9 ms·

Mag Wealth (2024)

153 points by andsoitis 1y ago

Sprotch 1y ago
I’d argue focusing on wealth inequality is precisely the wrong approach. A better approach would be to look at the quality of life of the poorest.
- roflyear 1y ago
  I don't think many look at wealth inequality in isolation, it's usually accompanied by how people are starving. E.g. "over 20 people die from malnutrition in the US but we have over 900 billionaire's" - e.g. each billionaire would probably only have to give $300k each (equiv to what the average tax payer gives to the defense budget each year) to prevent most deaths in the US due to lack of food - etc.
  - gishh 1y ago
    883 billion divided by 200 million is like 4 grand. How do you figure each taxpayer pays 300k/yr in taxes to the defense budget?
    - Spooky23 1y ago
      You make your currency the reserve currency, tax the world by inflating it while restricting circulation, print money, then borrow. When people or countries potentially disrupt the equilibrium, kill them.
      - gishh 1y ago
        Sorry, I meant the math part
  - solveit 1y ago
    I get the feeling that you're winging the specific numbers because they're spectacularly incoherent. But anyway, the United States is extremely rich and has essentially no big problems that can be solved by a small amount (say, a few billion) of money. The problems are either so big that it would take trillions to solve (supporting aging population etc), or blocked by something other than money (politics, regulations, etc). The big problems that can be solved just by throwing a few billion at them are solved quite easily by either the government or by private entities like the Gates Foundation.
    - rizzom5000 1y ago
      In practice, it seems that politics generally takes precedence over problem solving. If you look into the psychology of it, neither politicians nor voters are really incentivized to solve big problems. This is especially true for big problems that will take more than an election cycle to solve. It seems to me that it would be easy to support an argument that suggests more big problems could be solved if incentives were better aligned toward problem solving and if competent people, not professional politicians, were chosen to solve them.
  - Workaccount2 1y ago
    In the US, the poorest people suffer from an obesity epidemic. Virtually no one is starving in the US anymore, besides mental health problems or other edge cases creating it.
    - HumblyTossed 1y ago
      The poor are food insecure. This leads to obesity not because they have access to an abundance of food but because their access to food is not stead, leading to over eating to compensate, and the food they can afford is not healthy.
      - akoboldfrying 1y ago
        > the food they can afford is not healthy Are you really claiming that it's cheaper to buy an appetite-satisfying amount of unhealthy food (chips/sweets/snacks/fast food) than fresh vegetables and staples like rice or potatoes? Serious question.
        miltonlost 1y ago
        Yes, both cheaper and more accessible and easier to eat without having to spend the time (which the working poor don't have) to then cook the raw foods. They're called food deserts. https://en.wikipedia.org/wiki/Food_desert https://en.wikipedia.org/wiki/Food_desert
        akoboldfrying 1y ago
        Thanks for the link. I agree that preparation time is an important consideration. I do think that the food desert criterion (> 1.6km to the nearest supermarket in urban centres) seems very restrictive -- this would make half of most suburbs "food deserts" in the affluent western country where I live. I find the more recent concept of "food swamps", also explained on that page, to be a (perhaps unwitting) direct challenge to the theory that absence of nearby healthy food is the root cause: > A related concept is the phenomenon of a food swamp, a recently coined term by researchers who defined it as an area with a disproportionate number of fast food restaurants (and fast food advertising) in comparison to the number of supermarkets in that area.[13] The single supermarket in a low-income area does not, according to researchers Rose and colleagues, necessitate availability nor does it decrease obesity rates and health risks If this claim is true -- that is, if areas with 1 nearby supermarket have obesity rates no better than areas with 0 -- then it's essentially impossible to blame health outcomes on the availability of healthy food nearby. If an area has nearby supermarkets, it is much harder to make the case that obesity is purely the result of external factors outside a person's control.
  - SpicyLemonZest 1y ago
    One of the things you learn quickly when you look at these kind of problems is that they’re not so easy to solve with money. The budget for SNAP, the US’s primary food benefits program, is about $100 billion; the additional $270 million you propose would be a tiny drop in the bucket.
- SilverElfin 1y ago
  Agree. Focusing on the inequality bit feels closer to envy. But if the quality of life or something like inflation adjusted wealth is going up for everyone, or if it is above some acceptable minimum, then is it really a problem? Or just a reflection of how concentrated things can be in a technologically advanced world?
  - computerthings 1y ago
    [dead]
  - kuerbel 1y ago
    I’m from Europe, and that’s what I focus on when talking about inequality: even if everyone’s living standards are rising, extreme wealth concentration can erode social cohesion, limit access to essential services, and distort political influence. You seem to view this through an American lens, very focused on individual opportunity, while to me it's about fairness, shared responsibility, and the health of society.
    - vjvjvjvjghv 1y ago
      I think it's not even the billionaires that are the biggest problem. It's more like the top 10-20% that are driving up housing prices and many other things. They are a large enough group that it makes sense to mostly cater to them which is something we already see in most new apartments being higher end, less and less cheap cars on the market, no small houses to buy, restaurant prices shooting up, concert tickers becoming crazy expensive and so on. Las Vegas used to be the place for the average guy to fun. In the last few years they have publicly stated that they don't want that population anymore but want more of the upper end. All this leads to a system that favors the top 10-20% who can afford things, own assets like stocks and real estate, get better education for their kids and leaves the rest of the polulation out in the cold.
      - Spooky23 1y ago
        It’s not that they don’t want — you can gamble on the toilet now. The guys who were gonna fly in and drop $10k already blew their kids college fund on Draft Kings.
- CGMthrowaway 1y ago
  Agreed. Unfortunately humans are hardwired to compare themselves to others.
  - aprilthird2021 1y ago
    So much so that even if the quality of life of the lowest improves greatly, if the quality of life of everyone around them improves even more rapidly, they will feel worse off, not better off
    - CGMthrowaway 1y ago
      "You don't have to run faster than the bear to get away. You just have to run faster than the guy next to you." Because on one level, we are all just competing for finite resources - especially quality females - economics is in that context an ordinal competition, not cardinal.[1] But on another level, it's the mutual cooperation, wealth creation from nothing (making the "finite" a little less finite and a little more infinite), etc that allows us to advance both as a society and as individuals. [1]There is an interesting tie into Mises here if I wanted to rabbit hole it (value is subjective, not measurable in cardinal units, and exists only in the mind as a ranked preference of options)
      - czl 1y ago
