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I've never understood the argument of "allowing" people to become billionaires. Many of these people created things that changed the world. Should they be art

by watty 15y ago

I've never understood the argument of "allowing" people to become billionaires. Many of these people created things that changed the world. Should they be artificially limited even more on their income?

mike-cardwell 15y ago
Yes. Yes they should be restricted. We artificially limit people to protect other peoples freedoms all the time.
- fennecfoxen 15y ago
  Which committee decides exactly how many million dollars a man is allowed to make in his lifetime? I nominate Hugo Chavez for chairperson; he's an international expert on these affairs and surely the Venezuelan economy's current state of double-digit inflation and economic contraction in all sectors (except for oil) are completely unrelated to his confiscatory policies. ;)
  - mike-cardwell 15y ago
    The people who already do this are called the government. They do this by setting taxes. Reducing salary inequality would be a simple case of raising and setting the right taxes and closing the relevant loopholes.
rayiner 15y ago
Billionaires don't exist without a state. Nobody toils for years in grad school and invests time and money in a new enterprise without the panoply of legal protections created by the state. Moreover, since the system of property rights enforced by the state is, like any other system of law, completely arbitrary, the specific people that get rich under a certain system owe their wealth to that arbitrary choice. So the phrase "artificially limited" is a deep distortion of the underlying situation. It's not a matter of more versus less limitation in the legal framework. The income would not exist without all of the limitations that exist on other people in that framework. Rather, we're simply talking about points in a design space: one arbitrary set of choices versus another arbitrary set of choices.
- billybob 15y ago
  Assuming that the laws are uniformly applied (which may not be true), they are irrelevant to the differences between people's incomes. If Person A invents hoverboards and everyone buys them, creating billions in economic value, and Person B works at a gas station and creates a few thousand in economic value, they both reap proportional rewards. No, Person A couldn't have succeeded without laws protecting him/her from theft and arson. But Person B also has that protection, so clearly the difference between them lies somewhere else. If Person A has gotten billions in government aid through political connections unavailable to Person B, there's a problem. But a non-corrupt legal system is impartial, and therefore you can't attribute success or failure to it. If the system is corrupt, the solution is reform, not income redistribution.
  - hackinthebochs 15y ago
    The point is that, the particular rules of the system that reward person A with wealth is arbitrary. They essentially reward the genetic lottery and luck. Person A was able to invent hoverboards because of a million things in his lifetime lined up exactly right for him to be in the right place for his invention, most notably accident of birth and genetic lottery (genius, work ethic). In a different time the rules would have rewarded the best hunter, still largely based on the genetic roll of the die. When you strip away the fallacy of the self-made man, you realize everything is arbitrary; who makes it big is greatly dependent on the rules of the system. Thus is makes sense for the system to have an in-built limit to how much it rewards any given individual.
    - cchurch 15y ago
      You've essentially modernized the old debate between free will and predestination.
  - rayiner 15y ago
    > Assuming that the laws are uniformly applied (which may not be true), they are irrelevant to the differences between people's incomes. That's not true at all. The law has huge impacts on how things are distributed. You're making an assumptions premised on how our existing system of property law works. E.g. "If Person A invents hoverboards and everyone buys them, creating billions in economic value..." Our current system is, of course, completely arbitrary. Say Person A invents hoverboards, then Person W00001-W10000 engineer the production design, mine the raw materials, assembles them, packs them, transports them, and sells them. Say $4 billion in economic value is created as a result. Objectively, all we can say is that the $4 billion in economic value is the product of that combined activity. If nobody transported those products to the market, there would be $0 of economic value. Apportioning "credit" for the resulting economic value, and thus income from the proceeds, is a completely subjective process. It is no less subjective just because we do it indirectly, through a system of arbitrary property rules that leads to a particular allocation. Our system of property and contract law gives very strong protections to: 1) people who originate the last 5% of a valuable idea; 2) owners of capital. The "inventor" of the hoverboard almost certainly had 95% of the research already done for him, he just took the idea the last step forward. Assigning him 100% of the credit in the form of a patent is, of course, completely arbitrary. Moreover, in a capital-intensive business like manufacturing it won't be the inventor of the hoverboard that makes all the revenue from it, it will be the investor that supplied the production capital. Again, that's a completely arbitrary allocation. That is not to say that there are not utilitarian reasons to prefer a set of rules that yields one allocation rather than another. Maybe giving the patent monopoly to the 5% guy yields more overall productivity than giving it jointly to the top 5 researchers who did the other 95% of the work. Or maybe we just do it that way because its the easiest system to administer. Either way, we're mired in utilitarian arguments, and whether its "fair" to "restrict" someone is wholly irrelevant to the discussion.
lutorm 15y ago
We can argue over to what extent their success is earned or simply random. Taleb would argue that it has much more to do with randomness than not, and in that case I fail to see how they have earned more than the countless others who attempted the same thing but were unlucky.

