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I think that this is not just a story-telling problem. It is a wealth-sharing problem as well. I don't know much about stripe, but think of Bezos as a pretty

I think that this is not just a story-telling problem. It is a wealth-sharing problem as well. I don't know much about stripe, but think of Bezos as a pretty good example - to a O(n) rounding he has 100 billion dollars and 1 million employees. Why is he getting 100,000 from each employee ? Not because those employees send him a cheque. But because of particular outcomes of share capital, and corporate law. Decisions made in UK / US legal circles since before the USA was a USA. These decisions have been part of 200 years of the most phenomenal growth in global human wealth ever, so there is a lot of baby in the bathwater. But look at say the German mittelstand - a different approach to local business banking. And compare european social-democracy to US welfare states. There is a lot of room and flexibility between "totally dampen growth and human innovation" and "more equal sharing of life's burdens". Oh and lest we forget, it is in the main scientific advances that have bought us the last 200 years, not founders or entrepreneurs, and those advances were funded almost fully by government out of ... tax revenue. So the last 200 years of growth can be seen as a story of government funded and directed scientific achievement, given reign to rollout in a benign business climate, and the workforce provided via mass education and health programs, all of which funded by taxing the successful companies. Is that an over simplification - hell yes. But so is "young founder has great idea and works hard".

