32 ms·

A catalog of wealth-creation mechanisms (2009)

306 points by xojoc 5y ago

streamofdigits 5y ago
I am surprised education does not figure more prominently in 9. In a sense all wealth is created through education (a newborn child knowns nothing about "wealth"). NB: Education is not just the "provision of information" or "help with figuring out the rules" (although there are aspects of both).
rootsudo 5y ago
While I agree these are "wealth creation" mechanisms, what the blog describes is market (economy) inefficiencies that enable arbitrage. So by spotting an inefficiency and exploiting it, you profit. tl;dr explore and exploit.
- dandare 5y ago
  You are wrong in a very classical, meaning half of earthlings believe this misconception. Trade can make both sides richer. Some would say any voluntary trade makes both sides richer, but that depends on your definition of voluntarism and exploitation of someone's weakness. Anyway, for trade that makes both sides really richer in any sense of that word see https://en.wikipedia.org/wiki/Comparative_advantage#Ricardo's_example https://en.wikipedia.org/wiki/Comparative_advantage#Ricardo'...
  - rootsudo 5y ago
    I disagree (again) because knowing something sells for a lower amount in X but sells for higher in Y is classical information arbitrage and opportunity cost.
Borrible 5y ago
Fasten, widen and simplify communication space. Entertain communicants for free. Boost individuality and ego of communicants or tweak according to demand. Sell the inflated souls to the highest bidder.
- silicon2401 5y ago
  > fasten This should be speed up or accelerate: https://www.merriam-webster.com/dictionary/fasten https://www.merriam-webster.com/dictionary/fasten
  - Borrible 5y ago
    Thank you, much appreciated. Most people are reluctant to improve non-native speakers. Which I personally think is a pity.
peterburkimsher 5y ago
The article is a good summary of typical business models! I also learned a lot by trying to answer the (Bonus question: what did the U.S. give to China in exchange for its china?) - fur and opium. https://en.wikipedia.org/wiki/Old_China_Trade https://en.wikipedia.org/wiki/Old_China_Trade The article lists the following: Move, Store, Transform, Farm, Build, Mine, Health, Research, Information (Supply/Demand, Law, Journalism). I'm pretty sure this is a comprehensive list. Can anyone think of anything I've left out? Music and art come to mind as not being "useful information" but still appealing, because they reflect and enhance culture, which brings people together. As for wealth storage, I heard another list of investment advice being told on a Sunday morning: stocks, bonds, and property. I winced, because I don't trust the stock market (even though I do believe that some companies have great potential. Government bonds require political stability, which I worry about. Property values are destroyed in war or natural disasters, both of which I expect are likely to occur in my lifetime. What could we invest in instead? Philanthropy. We could just give it all away! Building guanxi will endure even huge economic changes. Laptops and phones come and go, but Hacker News karma is forever ;-) https://news.ycombinator.com/item?id=28004632 https://news.ycombinator.com/item?id=28004632
- TeMPOraL 5y ago
  I was curious, so I looked it up: the missing category is energy. https://blog.rongarret.info/2009/10/wealth-production-mechanisms-followup.html https://blog.rongarret.info/2009/10/wealth-production-mechan... > Producing, storing, converting, and transporting energy is what I had in mind as the missing top-level category.
zakary 5y ago
Great article. I’ve always been fascinated by the question “where does the value of things really come from?” And this article touches on that. Everything ultimately goes back to the fundamental ways we create wealth, and how much time and energy we expend doing it. The article mentions No.3 as containing most services which involve transforming goods. I wonder where do personal services like massage, and prostitution come into that? Or what about friendship or a romantic partner? A husband or wife cannot be converted into money but I’d say having one is to most people a definite kind of wealth. You might call these ‘emotional services’, and group them in with art and entertainment in general. I would say this is at least different enough from manufacturing to warrant their own category. Edit: rewording
- mbg721 5y ago
  While economics might have some insight into how people value things, humans don't really treat everything as a transaction. The story that comes up from time to time is a day-care that charged fees to parents who arrived late, and that caused more tardiness, because now the parents didn't feel guilty; now they were buying something.
  - zakary 5y ago
    I hadn’t heard of the day care example before . That’s really interesting.
- pjc50 5y ago
  One of the core strands of postwar feminism has been examining how much uncompensated domestic labour women are expected to perform, not just for their partner and their children but also for other family members. Especially in the context of care for the old or sick. The term "emotional labour" is the more common used one for what you've described as "emotional services".
  - zakary 5y ago
    Emotional Labour is definitely the better term for it. Thank you for giving me the right term to google. I wonder how much of the ‘economy’ (in terms of work done and the dollar figures we put on that) is actually a part of this undocumented category. The GDP-PPP of countries doesn’t take this sort of thing into account as far as I’m aware, but I’d like to know what would happen to those numbers if everyone simply stopped doing unpaid emotional labour. You could get a sense pretty quickly of how much society is undervaluing it.
bovermyer 5y ago
This is a very long-lived, and actively maintained, blog. I'm impressed. There aren't many out there like this.
- lisper 5y ago
  Not so active nowadays I'm afraid. I'm going through a bit of an existential crisis (thinking about climate change).
  - matmatmatmat 5y ago
    Would be great to get your thoughts on climate change when you get the chance.
    - lisper 5y ago
      I'm debating with myself over whether to write it up. The TL;DR is that I have come to believe that the situation is much more dire than anyone seems to realize. The big short-term problem is going to be changes in rain patterns, which will cause crop failures, which will result in world-wide famines, which will lead to political unrest, which will lead to WW3, and that all this could happen in my lifetime. The really scary part is how fast things are changing. I live in northern California, and the changes we've seen here just in the last ten years are dramatic. People think about climate change as playing out over centuries or maybe decades, but it's not. Things are changing year-over-year. The scariest thing is that even if we cut emissions to zero tomorrow (and obviously that is not going to happen) that would not solve the problem. We have to actually go to net negative emissions to avoid catastrophe. So an actual solution seems out of reach in any realistic scenario. We've taken carbon that nature has sequestered over a period of hundreds of millions of years and released it in a period of a few hundred. That genie will not go quietly back in her bottle. There is literally nothing that would make me happier than to have someone convince me that I'm wrong about this.
      - state_less 5y ago
        You're not alone lisper. I thought of another way to grow your wealth to add to your list, risk reduction. If you can reduce the risk of losing wealth, you stand to gain more wealth. For example, it's great to have crop lands, healthy national parks and coastal cities, but if you don't address risks to this wealth, you stand to lose it. When you lose wealth, you also forfeit gains you might have otherwise had from them. So taking care of your downside also adds to your upside.
darkerside 5y ago
I don't see anywhere that Automation fits into that list. We can create value by automating many of the other items on the list. Relevant today is the automation of serving information (web developers!), but automating transformation (factories) was a game changer for industry. Also, > Google makes money via 9a, not 9c. I don't think that's true. Google makes most of its money on ads, not market making. While there is an aspect to ad serving that is market making, I think it's fair to characterize their primary revenue stream as money-for-eyeballs, which is very much monetization of Information.
- zakary 5y ago
