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One thing I’m curious about that these articles never go into: what is the eventual physical utility of all this stored wealth? As an analogy, if money is like

One thing I’m curious about that these articles never go into: what is the eventual physical utility of all this stored wealth? As an analogy, if money is like potential energy when kept in the form of financial instruments and real estate, what is its first eventual “kinetic” form after belonging to a billionaire? For example, if you were to trace all of Rockefeller’s fortune after his death, I would imagine most of it initially went to his heirs. But eventually, at least part of the wealth diffused out of the bloodline, and if you were to go through and account for the physical utility of that money, what would it look like? Labor to create superyachts and exotic sports cars? New buildings on college campuses? Cancer research? It would be nice if we had a system that quantifies this somehow, because in addition to the problems created by wealth inequality, I would argue that there are sufficiently many inefficiencies in most governmental bureaucracies as to result in a similarly poor usage of money as a billionaire who spends some of their wealth to construct a mansion on a private island. To play devil’s advocate, suppose we have a hypothetical billionaire that never spends any of their money on luxury or excess but rather devotes most of their time to figuring out how to use their wealth in a way that extracts maximum humanitarian value from it. You could argue that what constitutes “humanitarian value” is totally subjective and that decisions concerning such a large amount of money shouldn’t be left to one person. But on the flip side, would you say that most governments succeed at representing the average person’s desire for utilizing tax revenue in a way that optimally benefits society? Do they accomplish this efficiently? I don’t know the answer and don’t really have a strong opinion either way without further research, but sometimes I wonder if despite the problems they cause, billionaires sort of represent the “exploration” part of “exploration vs exploitation” in reinforcement learning, as they slightly destabilize a societal system that might otherwise be stuck in a rut or a local optimum.

