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> I think we're past believing that our top .1% is bringing value that's worth billions of times more than the rest of the population. Fortunately, we do not h
by 988747 4y ago
> I think we're past believing that our top .1% is bringing value that's worth billions of times more than the rest of the population.
Fortunately, we do not have to rely on our beliefs here, we have an objective measure, which we call "money".
If someone starts a company in their garage, and a decade later that company is worth few billions of dollars then that's the value this person brought to society - because people willingly paid them those billions of dollars for their product/service.
Of course the whole logic breaks down with purely speculative financial assets such as crypto.
- guelo 4y agoParasitic rents and many other market distortions/extortions exist.
- robertlagrant 4y agoSaying that something exists isn't a complete thought.
- guelo 4y agoStatements in a conversations do not stand alone. Thoughts flow from one to another.
- robertlagrant 4y agoThoughts can't flow if they aren't expressed completely. Insinuation can flow, but not open thoughts.
- mickael-kerjean 4y agoBy that only measure Nobels are thousand of time less valuable than Sam Bankman Fried
- nxmnxm99 4y agoHe didn't say it's the only measure.
- 988747 4y agoNobel prize winners are bad example, because their work is usually theoretical, hard to put to use. If someone writes a paper tomorrow proving that faster-than-light travel is possible then the only immediate value it brings is that you now have a nice lecture to read in bed. There are still thousands man-years of work required before an actual spaceship will be available for sale in your local dealership.
- Beldin 4y agoAlternatively, you could let people pay whatever they want for the product. That would also give you a very accurate and objective measure of how people value the product. What? You don't think the two measures would converge? In either case, the one with more market power would use that to improve their side of the bargain? Who'd've thunk...
- zaphar 4y agoThat would not tell you anything about how much someone values a product. Everyone will happily pay 0 for something they value at 10. It's a fantastic deal for them. Too discover the true value you have to raise the price until they refuse to pay it. Which is what a market is intended to do.
- luckylion 4y ago> If someone starts a company in their garage, and a decade later that company is worth few billions of dollars then that's the value this person brought to society - because people willingly paid them those billions of dollars for their product/service. What was the value FTX or Theranos brought to society?
- robertlagrant 4y agoYou'll note that when it goes wrong in each of those cases, we lock the perpetrators up in a box. And their company's value drops according to the new information.
- luckylion 4y agoTotally, because the _expected future value_ changes with the new information. If they had actually created something of value, that wouldn't change because of new information. But they hadn't, and yet their companies were worth billions. "Provides value" is loosely connected to "expected future value", but it's certainly not the same thing.
- robertlagrant 4y agoI agree. Except creating something of value isn't the same as company value - company value should be derived from ability to make money at a certain rate while spending it at a certain rate. This does include what you say, but with some extra bits. But back to your point: it is possible to simulate either or both of those things and have eager investors get in early, but that's why they (probably) get in for less money than if the company had done what it claimed. They took a risk, and taking a risk is one of the valuable contributions one can make to a company.