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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

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.
- ggrrhh_ta 5y ago
  One can legitimately (within the set of rules we give ourselves as a society) possess and earn a lot of wealth without actually creating most of that value. If all the employees - en masse - could not go any more to work, would the company still be providing that huge amount of value? Probably not. At the end of the chain there is always a group of people creating the value through work. That doesn't mean that the wealth is not legitimately earned even if that person -alone- did not create million times more value.
  - pitaj 5y ago
    Value is subjective. Wealth is not created by labor, but by mutually beneficial consensual trade.
    - deleted 5y ago
      [deleted]
- LeifCarrotson 5y ago
  The company itself is performing things that are valuable, but he's not doing those actions personally. Of the three types of wealth acquisition, making money from an ownership position is extraction. If the workers don't show up to create value for him and for the company, they don't get paid. They're creating some value by packing boxes, that contribution might be worth $25/hr, but they've only been able to negotiate $18/hr of that value creation. They're probably handling goods worth tens of thousands of dollars per hour where that wealth is exchanged between end consumers and manufacturers, but they're not charging a commission to the buyers based on a percentage of that transaction. For Jeff, though, he's not personally adding value to the company in proportion to his personal contributions of labor or ideas or memos. Instead, because of his ownership of approximately 10% of the company, he's a dead weight on transactions regarding the other 90%. He extracts some of the money moving between those other people on the market. I admit that there's definitely an element of risk that's not well covered by this simple three-category model, but I question whether taking a risk from a position as a VP of a hedge fund (another primarily extraction-based operation) morally ought to have an upside worth $200B.
imtringued 5y ago
Start out from a very simplified scenario: You do all work yourself. It's pretty easy to see why this is inefficient. You need to duplicate equipment and experience. You need to travel long distances. You cannot work 24/7. Some work needs more than one person. Since labor is the fundamental building block of a society you are better off if you can do something with less labor. You let someone else do the work because they can do it in less time than you can. Jeff Bezos isn't rich because he is creating more value or wealth, he's rich because he is delegating work to lots of people. The CEO of a company is basically a monopoly no matter how big the company is.

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.

ggrrhh_ta 5y ago
One can legitimately (within the set of rules we give ourselves as a society) possess and earn a lot of wealth without actually creating most of that value. If all the employees - en masse - could not go any more to work, would the company still be providing that huge amount of value? Probably not. At the end of the chain there is always a group of people creating the value through work. That doesn't mean that the wealth is not legitimately earned even if that person -alone- did not create million times more value.
- pitaj 5y ago
  Value is subjective. Wealth is not created by labor, but by mutually beneficial consensual trade.
  - deleted 5y ago
    [deleted]
LeifCarrotson 5y ago
The company itself is performing things that are valuable, but he's not doing those actions personally. Of the three types of wealth acquisition, making money from an ownership position is extraction. If the workers don't show up to create value for him and for the company, they don't get paid. They're creating some value by packing boxes, that contribution might be worth $25/hr, but they've only been able to negotiate $18/hr of that value creation. They're probably handling goods worth tens of thousands of dollars per hour where that wealth is exchanged between end consumers and manufacturers, but they're not charging a commission to the buyers based on a percentage of that transaction. For Jeff, though, he's not personally adding value to the company in proportion to his personal contributions of labor or ideas or memos. Instead, because of his ownership of approximately 10% of the company, he's a dead weight on transactions regarding the other 90%. He extracts some of the money moving between those other people on the market. I admit that there's definitely an element of risk that's not well covered by this simple three-category model, but I question whether taking a risk from a position as a VP of a hedge fund (another primarily extraction-based operation) morally ought to have an upside worth $200B.

imtringued 5y ago

Start out from a very simplified scenario: You do all work yourself. It's pretty easy to see why this is inefficient. You need to duplicate equipment and experience. You need to travel long distances. You cannot work 24/7. Some work needs more than one person. Since labor is the fundamental building block of a society you are better off if you can do something with less labor. You let someone else do the work because they can do it in less time than you can. Jeff Bezos isn't rich because he is creating more value or wealth, he's rich because he is delegating work to lots of people. The CEO of a company is basically a monopoly no matter how big the company is.