weatherlite 3y ago
I think your hunch is correct very unequal distribution of money leads to economic inefficiency since the money is hoarded (or put into financial instruments or luxurious real estate) and does not trickle to the rest of the economy. Even if on average things are fine (they're not really), if the average citizen is getting left behind you're slowly eroding the middle class and democracy.
- zpeti 3y ago
  All 5 of the billionaires in the article have almost all their wealth in shares of companies, usually ones they run. Is this hoarding? Like how is zuckerberg hoarding by owning shares in the company he founded and runs? What exactly should he do? Sell all his shares? What happens then? What does Mark zuckerberg do with 100bn in cash? Do you tax it? What does the government do with 100bn in tax revenue? Would they spend it better than Zuckerberg? Also - the people who bought the shares from Zuckerberg, what do they do? They just paid 100bn for shares in facebook, are they hoarders now? Are they more evil or less evil than zuckerberg for hoarding? I just don't understand the conversation around these topics. What exactly should we do, apart from complaining about entepreneurs? These 5 people have approx $1trn in wealth, do you know how long it would take the US government to spend that? 2 months. Do you think congress is actually competent in spending that money? Can they even decide how to spend it? And it's a one off, remember that! Would that actually make a different to anything? 2 months of larger spending? Can someone please explain to me what exactly we should be doing? Like exactly? "wealth tax" has serious consequences, how do you deal with those? Are there examples in history where this actually worked? Like actually, taking 50% of people's wealth, and redistributing it? What happens once these 5 billionaires just leave the USA and go live in new zealand? Or Singapore, or whatever? What happens if the richest 1000 people in the USA leave? What happens to all the 18 year old entreprneurs who are going to build the next big companies? Will they stay in the USA? Please, someone, explain to me how this works in practice.
  - probably_wrong 3y ago
    Imagine you found a bug in your codebase. For the sake of the example, let's say that every 100th uploaded file gets deleted forever. The questions you are posing are mostly the equivalent of asking "but what if someone was using this feature as their Recycling bin? How will the time spent fixing it fit within the project's budget? And what if the developer who committed that code leaves the company because he doesn't like being told he writes faulty code?" The answer to those questions, of course, is "somehow". And maybe not all hours will be properly budgeted. But any mildly reasonable efforts towards fixing the obvious problem that's causing real harm to your users right now is better than opening a committee to discuss a framework for fixing integrity-related bugs in a proactive manner.
Iulioh 3y ago
The problem is that money is power if you want to define power as "the ability to make things happen" So the only fact of having the ability to do something alters a lot of financial and social interactions and this depends too on the public perception of the person Think Gates and Musk, I don't think there is a way to quantify that
tikkabhuna 3y ago
> To play devil’s advocate, suppose we have a hypothetical billionaire that never spends any of their money on luxury or excess but rather devotes most of their time to figuring out how to use their wealth in a way that extracts maximum humanitarian value from it. You could argue that what constitutes “humanitarian value” is totally subjective and that decisions concerning such a large amount of money shouldn’t be left to one person. But on the flip side, would you say that governments actually succeed at representing the average person’s desire for utilizing tax revenue in a way that optimally benefits society? Do they accomplish this efficiently? This sounds like Bill Gates. He's chosen humanitarian endeavours that he wants to focus on. I believe its good to have someone who can deploy significant capital on multi-decade projects. Bill Gates doesn't seem like the person who will give up eradicating polio just because he didn't get it done in a term. However, on the flip side you have Elon Musk buying an influential social media platform...
- Xcelerate 3y ago
  > This sounds like Bill Gates. He's chosen humanitarian endeavours that he wants to focus on. I believe its good to have someone who can deploy significant capital on multi-decade projects. We could consider the counterfactual situation. If this money went to the U.S. government instead of Bill Gates, would it have accomplished more for humanity than from his efforts as an individual? And to your point, even if this is the case for one billionaire, how does the outcome change if you aggregate the humanitarian utility of wealth across all billionaires vs the totality of that wealth going to various governments?
  - matwood 3y ago
    > If this money went to the U.S. government instead of Bill Gates, would it have accomplished more for humanity than from his efforts as an individual? BillG has ~120B net worth and the US spends ~6.5 trillion/year (in 2022). So it would cover just under 2% of the US yearly budget. Doesn't seem very significant considering that would be a one-time payment.
- eecc 3y ago
  WEll, Musk hasn't just flunked on Twitter. Each of his other companies would amount to a respectable lifetime achievement in their own.
lotsofpulp 3y ago