l33t2328 4y ago
To an O(n) rounding error he also has 0 dollar and 100000000 employees
jdavis703 4y ago
If Amazon’s board decided to reallocate the CEO’s compensation package and grant it to employees, it would increase the entry level salaries of warehouse workers from $18/hour to $18.45/hour. Not a bad bump, but also historically low by Amazon pay bumps. But it’s also not going to solve income inequality… And very likely there are few people qualified to be CEO of Amazon who’d do the job for $18.45/hour.
- daenz 4y ago
  Not to mention the financial fallout of not having an experienced leader at the helm. Sure, it would coast for awhile without a leader, and I'm sure someone will try to explain to me how it could be run completely democratically, but eventually a competitor with a competent leader would eat their lunch.
  - tsimionescu 4y ago
    I know one or two democratic countries that are doing OK despite being democratic. Democracy doesn't have to be leaderless: we have a good few hundred years of experience in running entities many times more complex than a company using democratic processes, appointing leaders by vote etc.
    - daenz 4y ago
      I don't want the companies providing essential goods and services to run as inefficiently as governments do. It would be disastrous.
      - tsimionescu 4y ago
        There are many more governments than companies providing essential goods and services. And in times of crisis (say, flooding or fires), it's the military and other government entities that have to step in to fix things, never private companies.
- jonplackett 4y ago
  Don’t confuse compensation with his wealth. CEOs often have hardly any salary. But his shares nearly doubled in value over the pandemic - increasing by $84 billion. Divide those billions per employee instead and they get $84,000 each. And Bezos is still as rich as he was before the pandemic.
  - lubos 4y ago
    Amazon stock price is currently back to where it was before the pandemic. Look at the charts.
VWWHFSfQ 4y ago
> It is a wealth-sharing problem as well. The reality is that it's just not possible to start these kinds of Unicorn companies anywhere except in the USA. The EU's extreme policies contribute to an overwhelming burden of tax and employment regulations, which results in risk-averseness. So entrepreneurial Europeans go to USA to start their company.
- wbsss4412 4y ago
  That thesis is hard to square with the fact that it’s not that these unicorns are started in the US, it’s that they are almost all started in one metropolitan area. The distinguishing factors here aren’t simply European regulations and taxes.
  - VWWHFSfQ 4y ago
    It's a matter of locality sure. But also access. SF and NYC have easy access to startup incubators and venture capital. Do you have a great idea and looking for an angel to give it a chance? You'll probably find it in New York or San Francisco. Pretty unlikely in Munich or Paris.
    - jhugo 4y ago
      I realise it's maybe clear from the context of the thread, but it's worth reiterating that this is only true for unicorn-scale. There is plenty of startup capital available for good ideas in both Paris and Munich as well as many other European cities, they are just unlikely to breed unicorns.
      - tluyben2 4y ago
        I think this is important; I am in a bunch of startup hubs in the eu/uk as technical validator and tech expert and over the last 10 years of doing that, I haven’t heard 1 team that wanted to go for unicorn growth. There is money enough here for a healthy, profit making company; just generally (Revolut as counter example) not for burning a few 100m$ to become a (loss making) unicorn.
dustingetz 4y ago
Ok. How?
- lmm 4y ago
  - Stop giving discounted tax rates for capital gains, make people pay the full income tax rate for any kind of income - Abolish step-up basis, which allows dynasties to build tax-free wealth via "invest, borrow, die"-type strategies. Also other tax avoidance strategies used by the rich e.g. 503cs. - Stop giving corporations special treatment under anti-trust law compared to other ways of organising. Give unions, workers' co-operatives, and other such organisations, the same rights to act in an organised way that corporations have. (And, conversely, start paying attention to corporate monopolies rather than using the narrow "consumer harm" standard that's been followed in recent years)
  - EVa5I7bHFq9mnYK 4y ago
    Unlike wages, capital gains can be negative. And generally IRS doesn't compensate for losses, except for minuscule amount. Otherwise imagine Treasury having to refund trillions to Bitcoin bag holders. So lower rate reflects higher risk.
    - triceratops 4y ago
      A lower rate for the same amount of income in capital gains compared to salary makes sense. But why is the top rate for capital gains only 20% when it's 38% for income? (plus whatever the state adds on top). Why aren't there more brackets that go higher for capital gains as well?
      - mym1990 4y ago
        The controversial answer might be that the wealthier brackets are more likely to be holders of financial investments, and the tax code seems to clearly benefit wealthier groups because the tax code is influenced BY the wealthier class through lobbying and the sorts. If I had no context of the situation, I would see the lower % as a way to incentivize people to invest their money in things that would fall under capital gains.
majormajor 4y ago
I don't really follow your examples, but I think there's a part of startup comp structures that's worth calling out in general. Equity distribution ratios are way different than salary ones. Your boss in a mature company may make 20% more than you, give or take. Your boss in a early stage startup may have 10x (or more!) more equity than you. Even if they don't have 10x to lose.
- lifeisstillgood 4y ago
  Yes I think that is more or less what I am talking about. In a democracy the tendency is towards fairer equitable distribution of wealth (why FDR was called a traitor to his class, why Jim Crow laws exist etc). It is one factor in why companies are not democracies- but I think (hope?) we may see much experimentation in democratic decision making to try and make it as speedy as hierarchical companies (hmm - there is likely to be a speed / stability / waste trade off here?)
  - chii 4y ago
    > It is one factor in why companies are not democracies societal democracy works because everybody is born into a society equally. A company democracy doesn't work because not everyone is "born" into the company - the founders are more born, since they put up initial capital. If the employees also put up capital, they will get an apportioned vote. So a company _is_ a democracy, but the votes aren't tied to lives like in society, but tied to capital. Each dollar buys you a vote.
    - tsimionescu 4y ago
      This values capital over labor to a far too large extent. The value of a (successful) company is overwhelmingly dominated by labor - including the labor of the founders and CEOs, to be clear - not by original capital investments. But, ownership is only afforded to those who contribute capital, and ~0% to those contributing labor (this does vary between companies, as some do offer equity as part of the labor contract, but typically only to certain employees; its very unlikely the cleaning person will be offered any equity, for example).
philwelch 4y ago
> It is a wealth-sharing problem as well. I don't know much about stripe, but think of Bezos as a pretty good example - to a O(n) rounding he has 100 billion dollars and 1 million employees. Why is he getting 100,000 from each employee? I used to work for Amazon. I did not give Jeff Bezos $100,000. In fact, I actually made money out of the deal.
- pjbeam 4y ago
  Same here.
- notfromhere 4y ago
  By its nature, you get more value out of an employee than you pay in wages. Otherwise, there would be no point to hiring anyone.
  - throw123123123 4y ago
    At the same time, the proposal has to be better than what others companies offer, or nobody would accept the position.
  - jollofricepeas 4y ago
    Exactly. Fundamentally, tech workers don’t seem to understand this point mainly because they are making more money than “everyone else.” The other reason is that we as humans don’t understand big numbers. Big ape brains can’t understand the gap between $1 million and $1 billion let alone 100 billion. If software engineers would have banded together a long time ago to get a larger piece of the pie like professional athletes, then…. - Senior engineers would make NFL wages - And quants would be making NBA/NFL wages
    - edanm 4y ago
      > - Senior engineers would make NFL wages That is an absurd exaggeration, unless by "senior engineers" you are including people who do a lot more than "just" engineering, e.g. build companies, build products, etc. The reason NFL wages are so high is not just that they bring in a lot of money, it's that the players are to a large extent irreplaceable. If you take the, say, 500 most talented players in the US at a given time, you can't just replace them with the next 500 most talented players and get the same outcome. So each of them commands a very large salary - because the alternatives are worse, and will lead to worse outcomes, which will lead to less money for the team. And at the top end, the best players are a massive draw that makes teams tons of money. Compare that to engineers. We are, to a much larger extent, replaceable. If Amazon can't hire the 1000 "best" engineers, going to the next 1000 will probably not noticeably impact their product. I'm not denying that there are talent differentials between engineers - I think it's even more than the commonly cited 10x. But it's still not that big, definitely not bigger than the difference in NFL players (since engineering is not competitive.) Note that if you stretch the definition of software engineer to include people building and launching brand new products, building huge successful teams, etc, then you're getting into the realm of CTOs, CEOs, founders, etc, which are far less replaceable (I'm a good engineer, but I couldn't have built Stripe). But then we're talking about the people who are adequately compensated for their work.
Thorrez 4y ago
>1 million employees 1 million employees right now, or all time? Amazon is ~28 years old. $100B/28 years = $3.6B/year.
bryanrasmussen 4y ago
>to a O(n) rounding he has 100 billion dollars and 1 million employees. Assuming those numbers are correct, I believe he got that 100 billion over time and over time he has had much more than 1 million employees, although probably the most amount of employees he has had at any one time was 1 million.
France_is_bacon 4y ago
[dead]
concordDance 4y ago
> Oh and lest we forget, it is in the main scientific advances that have bought us the last 200 years, not founders or entrepreneurs, and those advances were funded almost fully by government out of ... tax revenue. This doesn't ring true to me... the industrial revolution came from the steam engine. And so many later advancements like the light bulb, generators, cars, planes, mass manufacture of fertilizer didn't have much governmemt involvement.
ken47 4y ago
Here's the thing. The average person only cares about their economic growth up to a point. Study after study has concluded that once most people have "enough" money, adding more does not bring them any more happiness (with the rare exception of a increase being so substantial that it radically improves their social status -- let's say by at least an order of magnitude). And studies have shown that people become unhappy when confronted with people who have significantly more than them - simply put, envy. Therefore, one can easily argue that if economic growth is coupled to ever-increasing inequality, it actually begins to reduce overall human happiness after a point -- and if you "read the room" around the world, I'm pretty sure humanity has passed that point. Just take a look at how society is structured today, where a 1% difference in achievement at some arbitrarily determined age can lead to a difference in expected lifetime income that is orders of magnitude larger. And that's not to mention the kind of personal wealth that, due to the properties of exponential growth, cannot help but grow, regardless of the competence of its owner. Die-hard capitalists argue that this is the best economic system that we've ever had, but our sample size is very limited. We've only been trying this out for a minute fraction of humanity's existence, and the effects of this system have not reached a steady state. If the past few decades are any indication, capitalism has made the world worse off in many ways. It enabled our ancestors to leave us with many major unsolved problems, with blissful ignorance - issues that are given token acknowledgement in economics classes as "externalities," a term that doesn't even begin capture how important they really are for humanity's future. I posit that overall human happiness plotted against economic inequality is maximized somewhere in between strictly enforced equality and the extreme levels of inequality that we see today. It doesn't take a genius to see it, but no one really talks about the middle. Perhaps sanity is too boring for this generation.

