly, there's absolutely no data on what proportion of income flows to which decile. The conclusion (income inequality isn't a problem) is simply based on an assumption that the rise in the Gini coefficient is based entirely on the wealth accumulated by founders, and that this is a good thing. I think this post boils down to "people like me are creating a lot of value, please acknowledge it. Also there are no downsides to this accumulation of wealth". This would be fine if PG also didn't argue that policies like wealth taxes are harmful (http://www.paulgraham.com/wtax.html http://www.paulgraham.com/wtax.html). It just seems like a desperate play to keep his wealth intact.

amznbyebyebye 6y ago
It’s probably rich man guilt, plus some attempt at rationalization through cherry picked facts and data.. Also why I think bill gates >>> pg
- anon_tor_12345 6y ago
  >It’s probably rich man guilt it's hilarious to me how so many talking heads think the solution to guilt is more speech instead of praxis. you feel guilty about all of your wealth? give large sums of it away. charity works wonders for the guilty conscience (speaking from experience here). but that's unthinkable so they just go on engaging in this kind of sophistry. lays bare that they're not actually trying to cure their guilt but justify themselves.
  - Der_Einzige 6y ago
    The kind of people who use the word "praxis" don't end up having good praxis 99% of the time.
    - anon_tor_12345 6y ago
      not sure what this means since i'm not a native english speaker - i understand praxis to mean something that you do instead of something that you say.
      - jdminhbg 6y ago
        In standard American English, 'praxis' is a Marxist shibboleth. For a non-loaded term, you can just use 'practice.'
        anon_tor_12345 6y ago
        I'm not sure what marxism has to do with this (I don't think Marx wrote about charity) and although I'm not a native speaker I'm pretty good at syntax/semantics: >the solution to guilt is more speech instead of praxis vs >the solution to guilt is more speech instead of practice Second one is vague and unclear.
        FabHK 6y ago
        In English, the usual terms are theory and practice. Praxis is a synonym of practice, but it is rare and formal (for the marxist connection, see https://en.wikipedia.org/wiki/Praxis_School https://en.wikipedia.org/wiki/Praxis_School). At any rate, what you wanted to say is maybe best expressed as "the solution to guilt is more speech instead of action."
        anon_tor_12345 6y ago
        I'm well aware of both the colloquial use of practice and "marxist praxis". I was simply implying that, as written, my statement didn't intersect marxism in any way and therefore couldn't have been misunderstood as such without willful misunderstanding. Note that there are other uses of the word that also themselves don't intersect marxism in any way https://www.ets.org/praxis https://www.ets.org/praxis https://www.luc.edu/socialwork/praxis/ https://www.luc.edu/socialwork/praxis/ https://en.wikipedia.org/wiki/Apraxia https://en.wikipedia.org/wiki/Apraxia Furthermore the precise definition of praxis: >Praxis (from Ancient Greek: πρᾶξις, romanized: praxis) is the process by which a theory, lesson, or skill is enacted, embodied, or realized. "Praxis" may also refer to the act of engaging, applying, exercising, realizing, or practicing ideas. is exactly what I intended (since I believe pg, and others I was implicating, pontificate but don't do much).
- i_haz_rabies 6y ago
  I feel a certain degree of guilt over my (relatively low, even in Canada) developer salary. I didn't do anything to deserve my comfortable life. I can't imagine how people with billions sleep at night.
junippor 6y ago
Sloppy thinking too. > But at the moment at least, there is definitely something they share in common that distinguishes them. What retailer starts AWS? What car maker is run by someone who also has a rocket company? So your justification for how you're classify Amazon is something the company does (good) but your justification for how you're classifying Tesla is other things the CEO owns? Very sloppy, Paul. Very lazy.
- deleted 6y ago
  [deleted]
- cupofcoffee 6y ago
  I'm dying lol
sneak 6y ago
> At the end, there's a massive claim that isn't fully stated but implied. "Of course the Gini coefficient is increasing" translated means "income inequality is not a problem". Now, I can't speak to whether or not pg's implication here was intended and unsaid, or not intended: it is likely intentionally ambiguous. One thing I can speak to though is that it seems common now to read something as if the thing it implies is the thing the author actually intended to communicate. We should be quite careful with this sort of assumption. Sometimes it's a safe one, other times it is not.
WhompingWindows 6y ago
Paul Graham's articles always shoot immediately up to the top of HN, but I agree with you, they're generally cursory and pithy thoughts which don't convince my skeptical mind. I don't know, can someone explain why his work is so popular? Think of all the amazing writers across our civilization whose work is linkable, and we're worshipping these decent but not amazing blog posts?
- blackshaw 6y ago
  Because he's the founder of this website?
  - lolive 6y ago
    Just like RMS is highly respected at the FSF :)
    - thought12342 6y ago
      I don't understand if your insulting RMS but the comparison is definitely insult to RMS. RMS is the legend.
    - true_religion 6y ago
      I understand the comparison, but the FSF can exist without RMS. PG on the other hand solely supports HN, I doubt he would continue to pay for a site that vilified him.
      - troygoode 6y ago
        This is incorrect. HN is run by Y Combinator; yes, PG started YC, but he retired from YC 7 years ago.
        true_religion 6y ago
        Oh, I had thought he stepped down from the day to day role but still had significant investment and control. There are many firms where the owner is never present, but all employees know not to cross them. (E.g. Washington Post & Jeff Bezos).
tyre 6y ago
Add to that that tech companies concentrate wealth line never before. Airbnb takes a cut of transactions not only around the US but across the world. Not everyone works in the Bay Area, but how many of the founders, early employees, and VCs do? The ones who really make massive wealth? Not 100%, but most. Same with Stripe, the same with Facebook, Google, etc. we’re pulling tremendous wealth into a small area, with technology that can scale tremendously large businesses with fewer people. This isn’t to say that, for example, wealth from finance companies doesn’t centralize in New York and London. That’s bad too. It’s not to say that good things don’t come from these companies (though Facebook seems to be a net negative for humanity.) But this level of wealth concentration and inequality is detrimental to the fabric of a society. We’re not better off, we’re not more innovative, we’re not healthier or more cohesive or happier when this happens.
- strikelaserclaw 6y ago
  undoubtedly, i think theres a sweet spot for letting people gain rewards from their own hard work/talent/value creation, but i think as a society we are moving into the dangerous territory where that balance is totally skewed in one direction.
  - VRay 6y ago
    You're looking mixing up cause and effect You're mad about "cause": Evil startup stiffs tons of small players across the world You're lashing out at "effect": Lots of money gets concentrated around the evil startup's headquarters A lot of really bad stuff has happened in history because of this sort of bad logic, so you really need to rethink your position
  - Dracophoenix 6y ago
    First off, I really like your username! I'm sure you had a particular robotic animal in mind when you chose it. Secondly, a gain from one's own rewards is supposed to be in one direction. A person is entitled to the fruits of his labor. Not anyone else. There are only a few people at the top of any profession or activity. But this fact seems to be ignored for some "utopian" dream where the guilt or coercion of the successful compels, via self-abnegation, some "compensation" to the masses for the latter's lack of success. That the best are merely cogs to keep churning to the rhythms and dictates of his fellow man and of his government. That the best see no value in their own work or selves without others as their chief barometer. However, I don't see it argued that Usain Bolt should slow down so that he doesn't ruin the Olympic Sprint for the rest of his competitors. I don't see it argued that intelligent students should stop going to Harvard/Stanford/{take your pick} because such academic success makes everyone else look mediocre by comparison. Why should it be any different in Silicon Valley? Why should one accept inefficiency or inadequacy? It benefits no one to either become or accept a prize that is lesser in value than the sum of one's actions. Except perhaps for martyrs and masochists.
zone411 6y ago
>Firstly, Gini coefficient is based on income, not wealth. Huh? Gini coefficient can be based on wealth just as well as on income. For example: https://en.wikipedia.org/wiki/List_of_countries_by_wealth_equality https://en.wikipedia.org/wiki/List_of_countries_by_wealth_eq.... This essay doesn't specify which one PG is talking about.
- BlargMcLarg 6y ago