> what is the eventual physical utility of all this stored wealth? As an analogy, if money is like potential energy when kept in the form of financial instruments and real estate, what is its first eventual “kinetic” form after belonging to a billionaire? Money is just a proxy for power (as are things like title to real estate, equity ownership in a business, board seats, etc). The utility is just that, the power to do something. Obviously, greatly depends on the one wielding it, but also on the environment (status of civilization, courts, relationships, orderly societies, wars, availability of resources). Note that all of these abstractions for power mean nothing if other people do not respect them. I take that to mean “wealth”, in a way, is a measure of how orderly a society (or world) is, regardless of how unfairly distributed it is.
indigochill 3y ago
> You could argue that what constitutes “humanitarian value” is totally subjective and that decisions concerning such a large amount of money shouldn’t be left to one person. But on the flip side, would you say that most governments actually succeed at representing the average person’s desire for utilizing tax revenue in a way that optimally benefits society? Do they accomplish this efficiently? Humanitarian value is also quite a broad range. Is someone a worse person for devoting themselves to world hunger while ignoring cancer research? I would say of course not. As for the question of one person vs a nominally democratically elected government, the western liberal perspective is that government should be by the people for the people, from which it kind of follows that a government that's elected by the people is a better representation of the will of the people than one person who answers to no one but themselves (this also goes for multinational corporations which also effectively answer to no one - yes, they may get fined in certain jurisdictions, but they can navigate where they do business to carve out the fines they'll accept and those they won't). Where I feel we got it wrong in modern society, especially in the US, is that the centralization of power in a single national government has led to an impossible problem of balancing the competing interests of a vastly diverse country (you see this a bit in the EU as well, where the interests of western and central European countries can be at odds at times, but the EU is more loosely bound than the US). Distributing more of that power to the states/counties/cities would enable decision-making better-tailored to a more comprehensible demographic. It also gives more people the opportunity to participate in governing themselves (that "by the people" part). Only so many people can sit in the Senate, but there are a -lot- of city council positions across the country.
dariosalvi78 3y ago
the equivalence between money and energy or any other physical quantity is wrong. Money can be literally destroyed in a second, without leaving any trace. The vast majority of money goes nowhere, it loses value because of inflation, or just pumps up price of stuff that is used for living, such as housing, without "producing" absolutely nothing.
- Xcelerate 3y ago
  > Money can be literally destroyed in a second, without leaving any trace. I disagree. Money (a scalar value) isn’t any more real than energy (a scalar value; see Noether’s theorem). Both money and energy are accounting devices. Money cannot disappear since it’s not physical. A specific amount of money and its corresponding form (e.g., stocks, 401k, treasury notes) represent a probability that something can be obtained in the future from someone else, conditioned on the social convention that a few numbers change across a few databases. If you burn dollar bills or delete the private key to a Bitcoin wallet, you haven’t changed humanity’s capability to build yachts or conduct medical research; you’ve only changed who gets to influence those decisions.
  - dariosalvi78 3y ago
    in physics there is the first law of thermodynamics, in economy there is nothing of the sort.
csomar 3y ago
> if money is like potential energy It's not. Money (as in paper or digits) has "intrinsically" no value. It's a sort of game of chairs (and accounting) that society is living with because we have no alternative. It does seem that it has potential energy because society has decided so: People will recognize your money with their potential energy. In a sense, inflation is people distrust in the system. Hyper-inflation is people refusing to work with the system. > what is the eventual physical utility of all this stored wealth? You can't store wealth in money or bonds. If you want to store real wealth, you should try storing useful everyday things like water. But then you'll have storage costs and redistribution issues. If you store phones, they'll quickly lose value. That's why people use money despite the government continuously debasing it. > I would argue that there are sufficiently many inefficiencies in most governmental bureaucracies as to result in a similarly poor usage of money as a billionaire who spends some of their wealth to construct a mansion on a private island. Exactly. A billionaire that is living in a studio and cooking his food is exerting the same tax on society of a Starbucks barista. On the other hand, a millionaire with a yacht, is very taxing on society. If you have a housing shortage, it makes more sense for people to build houses for themselves and not yachts. > I don’t know the answer and don’t really have a strong opinion either way without further research No one does, really. No one understands this at the micro-level as the economy is an emergent phenomena. The Fed just increase/decrease supply; and is basing its model on the idea that 2% inflation is good (and deflation is bad!). > but sometimes I wonder if despite the problems they cause, billionaires sort of represent the “exploration” part of “exploration vs exploitation” in reinforcement learning, as they slightly destabilize a societal system that might otherwise be stuck in a rut or a local optimum. The system will swing. People having equal wealth does not mean prosperity and growth. They might just be stuck there. In this case, it makes sense to throw money at someone (or anyone) who is willing to innovate among the herd.