l33t2328 4y ago

To an O(n) rounding error he also has 0 dollar and 100000000 employees

jdavis703 4y ago

If Amazon’s board decided to reallocate the CEO’s compensation package and grant it to employees, it would increase the entry level salaries of warehouse workers from $18/hour to $18.45/hour. Not a bad bump, but also historically low by Amazon pay bumps. But it’s also not going to solve income inequality… And very likely there are few people qualified to be CEO of Amazon who’d do the job for $18.45/hour.

daenz 4y ago
Not to mention the financial fallout of not having an experienced leader at the helm. Sure, it would coast for awhile without a leader, and I'm sure someone will try to explain to me how it could be run completely democratically, but eventually a competitor with a competent leader would eat their lunch.
- tsimionescu 4y ago
  I know one or two democratic countries that are doing OK despite being democratic. Democracy doesn't have to be leaderless: we have a good few hundred years of experience in running entities many times more complex than a company using democratic processes, appointing leaders by vote etc.
  - daenz 4y ago
    I don't want the companies providing essential goods and services to run as inefficiently as governments do. It would be disastrous.
    - tsimionescu 4y ago
      There are many more governments than companies providing essential goods and services. And in times of crisis (say, flooding or fires), it's the military and other government entities that have to step in to fix things, never private companies.
jonplackett 4y ago
Don’t confuse compensation with his wealth. CEOs often have hardly any salary. But his shares nearly doubled in value over the pandemic - increasing by $84 billion. Divide those billions per employee instead and they get $84,000 each. And Bezos is still as rich as he was before the pandemic.
- lubos 4y ago
  Amazon stock price is currently back to where it was before the pandemic. Look at the charts.