by watty 15y ago

mike-cardwell 15y ago

Yes. Yes they should be restricted. We artificially limit people to protect other peoples freedoms all the time.

fennecfoxen 15y ago
Which committee decides exactly how many million dollars a man is allowed to make in his lifetime? I nominate Hugo Chavez for chairperson; he's an international expert on these affairs and surely the Venezuelan economy's current state of double-digit inflation and economic contraction in all sectors (except for oil) are completely unrelated to his confiscatory policies. ;)
- mike-cardwell 15y ago
  The people who already do this are called the government. They do this by setting taxes. Reducing salary inequality would be a simple case of raising and setting the right taxes and closing the relevant loopholes.

rayiner 15y ago

Billionaires don't exist without a state. Nobody toils for years in grad school and invests time and money in a new enterprise without the panoply of legal protections created by the state. Moreover, since the system of property rights enforced by the state is, like any other system of law, completely arbitrary, the specific people that get rich under a certain system owe their wealth to that arbitrary choice. So the phrase "artificially limited" is a deep distortion of the underlying situation. It's not a matter of more versus less limitation in the legal framework. The income would not exist without all of the limitations that exist on other people in that framework. Rather, we're simply talking about points in a design space: one arbitrary set of choices versus another arbitrary set of choices.

billybob 15y ago
Assuming that the laws are uniformly applied (which may not be true), they are irrelevant to the differences between people's incomes. If Person A invents hoverboards and everyone buys them, creating billions in economic value, and Person B works at a gas station and creates a few thousand in economic value, they both reap proportional rewards. No, Person A couldn't have succeeded without laws protecting him/her from theft and arson. But Person B also has that protection, so clearly the difference between them lies somewhere else. If Person A has gotten billions in government aid through political connections unavailable to Person B, there's a problem. But a non-corrupt legal system is impartial, and therefore you can't attribute success or failure to it. If the system is corrupt, the solution is reform, not income redistribution.
- hackinthebochs 15y ago
  The point is that, the particular rules of the system that reward person A with wealth is arbitrary. They essentially reward the genetic lottery and luck. Person A was able to invent hoverboards because of a million things in his lifetime lined up exactly right for him to be in the right place for his invention, most notably accident of birth and genetic lottery (genius, work ethic). In a different time the rules would have rewarded the best hunter, still largely based on the genetic roll of the die. When you strip away the fallacy of the self-made man, you realize everything is arbitrary; who makes it big is greatly dependent on the rules of the system. Thus is makes sense for the system to have an in-built limit to how much it rewards any given individual.
  - cchurch 15y ago
    You've essentially modernized the old debate between free will and predestination.
- rayiner 15y ago
  > Assuming that the laws are uniformly applied (which may not be true), they are irrelevant to the differences between people's incomes. That's not true at all. The law has huge impacts on how things are distributed. You're making an assumptions premised on how our existing system of property law works. E.g. "If Person A invents hoverboards and everyone buys them, creating billions in economic value..." Our current system is, of course, completely arbitrary. Say Person A invents hoverboards, then Person W00001-W10000 engineer the production design, mine the raw materials, assembles them, packs them, transports them, and sells them. Say $4 billion in economic value is created as a result. Objectively, all we can say is that the $4 billion in economic value is the product of that combined activity. If nobody transported those products to the market, there would be $0 of economic value. Apportioning "credit" for the resulting economic value, and thus income from the proceeds, is a completely subjective process. It is no less subjective just because we do it indirectly, through a system of arbitrary property rules that leads to a particular allocation. Our system of property and contract law gives very strong protections to: 1) people who originate the last 5% of a valuable idea; 2) owners of capital. The "inventor" of the hoverboard almost certainly had 95% of the research already done for him, he just took the idea the last step forward. Assigning him 100% of the credit in the form of a patent is, of course, completely arbitrary. Moreover, in a capital-intensive business like manufacturing it won't be the inventor of the hoverboard that makes all the revenue from it, it will be the investor that supplied the production capital. Again, that's a completely arbitrary allocation. That is not to say that there are not utilitarian reasons to prefer a set of rules that yields one allocation rather than another. Maybe giving the patent monopoly to the 5% guy yields more overall productivity than giving it jointly to the top 5 researchers who did the other 95% of the work. Or maybe we just do it that way because its the easiest system to administer. Either way, we're mired in utilitarian arguments, and whether its "fair" to "restrict" someone is wholly irrelevant to the discussion.

lutorm 15y ago

We can argue over to what extent their success is earned or simply random. Taleb would argue that it has much more to do with randomness than not, and in that case I fail to see how they have earned more than the countless others who attempted the same thing but were unlucky.