weatherlite 3y ago

I think your hunch is correct very unequal distribution of money leads to economic inefficiency since the money is hoarded (or put into financial instruments or luxurious real estate) and does not trickle to the rest of the economy. Even if on average things are fine (they're not really), if the average citizen is getting left behind you're slowly eroding the middle class and democracy.

zpeti 3y ago
All 5 of the billionaires in the article have almost all their wealth in shares of companies, usually ones they run. Is this hoarding? Like how is zuckerberg hoarding by owning shares in the company he founded and runs? What exactly should he do? Sell all his shares? What happens then? What does Mark zuckerberg do with 100bn in cash? Do you tax it? What does the government do with 100bn in tax revenue? Would they spend it better than Zuckerberg? Also - the people who bought the shares from Zuckerberg, what do they do? They just paid 100bn for shares in facebook, are they hoarders now? Are they more evil or less evil than zuckerberg for hoarding? I just don't understand the conversation around these topics. What exactly should we do, apart from complaining about entepreneurs? These 5 people have approx $1trn in wealth, do you know how long it would take the US government to spend that? 2 months. Do you think congress is actually competent in spending that money? Can they even decide how to spend it? And it's a one off, remember that! Would that actually make a different to anything? 2 months of larger spending? Can someone please explain to me what exactly we should be doing? Like exactly? "wealth tax" has serious consequences, how do you deal with those? Are there examples in history where this actually worked? Like actually, taking 50% of people's wealth, and redistributing it? What happens once these 5 billionaires just leave the USA and go live in new zealand? Or Singapore, or whatever? What happens if the richest 1000 people in the USA leave? What happens to all the 18 year old entreprneurs who are going to build the next big companies? Will they stay in the USA? Please, someone, explain to me how this works in practice.
- probably_wrong 3y ago
  Imagine you found a bug in your codebase. For the sake of the example, let's say that every 100th uploaded file gets deleted forever. The questions you are posing are mostly the equivalent of asking "but what if someone was using this feature as their Recycling bin? How will the time spent fixing it fit within the project's budget? And what if the developer who committed that code leaves the company because he doesn't like being told he writes faulty code?" The answer to those questions, of course, is "somehow". And maybe not all hours will be properly budgeted. But any mildly reasonable efforts towards fixing the obvious problem that's causing real harm to your users right now is better than opening a committee to discuss a framework for fixing integrity-related bugs in a proactive manner.

Iulioh 3y ago

The problem is that money is power if you want to define power as "the ability to make things happen" So the only fact of having the ability to do something alters a lot of financial and social interactions and this depends too on the public perception of the person Think Gates and Musk, I don't think there is a way to quantify that

tikkabhuna 3y ago

> To play devil’s advocate, suppose we have a hypothetical billionaire that never spends any of their money on luxury or excess but rather devotes most of their time to figuring out how to use their wealth in a way that extracts maximum humanitarian value from it. You could argue that what constitutes “humanitarian value” is totally subjective and that decisions concerning such a large amount of money shouldn’t be left to one person. But on the flip side, would you say that governments actually succeed at representing the average person’s desire for utilizing tax revenue in a way that optimally benefits society? Do they accomplish this efficiently? This sounds like Bill Gates. He's chosen humanitarian endeavours that he wants to focus on. I believe its good to have someone who can deploy significant capital on multi-decade projects. Bill Gates doesn't seem like the person who will give up eradicating polio just because he didn't get it done in a term. However, on the flip side you have Elon Musk buying an influential social media platform...

Xcelerate 3y ago
> This sounds like Bill Gates. He's chosen humanitarian endeavours that he wants to focus on. I believe its good to have someone who can deploy significant capital on multi-decade projects. We could consider the counterfactual situation. If this money went to the U.S. government instead of Bill Gates, would it have accomplished more for humanity than from his efforts as an individual? And to your point, even if this is the case for one billionaire, how does the outcome change if you aggregate the humanitarian utility of wealth across all billionaires vs the totality of that wealth going to various governments?
- matwood 3y ago
  > If this money went to the U.S. government instead of Bill Gates, would it have accomplished more for humanity than from his efforts as an individual? BillG has ~120B net worth and the US spends ~6.5 trillion/year (in 2022). So it would cover just under 2% of the US yearly budget. Doesn't seem very significant considering that would be a one-time payment.
eecc 3y ago
WEll, Musk hasn't just flunked on Twitter. Each of his other companies would amount to a respectable lifetime achievement in their own.

lotsofpulp 3y ago

> what is the eventual physical utility of all this stored wealth? As an analogy, if money is like potential energy when kept in the form of financial instruments and real estate, what is its first eventual “kinetic” form after belonging to a billionaire? Money is just a proxy for power (as are things like title to real estate, equity ownership in a business, board seats, etc). The utility is just that, the power to do something. Obviously, greatly depends on the one wielding it, but also on the environment (status of civilization, courts, relationships, orderly societies, wars, availability of resources). Note that all of these abstractions for power mean nothing if other people do not respect them. I take that to mean “wealth”, in a way, is a measure of how orderly a society (or world) is, regardless of how unfairly distributed it is.