        One of the big advantages humans have is that we are really good at working around constraints rather than just fighting over them. Health care, education, and even things like prenatal screening to reduce serious genetic disease all expand people’s potential and quality of life. Over time, that means more people who are emotionally stable, educated, and healthy, which is exactly what makes “higher quality” partners possible in the first place. When we treat everything as a zero sum status game, especially when it comes to other human beings, we tend to slide into ugly, destructive dynamics (up to and including wars) where everyone burns resources just to keep their relative place. Cooperation and innovation, on the other hand, are how we turn a fixed pie into a growing one. So yes, relative position matters in some contexts, but the whole reason our species has gotten this far is that we are not limited to fighting over scraps. We can change the size and shape of the pie together.
- bijection 1y ago
  Though I agree that inequality is less important than the quality of life of the poorest people, this article explicitly tries to characterize the latter, so even though this is done in the name of discussing wealth inequality, I'm not sure your comment applies here.
  - loeg 1y ago
    The whole article is about creating a log-ish scale comparison system.
- hearsathought 1y ago
  [flagged]
- Nifty3929 1y ago
  Yes, and also numerical "wealth" is not the same as stuff. Rich people often have very high numerical wealth, but actually don't have so much more "stuff" - houses, medicine, food, etc. They will certainly have more of these things, but maybe 100x not 1Mx. For example, let's say that Musk is 250k times wealthier than I am. Does he have 250k shoes? Houses? Not really. And it's the consumption of stuff that is really the share that one takes from society, not "wealth." Having $1 might be wealth, but it is not until I spend that Dollar on an apple that I have taken something from society.
  - deleted 1y ago
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  - lazide 1y ago
    Eh, even the ‘taking’ in this example isn’t so simple. By spending that $1, you’ve also given a farmer (plus middle men, plus a retailer) $1 they otherwise wouldn’t have had - and relieved them of an apple they already have too many of. The big ‘taking’ events are when things are destroyed without an exchange of value (aka if those farmers can’t sell the apples because a new law passes, or there is a disease event, or the like), or where a market is cornered/controlled/manipulated to the extent someone is forced to sell for an artificially induced (lower) price, or sell at an artificially induced (higher) price. Smaller ‘taking’ events are when something is actually consumed, but that has to happen eventually, and someone paid for it to happen. Which means they also traded something else for that money (time, work, whatever). Otherwise, it’s numbers moving from one side of the book to the other. Things aren’t lost/destroyed, but are moving around.
    - Epa095 1y ago
      Money is not like mana in a game, it does not create things by itself. It is more similar to votes, each dollar is a vote into the economy for what should be created, and where the goods and services should go. And the more money you have the more votes you have. So yes, he payes for the apple, and that's good. But the apple existed, and would be sold to someone else if he had not bought it. The accumulation of wealth does centralise power over the economy, what gets produced, and how it gets consumed.
- deleted 1y ago
  [deleted]
- dasil003 1y ago
  Why is it "precisely the wrong approach"? And why does it have to be just one? I agree looking at the quality of life of the poorest is a valuable barometer for the quality and success of a society to serve all its people. Similarly I think looking at the richest and what checks exist on their power also says a lot about the health of a civilization. It also makes perfect sense to me that we would look at wealth distributions as well. After all comparison and competition is core to the human experience, is entirely relative, and more visible than ever in the age of the internet and social media. These dynamics massively impact individual perceptions of success and political priorities, fairness being a deeply baked value in the human wetware (just ask any 5-year-old), so not sure why we wouldn't want to address them directly. Certainly there's more value than in the superficial tribalism and dog whistle culture that passes for political discourse today?
- jimkleiber 1y ago
  I'm reflecting more these days on what I call "trust inequality." I'm curious how much trust in each other relates to wealth. Any thoughts?
  - CGMthrowaway 1y ago
    What does trust inequality mean to you?
    - jimkleiber 1y ago
      Not sure yet, curious to reflect on it more. But initial take is that some environments people trust each other more. Trusting intentions, actions, words, ability. For example, a low-trust environment would probably be most prisons. High-trust might be a neighborhood where people don't lock their doors. I remember reading a World Bank economist saying that we might be able to explain the difference in GDP per capita between the US and a place like Somalia based on how much people trust each other. How mistrust can add so much friction to interactions.
      - CGMthrowaway 1y ago
        There's a lot of research in this area. You might not like the conclusions. Fukuyama (Trust) or Putnam (Bowling Alone) might be a good place to start, or here is a public paper by Putnam: https://www.puttingourdifferencestowork.com/pdf/j.1467-9477.2007.00176%20Putnam%20Diversity.pdf https://www.puttingourdifferencestowork.com/pdf/j.1467-9477.... Here's another prominent paper: https://www.sciencedirect.com/science/article/abs/pii/S0047272701000846 https://www.sciencedirect.com/science/article/abs/pii/S00472... Uslaner (2002) makes a distinction between moralistic trust ("Can people be trusted?") and strategic trust ("Can THIS person be trusted?") that you may find interesting. There is also Yamagashi's Paradox: Japanese cooperate more, but trust less. Americans trust more, but defect more in specific situations.
        jimkleiber 1y ago
        I am very very fascinated by these leads. Thank you so much for sharing them, and excited to hear about any more that you may have.
- wyre 1y ago
  >I’d argue focusing on wealth inequality is precisely the wrong approach. Okay, so whats the argument? Wealth inequality and the QoL of the lowest wealth individuals are intrinsically linked, because we live under systems of government with powers of taxation and goals to increase the QoL of their citizens. At what point does the poorest become wealthy enough that immense levels of wealth-hoarding, especially by individuals, is okay? I cannot believe with a good conscience that at any point it becomes okay, unless we are all living in a utopia. If you don't agree with socialism, that is what it is, but to care about the QoL of the poorest without wanting actual support networks for those people isn't rational and seems more like moral posturing.
- rectang 1y ago
  Eventually huge wealth inequality impacts quality of life because quality of life is not measured exclusively in cheap toasters. For starters, look at the proportion of income that goes to rent: https://www.jchs.harvard.edu/blog/rental-housing-unaffordability-how-did-we-get-here https://www.jchs.harvard.edu/blog/rental-housing-unaffordabi... > The net effect of this longer history is that renters today spend much more of their incomes on rent than they did in previous generations. The median renter household in 1960 spent less than a fifth of their income on rent. By 2022, housing costs consumed 31 percent of the median renter’s income. As inequality has increased, life has become more uncertain for those towards the bottom, because the cost of recovering from adverse life events (health crises, unemployment, etc) has become increasingly unmanageable.