  Think the implicit meaning here is that Gini coefficient is often used only as an indicator of income inequality, not wealth inequality, despite it being usable for both. Usually one has to specify "wealth Gini coefficient", as most default to income otherwise.
  - zone411 6y ago
    However, this essay is specifically about wealth so at most I'd criticize this use as somewhat ambiguous instead of assuming that PG meant income Gini and therefore confuses income with wealth.
    - whimsicalism 6y ago
      Having read a fair bit of discussion of inequality, I think that in any popular discussion if you see the phrase "gini coefficient" unqualified, you should presume it to be discussing income, even if the rest of the discussion was about wealth. It's a very pervasive error.
astura 6y ago
There's also the unstated implication that "anyone can do it if they work hard for it" - basically saying it used to be you had to be born into a wealthy family to be one of the richest people in the world and now you can be the richest person in the world based on merit alone (thus rich people are inherently meritorious).
- evgen 6y ago
  Somehow all of those explanations seem to gloss over the fact that you generally need to be born into a wealthy family in order to have the cushion to take the risks that allow you to collect billions. As an example, Paul Graham would have been far less likely to attend Cornell and Harvard if his father had a blue collar factory job instead of being a nuclear physicist. Almost none of the 'bootstrap billionaires' of the tech world come from less than an upper middle-class background, but like PG they are quite fond of suggesting that their success was entirely due to 'merit'.
prostoalex 6y ago
> "Of course the Gini coefficient is increasing" translated means "income inequality is not a problem". The book "The Great Leveler" https://www.goodreads.com/book/show/31951505-the-great-leveler https://www.goodreads.com/book/show/31951505-the-great-level... is probably the most comprehensive dive into history of inequality, and arrives at a fairly unexciting conclusion that periods of great inequality are correlated with significant economic growth (usually related to advances in automation, which tend not to be universally distributed) whereas periods of equality can generally be attributed to stagnation.
- aardvarkr 6y ago
  That’s a fascinating point!
- uoaei 6y ago
  That would seem to indicate that Goodhart's Law is in effect and not much more. At least, not until you demonstrate an analysis of quality of life during those same periods.
- whimsicalism 6y ago
  Growth from whom and stagnation for whom? If during this "stagnation", the level of societal wealth remains the same, but inequality decreases, that indicates massive utility gains due to decreasing marginal utility of wealth. Moreover, inequality now is extremely high, and growth is decelerating. China has less wealth inequality than the United States, yet is growing substantially faster.
  - Aunche 6y ago
    > Moreover, inequality now is extremely high, and growth is decelerating. China has less wealth inequality than the United States, yet is growing substantially faster. Growth is a second derivative. Income inequality is a function of first derivatives. You can't directly compare the two. If I had to guess, China's wealth inequality in China is growing at a much faster rate than that of the US.
- dnautics 6y ago
timkam 6y ago
I agree. To me, the post reads a bit like this: "Back then, we did not have as much inequality, but the super-rich did not deserve their wealth. Now, we have more inequality, but the super-rich [like PG himself] really deserve it, because they are innovators." The post does not cover the arguably more important questions like "Are the working and middle classes better off?", "Was there less innovation back then or were lesser paid innovators just as innovative?", and "Can we have as much or even more innovation with less inequality?".
- gen220 6y ago
  Yep, I think there’s a lazy argument that tends to get made to justify the status quo, namely that inequality is necessary for innovation. Of course it is, otherwise why take risks? But this does not justify the 1000x inequality that we have today separating CEOs from laborers and 10000x separating founders from laborers. What if those numbers were 100x and 5000x? Might we see even more innovation, and stronger communities? The payoffs figures of today are also used to justify truly stupid risks. There are ponzi scheme type people who would rather masquerade at being a founder 10 times over in search of getting lucky once, screwing over investors and laborers in the process. Maybe if the disparity weren’t so eye popping, the same people would go into other fields instead.
- didibus 6y ago
  You hit the nail on the head! It also didn't discuss that it seems more so that there is a new technology which is enabling a shift on riches, but it's likely that the next phase is one of inherited wealth again. Unless he believes that the children of those new fortunes won't inherit anything or will keep being surpassed in riches by the next generation startups. But I'm not so sure, I think it's just a cycle, refresh most company from a non tech based one to a tech one, and once that's done, it'll go back to consolidation and inheritance, until the next big technology.
- whimsicalism 6y ago
  Moreover, people seem to continuously forget the fact that half of all wealth in the United States is inherited by the top 5% wealthiest households, not 'earned' via value creation. In general, I tend to agree with Rawls that this notion of 'deserving' is irrelevant to the question of how we ought to distribute goods/welfare in society.
bambax 6y ago
The people he thanks for "having read drafts of this" are: - his two lifelong friends and business partners - his wife - two prominent libertarian economists. Missing from that list are his children and Peter Thiel.
- bambax 6y ago
  Yeah. My point is, PG's essays project objectivity and neutrality and even science; but in truth he has an agenda, and it's the same as Thiel's.
grenoire 6y ago
pg has been touting the statistics he's pulling out in here for a while on Twitter. I think he read these somewhere and started digging a bit more into it, constructed a narrative, and wrote an essay.
deleted 6y ago
[deleted]
closeparen 6y ago
These takes freak people out because we want to think of anti-inequality as a virtuous, prosocial belief. But a commitment to hold down inequality is a commitment to prevent the creation of value. I don’t think it’s controversial to skim the top of the creation of value / rise in inequality to fund services that people need. But as long as a founder’s share of his value creation is greater than the share accruing to the homeless person down the street, his enterprise is still promoting inequality. From an inequality frame, even with a 99% tax rate it ought to be stopped. There are more than 99 other Americans; the founder’s share is still outsized.
- whimsicalism 6y ago
  Is it? Does most inequality rise from value creation? Most wealth in America is held by the top 5% wealthiest households directly as a result of inheritance, not hard work or value creation. How is arguing that the inequality produced by inherited wealth needs to be restrained a "commitment to prevent the creation of value"?
  - closeparen 6y ago
    No one is qualifying their discussion of inequality with “produced by inherited wealth.” If they did, it’d be a lot more palatable. About half the inequality discourse I see targets founders. The other half targets workers whose salaries are too high, whose children are too well prepared for college.
gopalv 6y ago
> people like me are creating a lot of value, please acknowledge it. Also there are no downsides to this accumulation of wealth That is an overstatement of the article, but the article is actually defending the rise in inequality as a nature of the world today with no guilt (of participation) about it. Reminds me of the call girls in H2G2 who specialize in sociology telling executives that it is okay to be rich and they earned every dollar in a dystopian war field (HanDod city?). It is extremely important for a creator to truly believe that "they built all this value" (non zero sum value and that is often true) and not merely built an efficient transfer mechanism into their pocket. This in contrast to something like Warren Buffet's "lottery of birth" statements. He is right about something though, the rules are the same as before. "Welcome all. Everyone can play, the winners get to keep playing, the rich can play longer even if they lose - those who play longest, win big. Just remember there are no second acts in american life". The winner-take-all only benefits those who can actually spread their investments around ,so that the investors can spread their money, but the workers can't spread their time around 10 possible jobs. Also, picking oil and 1982 feels odd considering half the "gas crisis of the 70s" highlighted why oil is critical. If I said medical tech would boom in the next five years, with vaccines for HIV and bespoke immune therapy for cancers, that would not be a bad bet because of the usual "events leading up to".
hardwaregeek 6y ago
> A French critic cleverly wrote that "with Autumn Sonata Bergman does Bergman." It is witty but unfortunate. For me, that is. I think it is only too true that Bergman (Ingmar, that is) did a Bergman.... I love and admire the filmmaker Tarkovsky and believe him to be one of the greatest of all time. My admiration for Fellini is limitless. But I also feel that Tarkovsky began to make Tarkovsky films and that Fellini began to make Fellini films. -- Ingmar Bergman And PG does PG. It's a classic pseudo-contrarian, startup rally cry, PG post. Which isn't to say it's worth getting annoyed at it. It's simply on brand.
