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I think this is a very smart piece. It exposes very clearly that money is not value. You can bundle existing value from one side, add maybe an extra bit here a

I think this is a very smart piece. It exposes very clearly that money is not value. You can bundle existing value from one side, add maybe an extra bit here and there and collect money for the process. But how much money you collected in the end has very little relation to how much value you added to the system. Especially since some of the shareholders did absolutely no value creation. Jeff Benzos is a very smart person and an excellent CEO. He used to work for the Renaissance Fund as well. I really wish I could hear his honest opinion on this piece. He will most likely never read it but I hope he would and I hope he took the time to reply with honesty and no ego.

Grimm1 5y ago
I think it quibbled over standard language that every business uses in it's releases and used Bezos as a whipping post to make a point because it wouldn't have gotten traction otherwise.
- jdmoreira 5y ago
  So what? That’s why is meaningful. It exposes falsehood that we are too distracted to see and understand. I for one appreciate having my mind blown once in a while and my dogmas questioned.
  - gitanovic 5y ago
    This I also read the letter from Bezos and thought "ok is just useless propaganda" But having someone break it down for me and questioning every statement, was somewhat useful, and possibly increased my awareness to this kind of krap... ehm double standards
Kranar 5y ago
I thought it was poorly written and fails to understand some simple financial terms. When people say value is created for shareholders, they don't mean shareholders created that value; they mean that the value of the thing owned by shareholders has increased. I own shares of a company (I am therefore a shareholder), if the value of that company increases then the value I own as a shareholder increases, hence value was created for me as the shareholder. This is such a basic principle that the author failing to understand this is kind of embarrassing. There are other basic things the article gets wrong, like saying that bartering doesn't create value which is patently false. Bartering does in and of itself create value by allocating resources to those who wish to consume it. When Alice trades an apple with Bob for a potato, it's usually done because Alice has a need for a potato and doesn't have a need for the apple, and vice versa for Bob, hence the allocation of apples and potatoes goes to where it's most desired. This increases the efficiency of resource allocation which in and of itself creates value. Furthermore the bartering in and of itself causes an incentive to produce more apples and potatoes. Honestly this is really basic stuff and not worth writing an entire article bickering over semantics.
- MattRix 5y ago
  Maybe you need to read the article again, because in this comment you are conflating different kinds of “value” as if they are all equally meaningful.
- burkaman 5y ago
  > When people say value is created for shareholders From the Bezos letter: "Summarizing: Shareholders $21B Employees $91B 3P Sellers $25B Customers $164B Total $301B" This article is criticizing "employee value" and "customer value", not shareholder value.
- LeifCarrotson 5y ago
  This is a philosophical piece, the fact that it's really basic stuff is exactly why an entire blog post (better yet, a journal article or book) should be written to bicker over those semantics. Those financial terms are loaded with meaning and the author believes that meaning to be invalid; the semantics are the entire point. What does it mean to 'create value'? As a passive shareholder who does nothing but own shares that increase in value, have you actually created anything? How can you have created value without creating anything? If Alice values potatoes at 1.01 apples and Bob values apples at 1.01 potatoes, and they trade, maybe they've created 0.01 apples worth of value but they certainly have not created two, they started with two and ended with approximately two. If they change their mind and trade back, they've not created 0.02 apples worth of value, they've revealed that the whole thing was a waste of time. If the value of your time is $14.95 an hour, and you get an Amazon job making $15 an hour, Amazon's addition to the economy is $0.05 per hour not $15. No, it's the farmer who starts with dirt, water, sunshine and diesel and grows the apples and potatoes who is creating value. "Efficiency of resource allocation" are a lot of big words that do little more than justify the speaker diverting a little of the revenue stream to themselves. Money is only very loosely connected to value creation, because there are two separate factors that tie them together: The amount of value your work adds to society, and your ability to extract money from society. The whole point is that no human, not even Jeff Bezos, can generate 200 billion dollars worth of value by working. Not by carrying a lot of boxes really fast, nor by thinking really hard, nor by working long hours; not even if he pushes even more boxes while thinking really bright ideas while saving time by peeing in a bottle instead of going to the bathroom, he's simply not that many orders of magnitude smarter or stronger or more dedicated than other humans. And yet his net worth is close enough to $200B that it makes sense to round up about $1.7 billion dollars worth of value, while other people are carrying boxes for $15 an hour and are orders of magnitude away from rounding up to a net worth of $0.1 billion dollars. The disparity between value generated and money extracted is the core injustice that the open letter glosses over with casual semantics and that the article seeks to understand and expose by being unconventionally precise.
igorzx31 5y ago
Jeff Bezos worked at D.E. Shaw not Renaissance Technologies. Different funds.
- jdmoreira 5y ago
  Thanks! I must have mixed it up in my mind. Wetware Memory sucks.
throwaway789394 5y ago
Sounds like labor theory of value. Not really that great of a theory.
MR4D 5y ago
> that money is not value. Very much so! Money is a tool used for accounting, while value is a system for perception. They interact, but as you say, are not the same.
dools 5y ago
I wish someone would change the dictionary definition of money to “record of value” rather than “store of value”. It would clear up a lot of economic misconception.