  I think automation could probably be considered a subset of each item. Automation is a process not really a product. At least in this context the fundamental unit of wealth is the value to people. Automation per se doesn’t really have value to people, it’s the fruits of that automation that has value. If use a robot which uses automation to make a car, then the car is the thing that has the ‘created’ value. If I write an automation program for some computer task like sending people information that they want, then it’s really the info that drives the wealth creation in this context. The Automation is just a means to an end, not the goal by itself. Having said all that, I think Automation is absolutely the main driving factor in the massive acceleration in the amount of wealth being created. What will be really interesting is if we ever get to a point where whole industry verticals are entirely automated. If there is no human input or labour involved in mining, manufacturing and distribution of a product, especially if that product is only used by other autonomous system; what value can we as humans place on that item? Does it add value in any tangible way?
  - yetihehe 5y ago
    > If there is no human input or labour involved in mining, manufacturing and distribution of a product, especially if that product is only used by other autonomous system Creation, energy and maintenance of machines are not free. People who provide this things to site need money too, so it adds to price of mined items. Then moving and transforming/smelting those things costs too. Watch springs are several orders of magnitude more valuable per kg than raw mined iron.
pjc50 5y ago
There's a followup: https://blog.rongarret.info/2009/10/wealth-production-mechanisms-followup.html https://blog.rongarret.info/2009/10/wealth-production-mechan... - in reply to the first time this was posted on HN!
c54 5y ago
> Bonus question: what did the U.S. give to China in exchange for its china?) Anyone know? Suggested here are gold/silver bullion/coinage, unsurprisingly. Furs and sealskins. And probably a lot of opium: https://en.wikipedia.org/wiki/Old_China_Trade#Finding_mediums_of_exchange https://en.wikipedia.org/wiki/Old_China_Trade#Finding_medium...
- cushychicken 5y ago
  I'd guess cotton, sugar, or molasses.
- mellavora 5y ago
  opium
- sudosysgen 5y ago
  Silver that the Chinese would buy Opium from the UK for is a big one. Without the opium they'd have a surplus of silver/gold hence the Opium Wars.
- throwaway4220 5y ago
  He answers it as fur
- amir 5y ago
  It's answered in the article: the answer to the question I posed above about what the U.S. traded to China in the 19th century is "fur"
johnnyo 5y ago
Did anyone catch this in the comments below? > There is one major category of wealth-producing activity that I just thought of that I did leave out. I'll leave it as an exercise to see if anyone can figure it out :-) I'll post it in a couple of days if no one gets it. That was over ten years ago, I don't see a followup.
- davidlee1435 5y ago
  He followed up here: https://blog.rongarret.info/2009/10/wealth-production-mechanisms-followup.html https://blog.rongarret.info/2009/10/wealth-production-mechan... > Producing, storing, converting, and transporting energy is what I had in mind as the missing top-level category.
  - specialist 5y ago
    Nice. Synthesizing this list with Vaclav Smil's work would be cool. https://en.wikipedia.org/wiki/Vaclav_Smil https://en.wikipedia.org/wiki/Vaclav_Smil Maybe use TRIZ as a starting point. https://en.wikipedia.org/wiki/TRIZ https://en.wikipedia.org/wiki/TRIZ But recast to focus on econometrics. I'm certain this already exists somewhere. Vaclav is pretty dry reading, like reading an almanac, so I didn't get very far into his works.
- Stunting 5y ago
  Entertainment and distraction? A majority of theater, music, and art provide a distraction without providing knowledge or information. For the record, I think that is good. We need a break from our lives.
  - asdff 5y ago
    >A majority of theater, music, and art provide a distraction without providing knowledge or information Most art does provide knowledge or information. Look up the word "Allegory."
geoduck14 5y ago
>For those of you coming from Hacker News, I'm on a cruise ship going through Asia at the moment. >posted in 2009 I really hope this guy gets out of quarantine soon
- lisper 5y ago
  Funny you should mention that, because 11 years later, this happened: https://blog.rongarret.info/2020/02/the-cruise-that-went-worng.html https://blog.rongarret.info/2020/02/the-cruise-that-went-wor...
  - geoduck14 5y ago
    >I'm still a little unclear what this has to do with the power being cut off, but I'm told be reliable sources that yes, this is the law in California. It's almost enough to make me want to vote Republican. Lol!
jkhdigital 5y ago
> Wealth is a measure of how much stuff people have that they actually value for its own sake. Food, housing, clothing, shelter, and artwork, are all examples of wealth. Money, by way of contrast, is merely an accounting mechanism that humans have invented in order to facilitate trade. I think this is pretty accurate, except the description of money as "merely" an accounting mechanism. Trade is facilitated through a variety of accounting mechanisms, and money is obviously an item in this list insofar as it is the unit of account for economic entities that maintain accounting books. However, money is also a concrete economic good in and of itself, subject to forces of supply and demand much like any other good. The author correctly states that wealth is derived from subjective valuation, so money could be seen as something like the "limit" (categorically) of wealth, which aggregates the value judgments over all (person x good) combinations.
- mojomark 5y ago
  > > However, money is also a concrete economic good in and of itself. Just playing devil's advocate... if you're stranded on an deserted island with a suitcase full of US $100 bills or perhaps flash drives with bitcoin in them, does that provide significant concrete value to you in and of itself? Same question, but this time you have "food, housing, clothing, shelter, or artwork (e.g. some songs loaded in your out of range phone)"?
  - cortesoft 5y ago
    There are a lot of concrete economic goods that don't have value on a deserted island. Iron ore, gold, or really any natural resource that requires a lot of processing will be useless on a deserted island. In fact, the entire point of the "move things" category in the article is that things have different value in different places.
    - MichaelZuo 5y ago
      Gold surely has value as it’s the most malleable of the metals. Having a gold cooking pot is a vast increase in wealth on a deserted island compared to no cooking pot. If you put a bit of imagination a lot of random things can have value in an extreme enough situation.
alan-crowe 5y ago
I think it is missing something foundational. People have preferences over both production and consumption. Perhaps Mr A likes to consume X, but hates the work involved in producing X. Meanwhile Mr B likes to consume Y but hates the work involved in producing Y. Rather that A doing without X and B doing without Y, they could team up, swapping chores. Mr A makes Y for Mr B and Mr B makes X for Mr A. That clearly makes them better off, and needs to be on the list of wealth-creation mechanisms. But it sits awkwardly with the materialistic focus of the catalog. There are two people, producing the same things and consuming the same things, but with two scenarios with different levels of wealth. Ron's catalogue aggregates preferences; no difference in what work gets done? No difference in wealth. That raises an awkward question about language. Do we say that wealth comes from diversity of preferences? Or do we say that wealth comes from specialization and trade? Sometimes the two mechanisms operate conjunctively. A diversity of preferences does not, in itself, generate wealth. The wealth only comes if, in addition, one does the trading to exploit the diversity of preferences. But that specific kind of trading only generates wealth if there is a suitable diversity of preferences to exploit. That makes me doubt the value of a catalogue written as linear list. One needs to catalogue the package deals (for example: preference diversity AND trade).
- lumost 5y ago
  I think the challenge here is that when people think about wealth creation they directly associate it with a net productive activity. In theory A & B can satisfy their own needs in the above scheme. Or we could have a village where everyone satisfies exactly one other persons material needs. These activities do not result in net wealth creation. On the other hand if A makes X and X is consumed by B through Z then A has freed up B through Z to do something other than making X. Even then there is an argument to be made that some forms of production are self-limiting in that society as a whole cannot continue to be more productive if everyone is involved in specific kinds of high labor, low scalability activities which do not lend themselves to improvements over time.