  - Spooky23 1y ago
    The switch to the current monetary system, followed by the elimination of taxation for rich people created this. You can only prosper with compounding. People on the bottom are just as helpless as they were before. They carry on with benefits and modest income. They get (shitty) healthcare fit free. The next two tiers of working poor are the ones that have gotten screwed.
- globular-toast 1y ago
  That's exactly what someone who isn't poor would say.
- odiroot 1y ago
  This is how you end up with aggressive taxation on middle class, all the while the wealthy are laughing their way to the bank.
- Atomic_Torrfisk 1y ago
  I disagree, high degrees of wealth inequality result in manipulation of our society to act against the best interest of the common man. Unfortunately, this article seems to be more inline with quantization for the sake of navel gazing.
- max_ 1y ago
  Unfortunately no one cares about the poor. Inequality is a problem parroted by middle classes mostly due to envy. It has nothing to do with improving lives of the destitute.
- immibis 1y ago
  Both are important. A lot of poverty is directly caused by having a class of rich people who seek to siphon away as many resources as they can. A society with only poor people would probably be a more cooperative one, which would help in raising the average standard of living. For instance, shelter being expensive implies either that it's fundamentally difficult to construct shelter (which is not the case, as seen in every slum and homeless camp everywhere) or the existence of rich landlords.
hshdhdhj4444 1y ago
This is a nice start to develop a language to discuss wealth. 99 vs 1%, normal vs millionaires vs billionaires, lower vs upper vs middle class, investor vs working class are some of the language I’ve seen used. All of them are extremely inadequate and allow the |^7-11 folks to get away with a lot that they shouldn’t by scaring the folks at |^4-6 that it would apply to them.
- fragmede 1y ago
  I really like the introduction of the ↑N notation as a way to less crassly discuss people's financial standing in life. Calling someone broke is seen as an insult, but maybe saying that someone is at ↑1 won't be taken as a horrible insult when discussing someone else's situation.
brettgriffin 1y ago
> Generally, someone’s wealth level can be inferred from their net worth. > But also, “assets minus liabilities” offers some large shadows to hide behind. > So a better quantity to measure would be: the amount of money someone could bring to bear on a problem if they had to. If someone they loved fell deathly ill, but the treatment would cost some large amount of money, how much could they pull together in a month or two? How much could they borrow, and from whom, and on what terms? The following breakdowns are largely just people's net worth (assets minus liabilities) with the credit they can tap because of their assets. Not sure I entirely understand the point. Yeah, people with assets are generally more credit-worthy and can tap lines of credit.
- Swizec 1y ago
  > The following breakdowns are largely just people's net worth (assets minus liabilities) with the credit they can tap because of their assets. > Not sure I entirely understand the point. Yeah, people with assets are generally more credit-worthy and can tap lines of credit. Liquidity is a useful concept to think about when evaluating your risk levels. Having 500k in stocks is different than 500k in your primary residence. Same net worth but if you need to tap into 500k of stock, you can do that tomorrow. Liquidating your primary residence takes a few weeks (or months) and you’re then homeless. I think that’s what this article is getting at. Net worth + resilience to risk. You can take bigger bets (with higher rewards) when your risk is losing some paper money vs your car or house. edit for everyone suggesting helocs: yes you can also take a margin loan against stocks. This lowers your net worth and is a great choice if you expect inflows to continue or come back soon. It is not a good choice in all scenarios. Again back to different risk profiles :)
  - chollida1 1y ago
    > Liquidity is a useful concept to think about when evaluating your risk levels. Having 500k in stocks is different than 500k in your primary residence. Same net worth but if you need to tap into 500k of stock, you can do that tomorrow. Liquidating your primary residence takes a few weeks (or months) and you’re then homeless. This is well said and the main reason why when calculating if someone is an accredited investor they always exclude the value/equity of a person's primary residence. Someone who is renting but has a large pile of cash is in a better position to repay than someone who has their equity in their home as selling equites vs selling their primary home have far different stresses on the person, all other things being equal.
pavlov 1y ago
> ‘“Net worth” is an unfortunate term, because a human’s “worth” is obviously more than just their wealth.’ I grew up in a fairly egalitarian 1980s Nordic society and English is my third language. I remember the first time I heard “worth” used in this American idiom: “Person X is worth $Y” It was shocking; almost like the most forbidden thing you could say, a glimpse of eugenics. If a person’s worth is measured in dollars, what does that say about the worth of underpaid women and minorities and children with development challenges…? In the decades since, Silicon Valley has moved so far right that this barely registers anymore.
- brettgriffin 1y ago
  I don't understand this (and I didn't understand the point in the post). When we discuss someone's net worth, we are specifically discussing their assets less their liabilities. We use it primarily to distinguish their purchasing power and credit-worthiness. It is not a metric that is attempting to define their worth as a person. What standardized metrics could you possible use to measure that, and for what purpose would you use that metric? If you're filling out a mortgage application in a Nordic country, are these hypothetical underpaid women and minorities considered more credit worthy regardless of their net worth and income?
  - pavlov 1y ago
    > “It is not a metric that is attempting to define their worth as a person.” Yet that’s literally the word being used. Imagine if a language called men “the better sex.” One could argue that it’s just a word and people don’t take it for its literal meaning. But you’d wonder why people go along with that. Don’t they notice what they’re saying? That’s the feeling I got from “person X is worth $Y” back when I first heard it.
    - gishh 1y ago
      Net worth is purely about assets minus liability. “How many dollars are attached to your tax identity and how many dollars of stuff can be taxed” It has zero to do with the value of the the life of a person. You can conflate the two if you’d like, you’re picking on shortcut verbiage so we don’t say a paragraph of disclaimer text before talking about net worth.
Gooblebrai 1y ago
I might be dense today but I thought the upper arrow was like a "Level of wealth" thing. However here: > About 16 million people (↑7) are designated as HNWI. What does the ↑7 means? Later he starts using it in a context that I don't understand (e.g. > About 250,000 people (↑5.5))
- Gooblebrai 1y ago
  Ah, I was missing important context: https://saul.pw/mag/ https://saul.pw/mag/
- dougb5 1y ago
  It's an order-of-magnitude notation used in Saul's "MagWorld" writings and podcast. Recommended: https://saul.pw/mag/ https://saul.pw/mag/
nis0s 1y ago
This is also a good article with demarcations you can use to evaluate either family or personal finances and wealth, https://www.kiplinger.com/personal-finance/605075/are-you-rich https://www.kiplinger.com/personal-finance/605075/are-you-ri...
trollbridge 1y ago
Interesting. I guess I would be a 5, but live like a 2, as it’s less stressful that way. I have friends who are 6’s and acquaintances who are 7’s and their manner of thinking and goals in life baffle me. I simply cannot relate to them at all.
