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Risk. Taking risk, usually with leverage, is almost always required. I predicted Bitcoin could hit $50k back before it was worth ten bucks. But I was off a fai

Risk. Taking risk, usually with leverage, is almost always required. I predicted Bitcoin could hit $50k back before it was worth ten bucks. But I was off a failed startup at the time, so I only acquired 120 bitcoins, partially from some mild day trading to bring my dollar cost average to four bucks. I could have gone deep into debt. Risking the family money, but you know what? I didn't. Why? Because I didn't want my parents to lose $100k if I was wrong, and even though I thought it could 5000x, I was only about 20% sure. I'm fully out of crypto now, and I made a good return, but you know what? $300m? I could have been a billionaire, which I don't think would have been good for my soul, but still. The system that allocates capital selects people that don't make the same decision. Because so many of the gains of modern technology are exponential, the system rewards people that take risk even if there are downside consequences to other people and even if the likelihood of any one person taking such risks succeeding is low.

nerdponx 5y ago
I think this lies at the heart of what makes so many people uncomfortable with ultra-wealth. Put aside all of the adverse incentives that go along with accumulating so much power and control over people, politics, capital, etc. It's random. The rewards (infinite cosmic power, more or less) are disproportionate with the risk. Some/many people take greater risks with no hope of even a fraction of equivalent reward. Nobody denies that the billionaires of this world worked and work hard for their billions. Some might have even taken great risks. But there is little sense of justice in it. "Why should they get billions while I work just as hard as them? Because they happened to have that one good idea?" This is where the Marxists sweep in and wow everyone with their promise of a different way. I'm not convinced, but I definitely see the appeal.
- 3pt14159 5y ago
  Thanks for the thoughtful response. I'll say this: Billionaires do not have infinite cosmic power. If they, and they alone, achieved indefinite longevity then we could start to talk about this, but they're no demiurges or immortals. Even with some extra tech, the heat death of the universe awaits them eventually. Plus I have yet to see a convincing proof for the non-existence of God, so there's that too, but HN isn't the place for religious discussion. That said, I can't believe what we're letting them get away with. This is ridiculous. They don't pay taxes until they sell their shares, so they just make their interests into business divisions. Interested in space exploration? Make a rocket division of the company! Hire people around the world without ever paying into their education systems or infrastructure! If there weren't so many arms races in the economy then it wouldn't really matter how much wealth the individuals at the top accrue, but there are and the productivity gains from all the technology advancement over the past 70 years are consolidating in the hands of the very few and the same very few are using wealth to shape media narratives and political policy via lobbying. I'm not against inequality, I'm against the ever-more-expensive homes, healthcare, and tuition. Some billionaires fund important, life saving work, but so many don't and we don't have accept the system as it is. For example, we could force them to pay taxes on their capital gains before they sell if the current market value is more than 10x what they acquired them at. We could ensure that capital gains taxes were similar to income taxes for founders to stop the problem of a founder's income being mostly capital appreciation.
  - wombatmobile 5y ago
    > I can't believe what we're letting them get away with. If you consider that billionaires only personally consume a sliver of their net worth, what are they actually getting away with? For example, say a billionaire consumes $100K worth of food, $20K worth of gasoline and jet fuel, and $1m of clothing, entertainment, baubles, prostitution and medical services per year. What happens to the rest of her wealth? It's tied up in investments: $500m in shares of company X $100m in shares of company Y $100m in a mutual funds $100m in real estate (houses and land for personal use) $100m in a philanthropic fund $ 98m in artwork What do you find so objectionable about this?
    - LimaBearz 5y ago
      Not OP but I think that most people don’t have any issue with this what so ever. What people do have a problem with though is them skirting tax laws with hacks, loopholes, regulatory capture, and controlling the conservation propping themselves up as economic Jesus’es. Of of late a decent majority is starting to notice that there wage has been stagnated but that billionaires assets seem to grow irregardless of market trends or what the economy is doing. Most people I think are fine with their existence and good for them for doing good at the business game but theyre only one facet of of the economy, and while they’re doing great everyone else arguably isn’t getting better
      - wombatmobile 5y ago
        OK, thanks. I have two questions. 1. If I were to lend you the deluxe magic wand, what changes would you decree that would cause everyone else to get better? Now let's quantify the effect of those changes. 2. If instead of the billionaires getting richer next year, rather, because of your changes, the delta of their projected wealth increase goes to everybody else, how much better off would that make the average person?
        nerdponx 5y ago
        The average person isn't necessarily the problem. Start with the people who benefit the most from the least help. Steady access to decent food, clean water, safe non-toxic housing, and preventative healthcare. Is that so much to ask for?
- sumedh 5y ago
  > Because they happened to have that one good idea?" Or crushed other people's ideas using unfair competition.
JKCalhoun 5y ago
When we were young and poor and bought used car A instead of used car B it was impossible to look back and decide that you maybe had made a poor financial decision at that time. When your financial decisions though involve publicly traded assets, it is painfully easy to go back and with precision determine the exact amount you missed out on because of your risk aversion.
smolder 5y ago
Yeah. There is risk in terms of financial exposure, which the rich can take lots of, and do, with great benefit, and there's risk in terms of outcome for the individual, which is everywhere for the poor and entirely optional for the rich.