- awillen 5y ago
  This seems like it's covered under 3 and 9a. Mr. A has a demand for X and Mr. B has a demand for Y. Wealth can be created by a combination of 3 (making whatever it is they have a demand for) and 9a (creating a marketplace that matches their demands with whoever can supply them).
simonh 5y ago
For a transaction to create wealth the two parties must collectively be more wealthy than they were before. If they are collectively as wealthy then no wealth has been created. Some criminal activities destroy wealth in aggregate even though money or goods changed hands in a way that superficially resembles a trade. I suspect though that the distribution of money itself between people can increase net wealth, because it shifts how that money will then be used economically in useful ways. The same $1 in the hands of a minimum wage worker might have different economic value than if it was in the hands of a millionaire because how it is likely to be used in the economy is different. I don't know which is better though, will the minimum wage worker pay for services that are more beneficial, or will the millionaire invest it in a company that creates jobs and provides services? We need both things to happen though to some degree, so maybe the answer shifts with the economic cycles. If I buy a coffee and drink it have I just decreased net wealth by destroying valuable coffee, or have I increased it by transferring the money to somewhere it can do more useful economic work in downstream transactions?
- bckr 5y ago
  The coffee would become cold and undesirable of it were brewed and not purchased. The grounds of the beans would lose their flavor if not purchased and brewed. The land the beans are grown on, though, might be used for other purposes, including to restore natural habitats and thus derisk the whole economy.
  - samus 5y ago
    The coffee getting cold and the beans going stale are inefficiencies that arise because of entropy. The latter are true opportunity costs though.
    - hinkley 5y ago
      Some commodities have more elasticity on the supply side than others and that changes the economics. You only have so many options with coffee, you have to sell it sooner rather than later. Gold bars are easier to store, but also more attractive to steal. Other than that maple syrup heist in Canada a few years back, we don't usually see bulk, perishable goods getting stolen because it's too much of a pain. I think they only did it because of the element of surprise. Who steals syrup??
roussanoff 5y ago
US economic historian here. The idea that the US government funded the construction of the first Transcontinental Railroad and Panama Canal to trade with China is very, very weird. - 1850-1890 was a period of high protectionism, highest tariffs on imports in the US history. - A good approximation of share of traded goods in the railroads would be the share of imports+exports in the GDP. Together, exports and imports were not more than 15% of GDP. Source: https://www.nber.org/system/files/working_papers/w4710/w4710.pdf https://www.nber.org/system/files/working_papers/w4710/w4710..., Table 3. - railroads transported a lot of agricultural products and also passengers, and were hugely profitable from that. I doubt they would recover any cost by transporting porcelain and whatever other goods China exported at the time. - "But that answer is wrong, as can be shown by examining historical records of the time." - citation needed.
- MkNape 5y ago
  I’ve always wondered if one of the reasons was to protect the Union. Would be a lot easier to prevent states from seceding, and defend US borders when you can quickly transport soldiers (plus equipment, food, etc.) to where they’re needed.
  - myohmy 5y ago
    I would imagine so. The CN railroad was specifically built to transport soldiers from eastern Canada to BC to defend against American machinations. (Not for expansion, nope, no way, we didn't want Alaska anyways!)
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  - roussanoff 5y ago
    I don't think there is a single answer to "why the US built railroads", but both the railroads and the Eisenhower's Interstate Highway System certainly had something to do with the military needs.
- 5y ago
dandare 5y ago
Trade creates value and not just in the way of moving things. The law of comparative advantages is mind blowing once you understand it https://en.wikipedia.org/wiki/Comparative_advantage#Ricardo's_example https://en.wikipedia.org/wiki/Comparative_advantage#Ricardo'....
dandare 5y ago
Also capital (aka delayed consumption) creates value, under specific circumstances.
jimhi 5y ago
A long time ago I tried to categorize wealth mechanisms like this. There are tons of concepts, depending on how high or low you are generalizing. For instance, providing something only the wealthy have to the masses (private drivers, smartphones, etc) I found on the highest level everything could technically be boiled down to "paying money for a product or service to remove uncertainty". (Buying a hamburger so you don't have to make it yourself, insurance, everything)
asimjalis 5y ago
Ron missed an important category. Creating value by entertaining people.
- deleted 5y ago
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LeifCarrotson 5y ago
This is a great catalogue of wealth creation mechanisms at a societal or global level, but it misses the question of wealth acquisition: How does an individual gain personal wealth? There are, in my opinion, three fundamental categories: 1. Create value (this encompasses most of the catalog) 2. Deplete valuable resources 3. Extract value from a transaction stream The idealized engineer creates utility out of chaos. This value creation, however, is limited in its ability to cause them to gain wealth: They typically sell their time during which they perform this activity for a salary. A company that employs an engineer and pays him $100,000/year might make many times that amount with the products that he designs. An oil company, coal mine, or non-sustainable farmer owns some land rights and takes out resources. The things they remove are valuable, but the profit does not come from the creation of the resource - they already existed. This category also applies to other activities which might not actually take a resource away but which harm the commons. There are some activities which are useful, but where practitioners make far more money than the actual value they create. Someone who organizes and who employs many workers and sells the sum of their output is in a position to profit from the difference in that transaction. Jeff Bezos might hypothetically be smarter, luckier, stronger, and overall able to pack more boxes than any of his warehouse workers, but he's still human - he's not gaining wealth to the tune of more than $13,000,000 dollars per hour while his employees are making $18 an hour because he's creating about a million times more value. Instead, of the three categories, he (and anyone else who makes more than approximately a standard deviation above the median GDP) is primarily extracting more value. My personal problem is that I take particular satisfaction in creating something valuable. I find resource extraction to be unsatisfying to the point of being demoralizing, and I find leveraging power to extract more value than I think I'm due to be shameful.
- pitaj 5y ago
  > he's not gaining wealth to the tune of more than $13,000,000 dollars per hour while his employees are making $18 an hour because he's creating about a million times more value He gains that wealth because he took the risk and invested his money into a company that provides a huge amount of value to a massive amount of people. A large amount of people now increasingly value his company highly, believing that it has good future prospects. He is extracting practically nothing from the company itself or the workers. His wealth increases only because people in the market value the company highly, and he owns a large portion of the company.
netcan 5y ago
>> It's important to keep in mind that there is a distinction between wealth and money... I think this goes astray here. I think the operative distinction is between "wealth" in the abstract "wealth of nations" sense and the aggregate of wealth in the "net worth" sense. The first definition is pretty closely related to value. The second is more closely related to the value of assets. If real estate, shares, bonds and such have a high market value then we have more wealth in the "net worth" sense. The gross market cap of the education sector is not high, but it does generate value, for instance.