pton_xd 1y ago
Too granular, there are 4 levels of wealth: the destitute, those who have to work, those who have enough assets to not work, and finally the elite who influence the rules of society.
- gpt5 1y ago
  Those who have to work capture almost all of society. It’s a little odd to clump everyone into the same bucket of wealth.
  - trollbridge 1y ago
    Yet the ones who don’t work cause an outsized amount of social problems.
  - bbor 1y ago
    I see where you're coming from on a methodological level, but 1. Capitalists control our society, and live completely different lives than the rest. A typical CEO is certainly quite privileged, and may even work their way up to true wealth eventually! But at the end of the day, they're still clocking in for at least 40 hours a week to do something they'd rather not do, and their life would be completely upended if they had to stop working for some reason. The difference between Pichai and Bezos dwarfs the difference between Pichai and me for these reasons, IMO. 2. Capitalists directly control ~50% of the capital in the US last time I checked. It makes sense to split any given pie in half IMO, at least to start!
    - hollerith 1y ago
      >Capitalists control our society, and live completely different lives than the rest. Also, the Capitalists are good at keeping thing hidden from us. For example, we do not know how they arrive on Earth. I certainly don't believe they aren't born to a mother and a father like the rest of us.
    - Yoric 1y ago
      How do you define "capitalists", in this context?
dougb5 1y ago
The "↑11" bucket -- which Saul labeled as "Megacorps ($300b-$3t)" -- now contains at least one individual human. How far we've come (or fallen?) in just a year.
- noitpmeder 1y ago
  Except if that human tried to make his assets liquid it'd be worth a whole lot less than the face value.
  - tavavex 1y ago
    What does that matter for, though? The people in that wealth bracket tend to borrow against their assets (or use more convoluted schemes) rather than use those assets directly, and someone with $300B is still bound to have a lot more borrowing power than someone with $3B. Just because they can't put these hundreds of billions in a pocket right now doesn't mean that the power those assets grant is any less significant. And if someone that rich wanted to sell those assets, it's not like it's impossible to do. Is there anything besides having to stretch out the selling over a longer period of time that would be an inconvenience?
renewiltord 1y ago
One thing that previous societies definitely got right is to talk about envy negatively. Everything these days is about envy. It’s not enough for one’s life to improve. It has to improve relative to others or people get upset. “Keeping up with the Joneses” is now couched in socialist rhetoric about inequality. We can tell this is the case because when wage compression occurs, people get upset at “inflation” and “it’s so expensive now”. The bottom percentiles saw unprecedented growth in recent years relative to the middle. Rather than celebrate, people got upset because things got expensive. When poor labor gets paid more, they get more expensive. That’s how it works.
- Epa095 1y ago
  No. I can be envious of people who are independently wealthy, and control their own time. But that is not the same feeling I have for Bezos, Musk, and other billionaires. That feeling is fear. Fear for the power they have, both politically and over the economy. Fear that the rise of the oligarchie and the extreme wealth differences will be the death of democracy.
  - renewiltord 1y ago
    Yeah, that fear is a way for you to feel envy without damaging your self-image.
    - saulpw 1y ago
      No, these are orders of magnitude. It's like a short man who is 5 foot tall, standing next to a 6 foot man and feeling envy. But standing next to a 50 foot tall creature would be abjectly terrifying for any human of any height.
      - renewiltord 1y ago
        Sure, because of physical danger. But I’ve stood next to billionaires and been at no equivalent risk.
      - 1y ago
jeffbee 1y ago
"Hard drugs are plentiful at this level" appears to be something the author invented out of thin air. Cigarettes, alcohol, marijuana, and "hard drugs" all cost money and therefore the rates of abuse of these things are positively correlated with income, which should not surprise you.
- macleginn 1y ago
  There seems to be evidence for the OP's thesis. E.g., "Unfortunately, one’s economic status, especially if they are impoverished, can increase their likelihood of experiencing a substance use disorder, as this is one of the most common risk factors for this condition." (https://adcare.com/addiction-demographics/socioeconomic-groups/ https://adcare.com/addiction-demographics/socioeconomic-grou...)
- tavavex 1y ago
  These things would be positively correlated with income only to some bare minimum level. Most drugs seem to be relatively cheap, so it doesn't strike me as odd that someone with an utterly miserable life would be more likely to use their meager savings towards substance abuse to try and temporarily make themselves feel better.
bbor 1y ago
Traditionally when talking about money as it relates to social class, people refer to an income bracket I think this article is worth the read for the interesting data it highlights with the arbitrary framework, but it's hard to ignore the elephant in the room: the author's "traditional" experience here excludes a huge part of the economic thought of the last 200 years. I know this isn't exactly a forum predisposed to Marx, but I would encourage even the most fervent anti-communists to take some time to appreciate his economic work on a scientific level. Wealth is absolutely more important than income when analyzing society, because a certain amount of wealth makes one a "capitalist" (in a literal sense, not an ideological one). Capitalists live a life of luxury without working, and they are explicitly+intentionally tasked with the lions share of social responsibility (or, more pejoratively, social power). TL;DR: You don't need to be a Marxist to appreciate the utility of labor-based class analysis in our society! Given that the traditional SV goal is to become a capitalist as quickly as possible ("FIRE"), we'd do better to discuss this stuff more frequently...
- kuerbel 1y ago
  I have a feeling you'll be downvoted, but you are correct. Marx was an economist before he was a political commentator, or philosophist, or activist or whatever you want to call him.
- thrance 1y ago
  I found that if you omit to mention "Marx" from your comment and replace "Labor/Capital" by "Workers/Billionaires", people will generally upvote.
- saulpw 1y ago
  (author here) Thanks for this comment. I am remiss to not directly address how this ties into Marxist theory. I'll consider how to add references on the next rewrite. A key point in Mag Wealth is that there are several meaningfully different levels of both labor and capital. "Capital" is generally regarded as $^6 and up, whereas "labor" is below $^6. But just as there's a huge difference in the lives of a waitress vs lawyer (though both are "labor"), there's also a huge difference in the lives of a millionaire vs a billionaire (though both are capital). There are people who are unable to work and have even less opportunity than a minimum-wage worker; are they "labor", or maybe we should call them something else, like "destitute"? And there are people who have hundreds of billions of dollars who buy and control institutions of power; are they "capital" or do they become effectively "sovereign"?
zug_zug 1y ago
I don't get the point of these types of "5 levels of X"... Like yes you can take any continuous variable and draw as many lines in the sand as you'd like (5 levels of tallness, or even 27 levels of tallness, or whatever) and actually say nothing while apparently sound like you're saying something??