john_moscow 6y ago
>At the end, there's a massive claim that isn't fully stated but implied. "Of course the Gini coefficient is increasing" translated means "income inequality is not a problem". To me, the implied message simply reads as "Startups and private equity is the number way to make money in 2021. Come do business with us." Makes sense given PG's primary business.
caminante 6y ago
>Secondly, there's absolutely no data on what proportion of income flows to which decile. Is this true? If I simply look at the Gini wiki, there are clearly tables showing this data with percentages of population by income brackets[0]. [0] https://en.wikipedia.org/wiki/Gini_coefficient#Limitations https://en.wikipedia.org/wiki/Gini_coefficient#Limitations See [Table C. Household money income distributions and Gini Index, US]
didibus 6y ago
> Of course the Gini coefficient is increasing Ya this confused me, because the geni coefficient measures inequality, the higher the number, the more inequality. > A Gini coefficient of one (or 100%) expresses maximal inequality among values So is PG saying it's normal the world is becoming less equal? Because of more people starting companies?
snicker7 6y ago
> Firstly, Gini coefficient is based on income, not wealth. The Gini coefficient can be applied to any statistical distribution, including wealth. From Wiki: > The Gini index or Gini ratio, is a measure of statistical dispersion intended to represent the income inequality or wealth inequality within a nation or any other group of people
the_local_host 6y ago
It definitely takes a bias toward "wealth accumulation is good" to present the following as good news: > "The reason the percentage of heirs has decreased is not that fewer people are inheriting great fortunes, but that more people are making them." It's likely that many of the inheritances of 1982 were the echo of the corrupt and monopolistic industrialism in the 19th century. Is it a bad thing that the great individual fortunes that were built a century earlier couldn't be amassed in the 20th? Have we returned to a 19th-century environment now, with technology taking the place of railroads and telegraphs? On that note... > "the major sectors of the economy were either organized as government-backed cartels or dominated by a few oligopolistic corporations." Unless I see a FAANG company go out of business, soon, and as abruptly as it appeared, I'm inclined to think we're entering a new oligopolistic era. Just because these companies were recently startups doesn't mean they aren't entrenched now. (As an aside regarding the wealth tax, that actually would have worked to reduce the number of heirs at the top of the list in 1982 had it been enacted some time earlier.)
- m___ 6y ago
  --"I'm inclined to think we're entering a new oligopolistic era. Just because these companies were recently start-ups doesn't mean they aren't entrenched" Your comment is on start to end, just to add, these "companies", are nothing more then dystopian mirrors to the public, their fronts(all individuals in the public eye, greatest example of a nobody(Leon Musk)) are just second rate actors. The virtualization of "finance", it's moral justification, nothing more is at stake. Real power, ...dwells in the shadows. This goes from the White House, to Hollywood, over Silicon Valley to Mar o Lago in the Swamp State. The measure of a dollar between a billionaire, and a homeless dweller as to the price of a loaf of bread is meaningless. What counts is the grab for the hard assets, power, control, that probably starts at multiple billions. A second measure of any meaning is the time line power and influence can be stretched. A professional politician is seriously handicapped there, hence the proof of the above as to what is "wealth".
thegrimmest 6y ago
Can I ask a related question? Why all the focus on income/wealth "inequality"? Shouldn't we be looking at the absolute baseline quality of life? Hasn't it been increasing dramatically despite increasing inequality? Due to technological advances, hasn't the baseline quality of healthcare, education, sanitation, nutrition, shelter, comfort, convenience, etc. significantly improved from the 60s or the 80s? If so, why begrudge the rich, especially those who have driven this advancement, their fleets of yachts?
- kkoncevicius 6y ago
  Social status is by comparison, that's why. I assume the vast majority of people would choose to be in the aristocracy somewhere in 1300 Europe, compared to middle class today. Even if objectively the middle class has better quality of life.
  - thegrimmest 6y ago
    Why on earth would you assume that? Middle Ages aristocracy lived comparatively miserable lives - no daily hot shower, no climate control, nothing resembling health care, no running water or sanitation, no access to information, no international supply chain for food or products (eat only what your community can preserve for the winter). I would wager that any of those aristocrats would gladly amputate their limbs to live as an average person today.
    - dsq 6y ago
      Interesting to think of, let's say, one of our society's upper class given the opportunity to be a 'regular' person X years from now. Rejuvenation, instant cure for any illness, pain or wound, immersion into world spanning super intelligence, gratification of any physical or emotional desire, personal host of robotic servants, etc. The price is that they would be regular, that is, devoid of superior wealth or power. Would they take it?
- hn_throwaway_99 6y ago
  Three problems: 1. Humans are humans, and they pretty much always judge their success by comparing themselves to others. Or, rather, humans are primates. Take a look at the famous study of the monkey that got cucumber while the other monkey got tastier grapes. 2. Income inequality in and of itself can be a problem because the mega wealthy can essentially buy laws that benefit themselves. There have been many studies that show that politicians are much more responsive to the desires of the rich than the desires of the average person. 3. In any economy, limited resources always go to those on the top of the wealth graph, regardless of cost to produce. So while you may be able to say everyone's standard of living is better, that's cold comfort to someone who won't be able to buy a house in their lifetime because limited land supply goes to the richest.
Logon90 6y ago
Not exactly desperate, however much pretense we can muster :/
dheera 6y ago
It would be very interesting to re-order the list by the amount of liquid wealth that each person owns, not including fake founder stock wealth that can't be e.g. theoretically sold overnight to avert a world disaster -- very different from someone with an actual pile of cash or bonds or gold. Consider someone's effective wealth as the amount of liquid USD they could hypothetically produce in a 24 hour period by selling all of their assets, including market dynamics, and then tell me who the top 100 richest people are.
ahthat 6y ago
I don’t think PG is necessarily saying that income inequality is not a problem. This is disingenuous on your part. Saying “of course the Gini coefficient is increasing” does not necessarily translate to “income inequality is not a problem.” Rather, what he is to my mind correctly pointing out is that the entire situation regarding wealth accumulation, distribution, and class mobility is perhaps more nuanced than we typically understand it to be. Indeed, he points out that it is in fact easier in some major ways, which is a wonderful thing to realize. This does not necessarily mean that income inequality does not exist or is not a problem. There may still be ways in which it is. Instead, it is good to acknowledge that the ability to build wealth through starting businesses is, in his particular lens, better than it has ever been. Further, I think it is disingenuous to compact PGs meaning to “‘people like me are creating a lot of value, please acknowledge it. Also there are no downsides to this accumulation of wealth.’ ... it just seems like a desperate play to keep his wealth intact.” So much of the time argument betrays the arguer and rather demonstrates a perverse inclination to emotions such as jealousy rather than reasoned indifference. Why is he desperate in this case? Is he afraid of people taking his money away from him? Are there people actively attempting to do so? Is this not a natural human inclination? Is this something that only affects the wealthy? Do not all of us to a certain degree wisely protect what we have earned? It has indeed gone out of fashion to point out that the rewards of benefitting society are equal to the benefit ie what society is willing to pay for those benefits (if not less so, due to the existence of taxes). We should first admit that society is made of industrious and lucky individuals by varying degrees, admit this, and then stave away jealousy at the success of those more industrious and lucky than you or me - for success coming to the industrious and lucky remains just despite the existence of those who pursue lives of industry and are not as lucky. It is out of fashion to point out the simple and bare fact that ambition to improve the world is amplified in the environment where it is incentivized: if this be done through the respect garnered as a result of benefitting the world, that is great; if this be done as a result of rewarding the creator of those benefits commensurate to the benefits given, that is great also. In either case, the results are amplified; with both cases the results are amplified still further by the addition of the incentives. Yes, indeed the numbers by certain statistical methods appear disproportionate within studies of income inequality. Yet, simply because these figures impress upon us a knee-jerk reaction to decry the accumulation of great wealth by the few as unfair, does not make it so; it does not necessarily mean that something is wrong that these results should be allowed to occur. So long as the majority of we who inhabit the economy are not actively oppressed by the creators of great wealth, so long as our freedoms are not taken away, no reasoned argument can point to why the accumulation of great wealth is a damaging thing. Indeed, if it results from the great mutual benefit to society, this is in fact a very good thing. So long as the accumulators of such great wealth are not oppressing the majority of participants of the economy, the accumulation of great wealth ought to be a sign of the great benefits that the accumulators are providing to society, as it is society, as has now been remarked a number of times in this comment, that is paying for it. Indeed, if we continue to demonize wealth creators and go on to pass reforms that remove incentives to wealth creation, we would only de-incentivize the creation of future benefits to ourselves as members of society. Further, with certain reforms that constitute graded barriers to success, the freedom of economic mobility then being lessened, the entire economy and state as a whole is then oppressed by degrees - the oppression is then rather achieved by those who have sought to fix the “problem”. I’m not saying that income inequality does not exist - I’m saying that in this particular form the fact that there are disparities in income is not unfair, and that results from the just distribution of benefit to society that society is happy to pay for is not necessarily unjust by statistical analysis of income data alone.
newsclues 6y ago
Once you get to a point, preservation of wealth is the most important thing.
heMan09 6y ago
He’s a man of his youth; when you could start a garage band and have a modicum of success, then carry it forward with sound fiscal choices. Concepts like inflation, and buying power are lost on someone of PG’s wealth. He’s completely detached from the modern reality: content and options are ubiquitous relative to PG’s golden years. It’s the same with Marc Andreesen and his call to build; hey Marc why not build a progressive tax system that enabled your generation and your parents to explore as they chose instead of suggesting we all just rally behind a billionaires blog post? These guys are visible because they “won” an ephemeral challenge most people aren’t even aware of. It’s stunning how smart folks seem oblivious to the extent which relativity commands reality.
slibhb 6y ago
> It just seems like a desperate play to keep his wealth intact. To me this dismissal reads as a little blithe. Is it true that, now more than in the past, the rich are getting rich by innovating? I don't see you engaging with that argument. Clearly people who create successful businesses add value. Clearly Jeff Bezos has added a lot of value. That doesn't mean he shouldn't be taxed but I constantly see people talking about Bezos as if he's an evil capitalist oppressor who has stolen his wealth from virtuous laborers. To me it seems obvious that Bezos' personal wealth is a drop in the bucket compared to the value he's added to the world (hundreds of thousands of jobs, changed the way we buy things). It's totally fine to be in favor of higher taxes but it shouldn't be because you hate rich people or you think they are greedy parasites. Unfortunately I see a lot of that going around.
tubularhells 6y ago
I had the same feeling skimming through the post. What a despicable person this PG turned out to be.
- TacticalCoder 6y ago
  People are entitled to their opinions and there's no need to namecall on HN.
camhart 6y ago
Is income inequality a problem? In my opinion, the real problem would more accurately be defined as peoples inability to afford their basic needs: housing, food, and to a degree healthcare. Some might argue to throw education/training into the mix as well, and I wouldn't fight that too much as long as people remember more affordable options like community/technical colleges. Many who argue income inequality is a problem tend to imply that it means people can't afford their basic needs. I agree if people can't afford basic needs that's a problem. But my neighbor simply having 10000000x more "wealth" than me isn't a problem. Great for them. Where things become a problem is when people can't afford their needs. But lets be honest about what needs really are. Housing/shelter's needs demand a space for someone to stay dry/warm, with a toilet and running water (to keep things sanitary). We don't "need" a 3500 sq ft mansion even if you are a family of 16. Though the trend year after year, is we're spending more and more money on bigger and bigger homes for smaller and smaller family sizes (see https://www.aei.org/carpe-diem/new-us-homes-today-are-1000-square-feet-larger-than-in-1973-and-living-space-per-person-has-nearly-doubled/ https://www.aei.org/carpe-diem/new-us-homes-today-are-1000-s...), which subsequently cost more and more money to heat/cool. Not to mention the fact that more people are getting mortgages for larger and larger and longer and longer amounts... there are even mentions of > 30 year mortgages on the horizon... while mortgages help you get into a home, the typical 30 year mortgage today results in you paying ~1.5x+ over the cost of the actual home (300k home costs ~450-550k depending on interest rates). Not too long ago, many people built their own homes, mortgage free. Yea, they weren't fancy homes. Typically a box with a roof. But they lived within their means. Back in the day more people heated homes "for free" using wood they chopped themselves back in the day. And few had AC (none did if you go back far enough). Back in the day people didn't have a microwave, toaster oven, toaster, oven, stove top, panini press, smoker, bbq, coffee maker, etc all in their one home. Depending on how far back you go, they had none of these things and still survived. Back in the day you didn't "need" the latest iPhone every 12-24 months, or the biggest TV. You didn't need a new car every X years. You didn't "need" an international vacation every few years. The point I'm trying to make is our spending habits can take on some amount of blame (how much can be argued)... especially when you consider the demand impact of everyone willing to overspend and go into debt on items they don't truly "need". Take a look at the FIRE community (financial independence, early retirement) and you'll see real life examples of people who scale back their living to their needs + a few wants, on small amounts of income and how they're able to still put money aside every month. The community tends to highlight those that can save 50%+ of their income on a 6 figure salary... but there are plenty of examples of people saving on small amounts of income. With all that being said, I'd agree income to house cost ratio isn't great in a lot of areas in the country, and is trending in the wrong direction. That's a problem. Healthcare's rising costs isn't great--that's a problem. But also keep in mind people are living longer now than ever before (https://www.statista.com/statistics/1040079/life-expectancy-united-states-all-time/ https://www.statista.com/statistics/1040079/life-expectancy-...), and I'd assume the longer people live the more expensive their healthcare becomes... so while this is a problem, I think it's false to say it was "solved" decades ago. Educational costs are skyrocketing too--that could be argued a problem. But there's also more of us spending more money going into more debt to get all of these things, driving the demand up for each of them. Massive corporations using anti-competitive practices to crush small up and coming competition is a problem. Companies failing to pay out a decent salary is a problem. I think there are things that need to be addressed when it comes to peoples ability to cover basic needs + some ideal wants. However I have yet to hear a convincing argument that my neighbor getting filthly rich somehow leads to my inability to afford my basic needs.
mattsoldo 6y ago
Thanks for posting the PG wealth tax article. It is a highly flawed analysis. First wealth appreciates over time. So if your wealth appreciates at 15% / year, and the govt. taxes it at 1%, the net effect is growth rate is slowed to 14%. With these assumptions, someone starting with $1mm in wealth ends up with $2.6 billion after 60 years! Second - PG ignores that most wealth tax proposals have a high minimum wealth - in the $50mm range. So there is no early compounding of the tax. Adding this into the model, the wealthy founder ends up with $3.3 billion after 60 years. With no wealth tax, this hypothetical founder ends up with $4.3 billion. So, yes the government has taxed a total of ~ 25% over 60 years, but the founder ends up quite wealthy.