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eevilspock 5y ago
This is such a patriarchal/capitalist/libertarian/white supremacist take. What about the birthing and raising of children? What about the schooling of children? Of course in a man's world this is never assigned any value. What about slavery? America was built on chattel slavery, indentured servitude, and lessor degrees of coercion and exploitation that leverages asymmetries in wealth and freedom. While the first two are technically outlawed, the latter thrives as strong as ever. If coercing resources out of the ground (#6) is a wealth creation mechanism, isn't coercion of labor out of human bodies to do the actual work of #1-6 another wealth creation mechanism, even if it's one we don't want to admit, or at least talk about honestly? What about Rentier Capitalism[1]? Is it something we want to avoid talking about? --- [1] https://en.wikipedia.org/wiki/Rentier_capitalism https://en.wikipedia.org/wiki/Rentier_capitalism
pjdemers 5y ago
I would add to 9, "Move and store information". That's what most of us here in HN do.
- eevilspock 5y ago
  But what is actually being paid for? Who is ultimately paying "our" salaries? Why? “The best minds of my generation are thinking about how to make people click ads. That sucks.” ~ Jeff Hammerbacher, fmr. Manager of Facebook Data Team, founder of Cloudera. http://daltoncaldwell.com/an-audacious-proposal http://daltoncaldwell.com/an-audacious-proposal "It is difficult to get a man to understand something, when his salary depends upon his not understanding it!" ~ Upton Sinclair
lisper 5y ago
Author here. AMA.
- eevilspock 5y ago
  Please answer my questions in this comment: https://news.ycombinator.com/item?id=28788666 https://news.ycombinator.com/item?id=28788666
  - lisper 5y ago
    I would be more inclined to do so if you hadn't opened by accusing me of supporting white supremacy. I consider that a very serious charge. What did I say that makes you think I deserve it?
    - eevilspock 5y ago
      I didn't say you consciously support it. I said your take reflects it. I suspect your definition of "white supremacy" is "the KKK". For me and many others, it has a much broader definition: White supremacy is the Eurocentric/racial analog of patriarchy. As with patriarchy, it is a deeply integral part of the dominant culture. It is part of the social and historical milieu within which we all came into being. See also https://www.pym.org/annual-sessions/wp-content/uploads/sites/7/2017/06/What_Is_White_Supremacy_Martinez.pdf https://www.pym.org/annual-sessions/wp-content/uploads/sites... One doesn't have to be a misogynist or even a man to view things through the lens of patriarchy, or fail to realize one's perspective is so narrated. Likewise you can have black friends, participate in BLM protests or even be black and still have a white take on things ("white" here refers to culture, not skin color), because that is the culture that dominates, the economic system that dominates, the political power that dominates. Patriarchy, white supremacy, capitalist and heteronormative culture is woven into the fiber of even my own being. We all must work to unravel it. I haven't watched your documentary on homelessness, but obviously you are a thoughtful bloke. We could converse over email if you'd like. See my HN profile.
      - lisper 5y ago
andrepd 5y ago
> But historically, the most reliable and the most socially beneficial way of making money is to create wealth. Is it? It seems almost universally true, historically, that those with the most money are those which create the least value: nobles, landowners, heirs, etc.
- ksdale 5y ago
  There are definitely a lot of rich people that don't do anything useful, but looking at the Forbe's list, it's populated by business people who, regardless of the usefulness of their businesses, have worked a lot. (https://www.forbes.com/billionaires/ https://www.forbes.com/billionaires/) And then there's this - https://www.le.ac.uk/hi/polyptyques/capitulare/trans.html https://www.le.ac.uk/hi/polyptyques/capitulare/trans.html It's a guide for the people running Charlemagne's holdings. Naturally the nobility aren't doing the hardest work, but they're responsible for at least overseeing the creation of a lot of wealth if they want to keep their position.
  - Synaesthesia 5y ago
    They have not worked hard to earn their billions so much as used their power and influence in a clever way to suit their own ends. Most wealthly people also started with an inheritance.
    - ksdale 5y ago
      Most wealthy people do not end up with billions, and most of them end up with less than their parents had. While I don't disagree that they've used power and influence to suit their own ends, there's practically not a single person on that list who isn't a workaholic. I don't hold any of these people in high esteem but in my opinion, it's silly to suggest they haven't worked hard. Of course, they haven't worked a million times harder than anyone else, but they have "worked hard to earn their billions."
  - a1369209993 5y ago
    The question wasn't how hard they worked, but how must value they created. As a trivial example, digging a ditch and then filling back in has work X and value 0, wheras digging the same ditch and then digging slightly further to connect it to a river and provide convenient water for irrigation has work X/2(+1) and value 1 (in some arbitrary units). Forbe's list is populated by people whose work ultimately consists primarily of creating problems for others to solve.
spaetzleesser 5y ago
I sometimes have trouble with the idea of “creating wealth”. I am not sure if people like Bezos or Gates have created wealth but instead have managed to funnel wealth into their pockets. They may even have destroyed wealth by suppressing competition and potentially better ideas. It seems the real wealth creators are inventors and scientists who create new things . From then it’s more if zero sum game between different businesses.
- Synaesthesia 5y ago
  It's all about how you define "creating wealth". So indeed in todays liberal capitalist society we might say that an investor who's share trades were ultimately a zero sum game is "creating wealth" but a mother raising a child, which is hard work, is not.
trgn 5y ago
Since this list is so broad it includes pretty much any professional activity, as a counterpoint, compare to Adam Smith, who had a lot more rigorous definition, and for who wealth creation can only happen when labour is applied to the production of useful commodities, or in the market making for such (crudely summarized). e.g. "curing disease" did not create wealth. Instead, he put physicians on the same level as house maids and clowns, in that they are unproductive in the strictest sense (although still necessary of course).
munificent 5y ago
I think the main category the author misses is providing experiences. He lumps "novelist, screenwriter, composer and choreographer" as creating information that is "useful in and of itself", but I think that's a real stretch. Experiences can be directly subjectively enriching to the consumer even if they don't provide any "useful information". By "useful" here, I assume the author means something like "able to be used to produce value later". If I take you on a boat to watch the sunset, I have given you an experience that has value, so I have created some intangible wealth. But I haven't given you anything you could reasonably categorize as "information". It's not like you didn't know sunsets were pretty already. I think this category is important because in many ways it is both the most fundamental and also the most unlimited. Ultimately most of the other categories of wealth exist to eventually provide experiences. Why do I want things? So that I can experience having or using them. Very few material objects in our life exist for purely utilitarian reasons. But the real magic of experiences is that they can provide value without using anything up. When I take you to see the sunset, the sunset is still there for others to see too. When I read a book, the book is still able to be read by others. This is important because as we get closer and closer to using up the resources of the Earth, it's good for us to focus on intangible experiences that don't actually consume anything.
- MichaelZuo 5y ago
  I think he is using the physical definition of information, not the popular one. In that sense all human actions do create, modify, and/or destroy information.
bawolff 5y ago
This feels so vauge it might as well be saying that the way to make money is to figure out what people want and find a way to give it to them.