- p1esk 1y ago
  I think these groupings are meaningful: there are pretty clear social boundaries between these levels.
- onraglanroad 1y ago
  No you can't, because these are orders of magnitude. Try it with "27 levels of tallness" and see what you get.
- anal_reactor 1y ago
  They're massively overused, but sometimes continuous variables cause effects that are more discrete in nature. Like, sizes of human torsos follow the normal distribution, but t-shirts come in a few very much discrete sizes, so at some point it makes sense to make a simplification that in certain contexts, torsos themselves have a few discrete sizes.
antisthenes 1y ago
Not sure I see the point of these breakdowns. It reads as if written for a school-age child. In fact kids probably know intuitively exactly where they fall on this scale without having to read a blog, unless their parents are ultra-wealthy but hide it from them really well. Also putting someone with 300k vs 3 million in the same "bracket" is wild.
thrance 1y ago
I think writing an article that starts by "We need to have meaningful discussions about structural class differences, and segmenting the population based on wealth is an obvious starting point" and then not even mention Marx once is strange. This article does not give sufficient motivation for the construction of its complex 14-layers scale: why is it needed and how is it more useful to understand power dynamics in our society than the traditional capital vs labor distinction?
- p1esk 1y ago
  If you’re familiar with Marxism you don’t need this article, but most people are not.
geor9e 1y ago
Is ↑7 a typo? "A person with lower ↑6 wealth is a “high-net-worth individual” (HNWI, $1m)" "About 16 million people (↑7) are designated as HNWI."
- aoeusnth1 1y ago
  16M = 10^7.2 ~= ↑7
  - geor9e 1y ago
    I mean the quotes contradict each other, is $1M HNWI threshold ↑6 or is it ↑7?
    - ffitch 1y ago
      in this quote ↑6 describes the wealth level and ↑7 the number of people at that level. the author gives every number in log form.
      - geor9e 1y ago
        Thanks for finding a steel‑man way to interpret it. That is such a bizarre narrative choice I didn't even consider it. So they used that arrow notation consistantly to refer to the headings, representing the order of magnitude of money, the entire article, which was a great idea. Then for some baffling and unknowable reason, they decided to inform us that a count of people can also be expressed as a power of ten using the same notation.
tmcz26 1y ago
Reminds me of this 2019 post: https://ofdollarsanddata.com/climbing-the-wealth-ladder/ https://ofdollarsanddata.com/climbing-the-wealth-ladder/
silexia 1y ago
[flagged]
- saulpw 1y ago
  It's a framework for analysis. If you can use it to promote or discuss free market ideas, please do. There's nothing "far left" about noticing that there are 10+ orders of magnitude difference between the assets of the richest and poorest people, and that people's lives are qualitatively different at different magnitudes. For the record, as the author, I generally believe in the virtues of a "free market". Unchecked capitalism, however, seems to devolve into quite the non-free market, captured and controlled by a small number of people. That much seems unsurprising and apolitical. What to do about it is where policy and politics comes in.
  - silexia 1y ago
    Patents and licenses, both forms of government granted monopolies, are the primary reason capitalism goes bad. A true free market would vastly reduce prices across the board especially in areas like medical care where supply has been strictly limited for decades.
    - thrance 1y ago
      "Government granted monopolies", as you call them, are the logical endpoint of a "free market". It always devolves into this, as capital accumulates into fewer and fewer hands until some people are able to wrangle the state into doing their bidding.
    - tavavex 1y ago
      Monopolies don't need to be granted by someone, they're innate to a system that targets endless growth and centralization. Governments, despite being partially corrupted by undue influence that lets monopolism seep back into our society, are the only entities standing in between full monopolization and the world we live in now. In the total absence of a government, the wealthiest entities would repeatedly buy out smaller competitors and use their near-endless power to inhibit any new players from joining the scene (if not legally, then militarily). At that level of wealth, there is nothing that would be able to hold them back from further growth. The biggest company would become a de facto totalitarian government after a certain point. If you had an urgent emergency that had to be treated now, your nearest hospital in free-market-land might as well charge you a million dollars. If there's any sort of urgency that prevents you from going elsewhere, what are you gonna do? Die?
marcoc 1y ago
For me the link to forbes.com/billionaires isn't working right now. Archived copy https://web.archive.org/web/20251111072724/https://www.forbes.com/billionaires/ https://web.archive.org/web/20251111072724/https://www.forbe...
Atomic_Torrfisk 1y ago
Why the weird notation? Apart from very high net worth individuals, the metric seems pointless, navel gazing at best. Aside from that, why not just use log10(<individual's wealth>/<average wealth>) as a function of a particular market like EU, USA, Greenland, whatever. That way the metric is agnostic to inflation and differences in currency value.
johnea 1y ago
Denominated in the unpronounceable character, previously known as "up arrow"...
- saulpw 1y ago
  I pronounce it 'mag', which I talk about at length on the parent pages (saul.pw/mag).
  - johnea 1y ago
    I would have just used the letter 'M' or 'W'...
    - saulpw 1y ago
      Then you would have other design challenges :)
globular-toast 1y ago
I think in my ideal society it would be possible to move up a level by hard work alone (and, conversely, laziness would cause one to move down a level). Unfortunately it seems to me almost everyone stays at the level they were born at and changes happen only rarely due to good/bad luck.
QuiEgo 1y ago
This seems very similar to an old book on the subject, which was a fascinating read: https://en.wikipedia.org/wiki/Class:_A_Guide_Through_the_American_Status_System https://en.wikipedia.org/wiki/Class:_A_Guide_Through_the_Ame...
- saulpw 1y ago
  Thank you for this! I put it in my reading queue.
  - QuiEgo 1y ago
    It’s kind of a fun time capsule, there’s this unspoken question of “is there any truth to all that commie propaganda?” constantly floating in the background (the book was written by an American professor at the height of the Cold War). That said, still think it has a lot of great insights.
MuffinFlavored 1y ago
> 5 Wealth: Comfortable ($300k-$3m) Somebody with $300k has a relatively different life than somebody with $3m, no?
- Spooky23 1y ago
  It depends. My home in a smaller city would be ~$3M in NYC. It’s about $400k where I live.
- dmoy 1y ago
  $3M translates to indefinite-ish (handwaving) expenditures of about $70k-$120k per year depending on tax rate, etc. In the US, that covers unsubsidized healthcare for two people ($30k-$40k/yr range), rent in a 2-3BR, and like a decent ish standard of living. Without working. So... maybe? But also maybe not by a lot.
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klysm 1y ago
I feel like this is a good way to teach logarithms to layman
- saulpw 1y ago
  ding ding! That is the point of Mag World.
koliber 1y ago
I like this approach. In finance you have three basic statements: - balance sheet - profit & loss - cash flow It seems like looking at net worth of a person is like only looking at the balance sheet. The mag wealth approach also takes potential cash flow into perspective, by estimating ability to raise cash, even if it is through loans. It does provide a more complete picture.