amznbyebyebye 6y ago

It’s probably rich man guilt, plus some attempt at rationalization through cherry picked facts and data.. Also why I think bill gates >>> pg

anon_tor_12345 6y ago
>It’s probably rich man guilt it's hilarious to me how so many talking heads think the solution to guilt is more speech instead of praxis. you feel guilty about all of your wealth? give large sums of it away. charity works wonders for the guilty conscience (speaking from experience here). but that's unthinkable so they just go on engaging in this kind of sophistry. lays bare that they're not actually trying to cure their guilt but justify themselves.
- Der_Einzige 6y ago
  The kind of people who use the word "praxis" don't end up having good praxis 99% of the time.
  - anon_tor_12345 6y ago
    not sure what this means since i'm not a native english speaker - i understand praxis to mean something that you do instead of something that you say.
    - jdminhbg 6y ago
      In standard American English, 'praxis' is a Marxist shibboleth. For a non-loaded term, you can just use 'practice.'
      - anon_tor_12345 6y ago
        I'm not sure what marxism has to do with this (I don't think Marx wrote about charity) and although I'm not a native speaker I'm pretty good at syntax/semantics: >the solution to guilt is more speech instead of praxis vs >the solution to guilt is more speech instead of practice Second one is vague and unclear.
        FabHK 6y ago
        In English, the usual terms are theory and practice. Praxis is a synonym of practice, but it is rare and formal (for the marxist connection, see https://en.wikipedia.org/wiki/Praxis_School https://en.wikipedia.org/wiki/Praxis_School). At any rate, what you wanted to say is maybe best expressed as "the solution to guilt is more speech instead of action."
        anon_tor_12345 6y ago
        I'm well aware of both the colloquial use of practice and "marxist praxis". I was simply implying that, as written, my statement didn't intersect marxism in any way and therefore couldn't have been misunderstood as such without willful misunderstanding. Note that there are other uses of the word that also themselves don't intersect marxism in any way https://www.ets.org/praxis https://www.ets.org/praxis https://www.luc.edu/socialwork/praxis/ https://www.luc.edu/socialwork/praxis/ https://en.wikipedia.org/wiki/Apraxia https://en.wikipedia.org/wiki/Apraxia Furthermore the precise definition of praxis: >Praxis (from Ancient Greek: πρᾶξις, romanized: praxis) is the process by which a theory, lesson, or skill is enacted, embodied, or realized. "Praxis" may also refer to the act of engaging, applying, exercising, realizing, or practicing ideas. is exactly what I intended (since I believe pg, and others I was implicating, pontificate but don't do much).
i_haz_rabies 6y ago
I feel a certain degree of guilt over my (relatively low, even in Canada) developer salary. I didn't do anything to deserve my comfortable life. I can't imagine how people with billions sleep at night.

junippor 6y ago

Sloppy thinking too. > But at the moment at least, there is definitely something they share in common that distinguishes them. What retailer starts AWS? What car maker is run by someone who also has a rocket company? So your justification for how you're classify Amazon is something the company does (good) but your justification for how you're classifying Tesla is other things the CEO owns? Very sloppy, Paul. Very lazy.

deleted 6y ago
[deleted]
cupofcoffee 6y ago
I'm dying lol

sneak 6y ago

> At the end, there's a massive claim that isn't fully stated but implied. "Of course the Gini coefficient is increasing" translated means "income inequality is not a problem". Now, I can't speak to whether or not pg's implication here was intended and unsaid, or not intended: it is likely intentionally ambiguous. One thing I can speak to though is that it seems common now to read something as if the thing it implies is the thing the author actually intended to communicate. We should be quite careful with this sort of assumption. Sometimes it's a safe one, other times it is not.

WhompingWindows 6y ago

Paul Graham's articles always shoot immediately up to the top of HN, but I agree with you, they're generally cursory and pithy thoughts which don't convince my skeptical mind. I don't know, can someone explain why his work is so popular? Think of all the amazing writers across our civilization whose work is linkable, and we're worshipping these decent but not amazing blog posts?

blackshaw 6y ago
Because he's the founder of this website?
- lolive 6y ago
  Just like RMS is highly respected at the FSF :)
  - thought12342 6y ago
    I don't understand if your insulting RMS but the comparison is definitely insult to RMS. RMS is the legend.
  - true_religion 6y ago
    I understand the comparison, but the FSF can exist without RMS. PG on the other hand solely supports HN, I doubt he would continue to pay for a site that vilified him.
    - troygoode 6y ago
      This is incorrect. HN is run by Y Combinator; yes, PG started YC, but he retired from YC 7 years ago.
      - true_religion 6y ago
        Oh, I had thought he stepped down from the day to day role but still had significant investment and control. There are many firms where the owner is never present, but all employees know not to cross them. (E.g. Washington Post & Jeff Bezos).

tyre 6y ago

Add to that that tech companies concentrate wealth line never before. Airbnb takes a cut of transactions not only around the US but across the world. Not everyone works in the Bay Area, but how many of the founders, early employees, and VCs do? The ones who really make massive wealth? Not 100%, but most. Same with Stripe, the same with Facebook, Google, etc. we’re pulling tremendous wealth into a small area, with technology that can scale tremendously large businesses with fewer people. This isn’t to say that, for example, wealth from finance companies doesn’t centralize in New York and London. That’s bad too. It’s not to say that good things don’t come from these companies (though Facebook seems to be a net negative for humanity.) But this level of wealth concentration and inequality is detrimental to the fabric of a society. We’re not better off, we’re not more innovative, we’re not healthier or more cohesive or happier when this happens.

strikelaserclaw 6y ago
undoubtedly, i think theres a sweet spot for letting people gain rewards from their own hard work/talent/value creation, but i think as a society we are moving into the dangerous territory where that balance is totally skewed in one direction.
- VRay 6y ago
  You're looking mixing up cause and effect You're mad about "cause": Evil startup stiffs tons of small players across the world You're lashing out at "effect": Lots of money gets concentrated around the evil startup's headquarters A lot of really bad stuff has happened in history because of this sort of bad logic, so you really need to rethink your position
- Dracophoenix 6y ago
  First off, I really like your username! I'm sure you had a particular robotic animal in mind when you chose it. Secondly, a gain from one's own rewards is supposed to be in one direction. A person is entitled to the fruits of his labor. Not anyone else. There are only a few people at the top of any profession or activity. But this fact seems to be ignored for some "utopian" dream where the guilt or coercion of the successful compels, via self-abnegation, some "compensation" to the masses for the latter's lack of success. That the best are merely cogs to keep churning to the rhythms and dictates of his fellow man and of his government. That the best see no value in their own work or selves without others as their chief barometer. However, I don't see it argued that Usain Bolt should slow down so that he doesn't ruin the Olympic Sprint for the rest of his competitors. I don't see it argued that intelligent students should stop going to Harvard/Stanford/{take your pick} because such academic success makes everyone else look mediocre by comparison. Why should it be any different in Silicon Valley? Why should one accept inefficiency or inadequacy? It benefits no one to either become or accept a prize that is lesser in value than the sum of one's actions. Except perhaps for martyrs and masochists.

zone411 6y ago

>Firstly, Gini coefficient is based on income, not wealth. Huh? Gini coefficient can be based on wealth just as well as on income. For example: https://en.wikipedia.org/wiki/List_of_countries_by_wealth_equality https://en.wikipedia.org/wiki/List_of_countries_by_wealth_eq.... This essay doesn't specify which one PG is talking about.