306 points by xojoc 5y ago

I am surprised education does not figure more prominently in 9. In a sense all wealth is created through education (a newborn child knowns nothing about "wealth"). NB: Education is not just the "provision of information" or "help with figuring out the rules" (although there are aspects of both).

rootsudo 5y ago

While I agree these are "wealth creation" mechanisms, what the blog describes is market (economy) inefficiencies that enable arbitrage. So by spotting an inefficiency and exploiting it, you profit. tl;dr explore and exploit.

dandare 5y ago
You are wrong in a very classical, meaning half of earthlings believe this misconception. Trade can make both sides richer. Some would say any voluntary trade makes both sides richer, but that depends on your definition of voluntarism and exploitation of someone's weakness. Anyway, for trade that makes both sides really richer in any sense of that word see https://en.wikipedia.org/wiki/Comparative_advantage#Ricardo's_example https://en.wikipedia.org/wiki/Comparative_advantage#Ricardo'...
- rootsudo 5y ago
  I disagree (again) because knowing something sells for a lower amount in X but sells for higher in Y is classical information arbitrage and opportunity cost.

Borrible 5y ago

Fasten, widen and simplify communication space. Entertain communicants for free. Boost individuality and ego of communicants or tweak according to demand. Sell the inflated souls to the highest bidder.

silicon2401 5y ago
> fasten This should be speed up or accelerate: https://www.merriam-webster.com/dictionary/fasten https://www.merriam-webster.com/dictionary/fasten
- Borrible 5y ago
  Thank you, much appreciated. Most people are reluctant to improve non-native speakers. Which I personally think is a pity.

peterburkimsher 5y ago

The article is a good summary of typical business models! I also learned a lot by trying to answer the (Bonus question: what did the U.S. give to China in exchange for its china?) - fur and opium. https://en.wikipedia.org/wiki/Old_China_Trade https://en.wikipedia.org/wiki/Old_China_Trade The article lists the following: Move, Store, Transform, Farm, Build, Mine, Health, Research, Information (Supply/Demand, Law, Journalism). I'm pretty sure this is a comprehensive list. Can anyone think of anything I've left out? Music and art come to mind as not being "useful information" but still appealing, because they reflect and enhance culture, which brings people together. As for wealth storage, I heard another list of investment advice being told on a Sunday morning: stocks, bonds, and property. I winced, because I don't trust the stock market (even though I do believe that some companies have great potential. Government bonds require political stability, which I worry about. Property values are destroyed in war or natural disasters, both of which I expect are likely to occur in my lifetime. What could we invest in instead? Philanthropy. We could just give it all away! Building guanxi will endure even huge economic changes. Laptops and phones come and go, but Hacker News karma is forever ;-) https://news.ycombinator.com/item?id=28004632 https://news.ycombinator.com/item?id=28004632

TeMPOraL 5y ago
I was curious, so I looked it up: the missing category is energy. https://blog.rongarret.info/2009/10/wealth-production-mechanisms-followup.html https://blog.rongarret.info/2009/10/wealth-production-mechan... > Producing, storing, converting, and transporting energy is what I had in mind as the missing top-level category.

zakary 5y ago

Great article. I’ve always been fascinated by the question “where does the value of things really come from?” And this article touches on that. Everything ultimately goes back to the fundamental ways we create wealth, and how much time and energy we expend doing it. The article mentions No.3 as containing most services which involve transforming goods. I wonder where do personal services like massage, and prostitution come into that? Or what about friendship or a romantic partner? A husband or wife cannot be converted into money but I’d say having one is to most people a definite kind of wealth. You might call these ‘emotional services’, and group them in with art and entertainment in general. I would say this is at least different enough from manufacturing to warrant their own category. Edit: rewording

mbg721 5y ago
While economics might have some insight into how people value things, humans don't really treat everything as a transaction. The story that comes up from time to time is a day-care that charged fees to parents who arrived late, and that caused more tardiness, because now the parents didn't feel guilty; now they were buying something.
- zakary 5y ago
  I hadn’t heard of the day care example before . That’s really interesting.
pjc50 5y ago
One of the core strands of postwar feminism has been examining how much uncompensated domestic labour women are expected to perform, not just for their partner and their children but also for other family members. Especially in the context of care for the old or sick. The term "emotional labour" is the more common used one for what you've described as "emotional services".
- zakary 5y ago
  Emotional Labour is definitely the better term for it. Thank you for giving me the right term to google. I wonder how much of the ‘economy’ (in terms of work done and the dollar figures we put on that) is actually a part of this undocumented category. The GDP-PPP of countries doesn’t take this sort of thing into account as far as I’m aware, but I’d like to know what would happen to those numbers if everyone simply stopped doing unpaid emotional labour. You could get a sense pretty quickly of how much society is undervaluing it.

bovermyer 5y ago

This is a very long-lived, and actively maintained, blog. I'm impressed. There aren't many out there like this.

lisper 5y ago
Not so active nowadays I'm afraid. I'm going through a bit of an existential crisis (thinking about climate change).
- matmatmatmat 5y ago
  Would be great to get your thoughts on climate change when you get the chance.
  - lisper 5y ago
    I'm debating with myself over whether to write it up. The TL;DR is that I have come to believe that the situation is much more dire than anyone seems to realize. The big short-term problem is going to be changes in rain patterns, which will cause crop failures, which will result in world-wide famines, which will lead to political unrest, which will lead to WW3, and that all this could happen in my lifetime. The really scary part is how fast things are changing. I live in northern California, and the changes we've seen here just in the last ten years are dramatic. People think about climate change as playing out over centuries or maybe decades, but it's not. Things are changing year-over-year. The scariest thing is that even if we cut emissions to zero tomorrow (and obviously that is not going to happen) that would not solve the problem. We have to actually go to net negative emissions to avoid catastrophe. So an actual solution seems out of reach in any realistic scenario. We've taken carbon that nature has sequestered over a period of hundreds of millions of years and released it in a period of a few hundred. That genie will not go quietly back in her bottle. There is literally nothing that would make me happier than to have someone convince me that I'm wrong about this.
    - state_less 5y ago
      You're not alone lisper. I thought of another way to grow your wealth to add to your list, risk reduction. If you can reduce the risk of losing wealth, you stand to gain more wealth. For example, it's great to have crop lands, healthy national parks and coastal cities, but if you don't address risks to this wealth, you stand to lose it. When you lose wealth, you also forfeit gains you might have otherwise had from them. So taking care of your downside also adds to your upside.

darkerside 5y ago

I don't see anywhere that Automation fits into that list. We can create value by automating many of the other items on the list. Relevant today is the automation of serving information (web developers!), but automating transformation (factories) was a game changer for industry. Also, > Google makes money via 9a, not 9c. I don't think that's true. Google makes most of its money on ads, not market making. While there is an aspect to ad serving that is market making, I think it's fair to characterize their primary revenue stream as money-for-eyeballs, which is very much monetization of Information.