Mag Wealth (2024)

153 points by andsoitis 1y ago

I’d argue focusing on wealth inequality is precisely the wrong approach. A better approach would be to look at the quality of life of the poorest.

roflyear 1y ago
I don't think many look at wealth inequality in isolation, it's usually accompanied by how people are starving. E.g. "over 20 people die from malnutrition in the US but we have over 900 billionaire's" - e.g. each billionaire would probably only have to give $300k each (equiv to what the average tax payer gives to the defense budget each year) to prevent most deaths in the US due to lack of food - etc.
- gishh 1y ago
  883 billion divided by 200 million is like 4 grand. How do you figure each taxpayer pays 300k/yr in taxes to the defense budget?
  - Spooky23 1y ago
    You make your currency the reserve currency, tax the world by inflating it while restricting circulation, print money, then borrow. When people or countries potentially disrupt the equilibrium, kill them.
    - gishh 1y ago
      Sorry, I meant the math part
- solveit 1y ago
  I get the feeling that you're winging the specific numbers because they're spectacularly incoherent. But anyway, the United States is extremely rich and has essentially no big problems that can be solved by a small amount (say, a few billion) of money. The problems are either so big that it would take trillions to solve (supporting aging population etc), or blocked by something other than money (politics, regulations, etc). The big problems that can be solved just by throwing a few billion at them are solved quite easily by either the government or by private entities like the Gates Foundation.
  - rizzom5000 1y ago
    In practice, it seems that politics generally takes precedence over problem solving. If you look into the psychology of it, neither politicians nor voters are really incentivized to solve big problems. This is especially true for big problems that will take more than an election cycle to solve. It seems to me that it would be easy to support an argument that suggests more big problems could be solved if incentives were better aligned toward problem solving and if competent people, not professional politicians, were chosen to solve them.
- Workaccount2 1y ago
  In the US, the poorest people suffer from an obesity epidemic. Virtually no one is starving in the US anymore, besides mental health problems or other edge cases creating it.
  - HumblyTossed 1y ago
    The poor are food insecure. This leads to obesity not because they have access to an abundance of food but because their access to food is not stead, leading to over eating to compensate, and the food they can afford is not healthy.
    - akoboldfrying 1y ago
      > the food they can afford is not healthy Are you really claiming that it's cheaper to buy an appetite-satisfying amount of unhealthy food (chips/sweets/snacks/fast food) than fresh vegetables and staples like rice or potatoes? Serious question.
      - miltonlost 1y ago
        Yes, both cheaper and more accessible and easier to eat without having to spend the time (which the working poor don't have) to then cook the raw foods. They're called food deserts. https://en.wikipedia.org/wiki/Food_desert https://en.wikipedia.org/wiki/Food_desert
        akoboldfrying 1y ago
        Thanks for the link. I agree that preparation time is an important consideration. I do think that the food desert criterion (> 1.6km to the nearest supermarket in urban centres) seems very restrictive -- this would make half of most suburbs "food deserts" in the affluent western country where I live. I find the more recent concept of "food swamps", also explained on that page, to be a (perhaps unwitting) direct challenge to the theory that absence of nearby healthy food is the root cause: > A related concept is the phenomenon of a food swamp, a recently coined term by researchers who defined it as an area with a disproportionate number of fast food restaurants (and fast food advertising) in comparison to the number of supermarkets in that area.[13] The single supermarket in a low-income area does not, according to researchers Rose and colleagues, necessitate availability nor does it decrease obesity rates and health risks If this claim is true -- that is, if areas with 1 nearby supermarket have obesity rates no better than areas with 0 -- then it's essentially impossible to blame health outcomes on the availability of healthy food nearby. If an area has nearby supermarkets, it is much harder to make the case that obesity is purely the result of external factors outside a person's control.
- SpicyLemonZest 1y ago
  One of the things you learn quickly when you look at these kind of problems is that they’re not so easy to solve with money. The budget for SNAP, the US’s primary food benefits program, is about $100 billion; the additional $270 million you propose would be a tiny drop in the bucket.
SilverElfin 1y ago
Agree. Focusing on the inequality bit feels closer to envy. But if the quality of life or something like inflation adjusted wealth is going up for everyone, or if it is above some acceptable minimum, then is it really a problem? Or just a reflection of how concentrated things can be in a technologically advanced world?
- computerthings 1y ago
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- kuerbel 1y ago
  I’m from Europe, and that’s what I focus on when talking about inequality: even if everyone’s living standards are rising, extreme wealth concentration can erode social cohesion, limit access to essential services, and distort political influence. You seem to view this through an American lens, very focused on individual opportunity, while to me it's about fairness, shared responsibility, and the health of society.
  - vjvjvjvjghv 1y ago
    I think it's not even the billionaires that are the biggest problem. It's more like the top 10-20% that are driving up housing prices and many other things. They are a large enough group that it makes sense to mostly cater to them which is something we already see in most new apartments being higher end, less and less cheap cars on the market, no small houses to buy, restaurant prices shooting up, concert tickers becoming crazy expensive and so on. Las Vegas used to be the place for the average guy to fun. In the last few years they have publicly stated that they don't want that population anymore but want more of the upper end. All this leads to a system that favors the top 10-20% who can afford things, own assets like stocks and real estate, get better education for their kids and leaves the rest of the polulation out in the cold.
    - Spooky23 1y ago
      It’s not that they don’t want — you can gamble on the toilet now. The guys who were gonna fly in and drop $10k already blew their kids college fund on Draft Kings.
CGMthrowaway 1y ago
Agreed. Unfortunately humans are hardwired to compare themselves to others.
- aprilthird2021 1y ago
  So much so that even if the quality of life of the lowest improves greatly, if the quality of life of everyone around them improves even more rapidly, they will feel worse off, not better off
  - CGMthrowaway 1y ago
    "You don't have to run faster than the bear to get away. You just have to run faster than the guy next to you." Because on one level, we are all just competing for finite resources - especially quality females - economics is in that context an ordinal competition, not cardinal.[1] But on another level, it's the mutual cooperation, wealth creation from nothing (making the "finite" a little less finite and a little more infinite), etc that allows us to advance both as a society and as individuals. [1]There is an interesting tie into Mises here if I wanted to rabbit hole it (value is subjective, not measurable in cardinal units, and exists only in the mind as a ranked preference of options)
    - czl 1y ago
      One of the big advantages humans have is that we are really good at working around constraints rather than just fighting over them. Health care, education, and even things like prenatal screening to reduce serious genetic disease all expand people’s potential and quality of life. Over time, that means more people who are emotionally stable, educated, and healthy, which is exactly what makes “higher quality” partners possible in the first place. When we treat everything as a zero sum status game, especially when it comes to other human beings, we tend to slide into ugly, destructive dynamics (up to and including wars) where everyone burns resources just to keep their relative place. Cooperation and innovation, on the other hand, are how we turn a fixed pie into a growing one. So yes, relative position matters in some contexts, but the whole reason our species has gotten this far is that we are not limited to fighting over scraps. We can change the size and shape of the pie together.