indigochill 3y ago

> You could argue that what constitutes “humanitarian value” is totally subjective and that decisions concerning such a large amount of money shouldn’t be left to one person. But on the flip side, would you say that most governments actually succeed at representing the average person’s desire for utilizing tax revenue in a way that optimally benefits society? Do they accomplish this efficiently? Humanitarian value is also quite a broad range. Is someone a worse person for devoting themselves to world hunger while ignoring cancer research? I would say of course not. As for the question of one person vs a nominally democratically elected government, the western liberal perspective is that government should be by the people for the people, from which it kind of follows that a government that's elected by the people is a better representation of the will of the people than one person who answers to no one but themselves (this also goes for multinational corporations which also effectively answer to no one - yes, they may get fined in certain jurisdictions, but they can navigate where they do business to carve out the fines they'll accept and those they won't). Where I feel we got it wrong in modern society, especially in the US, is that the centralization of power in a single national government has led to an impossible problem of balancing the competing interests of a vastly diverse country (you see this a bit in the EU as well, where the interests of western and central European countries can be at odds at times, but the EU is more loosely bound than the US). Distributing more of that power to the states/counties/cities would enable decision-making better-tailored to a more comprehensible demographic. It also gives more people the opportunity to participate in governing themselves (that "by the people" part). Only so many people can sit in the Senate, but there are a -lot- of city council positions across the country.

dariosalvi78 3y ago

the equivalence between money and energy or any other physical quantity is wrong. Money can be literally destroyed in a second, without leaving any trace. The vast majority of money goes nowhere, it loses value because of inflation, or just pumps up price of stuff that is used for living, such as housing, without "producing" absolutely nothing.

Xcelerate 3y ago
> Money can be literally destroyed in a second, without leaving any trace. I disagree. Money (a scalar value) isn’t any more real than energy (a scalar value; see Noether’s theorem). Both money and energy are accounting devices. Money cannot disappear since it’s not physical. A specific amount of money and its corresponding form (e.g., stocks, 401k, treasury notes) represent a probability that something can be obtained in the future from someone else, conditioned on the social convention that a few numbers change across a few databases. If you burn dollar bills or delete the private key to a Bitcoin wallet, you haven’t changed humanity’s capability to build yachts or conduct medical research; you’ve only changed who gets to influence those decisions.
- dariosalvi78 3y ago
  in physics there is the first law of thermodynamics, in economy there is nothing of the sort.

csomar 3y ago

> if money is like potential energy It's not. Money (as in paper or digits) has "intrinsically" no value. It's a sort of game of chairs (and accounting) that society is living with because we have no alternative. It does seem that it has potential energy because society has decided so: People will recognize your money with their potential energy. In a sense, inflation is people distrust in the system. Hyper-inflation is people refusing to work with the system. > what is the eventual physical utility of all this stored wealth? You can't store wealth in money or bonds. If you want to store real wealth, you should try storing useful everyday things like water. But then you'll have storage costs and redistribution issues. If you store phones, they'll quickly lose value. That's why people use money despite the government continuously debasing it. > I would argue that there are sufficiently many inefficiencies in most governmental bureaucracies as to result in a similarly poor usage of money as a billionaire who spends some of their wealth to construct a mansion on a private island. Exactly. A billionaire that is living in a studio and cooking his food is exerting the same tax on society of a Starbucks barista. On the other hand, a millionaire with a yacht, is very taxing on society. If you have a housing shortage, it makes more sense for people to build houses for themselves and not yachts. > I don’t know the answer and don’t really have a strong opinion either way without further research No one does, really. No one understands this at the micro-level as the economy is an emergent phenomena. The Fed just increase/decrease supply; and is basing its model on the idea that 2% inflation is good (and deflation is bad!). > but sometimes I wonder if despite the problems they cause, billionaires sort of represent the “exploration” part of “exploration vs exploitation” in reinforcement learning, as they slightly destabilize a societal system that might otherwise be stuck in a rut or a local optimum. The system will swing. People having equal wealth does not mean prosperity and growth. They might just be stuck there. In this case, it makes sense to throw money at someone (or anyone) who is willing to innovate among the herd.