zakary 5y ago
I think automation could probably be considered a subset of each item. Automation is a process not really a product. At least in this context the fundamental unit of wealth is the value to people. Automation per se doesn’t really have value to people, it’s the fruits of that automation that has value. If use a robot which uses automation to make a car, then the car is the thing that has the ‘created’ value. If I write an automation program for some computer task like sending people information that they want, then it’s really the info that drives the wealth creation in this context. The Automation is just a means to an end, not the goal by itself. Having said all that, I think Automation is absolutely the main driving factor in the massive acceleration in the amount of wealth being created. What will be really interesting is if we ever get to a point where whole industry verticals are entirely automated. If there is no human input or labour involved in mining, manufacturing and distribution of a product, especially if that product is only used by other autonomous system; what value can we as humans place on that item? Does it add value in any tangible way?
- yetihehe 5y ago
  > If there is no human input or labour involved in mining, manufacturing and distribution of a product, especially if that product is only used by other autonomous system Creation, energy and maintenance of machines are not free. People who provide this things to site need money too, so it adds to price of mined items. Then moving and transforming/smelting those things costs too. Watch springs are several orders of magnitude more valuable per kg than raw mined iron.

pjc50 5y ago

There's a followup: https://blog.rongarret.info/2009/10/wealth-production-mechanisms-followup.html https://blog.rongarret.info/2009/10/wealth-production-mechan... - in reply to the first time this was posted on HN!

c54 5y ago

> Bonus question: what did the U.S. give to China in exchange for its china?) Anyone know? Suggested here are gold/silver bullion/coinage, unsurprisingly. Furs and sealskins. And probably a lot of opium: https://en.wikipedia.org/wiki/Old_China_Trade#Finding_mediums_of_exchange https://en.wikipedia.org/wiki/Old_China_Trade#Finding_medium...

cushychicken 5y ago
I'd guess cotton, sugar, or molasses.
mellavora 5y ago
opium
sudosysgen 5y ago
Silver that the Chinese would buy Opium from the UK for is a big one. Without the opium they'd have a surplus of silver/gold hence the Opium Wars.
throwaway4220 5y ago
He answers it as fur
amir 5y ago
It's answered in the article: the answer to the question I posed above about what the U.S. traded to China in the 19th century is "fur"

johnnyo 5y ago

Did anyone catch this in the comments below? > There is one major category of wealth-producing activity that I just thought of that I did leave out. I'll leave it as an exercise to see if anyone can figure it out :-) I'll post it in a couple of days if no one gets it. That was over ten years ago, I don't see a followup.

davidlee1435 5y ago
He followed up here: https://blog.rongarret.info/2009/10/wealth-production-mechanisms-followup.html https://blog.rongarret.info/2009/10/wealth-production-mechan... > Producing, storing, converting, and transporting energy is what I had in mind as the missing top-level category.
- specialist 5y ago
  Nice. Synthesizing this list with Vaclav Smil's work would be cool. https://en.wikipedia.org/wiki/Vaclav_Smil https://en.wikipedia.org/wiki/Vaclav_Smil Maybe use TRIZ as a starting point. https://en.wikipedia.org/wiki/TRIZ https://en.wikipedia.org/wiki/TRIZ But recast to focus on econometrics. I'm certain this already exists somewhere. Vaclav is pretty dry reading, like reading an almanac, so I didn't get very far into his works.
Stunting 5y ago
Entertainment and distraction? A majority of theater, music, and art provide a distraction without providing knowledge or information. For the record, I think that is good. We need a break from our lives.
- asdff 5y ago
  >A majority of theater, music, and art provide a distraction without providing knowledge or information Most art does provide knowledge or information. Look up the word "Allegory."

geoduck14 5y ago

>For those of you coming from Hacker News, I'm on a cruise ship going through Asia at the moment. >posted in 2009 I really hope this guy gets out of quarantine soon

lisper 5y ago
Funny you should mention that, because 11 years later, this happened: https://blog.rongarret.info/2020/02/the-cruise-that-went-worng.html https://blog.rongarret.info/2020/02/the-cruise-that-went-wor...
- geoduck14 5y ago
  >I'm still a little unclear what this has to do with the power being cut off, but I'm told be reliable sources that yes, this is the law in California. It's almost enough to make me want to vote Republican. Lol!

jkhdigital 5y ago

> Wealth is a measure of how much stuff people have that they actually value for its own sake. Food, housing, clothing, shelter, and artwork, are all examples of wealth. Money, by way of contrast, is merely an accounting mechanism that humans have invented in order to facilitate trade. I think this is pretty accurate, except the description of money as "merely" an accounting mechanism. Trade is facilitated through a variety of accounting mechanisms, and money is obviously an item in this list insofar as it is the unit of account for economic entities that maintain accounting books. However, money is also a concrete economic good in and of itself, subject to forces of supply and demand much like any other good. The author correctly states that wealth is derived from subjective valuation, so money could be seen as something like the "limit" (categorically) of wealth, which aggregates the value judgments over all (person x good) combinations.

mojomark 5y ago
> > However, money is also a concrete economic good in and of itself. Just playing devil's advocate... if you're stranded on an deserted island with a suitcase full of US $100 bills or perhaps flash drives with bitcoin in them, does that provide significant concrete value to you in and of itself? Same question, but this time you have "food, housing, clothing, shelter, or artwork (e.g. some songs loaded in your out of range phone)"?
- cortesoft 5y ago
  There are a lot of concrete economic goods that don't have value on a deserted island. Iron ore, gold, or really any natural resource that requires a lot of processing will be useless on a deserted island. In fact, the entire point of the "move things" category in the article is that things have different value in different places.
  - MichaelZuo 5y ago
    Gold surely has value as it’s the most malleable of the metals. Having a gold cooking pot is a vast increase in wealth on a deserted island compared to no cooking pot. If you put a bit of imagination a lot of random things can have value in an extreme enough situation.

alan-crowe 5y ago

I think it is missing something foundational. People have preferences over both production and consumption. Perhaps Mr A likes to consume X, but hates the work involved in producing X. Meanwhile Mr B likes to consume Y but hates the work involved in producing Y. Rather that A doing without X and B doing without Y, they could team up, swapping chores. Mr A makes Y for Mr B and Mr B makes X for Mr A. That clearly makes them better off, and needs to be on the list of wealth-creation mechanisms. But it sits awkwardly with the materialistic focus of the catalog. There are two people, producing the same things and consuming the same things, but with two scenarios with different levels of wealth. Ron's catalogue aggregates preferences; no difference in what work gets done? No difference in wealth. That raises an awkward question about language. Do we say that wealth comes from diversity of preferences? Or do we say that wealth comes from specialization and trade? Sometimes the two mechanisms operate conjunctively. A diversity of preferences does not, in itself, generate wealth. The wealth only comes if, in addition, one does the trading to exploit the diversity of preferences. But that specific kind of trading only generates wealth if there is a suitable diversity of preferences to exploit. That makes me doubt the value of a catalogue written as linear list. One needs to catalogue the package deals (for example: preference diversity AND trade).