bijection 1y ago
Though I agree that inequality is less important than the quality of life of the poorest people, this article explicitly tries to characterize the latter, so even though this is done in the name of discussing wealth inequality, I'm not sure your comment applies here.
- loeg 1y ago
  The whole article is about creating a log-ish scale comparison system.
hearsathought 1y ago
[flagged]
Nifty3929 1y ago
Yes, and also numerical "wealth" is not the same as stuff. Rich people often have very high numerical wealth, but actually don't have so much more "stuff" - houses, medicine, food, etc. They will certainly have more of these things, but maybe 100x not 1Mx. For example, let's say that Musk is 250k times wealthier than I am. Does he have 250k shoes? Houses? Not really. And it's the consumption of stuff that is really the share that one takes from society, not "wealth." Having $1 might be wealth, but it is not until I spend that Dollar on an apple that I have taken something from society.
- deleted 1y ago
  [deleted]
- lazide 1y ago
  Eh, even the ‘taking’ in this example isn’t so simple. By spending that $1, you’ve also given a farmer (plus middle men, plus a retailer) $1 they otherwise wouldn’t have had - and relieved them of an apple they already have too many of. The big ‘taking’ events are when things are destroyed without an exchange of value (aka if those farmers can’t sell the apples because a new law passes, or there is a disease event, or the like), or where a market is cornered/controlled/manipulated to the extent someone is forced to sell for an artificially induced (lower) price, or sell at an artificially induced (higher) price. Smaller ‘taking’ events are when something is actually consumed, but that has to happen eventually, and someone paid for it to happen. Which means they also traded something else for that money (time, work, whatever). Otherwise, it’s numbers moving from one side of the book to the other. Things aren’t lost/destroyed, but are moving around.
  - Epa095 1y ago
    Money is not like mana in a game, it does not create things by itself. It is more similar to votes, each dollar is a vote into the economy for what should be created, and where the goods and services should go. And the more money you have the more votes you have. So yes, he payes for the apple, and that's good. But the apple existed, and would be sold to someone else if he had not bought it. The accumulation of wealth does centralise power over the economy, what gets produced, and how it gets consumed.
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dasil003 1y ago
Why is it "precisely the wrong approach"? And why does it have to be just one? I agree looking at the quality of life of the poorest is a valuable barometer for the quality and success of a society to serve all its people. Similarly I think looking at the richest and what checks exist on their power also says a lot about the health of a civilization. It also makes perfect sense to me that we would look at wealth distributions as well. After all comparison and competition is core to the human experience, is entirely relative, and more visible than ever in the age of the internet and social media. These dynamics massively impact individual perceptions of success and political priorities, fairness being a deeply baked value in the human wetware (just ask any 5-year-old), so not sure why we wouldn't want to address them directly. Certainly there's more value than in the superficial tribalism and dog whistle culture that passes for political discourse today?
jimkleiber 1y ago
I'm reflecting more these days on what I call "trust inequality." I'm curious how much trust in each other relates to wealth. Any thoughts?
- CGMthrowaway 1y ago
  What does trust inequality mean to you?
  - jimkleiber 1y ago
    Not sure yet, curious to reflect on it more. But initial take is that some environments people trust each other more. Trusting intentions, actions, words, ability. For example, a low-trust environment would probably be most prisons. High-trust might be a neighborhood where people don't lock their doors. I remember reading a World Bank economist saying that we might be able to explain the difference in GDP per capita between the US and a place like Somalia based on how much people trust each other. How mistrust can add so much friction to interactions.
    - CGMthrowaway 1y ago
      There's a lot of research in this area. You might not like the conclusions. Fukuyama (Trust) or Putnam (Bowling Alone) might be a good place to start, or here is a public paper by Putnam: https://www.puttingourdifferencestowork.com/pdf/j.1467-9477.2007.00176%20Putnam%20Diversity.pdf https://www.puttingourdifferencestowork.com/pdf/j.1467-9477.... Here's another prominent paper: https://www.sciencedirect.com/science/article/abs/pii/S0047272701000846 https://www.sciencedirect.com/science/article/abs/pii/S00472... Uslaner (2002) makes a distinction between moralistic trust ("Can people be trusted?") and strategic trust ("Can THIS person be trusted?") that you may find interesting. There is also Yamagashi's Paradox: Japanese cooperate more, but trust less. Americans trust more, but defect more in specific situations.
      - jimkleiber 1y ago
        I am very very fascinated by these leads. Thank you so much for sharing them, and excited to hear about any more that you may have.
wyre 1y ago
>I’d argue focusing on wealth inequality is precisely the wrong approach. Okay, so whats the argument? Wealth inequality and the QoL of the lowest wealth individuals are intrinsically linked, because we live under systems of government with powers of taxation and goals to increase the QoL of their citizens. At what point does the poorest become wealthy enough that immense levels of wealth-hoarding, especially by individuals, is okay? I cannot believe with a good conscience that at any point it becomes okay, unless we are all living in a utopia. If you don't agree with socialism, that is what it is, but to care about the QoL of the poorest without wanting actual support networks for those people isn't rational and seems more like moral posturing.
rectang 1y ago
Eventually huge wealth inequality impacts quality of life because quality of life is not measured exclusively in cheap toasters. For starters, look at the proportion of income that goes to rent: https://www.jchs.harvard.edu/blog/rental-housing-unaffordability-how-did-we-get-here https://www.jchs.harvard.edu/blog/rental-housing-unaffordabi... > The net effect of this longer history is that renters today spend much more of their incomes on rent than they did in previous generations. The median renter household in 1960 spent less than a fifth of their income on rent. By 2022, housing costs consumed 31 percent of the median renter’s income. As inequality has increased, life has become more uncertain for those towards the bottom, because the cost of recovering from adverse life events (health crises, unemployment, etc) has become increasingly unmanageable.
- Spooky23 1y ago
  The switch to the current monetary system, followed by the elimination of taxation for rich people created this. You can only prosper with compounding. People on the bottom are just as helpless as they were before. They carry on with benefits and modest income. They get (shitty) healthcare fit free. The next two tiers of working poor are the ones that have gotten screwed.
globular-toast 1y ago
That's exactly what someone who isn't poor would say.
odiroot 1y ago
This is how you end up with aggressive taxation on middle class, all the while the wealthy are laughing their way to the bank.
Atomic_Torrfisk 1y ago
I disagree, high degrees of wealth inequality result in manipulation of our society to act against the best interest of the common man. Unfortunately, this article seems to be more inline with quantization for the sake of navel gazing.
max_ 1y ago
Unfortunately no one cares about the poor. Inequality is a problem parroted by middle classes mostly due to envy. It has nothing to do with improving lives of the destitute.
immibis 1y ago
Both are important. A lot of poverty is directly caused by having a class of rich people who seek to siphon away as many resources as they can. A society with only poor people would probably be a more cooperative one, which would help in raising the average standard of living. For instance, shelter being expensive implies either that it's fundamentally difficult to construct shelter (which is not the case, as seen in every slum and homeless camp everywhere) or the existence of rich landlords.