BlargMcLarg 6y ago
Think the implicit meaning here is that Gini coefficient is often used only as an indicator of income inequality, not wealth inequality, despite it being usable for both. Usually one has to specify "wealth Gini coefficient", as most default to income otherwise.
- zone411 6y ago
  However, this essay is specifically about wealth so at most I'd criticize this use as somewhat ambiguous instead of assuming that PG meant income Gini and therefore confuses income with wealth.
  - whimsicalism 6y ago
    Having read a fair bit of discussion of inequality, I think that in any popular discussion if you see the phrase "gini coefficient" unqualified, you should presume it to be discussing income, even if the rest of the discussion was about wealth. It's a very pervasive error.

astura 6y ago

There's also the unstated implication that "anyone can do it if they work hard for it" - basically saying it used to be you had to be born into a wealthy family to be one of the richest people in the world and now you can be the richest person in the world based on merit alone (thus rich people are inherently meritorious).

evgen 6y ago
Somehow all of those explanations seem to gloss over the fact that you generally need to be born into a wealthy family in order to have the cushion to take the risks that allow you to collect billions. As an example, Paul Graham would have been far less likely to attend Cornell and Harvard if his father had a blue collar factory job instead of being a nuclear physicist. Almost none of the 'bootstrap billionaires' of the tech world come from less than an upper middle-class background, but like PG they are quite fond of suggesting that their success was entirely due to 'merit'.

prostoalex 6y ago

> "Of course the Gini coefficient is increasing" translated means "income inequality is not a problem". The book "The Great Leveler" https://www.goodreads.com/book/show/31951505-the-great-leveler https://www.goodreads.com/book/show/31951505-the-great-level... is probably the most comprehensive dive into history of inequality, and arrives at a fairly unexciting conclusion that periods of great inequality are correlated with significant economic growth (usually related to advances in automation, which tend not to be universally distributed) whereas periods of equality can generally be attributed to stagnation.

aardvarkr 6y ago
That’s a fascinating point!
uoaei 6y ago
That would seem to indicate that Goodhart's Law is in effect and not much more. At least, not until you demonstrate an analysis of quality of life during those same periods.
whimsicalism 6y ago
Growth from whom and stagnation for whom? If during this "stagnation", the level of societal wealth remains the same, but inequality decreases, that indicates massive utility gains due to decreasing marginal utility of wealth. Moreover, inequality now is extremely high, and growth is decelerating. China has less wealth inequality than the United States, yet is growing substantially faster.
- Aunche 6y ago
  > Moreover, inequality now is extremely high, and growth is decelerating. China has less wealth inequality than the United States, yet is growing substantially faster. Growth is a second derivative. Income inequality is a function of first derivatives. You can't directly compare the two. If I had to guess, China's wealth inequality in China is growing at a much faster rate than that of the US.
dnautics 6y ago

timkam 6y ago

I agree. To me, the post reads a bit like this: "Back then, we did not have as much inequality, but the super-rich did not deserve their wealth. Now, we have more inequality, but the super-rich [like PG himself] really deserve it, because they are innovators." The post does not cover the arguably more important questions like "Are the working and middle classes better off?", "Was there less innovation back then or were lesser paid innovators just as innovative?", and "Can we have as much or even more innovation with less inequality?".

gen220 6y ago
Yep, I think there’s a lazy argument that tends to get made to justify the status quo, namely that inequality is necessary for innovation. Of course it is, otherwise why take risks? But this does not justify the 1000x inequality that we have today separating CEOs from laborers and 10000x separating founders from laborers. What if those numbers were 100x and 5000x? Might we see even more innovation, and stronger communities? The payoffs figures of today are also used to justify truly stupid risks. There are ponzi scheme type people who would rather masquerade at being a founder 10 times over in search of getting lucky once, screwing over investors and laborers in the process. Maybe if the disparity weren’t so eye popping, the same people would go into other fields instead.
didibus 6y ago
You hit the nail on the head! It also didn't discuss that it seems more so that there is a new technology which is enabling a shift on riches, but it's likely that the next phase is one of inherited wealth again. Unless he believes that the children of those new fortunes won't inherit anything or will keep being surpassed in riches by the next generation startups. But I'm not so sure, I think it's just a cycle, refresh most company from a non tech based one to a tech one, and once that's done, it'll go back to consolidation and inheritance, until the next big technology.
whimsicalism 6y ago
Moreover, people seem to continuously forget the fact that half of all wealth in the United States is inherited by the top 5% wealthiest households, not 'earned' via value creation. In general, I tend to agree with Rawls that this notion of 'deserving' is irrelevant to the question of how we ought to distribute goods/welfare in society.

bambax 6y ago

The people he thanks for "having read drafts of this" are: - his two lifelong friends and business partners - his wife - two prominent libertarian economists. Missing from that list are his children and Peter Thiel.

bambax 6y ago
Yeah. My point is, PG's essays project objectivity and neutrality and even science; but in truth he has an agenda, and it's the same as Thiel's.

grenoire 6y ago

pg has been touting the statistics he's pulling out in here for a while on Twitter. I think he read these somewhere and started digging a bit more into it, constructed a narrative, and wrote an essay.

deleted 6y ago

[deleted]

closeparen 6y ago

These takes freak people out because we want to think of anti-inequality as a virtuous, prosocial belief. But a commitment to hold down inequality is a commitment to prevent the creation of value. I don’t think it’s controversial to skim the top of the creation of value / rise in inequality to fund services that people need. But as long as a founder’s share of his value creation is greater than the share accruing to the homeless person down the street, his enterprise is still promoting inequality. From an inequality frame, even with a 99% tax rate it ought to be stopped. There are more than 99 other Americans; the founder’s share is still outsized.

whimsicalism 6y ago
Is it? Does most inequality rise from value creation? Most wealth in America is held by the top 5% wealthiest households directly as a result of inheritance, not hard work or value creation. How is arguing that the inequality produced by inherited wealth needs to be restrained a "commitment to prevent the creation of value"?
- closeparen 6y ago
  No one is qualifying their discussion of inequality with “produced by inherited wealth.” If they did, it’d be a lot more palatable. About half the inequality discourse I see targets founders. The other half targets workers whose salaries are too high, whose children are too well prepared for college.

gopalv 6y ago

> people like me are creating a lot of value, please acknowledge it. Also there are no downsides to this accumulation of wealth That is an overstatement of the article, but the article is actually defending the rise in inequality as a nature of the world today with no guilt (of participation) about it. Reminds me of the call girls in H2G2 who specialize in sociology telling executives that it is okay to be rich and they earned every dollar in a dystopian war field (HanDod city?). It is extremely important for a creator to truly believe that "they built all this value" (non zero sum value and that is often true) and not merely built an efficient transfer mechanism into their pocket. This in contrast to something like Warren Buffet's "lottery of birth" statements. He is right about something though, the rules are the same as before. "Welcome all. Everyone can play, the winners get to keep playing, the rich can play longer even if they lose - those who play longest, win big. Just remember there are no second acts in american life". The winner-take-all only benefits those who can actually spread their investments around ,so that the investors can spread their money, but the workers can't spread their time around 10 possible jobs. Also, picking oil and 1982 feels odd considering half the "gas crisis of the 70s" highlighted why oil is critical. If I said medical tech would boom in the next five years, with vaccines for HIV and bespoke immune therapy for cancers, that would not be a bad bet because of the usual "events leading up to".