lumost 5y ago
I think the challenge here is that when people think about wealth creation they directly associate it with a net productive activity. In theory A & B can satisfy their own needs in the above scheme. Or we could have a village where everyone satisfies exactly one other persons material needs. These activities do not result in net wealth creation. On the other hand if A makes X and X is consumed by B through Z then A has freed up B through Z to do something other than making X. Even then there is an argument to be made that some forms of production are self-limiting in that society as a whole cannot continue to be more productive if everyone is involved in specific kinds of high labor, low scalability activities which do not lend themselves to improvements over time.
awillen 5y ago
This seems like it's covered under 3 and 9a. Mr. A has a demand for X and Mr. B has a demand for Y. Wealth can be created by a combination of 3 (making whatever it is they have a demand for) and 9a (creating a marketplace that matches their demands with whoever can supply them).

simonh 5y ago

For a transaction to create wealth the two parties must collectively be more wealthy than they were before. If they are collectively as wealthy then no wealth has been created. Some criminal activities destroy wealth in aggregate even though money or goods changed hands in a way that superficially resembles a trade. I suspect though that the distribution of money itself between people can increase net wealth, because it shifts how that money will then be used economically in useful ways. The same $1 in the hands of a minimum wage worker might have different economic value than if it was in the hands of a millionaire because how it is likely to be used in the economy is different. I don't know which is better though, will the minimum wage worker pay for services that are more beneficial, or will the millionaire invest it in a company that creates jobs and provides services? We need both things to happen though to some degree, so maybe the answer shifts with the economic cycles. If I buy a coffee and drink it have I just decreased net wealth by destroying valuable coffee, or have I increased it by transferring the money to somewhere it can do more useful economic work in downstream transactions?

bckr 5y ago
The coffee would become cold and undesirable of it were brewed and not purchased. The grounds of the beans would lose their flavor if not purchased and brewed. The land the beans are grown on, though, might be used for other purposes, including to restore natural habitats and thus derisk the whole economy.
- samus 5y ago
  The coffee getting cold and the beans going stale are inefficiencies that arise because of entropy. The latter are true opportunity costs though.
  - hinkley 5y ago
    Some commodities have more elasticity on the supply side than others and that changes the economics. You only have so many options with coffee, you have to sell it sooner rather than later. Gold bars are easier to store, but also more attractive to steal. Other than that maple syrup heist in Canada a few years back, we don't usually see bulk, perishable goods getting stolen because it's too much of a pain. I think they only did it because of the element of surprise. Who steals syrup??

roussanoff 5y ago

US economic historian here. The idea that the US government funded the construction of the first Transcontinental Railroad and Panama Canal to trade with China is very, very weird. - 1850-1890 was a period of high protectionism, highest tariffs on imports in the US history. - A good approximation of share of traded goods in the railroads would be the share of imports+exports in the GDP. Together, exports and imports were not more than 15% of GDP. Source: https://www.nber.org/system/files/working_papers/w4710/w4710.pdf https://www.nber.org/system/files/working_papers/w4710/w4710..., Table 3. - railroads transported a lot of agricultural products and also passengers, and were hugely profitable from that. I doubt they would recover any cost by transporting porcelain and whatever other goods China exported at the time. - "But that answer is wrong, as can be shown by examining historical records of the time." - citation needed.

MkNape 5y ago
I’ve always wondered if one of the reasons was to protect the Union. Would be a lot easier to prevent states from seceding, and defend US borders when you can quickly transport soldiers (plus equipment, food, etc.) to where they’re needed.
- myohmy 5y ago
  I would imagine so. The CN railroad was specifically built to transport soldiers from eastern Canada to BC to defend against American machinations. (Not for expansion, nope, no way, we didn't want Alaska anyways!)
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- roussanoff 5y ago
  I don't think there is a single answer to "why the US built railroads", but both the railroads and the Eisenhower's Interstate Highway System certainly had something to do with the military needs.
5y ago

dandare 5y ago

Trade creates value and not just in the way of moving things. The law of comparative advantages is mind blowing once you understand it https://en.wikipedia.org/wiki/Comparative_advantage#Ricardo's_example https://en.wikipedia.org/wiki/Comparative_advantage#Ricardo'....

dandare 5y ago

Also capital (aka delayed consumption) creates value, under specific circumstances.

jimhi 5y ago

A long time ago I tried to categorize wealth mechanisms like this. There are tons of concepts, depending on how high or low you are generalizing. For instance, providing something only the wealthy have to the masses (private drivers, smartphones, etc) I found on the highest level everything could technically be boiled down to "paying money for a product or service to remove uncertainty". (Buying a hamburger so you don't have to make it yourself, insurance, everything)

asimjalis 5y ago

Ron missed an important category. Creating value by entertaining people.

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LeifCarrotson 5y ago

This is a great catalogue of wealth creation mechanisms at a societal or global level, but it misses the question of wealth acquisition: How does an individual gain personal wealth? There are, in my opinion, three fundamental categories: 1. Create value (this encompasses most of the catalog) 2. Deplete valuable resources 3. Extract value from a transaction stream The idealized engineer creates utility out of chaos. This value creation, however, is limited in its ability to cause them to gain wealth: They typically sell their time during which they perform this activity for a salary. A company that employs an engineer and pays him $100,000/year might make many times that amount with the products that he designs. An oil company, coal mine, or non-sustainable farmer owns some land rights and takes out resources. The things they remove are valuable, but the profit does not come from the creation of the resource - they already existed. This category also applies to other activities which might not actually take a resource away but which harm the commons. There are some activities which are useful, but where practitioners make far more money than the actual value they create. Someone who organizes and who employs many workers and sells the sum of their output is in a position to profit from the difference in that transaction. Jeff Bezos might hypothetically be smarter, luckier, stronger, and overall able to pack more boxes than any of his warehouse workers, but he's still human - he's not gaining wealth to the tune of more than $13,000,000 dollars per hour while his employees are making $18 an hour because he's creating about a million times more value. Instead, of the three categories, he (and anyone else who makes more than approximately a standard deviation above the median GDP) is primarily extracting more value. My personal problem is that I take particular satisfaction in creating something valuable. I find resource extraction to be unsatisfying to the point of being demoralizing, and I find leveraging power to extract more value than I think I'm due to be shameful.

pitaj 5y ago
> he's not gaining wealth to the tune of more than $13,000,000 dollars per hour while his employees are making $18 an hour because he's creating about a million times more value He gains that wealth because he took the risk and invested his money into a company that provides a huge amount of value to a massive amount of people. A large amount of people now increasingly value his company highly, believing that it has good future prospects. He is extracting practically nothing from the company itself or the workers. His wealth increases only because people in the market value the company highly, and he owns a large portion of the company.

netcan 5y ago

>> It's important to keep in mind that there is a distinction between wealth and money... I think this goes astray here. I think the operative distinction is between "wealth" in the abstract "wealth of nations" sense and the aggregate of wealth in the "net worth" sense. The first definition is pretty closely related to value. The second is more closely related to the value of assets. If real estate, shares, bonds and such have a high market value then we have more wealth in the "net worth" sense. The gross market cap of the education sector is not high, but it does generate value, for instance.