Grimm1 5y ago

I think it quibbled over standard language that every business uses in it's releases and used Bezos as a whipping post to make a point because it wouldn't have gotten traction otherwise.

jdmoreira 5y ago
So what? That’s why is meaningful. It exposes falsehood that we are too distracted to see and understand. I for one appreciate having my mind blown once in a while and my dogmas questioned.
- gitanovic 5y ago
  This I also read the letter from Bezos and thought "ok is just useless propaganda" But having someone break it down for me and questioning every statement, was somewhat useful, and possibly increased my awareness to this kind of krap... ehm double standards

Kranar 5y ago

I thought it was poorly written and fails to understand some simple financial terms. When people say value is created for shareholders, they don't mean shareholders created that value; they mean that the value of the thing owned by shareholders has increased. I own shares of a company (I am therefore a shareholder), if the value of that company increases then the value I own as a shareholder increases, hence value was created for me as the shareholder. This is such a basic principle that the author failing to understand this is kind of embarrassing. There are other basic things the article gets wrong, like saying that bartering doesn't create value which is patently false. Bartering does in and of itself create value by allocating resources to those who wish to consume it. When Alice trades an apple with Bob for a potato, it's usually done because Alice has a need for a potato and doesn't have a need for the apple, and vice versa for Bob, hence the allocation of apples and potatoes goes to where it's most desired. This increases the efficiency of resource allocation which in and of itself creates value. Furthermore the bartering in and of itself causes an incentive to produce more apples and potatoes. Honestly this is really basic stuff and not worth writing an entire article bickering over semantics.

MattRix 5y ago
Maybe you need to read the article again, because in this comment you are conflating different kinds of “value” as if they are all equally meaningful.
burkaman 5y ago
> When people say value is created for shareholders From the Bezos letter: "Summarizing: Shareholders $21B Employees $91B 3P Sellers $25B Customers $164B Total $301B" This article is criticizing "employee value" and "customer value", not shareholder value.
LeifCarrotson 5y ago
This is a philosophical piece, the fact that it's really basic stuff is exactly why an entire blog post (better yet, a journal article or book) should be written to bicker over those semantics. Those financial terms are loaded with meaning and the author believes that meaning to be invalid; the semantics are the entire point. What does it mean to 'create value'? As a passive shareholder who does nothing but own shares that increase in value, have you actually created anything? How can you have created value without creating anything? If Alice values potatoes at 1.01 apples and Bob values apples at 1.01 potatoes, and they trade, maybe they've created 0.01 apples worth of value but they certainly have not created two, they started with two and ended with approximately two. If they change their mind and trade back, they've not created 0.02 apples worth of value, they've revealed that the whole thing was a waste of time. If the value of your time is $14.95 an hour, and you get an Amazon job making $15 an hour, Amazon's addition to the economy is $0.05 per hour not $15. No, it's the farmer who starts with dirt, water, sunshine and diesel and grows the apples and potatoes who is creating value. "Efficiency of resource allocation" are a lot of big words that do little more than justify the speaker diverting a little of the revenue stream to themselves. Money is only very loosely connected to value creation, because there are two separate factors that tie them together: The amount of value your work adds to society, and your ability to extract money from society. The whole point is that no human, not even Jeff Bezos, can generate 200 billion dollars worth of value by working. Not by carrying a lot of boxes really fast, nor by thinking really hard, nor by working long hours; not even if he pushes even more boxes while thinking really bright ideas while saving time by peeing in a bottle instead of going to the bathroom, he's simply not that many orders of magnitude smarter or stronger or more dedicated than other humans. And yet his net worth is close enough to $200B that it makes sense to round up about $1.7 billion dollars worth of value, while other people are carrying boxes for $15 an hour and are orders of magnitude away from rounding up to a net worth of $0.1 billion dollars. The disparity between value generated and money extracted is the core injustice that the open letter glosses over with casual semantics and that the article seeks to understand and expose by being unconventionally precise.

igorzx31 5y ago

Jeff Bezos worked at D.E. Shaw not Renaissance Technologies. Different funds.

jdmoreira 5y ago
Thanks! I must have mixed it up in my mind. Wetware Memory sucks.

throwaway789394 5y ago

Sounds like labor theory of value. Not really that great of a theory.

MR4D 5y ago

> that money is not value. Very much so! Money is a tool used for accounting, while value is a system for perception. They interact, but as you say, are not the same.

dools 5y ago

I wish someone would change the dictionary definition of money to “record of value” rather than “store of value”. It would clear up a lot of economic misconception.