hardwaregeek 6y ago

> A French critic cleverly wrote that "with Autumn Sonata Bergman does Bergman." It is witty but unfortunate. For me, that is. I think it is only too true that Bergman (Ingmar, that is) did a Bergman.... I love and admire the filmmaker Tarkovsky and believe him to be one of the greatest of all time. My admiration for Fellini is limitless. But I also feel that Tarkovsky began to make Tarkovsky films and that Fellini began to make Fellini films. -- Ingmar Bergman And PG does PG. It's a classic pseudo-contrarian, startup rally cry, PG post. Which isn't to say it's worth getting annoyed at it. It's simply on brand.

john_moscow 6y ago

>At the end, there's a massive claim that isn't fully stated but implied. "Of course the Gini coefficient is increasing" translated means "income inequality is not a problem". To me, the implied message simply reads as "Startups and private equity is the number way to make money in 2021. Come do business with us." Makes sense given PG's primary business.

caminante 6y ago

>Secondly, there's absolutely no data on what proportion of income flows to which decile. Is this true? If I simply look at the Gini wiki, there are clearly tables showing this data with percentages of population by income brackets[0]. [0] https://en.wikipedia.org/wiki/Gini_coefficient#Limitations https://en.wikipedia.org/wiki/Gini_coefficient#Limitations See [Table C. Household money income distributions and Gini Index, US]

didibus 6y ago

> Of course the Gini coefficient is increasing Ya this confused me, because the geni coefficient measures inequality, the higher the number, the more inequality. > A Gini coefficient of one (or 100%) expresses maximal inequality among values So is PG saying it's normal the world is becoming less equal? Because of more people starting companies?

snicker7 6y ago

> Firstly, Gini coefficient is based on income, not wealth. The Gini coefficient can be applied to any statistical distribution, including wealth. From Wiki: > The Gini index or Gini ratio, is a measure of statistical dispersion intended to represent the income inequality or wealth inequality within a nation or any other group of people

the_local_host 6y ago

It definitely takes a bias toward "wealth accumulation is good" to present the following as good news: > "The reason the percentage of heirs has decreased is not that fewer people are inheriting great fortunes, but that more people are making them." It's likely that many of the inheritances of 1982 were the echo of the corrupt and monopolistic industrialism in the 19th century. Is it a bad thing that the great individual fortunes that were built a century earlier couldn't be amassed in the 20th? Have we returned to a 19th-century environment now, with technology taking the place of railroads and telegraphs? On that note... > "the major sectors of the economy were either organized as government-backed cartels or dominated by a few oligopolistic corporations." Unless I see a FAANG company go out of business, soon, and as abruptly as it appeared, I'm inclined to think we're entering a new oligopolistic era. Just because these companies were recently startups doesn't mean they aren't entrenched now. (As an aside regarding the wealth tax, that actually would have worked to reduce the number of heirs at the top of the list in 1982 had it been enacted some time earlier.)

m___ 6y ago
--"I'm inclined to think we're entering a new oligopolistic era. Just because these companies were recently start-ups doesn't mean they aren't entrenched" Your comment is on start to end, just to add, these "companies", are nothing more then dystopian mirrors to the public, their fronts(all individuals in the public eye, greatest example of a nobody(Leon Musk)) are just second rate actors. The virtualization of "finance", it's moral justification, nothing more is at stake. Real power, ...dwells in the shadows. This goes from the White House, to Hollywood, over Silicon Valley to Mar o Lago in the Swamp State. The measure of a dollar between a billionaire, and a homeless dweller as to the price of a loaf of bread is meaningless. What counts is the grab for the hard assets, power, control, that probably starts at multiple billions. A second measure of any meaning is the time line power and influence can be stretched. A professional politician is seriously handicapped there, hence the proof of the above as to what is "wealth".

thegrimmest 6y ago

Can I ask a related question? Why all the focus on income/wealth "inequality"? Shouldn't we be looking at the absolute baseline quality of life? Hasn't it been increasing dramatically despite increasing inequality? Due to technological advances, hasn't the baseline quality of healthcare, education, sanitation, nutrition, shelter, comfort, convenience, etc. significantly improved from the 60s or the 80s? If so, why begrudge the rich, especially those who have driven this advancement, their fleets of yachts?

kkoncevicius 6y ago
Social status is by comparison, that's why. I assume the vast majority of people would choose to be in the aristocracy somewhere in 1300 Europe, compared to middle class today. Even if objectively the middle class has better quality of life.
- thegrimmest 6y ago
  Why on earth would you assume that? Middle Ages aristocracy lived comparatively miserable lives - no daily hot shower, no climate control, nothing resembling health care, no running water or sanitation, no access to information, no international supply chain for food or products (eat only what your community can preserve for the winter). I would wager that any of those aristocrats would gladly amputate their limbs to live as an average person today.
  - dsq 6y ago
    Interesting to think of, let's say, one of our society's upper class given the opportunity to be a 'regular' person X years from now. Rejuvenation, instant cure for any illness, pain or wound, immersion into world spanning super intelligence, gratification of any physical or emotional desire, personal host of robotic servants, etc. The price is that they would be regular, that is, devoid of superior wealth or power. Would they take it?
hn_throwaway_99 6y ago
Three problems: 1. Humans are humans, and they pretty much always judge their success by comparing themselves to others. Or, rather, humans are primates. Take a look at the famous study of the monkey that got cucumber while the other monkey got tastier grapes. 2. Income inequality in and of itself can be a problem because the mega wealthy can essentially buy laws that benefit themselves. There have been many studies that show that politicians are much more responsive to the desires of the rich than the desires of the average person. 3. In any economy, limited resources always go to those on the top of the wealth graph, regardless of cost to produce. So while you may be able to say everyone's standard of living is better, that's cold comfort to someone who won't be able to buy a house in their lifetime because limited land supply goes to the richest.

Logon90 6y ago

Not exactly desperate, however much pretense we can muster :/

dheera 6y ago

It would be very interesting to re-order the list by the amount of liquid wealth that each person owns, not including fake founder stock wealth that can't be e.g. theoretically sold overnight to avert a world disaster -- very different from someone with an actual pile of cash or bonds or gold. Consider someone's effective wealth as the amount of liquid USD they could hypothetically produce in a 24 hour period by selling all of their assets, including market dynamics, and then tell me who the top 100 richest people are.