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eevilspock 5y ago

This is such a patriarchal/capitalist/libertarian/white supremacist take. What about the birthing and raising of children? What about the schooling of children? Of course in a man's world this is never assigned any value. What about slavery? America was built on chattel slavery, indentured servitude, and lessor degrees of coercion and exploitation that leverages asymmetries in wealth and freedom. While the first two are technically outlawed, the latter thrives as strong as ever. If coercing resources out of the ground (#6) is a wealth creation mechanism, isn't coercion of labor out of human bodies to do the actual work of #1-6 another wealth creation mechanism, even if it's one we don't want to admit, or at least talk about honestly? What about Rentier Capitalism[1]? Is it something we want to avoid talking about? --- [1] https://en.wikipedia.org/wiki/Rentier_capitalism https://en.wikipedia.org/wiki/Rentier_capitalism

pjdemers 5y ago

I would add to 9, "Move and store information". That's what most of us here in HN do.

eevilspock 5y ago
But what is actually being paid for? Who is ultimately paying "our" salaries? Why? “The best minds of my generation are thinking about how to make people click ads. That sucks.” ~ Jeff Hammerbacher, fmr. Manager of Facebook Data Team, founder of Cloudera. http://daltoncaldwell.com/an-audacious-proposal http://daltoncaldwell.com/an-audacious-proposal "It is difficult to get a man to understand something, when his salary depends upon his not understanding it!" ~ Upton Sinclair

lisper 5y ago

Author here. AMA.

eevilspock 5y ago
Please answer my questions in this comment: https://news.ycombinator.com/item?id=28788666 https://news.ycombinator.com/item?id=28788666
- lisper 5y ago
  I would be more inclined to do so if you hadn't opened by accusing me of supporting white supremacy. I consider that a very serious charge. What did I say that makes you think I deserve it?
  - eevilspock 5y ago
    I didn't say you consciously support it. I said your take reflects it. I suspect your definition of "white supremacy" is "the KKK". For me and many others, it has a much broader definition: White supremacy is the Eurocentric/racial analog of patriarchy. As with patriarchy, it is a deeply integral part of the dominant culture. It is part of the social and historical milieu within which we all came into being. See also https://www.pym.org/annual-sessions/wp-content/uploads/sites/7/2017/06/What_Is_White_Supremacy_Martinez.pdf https://www.pym.org/annual-sessions/wp-content/uploads/sites... One doesn't have to be a misogynist or even a man to view things through the lens of patriarchy, or fail to realize one's perspective is so narrated. Likewise you can have black friends, participate in BLM protests or even be black and still have a white take on things ("white" here refers to culture, not skin color), because that is the culture that dominates, the economic system that dominates, the political power that dominates. Patriarchy, white supremacy, capitalist and heteronormative culture is woven into the fiber of even my own being. We all must work to unravel it. I haven't watched your documentary on homelessness, but obviously you are a thoughtful bloke. We could converse over email if you'd like. See my HN profile.
    - lisper 5y ago

andrepd 5y ago

> But historically, the most reliable and the most socially beneficial way of making money is to create wealth. Is it? It seems almost universally true, historically, that those with the most money are those which create the least value: nobles, landowners, heirs, etc.

ksdale 5y ago
There are definitely a lot of rich people that don't do anything useful, but looking at the Forbe's list, it's populated by business people who, regardless of the usefulness of their businesses, have worked a lot. (https://www.forbes.com/billionaires/ https://www.forbes.com/billionaires/) And then there's this - https://www.le.ac.uk/hi/polyptyques/capitulare/trans.html https://www.le.ac.uk/hi/polyptyques/capitulare/trans.html It's a guide for the people running Charlemagne's holdings. Naturally the nobility aren't doing the hardest work, but they're responsible for at least overseeing the creation of a lot of wealth if they want to keep their position.
- Synaesthesia 5y ago
  They have not worked hard to earn their billions so much as used their power and influence in a clever way to suit their own ends. Most wealthly people also started with an inheritance.
  - ksdale 5y ago
    Most wealthy people do not end up with billions, and most of them end up with less than their parents had. While I don't disagree that they've used power and influence to suit their own ends, there's practically not a single person on that list who isn't a workaholic. I don't hold any of these people in high esteem but in my opinion, it's silly to suggest they haven't worked hard. Of course, they haven't worked a million times harder than anyone else, but they have "worked hard to earn their billions."
- a1369209993 5y ago
  The question wasn't how hard they worked, but how must value they created. As a trivial example, digging a ditch and then filling back in has work X and value 0, wheras digging the same ditch and then digging slightly further to connect it to a river and provide convenient water for irrigation has work X/2(+1) and value 1 (in some arbitrary units). Forbe's list is populated by people whose work ultimately consists primarily of creating problems for others to solve.

spaetzleesser 5y ago

I sometimes have trouble with the idea of “creating wealth”. I am not sure if people like Bezos or Gates have created wealth but instead have managed to funnel wealth into their pockets. They may even have destroyed wealth by suppressing competition and potentially better ideas. It seems the real wealth creators are inventors and scientists who create new things . From then it’s more if zero sum game between different businesses.

Synaesthesia 5y ago
It's all about how you define "creating wealth". So indeed in todays liberal capitalist society we might say that an investor who's share trades were ultimately a zero sum game is "creating wealth" but a mother raising a child, which is hard work, is not.

trgn 5y ago

Since this list is so broad it includes pretty much any professional activity, as a counterpoint, compare to Adam Smith, who had a lot more rigorous definition, and for who wealth creation can only happen when labour is applied to the production of useful commodities, or in the market making for such (crudely summarized). e.g. "curing disease" did not create wealth. Instead, he put physicians on the same level as house maids and clowns, in that they are unproductive in the strictest sense (although still necessary of course).

munificent 5y ago

I think the main category the author misses is providing experiences. He lumps "novelist, screenwriter, composer and choreographer" as creating information that is "useful in and of itself", but I think that's a real stretch. Experiences can be directly subjectively enriching to the consumer even if they don't provide any "useful information". By "useful" here, I assume the author means something like "able to be used to produce value later". If I take you on a boat to watch the sunset, I have given you an experience that has value, so I have created some intangible wealth. But I haven't given you anything you could reasonably categorize as "information". It's not like you didn't know sunsets were pretty already. I think this category is important because in many ways it is both the most fundamental and also the most unlimited. Ultimately most of the other categories of wealth exist to eventually provide experiences. Why do I want things? So that I can experience having or using them. Very few material objects in our life exist for purely utilitarian reasons. But the real magic of experiences is that they can provide value without using anything up. When I take you to see the sunset, the sunset is still there for others to see too. When I read a book, the book is still able to be read by others. This is important because as we get closer and closer to using up the resources of the Earth, it's good for us to focus on intangible experiences that don't actually consume anything.

MichaelZuo 5y ago
I think he is using the physical definition of information, not the popular one. In that sense all human actions do create, modify, and/or destroy information.

bawolff 5y ago

This feels so vauge it might as well be saying that the way to make money is to figure out what people want and find a way to give it to them.