VWWHFSfQ 4y ago

> It is a wealth-sharing problem as well. The reality is that it's just not possible to start these kinds of Unicorn companies anywhere except in the USA. The EU's extreme policies contribute to an overwhelming burden of tax and employment regulations, which results in risk-averseness. So entrepreneurial Europeans go to USA to start their company.

wbsss4412 4y ago
That thesis is hard to square with the fact that it’s not that these unicorns are started in the US, it’s that they are almost all started in one metropolitan area. The distinguishing factors here aren’t simply European regulations and taxes.
- VWWHFSfQ 4y ago
  It's a matter of locality sure. But also access. SF and NYC have easy access to startup incubators and venture capital. Do you have a great idea and looking for an angel to give it a chance? You'll probably find it in New York or San Francisco. Pretty unlikely in Munich or Paris.
  - jhugo 4y ago
    I realise it's maybe clear from the context of the thread, but it's worth reiterating that this is only true for unicorn-scale. There is plenty of startup capital available for good ideas in both Paris and Munich as well as many other European cities, they are just unlikely to breed unicorns.
    - tluyben2 4y ago
      I think this is important; I am in a bunch of startup hubs in the eu/uk as technical validator and tech expert and over the last 10 years of doing that, I haven’t heard 1 team that wanted to go for unicorn growth. There is money enough here for a healthy, profit making company; just generally (Revolut as counter example) not for burning a few 100m$ to become a (loss making) unicorn.

dustingetz 4y ago

Ok. How?

lmm 4y ago
- Stop giving discounted tax rates for capital gains, make people pay the full income tax rate for any kind of income - Abolish step-up basis, which allows dynasties to build tax-free wealth via "invest, borrow, die"-type strategies. Also other tax avoidance strategies used by the rich e.g. 503cs. - Stop giving corporations special treatment under anti-trust law compared to other ways of organising. Give unions, workers' co-operatives, and other such organisations, the same rights to act in an organised way that corporations have. (And, conversely, start paying attention to corporate monopolies rather than using the narrow "consumer harm" standard that's been followed in recent years)
- EVa5I7bHFq9mnYK 4y ago
  Unlike wages, capital gains can be negative. And generally IRS doesn't compensate for losses, except for minuscule amount. Otherwise imagine Treasury having to refund trillions to Bitcoin bag holders. So lower rate reflects higher risk.
  - triceratops 4y ago
    A lower rate for the same amount of income in capital gains compared to salary makes sense. But why is the top rate for capital gains only 20% when it's 38% for income? (plus whatever the state adds on top). Why aren't there more brackets that go higher for capital gains as well?
    - mym1990 4y ago
      The controversial answer might be that the wealthier brackets are more likely to be holders of financial investments, and the tax code seems to clearly benefit wealthier groups because the tax code is influenced BY the wealthier class through lobbying and the sorts. If I had no context of the situation, I would see the lower % as a way to incentivize people to invest their money in things that would fall under capital gains.

majormajor 4y ago

I don't really follow your examples, but I think there's a part of startup comp structures that's worth calling out in general. Equity distribution ratios are way different than salary ones. Your boss in a mature company may make 20% more than you, give or take. Your boss in a early stage startup may have 10x (or more!) more equity than you. Even if they don't have 10x to lose.

lifeisstillgood 4y ago
Yes I think that is more or less what I am talking about. In a democracy the tendency is towards fairer equitable distribution of wealth (why FDR was called a traitor to his class, why Jim Crow laws exist etc). It is one factor in why companies are not democracies- but I think (hope?) we may see much experimentation in democratic decision making to try and make it as speedy as hierarchical companies (hmm - there is likely to be a speed / stability / waste trade off here?)
- chii 4y ago
  > It is one factor in why companies are not democracies societal democracy works because everybody is born into a society equally. A company democracy doesn't work because not everyone is "born" into the company - the founders are more born, since they put up initial capital. If the employees also put up capital, they will get an apportioned vote. So a company _is_ a democracy, but the votes aren't tied to lives like in society, but tied to capital. Each dollar buys you a vote.
  - tsimionescu 4y ago
    This values capital over labor to a far too large extent. The value of a (successful) company is overwhelmingly dominated by labor - including the labor of the founders and CEOs, to be clear - not by original capital investments. But, ownership is only afforded to those who contribute capital, and ~0% to those contributing labor (this does vary between companies, as some do offer equity as part of the labor contract, but typically only to certain employees; its very unlikely the cleaning person will be offered any equity, for example).