ahthat 6y ago

I don’t think PG is necessarily saying that income inequality is not a problem. This is disingenuous on your part. Saying “of course the Gini coefficient is increasing” does not necessarily translate to “income inequality is not a problem.” Rather, what he is to my mind correctly pointing out is that the entire situation regarding wealth accumulation, distribution, and class mobility is perhaps more nuanced than we typically understand it to be. Indeed, he points out that it is in fact easier in some major ways, which is a wonderful thing to realize. This does not necessarily mean that income inequality does not exist or is not a problem. There may still be ways in which it is. Instead, it is good to acknowledge that the ability to build wealth through starting businesses is, in his particular lens, better than it has ever been. Further, I think it is disingenuous to compact PGs meaning to “‘people like me are creating a lot of value, please acknowledge it. Also there are no downsides to this accumulation of wealth.’ ... it just seems like a desperate play to keep his wealth intact.” So much of the time argument betrays the arguer and rather demonstrates a perverse inclination to emotions such as jealousy rather than reasoned indifference. Why is he desperate in this case? Is he afraid of people taking his money away from him? Are there people actively attempting to do so? Is this not a natural human inclination? Is this something that only affects the wealthy? Do not all of us to a certain degree wisely protect what we have earned? It has indeed gone out of fashion to point out that the rewards of benefitting society are equal to the benefit ie what society is willing to pay for those benefits (if not less so, due to the existence of taxes). We should first admit that society is made of industrious and lucky individuals by varying degrees, admit this, and then stave away jealousy at the success of those more industrious and lucky than you or me - for success coming to the industrious and lucky remains just despite the existence of those who pursue lives of industry and are not as lucky. It is out of fashion to point out the simple and bare fact that ambition to improve the world is amplified in the environment where it is incentivized: if this be done through the respect garnered as a result of benefitting the world, that is great; if this be done as a result of rewarding the creator of those benefits commensurate to the benefits given, that is great also. In either case, the results are amplified; with both cases the results are amplified still further by the addition of the incentives. Yes, indeed the numbers by certain statistical methods appear disproportionate within studies of income inequality. Yet, simply because these figures impress upon us a knee-jerk reaction to decry the accumulation of great wealth by the few as unfair, does not make it so; it does not necessarily mean that something is wrong that these results should be allowed to occur. So long as the majority of we who inhabit the economy are not actively oppressed by the creators of great wealth, so long as our freedoms are not taken away, no reasoned argument can point to why the accumulation of great wealth is a damaging thing. Indeed, if it results from the great mutual benefit to society, this is in fact a very good thing. So long as the accumulators of such great wealth are not oppressing the majority of participants of the economy, the accumulation of great wealth ought to be a sign of the great benefits that the accumulators are providing to society, as it is society, as has now been remarked a number of times in this comment, that is paying for it. Indeed, if we continue to demonize wealth creators and go on to pass reforms that remove incentives to wealth creation, we would only de-incentivize the creation of future benefits to ourselves as members of society. Further, with certain reforms that constitute graded barriers to success, the freedom of economic mobility then being lessened, the entire economy and state as a whole is then oppressed by degrees - the oppression is then rather achieved by those who have sought to fix the “problem”. I’m not saying that income inequality does not exist - I’m saying that in this particular form the fact that there are disparities in income is not unfair, and that results from the just distribution of benefit to society that society is happy to pay for is not necessarily unjust by statistical analysis of income data alone.

newsclues 6y ago

Once you get to a point, preservation of wealth is the most important thing.

heMan09 6y ago

He’s a man of his youth; when you could start a garage band and have a modicum of success, then carry it forward with sound fiscal choices. Concepts like inflation, and buying power are lost on someone of PG’s wealth. He’s completely detached from the modern reality: content and options are ubiquitous relative to PG’s golden years. It’s the same with Marc Andreesen and his call to build; hey Marc why not build a progressive tax system that enabled your generation and your parents to explore as they chose instead of suggesting we all just rally behind a billionaires blog post? These guys are visible because they “won” an ephemeral challenge most people aren’t even aware of. It’s stunning how smart folks seem oblivious to the extent which relativity commands reality.

slibhb 6y ago

> It just seems like a desperate play to keep his wealth intact. To me this dismissal reads as a little blithe. Is it true that, now more than in the past, the rich are getting rich by innovating? I don't see you engaging with that argument. Clearly people who create successful businesses add value. Clearly Jeff Bezos has added a lot of value. That doesn't mean he shouldn't be taxed but I constantly see people talking about Bezos as if he's an evil capitalist oppressor who has stolen his wealth from virtuous laborers. To me it seems obvious that Bezos' personal wealth is a drop in the bucket compared to the value he's added to the world (hundreds of thousands of jobs, changed the way we buy things). It's totally fine to be in favor of higher taxes but it shouldn't be because you hate rich people or you think they are greedy parasites. Unfortunately I see a lot of that going around.

tubularhells 6y ago

I had the same feeling skimming through the post. What a despicable person this PG turned out to be.

TacticalCoder 6y ago
People are entitled to their opinions and there's no need to namecall on HN.

camhart 6y ago

Is income inequality a problem? In my opinion, the real problem would more accurately be defined as peoples inability to afford their basic needs: housing, food, and to a degree healthcare. Some might argue to throw education/training into the mix as well, and I wouldn't fight that too much as long as people remember more affordable options like community/technical colleges. Many who argue income inequality is a problem tend to imply that it means people can't afford their basic needs. I agree if people can't afford basic needs that's a problem. But my neighbor simply having 10000000x more "wealth" than me isn't a problem. Great for them. Where things become a problem is when people can't afford their needs. But lets be honest about what needs really are. Housing/shelter's needs demand a space for someone to stay dry/warm, with a toilet and running water (to keep things sanitary). We don't "need" a 3500 sq ft mansion even if you are a family of 16. Though the trend year after year, is we're spending more and more money on bigger and bigger homes for smaller and smaller family sizes (see https://www.aei.org/carpe-diem/new-us-homes-today-are-1000-square-feet-larger-than-in-1973-and-living-space-per-person-has-nearly-doubled/ https://www.aei.org/carpe-diem/new-us-homes-today-are-1000-s...), which subsequently cost more and more money to heat/cool. Not to mention the fact that more people are getting mortgages for larger and larger and longer and longer amounts... there are even mentions of > 30 year mortgages on the horizon... while mortgages help you get into a home, the typical 30 year mortgage today results in you paying ~1.5x+ over the cost of the actual home (300k home costs ~450-550k depending on interest rates). Not too long ago, many people built their own homes, mortgage free. Yea, they weren't fancy homes. Typically a box with a roof. But they lived within their means. Back in the day more people heated homes "for free" using wood they chopped themselves back in the day. And few had AC (none did if you go back far enough). Back in the day people didn't have a microwave, toaster oven, toaster, oven, stove top, panini press, smoker, bbq, coffee maker, etc all in their one home. Depending on how far back you go, they had none of these things and still survived. Back in the day you didn't "need" the latest iPhone every 12-24 months, or the biggest TV. You didn't need a new car every X years. You didn't "need" an international vacation every few years. The point I'm trying to make is our spending habits can take on some amount of blame (how much can be argued)... especially when you consider the demand impact of everyone willing to overspend and go into debt on items they don't truly "need". Take a look at the FIRE community (financial independence, early retirement) and you'll see real life examples of people who scale back their living to their needs + a few wants, on small amounts of income and how they're able to still put money aside every month. The community tends to highlight those that can save 50%+ of their income on a 6 figure salary... but there are plenty of examples of people saving on small amounts of income. With all that being said, I'd agree income to house cost ratio isn't great in a lot of areas in the country, and is trending in the wrong direction. That's a problem. Healthcare's rising costs isn't great--that's a problem. But also keep in mind people are living longer now than ever before (https://www.statista.com/statistics/1040079/life-expectancy-united-states-all-time/ https://www.statista.com/statistics/1040079/life-expectancy-...), and I'd assume the longer people live the more expensive their healthcare becomes... so while this is a problem, I think it's false to say it was "solved" decades ago. Educational costs are skyrocketing too--that could be argued a problem. But there's also more of us spending more money going into more debt to get all of these things, driving the demand up for each of them. Massive corporations using anti-competitive practices to crush small up and coming competition is a problem. Companies failing to pay out a decent salary is a problem. I think there are things that need to be addressed when it comes to peoples ability to cover basic needs + some ideal wants. However I have yet to hear a convincing argument that my neighbor getting filthly rich somehow leads to my inability to afford my basic needs.

mattsoldo 6y ago

Thanks for posting the PG wealth tax article. It is a highly flawed analysis. First wealth appreciates over time. So if your wealth appreciates at 15% / year, and the govt. taxes it at 1%, the net effect is growth rate is slowed to 14%. With these assumptions, someone starting with $1mm in wealth ends up with $2.6 billion after 60 years! Second - PG ignores that most wealth tax proposals have a high minimum wealth - in the $50mm range. So there is no early compounding of the tax. Adding this into the model, the wealthy founder ends up with $3.3 billion after 60 years. With no wealth tax, this hypothetical founder ends up with $4.3 billion. So, yes the government has taxed a total of ~ 25% over 60 years, but the founder ends up quite wealthy.