nerdponx 5y ago

I think this lies at the heart of what makes so many people uncomfortable with ultra-wealth. Put aside all of the adverse incentives that go along with accumulating so much power and control over people, politics, capital, etc. It's random. The rewards (infinite cosmic power, more or less) are disproportionate with the risk. Some/many people take greater risks with no hope of even a fraction of equivalent reward. Nobody denies that the billionaires of this world worked and work hard for their billions. Some might have even taken great risks. But there is little sense of justice in it. "Why should they get billions while I work just as hard as them? Because they happened to have that one good idea?" This is where the Marxists sweep in and wow everyone with their promise of a different way. I'm not convinced, but I definitely see the appeal.

3pt14159 5y ago
Thanks for the thoughtful response. I'll say this: Billionaires do not have infinite cosmic power. If they, and they alone, achieved indefinite longevity then we could start to talk about this, but they're no demiurges or immortals. Even with some extra tech, the heat death of the universe awaits them eventually. Plus I have yet to see a convincing proof for the non-existence of God, so there's that too, but HN isn't the place for religious discussion. That said, I can't believe what we're letting them get away with. This is ridiculous. They don't pay taxes until they sell their shares, so they just make their interests into business divisions. Interested in space exploration? Make a rocket division of the company! Hire people around the world without ever paying into their education systems or infrastructure! If there weren't so many arms races in the economy then it wouldn't really matter how much wealth the individuals at the top accrue, but there are and the productivity gains from all the technology advancement over the past 70 years are consolidating in the hands of the very few and the same very few are using wealth to shape media narratives and political policy via lobbying. I'm not against inequality, I'm against the ever-more-expensive homes, healthcare, and tuition. Some billionaires fund important, life saving work, but so many don't and we don't have accept the system as it is. For example, we could force them to pay taxes on their capital gains before they sell if the current market value is more than 10x what they acquired them at. We could ensure that capital gains taxes were similar to income taxes for founders to stop the problem of a founder's income being mostly capital appreciation.
- wombatmobile 5y ago
  > I can't believe what we're letting them get away with. If you consider that billionaires only personally consume a sliver of their net worth, what are they actually getting away with? For example, say a billionaire consumes $100K worth of food, $20K worth of gasoline and jet fuel, and $1m of clothing, entertainment, baubles, prostitution and medical services per year. What happens to the rest of her wealth? It's tied up in investments: $500m in shares of company X $100m in shares of company Y $100m in a mutual funds $100m in real estate (houses and land for personal use) $100m in a philanthropic fund $ 98m in artwork What do you find so objectionable about this?
  - LimaBearz 5y ago
    Not OP but I think that most people don’t have any issue with this what so ever. What people do have a problem with though is them skirting tax laws with hacks, loopholes, regulatory capture, and controlling the conservation propping themselves up as economic Jesus’es. Of of late a decent majority is starting to notice that there wage has been stagnated but that billionaires assets seem to grow irregardless of market trends or what the economy is doing. Most people I think are fine with their existence and good for them for doing good at the business game but theyre only one facet of of the economy, and while they’re doing great everyone else arguably isn’t getting better
    - wombatmobile 5y ago
      OK, thanks. I have two questions. 1. If I were to lend you the deluxe magic wand, what changes would you decree that would cause everyone else to get better? Now let's quantify the effect of those changes. 2. If instead of the billionaires getting richer next year, rather, because of your changes, the delta of their projected wealth increase goes to everybody else, how much better off would that make the average person?
      - nerdponx 5y ago
        The average person isn't necessarily the problem. Start with the people who benefit the most from the least help. Steady access to decent food, clean water, safe non-toxic housing, and preventative healthcare. Is that so much to ask for?
sumedh 5y ago
> Because they happened to have that one good idea?" Or crushed other people's ideas using unfair competition.

JKCalhoun 5y ago

When we were young and poor and bought used car A instead of used car B it was impossible to look back and decide that you maybe had made a poor financial decision at that time. When your financial decisions though involve publicly traded assets, it is painfully easy to go back and with precision determine the exact amount you missed out on because of your risk aversion.

smolder 5y ago

Yeah. There is risk in terms of financial exposure, which the rich can take lots of, and do, with great benefit, and there's risk in terms of outcome for the individual, which is everywhere for the poor and entirely optional for the rich.