philwelch 4y ago

> It is a wealth-sharing problem as well. I don't know much about stripe, but think of Bezos as a pretty good example - to a O(n) rounding he has 100 billion dollars and 1 million employees. Why is he getting 100,000 from each employee? I used to work for Amazon. I did not give Jeff Bezos $100,000. In fact, I actually made money out of the deal.

pjbeam 4y ago
Same here.
notfromhere 4y ago
By its nature, you get more value out of an employee than you pay in wages. Otherwise, there would be no point to hiring anyone.
- throw123123123 4y ago
  At the same time, the proposal has to be better than what others companies offer, or nobody would accept the position.
- jollofricepeas 4y ago
  Exactly. Fundamentally, tech workers don’t seem to understand this point mainly because they are making more money than “everyone else.” The other reason is that we as humans don’t understand big numbers. Big ape brains can’t understand the gap between $1 million and $1 billion let alone 100 billion. If software engineers would have banded together a long time ago to get a larger piece of the pie like professional athletes, then…. - Senior engineers would make NFL wages - And quants would be making NBA/NFL wages
  - edanm 4y ago
    > - Senior engineers would make NFL wages That is an absurd exaggeration, unless by "senior engineers" you are including people who do a lot more than "just" engineering, e.g. build companies, build products, etc. The reason NFL wages are so high is not just that they bring in a lot of money, it's that the players are to a large extent irreplaceable. If you take the, say, 500 most talented players in the US at a given time, you can't just replace them with the next 500 most talented players and get the same outcome. So each of them commands a very large salary - because the alternatives are worse, and will lead to worse outcomes, which will lead to less money for the team. And at the top end, the best players are a massive draw that makes teams tons of money. Compare that to engineers. We are, to a much larger extent, replaceable. If Amazon can't hire the 1000 "best" engineers, going to the next 1000 will probably not noticeably impact their product. I'm not denying that there are talent differentials between engineers - I think it's even more than the commonly cited 10x. But it's still not that big, definitely not bigger than the difference in NFL players (since engineering is not competitive.) Note that if you stretch the definition of software engineer to include people building and launching brand new products, building huge successful teams, etc, then you're getting into the realm of CTOs, CEOs, founders, etc, which are far less replaceable (I'm a good engineer, but I couldn't have built Stripe). But then we're talking about the people who are adequately compensated for their work.

Thorrez 4y ago

>1 million employees 1 million employees right now, or all time? Amazon is ~28 years old. $100B/28 years = $3.6B/year.

bryanrasmussen 4y ago

>to a O(n) rounding he has 100 billion dollars and 1 million employees. Assuming those numbers are correct, I believe he got that 100 billion over time and over time he has had much more than 1 million employees, although probably the most amount of employees he has had at any one time was 1 million.

France_is_bacon 4y ago

[dead]

concordDance 4y ago

> Oh and lest we forget, it is in the main scientific advances that have bought us the last 200 years, not founders or entrepreneurs, and those advances were funded almost fully by government out of ... tax revenue. This doesn't ring true to me... the industrial revolution came from the steam engine. And so many later advancements like the light bulb, generators, cars, planes, mass manufacture of fertilizer didn't have much governmemt involvement.

ken47 4y ago

Here's the thing. The average person only cares about their economic growth up to a point. Study after study has concluded that once most people have "enough" money, adding more does not bring them any more happiness (with the rare exception of a increase being so substantial that it radically improves their social status -- let's say by at least an order of magnitude). And studies have shown that people become unhappy when confronted with people who have significantly more than them - simply put, envy. Therefore, one can easily argue that if economic growth is coupled to ever-increasing inequality, it actually begins to reduce overall human happiness after a point -- and if you "read the room" around the world, I'm pretty sure humanity has passed that point. Just take a look at how society is structured today, where a 1% difference in achievement at some arbitrarily determined age can lead to a difference in expected lifetime income that is orders of magnitude larger. And that's not to mention the kind of personal wealth that, due to the properties of exponential growth, cannot help but grow, regardless of the competence of its owner. Die-hard capitalists argue that this is the best economic system that we've ever had, but our sample size is very limited. We've only been trying this out for a minute fraction of humanity's existence, and the effects of this system have not reached a steady state. If the past few decades are any indication, capitalism has made the world worse off in many ways. It enabled our ancestors to leave us with many major unsolved problems, with blissful ignorance - issues that are given token acknowledgement in economics classes as "externalities," a term that doesn't even begin capture how important they really are for humanity's future. I posit that overall human happiness plotted against economic inequality is maximized somewhere in between strictly enforced equality and the extreme levels of inequality that we see today. It doesn't take a genius to see it, but no one really talks about the middle. Perhaps sanity is too boring for this generation.