6 ms·

The George Clooney example doesn't seem apt. 1. George Clooney didn't get rich from acting. He got rich from selling Tequila. Regardless, his children will lik

The George Clooney example doesn't seem apt. 1. George Clooney didn't get rich from acting. He got rich from selling Tequila. Regardless, his children will likely remain wealthy despite never having been on a movie screen, much like the Waltons are among the top 20 richest people despite never having a job at Walmart. 2. Every year, fewer and fewer people get rich from having built something (labor), and more are just rich from being already rich (capital). If in a free-market system, if you let the people with most wealth concentrate power, after n-years you are just left with a monarchy with a couple extra steps.

solveit 5y ago
I would like to see a citation for point #2.
- nemothekid 5y ago
  It's literally the basis for Thomas Piketty's 'Capital in the Twenty-First Century'. It's a dense book, but widely acclaimed. It was also published 8 years ago and the claims aren't controversial.
  - mediascreen 5y ago
    To say it's not controversial seems misleading. It may be widely acclaimed, but also hugely criticised. Wikipedia has a short collection of the criticism. https://en.wikipedia.org/wiki/Capital_in_the_Twenty-First_Century#Criticism https://en.wikipedia.org/wiki/Capital_in_the_Twenty-First_Ce...
    - sudosysgen 5y ago
      There are very few critiques of the empirical assertion that the capital share of the economy is not increasing, though. Most are on other parts of his thesis or argument.
    - diordiderot 5y ago
      There are critiques of anthropogenic climate change and the addictive nature of nicotine
- imtringued 5y ago
  Real estate (land to be specific) is a popular investment because it lets you extract economic rents. You can build a dynasty around land because ownership is barely taxed. Land does not degrade by simply keeping it vacant. Meanwhile everyone around the land needs it to live on or to work or to extract resources. Inequality isn't driven by well deserved high returns, it is driven by monopolistic extortion where you cannot refuse even if you know you're getting ripped off.
jimmydorry 5y ago
Counter point: It's a self correcting problem (on a long enough time horizon). If his children can't manage their money by providing value to society (albeit not in the way that most can appreciate), they will quickly draw down that fortune and be unable to pass it on to their own children. Investing that money, or otherwise allocating that money to companies who can better use it provides value to society at large, and in return, the person investing will receive a return on investment to live off.
- nemothekid 5y ago
  >Counter point: It's a self correcting problem (on a long enough time horizon). To point to someone who has done the research, 'Capital in the Twenty-First Century', states that its not a self-correcting problem. Furthermore, I'd argue that index investing make it incredibly difficult for his heirs to lose their money. Anything short of a collapse American global hegemonic power means their wealth will be relatively safe. Furthermore, investing is not means of wealth redistribution. I can invest billions in Wal-Mart, but that will not motivate them to pay their cashiers a cent more. The compounding effect of the wealthy owning most of the industry through the stock market means their share of the ownership grows, leading to headlines like we see.
chrismcb 5y ago
Clooney got rich from acting, and got richer from selling his tequila business. And is #2 really true?
- nemothekid 5y ago
  >And is #2 really true? I addressed this in another reply, but I find it funny that you questioned that point literally after showing an example of it to be the case. Clooney leveraged capital from acting to buy a tequila "factory" (AFAICT, he didn't run the company, he didn't make tequila, he didn't manage distribution, his name was just on it), and used that capital to make more money they he would have ever had from acting. But somehow #2 is controversial on HN.

solveit 5y ago

I would like to see a citation for point #2.

nemothekid 5y ago
It's literally the basis for Thomas Piketty's 'Capital in the Twenty-First Century'. It's a dense book, but widely acclaimed. It was also published 8 years ago and the claims aren't controversial.
- mediascreen 5y ago
  To say it's not controversial seems misleading. It may be widely acclaimed, but also hugely criticised. Wikipedia has a short collection of the criticism. https://en.wikipedia.org/wiki/Capital_in_the_Twenty-First_Century#Criticism https://en.wikipedia.org/wiki/Capital_in_the_Twenty-First_Ce...
  - sudosysgen 5y ago
    There are very few critiques of the empirical assertion that the capital share of the economy is not increasing, though. Most are on other parts of his thesis or argument.
  - diordiderot 5y ago
    There are critiques of anthropogenic climate change and the addictive nature of nicotine
imtringued 5y ago
Real estate (land to be specific) is a popular investment because it lets you extract economic rents. You can build a dynasty around land because ownership is barely taxed. Land does not degrade by simply keeping it vacant. Meanwhile everyone around the land needs it to live on or to work or to extract resources. Inequality isn't driven by well deserved high returns, it is driven by monopolistic extortion where you cannot refuse even if you know you're getting ripped off.

jimmydorry 5y ago

Counter point: It's a self correcting problem (on a long enough time horizon). If his children can't manage their money by providing value to society (albeit not in the way that most can appreciate), they will quickly draw down that fortune and be unable to pass it on to their own children. Investing that money, or otherwise allocating that money to companies who can better use it provides value to society at large, and in return, the person investing will receive a return on investment to live off.

nemothekid 5y ago
>Counter point: It's a self correcting problem (on a long enough time horizon). To point to someone who has done the research, 'Capital in the Twenty-First Century', states that its not a self-correcting problem. Furthermore, I'd argue that index investing make it incredibly difficult for his heirs to lose their money. Anything short of a collapse American global hegemonic power means their wealth will be relatively safe. Furthermore, investing is not means of wealth redistribution. I can invest billions in Wal-Mart, but that will not motivate them to pay their cashiers a cent more. The compounding effect of the wealthy owning most of the industry through the stock market means their share of the ownership grows, leading to headlines like we see.

chrismcb 5y ago

Clooney got rich from acting, and got richer from selling his tequila business. And is #2 really true?

nemothekid 5y ago
>And is #2 really true? I addressed this in another reply, but I find it funny that you questioned that point literally after showing an example of it to be the case. Clooney leveraged capital from acting to buy a tequila "factory" (AFAICT, he didn't run the company, he didn't make tequila, he didn't manage distribution, his name was just on it), and used that capital to make more money they he would have ever had from acting. But somehow #2 is controversial on HN.