hshdhdhj4444 1y ago

This is a nice start to develop a language to discuss wealth. 99 vs 1%, normal vs millionaires vs billionaires, lower vs upper vs middle class, investor vs working class are some of the language I’ve seen used. All of them are extremely inadequate and allow the |^7-11 folks to get away with a lot that they shouldn’t by scaring the folks at |^4-6 that it would apply to them.

fragmede 1y ago
I really like the introduction of the ↑N notation as a way to less crassly discuss people's financial standing in life. Calling someone broke is seen as an insult, but maybe saying that someone is at ↑1 won't be taken as a horrible insult when discussing someone else's situation.

brettgriffin 1y ago

> Generally, someone’s wealth level can be inferred from their net worth. > But also, “assets minus liabilities” offers some large shadows to hide behind. > So a better quantity to measure would be: the amount of money someone could bring to bear on a problem if they had to. If someone they loved fell deathly ill, but the treatment would cost some large amount of money, how much could they pull together in a month or two? How much could they borrow, and from whom, and on what terms? The following breakdowns are largely just people's net worth (assets minus liabilities) with the credit they can tap because of their assets. Not sure I entirely understand the point. Yeah, people with assets are generally more credit-worthy and can tap lines of credit.

Swizec 1y ago
> The following breakdowns are largely just people's net worth (assets minus liabilities) with the credit they can tap because of their assets. > Not sure I entirely understand the point. Yeah, people with assets are generally more credit-worthy and can tap lines of credit. Liquidity is a useful concept to think about when evaluating your risk levels. Having 500k in stocks is different than 500k in your primary residence. Same net worth but if you need to tap into 500k of stock, you can do that tomorrow. Liquidating your primary residence takes a few weeks (or months) and you’re then homeless. I think that’s what this article is getting at. Net worth + resilience to risk. You can take bigger bets (with higher rewards) when your risk is losing some paper money vs your car or house. edit for everyone suggesting helocs: yes you can also take a margin loan against stocks. This lowers your net worth and is a great choice if you expect inflows to continue or come back soon. It is not a good choice in all scenarios. Again back to different risk profiles :)
- chollida1 1y ago
  > Liquidity is a useful concept to think about when evaluating your risk levels. Having 500k in stocks is different than 500k in your primary residence. Same net worth but if you need to tap into 500k of stock, you can do that tomorrow. Liquidating your primary residence takes a few weeks (or months) and you’re then homeless. This is well said and the main reason why when calculating if someone is an accredited investor they always exclude the value/equity of a person's primary residence. Someone who is renting but has a large pile of cash is in a better position to repay than someone who has their equity in their home as selling equites vs selling their primary home have far different stresses on the person, all other things being equal.

pavlov 1y ago

> ‘“Net worth” is an unfortunate term, because a human’s “worth” is obviously more than just their wealth.’ I grew up in a fairly egalitarian 1980s Nordic society and English is my third language. I remember the first time I heard “worth” used in this American idiom: “Person X is worth $Y” It was shocking; almost like the most forbidden thing you could say, a glimpse of eugenics. If a person’s worth is measured in dollars, what does that say about the worth of underpaid women and minorities and children with development challenges…? In the decades since, Silicon Valley has moved so far right that this barely registers anymore.

brettgriffin 1y ago
I don't understand this (and I didn't understand the point in the post). When we discuss someone's net worth, we are specifically discussing their assets less their liabilities. We use it primarily to distinguish their purchasing power and credit-worthiness. It is not a metric that is attempting to define their worth as a person. What standardized metrics could you possible use to measure that, and for what purpose would you use that metric? If you're filling out a mortgage application in a Nordic country, are these hypothetical underpaid women and minorities considered more credit worthy regardless of their net worth and income?
- pavlov 1y ago
  > “It is not a metric that is attempting to define their worth as a person.” Yet that’s literally the word being used. Imagine if a language called men “the better sex.” One could argue that it’s just a word and people don’t take it for its literal meaning. But you’d wonder why people go along with that. Don’t they notice what they’re saying? That’s the feeling I got from “person X is worth $Y” back when I first heard it.
  - gishh 1y ago
    Net worth is purely about assets minus liability. “How many dollars are attached to your tax identity and how many dollars of stuff can be taxed” It has zero to do with the value of the the life of a person. You can conflate the two if you’d like, you’re picking on shortcut verbiage so we don’t say a paragraph of disclaimer text before talking about net worth.

Gooblebrai 1y ago

I might be dense today but I thought the upper arrow was like a "Level of wealth" thing. However here: > About 16 million people (↑7) are designated as HNWI. What does the ↑7 means? Later he starts using it in a context that I don't understand (e.g. > About 250,000 people (↑5.5))

Gooblebrai 1y ago
Ah, I was missing important context: https://saul.pw/mag/ https://saul.pw/mag/
dougb5 1y ago
It's an order-of-magnitude notation used in Saul's "MagWorld" writings and podcast. Recommended: https://saul.pw/mag/ https://saul.pw/mag/

nis0s 1y ago

This is also a good article with demarcations you can use to evaluate either family or personal finances and wealth, https://www.kiplinger.com/personal-finance/605075/are-you-rich https://www.kiplinger.com/personal-finance/605075/are-you-ri...

trollbridge 1y ago

Interesting. I guess I would be a 5, but live like a 2, as it’s less stressful that way. I have friends who are 6’s and acquaintances who are 7’s and their manner of thinking and goals in life baffle me. I simply cannot relate to them at all.

pton_xd 1y ago

Too granular, there are 4 levels of wealth: the destitute, those who have to work, those who have enough assets to not work, and finally the elite who influence the rules of society.

gpt5 1y ago
Those who have to work capture almost all of society. It’s a little odd to clump everyone into the same bucket of wealth.
- trollbridge 1y ago
  Yet the ones who don’t work cause an outsized amount of social problems.
- bbor 1y ago
  I see where you're coming from on a methodological level, but 1. Capitalists control our society, and live completely different lives than the rest. A typical CEO is certainly quite privileged, and may even work their way up to true wealth eventually! But at the end of the day, they're still clocking in for at least 40 hours a week to do something they'd rather not do, and their life would be completely upended if they had to stop working for some reason. The difference between Pichai and Bezos dwarfs the difference between Pichai and me for these reasons, IMO. 2. Capitalists directly control ~50% of the capital in the US last time I checked. It makes sense to split any given pie in half IMO, at least to start!
  - hollerith 1y ago
    >Capitalists control our society, and live completely different lives than the rest. Also, the Capitalists are good at keeping thing hidden from us. For example, we do not know how they arrive on Earth. I certainly don't believe they aren't born to a mother and a father like the rest of us.
  - Yoric 1y ago
    How do you define "capitalists", in this context?

dougb5 1y ago

The "↑11" bucket -- which Saul labeled as "Megacorps ($300b-$3t)" -- now contains at least one individual human. How far we've come (or fallen?) in just a year.

noitpmeder 1y ago
Except if that human tried to make his assets liquid it'd be worth a whole lot less than the face value.
- tavavex 1y ago
  What does that matter for, though? The people in that wealth bracket tend to borrow against their assets (or use more convoluted schemes) rather than use those assets directly, and someone with $300B is still bound to have a lot more borrowing power than someone with $3B. Just because they can't put these hundreds of billions in a pocket right now doesn't mean that the power those assets grant is any less significant. And if someone that rich wanted to sell those assets, it's not like it's impossible to do. Is there anything besides having to stretch out the selling over a longer period of time that would be an inconvenience?

renewiltord 1y ago

One thing that previous societies definitely got right is to talk about envy negatively. Everything these days is about envy. It’s not enough for one’s life to improve. It has to improve relative to others or people get upset. “Keeping up with the Joneses” is now couched in socialist rhetoric about inequality. We can tell this is the case because when wage compression occurs, people get upset at “inflation” and “it’s so expensive now”. The bottom percentiles saw unprecedented growth in recent years relative to the middle. Rather than celebrate, people got upset because things got expensive. When poor labor gets paid more, they get more expensive. That’s how it works.

Epa095 1y ago
No. I can be envious of people who are independently wealthy, and control their own time. But that is not the same feeling I have for Bezos, Musk, and other billionaires. That feeling is fear. Fear for the power they have, both politically and over the economy. Fear that the rise of the oligarchie and the extreme wealth differences will be the death of democracy.
- renewiltord 1y ago
  Yeah, that fear is a way for you to feel envy without damaging your self-image.
  - saulpw 1y ago
    No, these are orders of magnitude. It's like a short man who is 5 foot tall, standing next to a 6 foot man and feeling envy. But standing next to a 50 foot tall creature would be abjectly terrifying for any human of any height.
    - renewiltord 1y ago
      Sure, because of physical danger. But I’ve stood next to billionaires and been at no equivalent risk.
    - 1y ago

jeffbee 1y ago

"Hard drugs are plentiful at this level" appears to be something the author invented out of thin air. Cigarettes, alcohol, marijuana, and "hard drugs" all cost money and therefore the rates of abuse of these things are positively correlated with income, which should not surprise you.

macleginn 1y ago
There seems to be evidence for the OP's thesis. E.g., "Unfortunately, one’s economic status, especially if they are impoverished, can increase their likelihood of experiencing a substance use disorder, as this is one of the most common risk factors for this condition." (https://adcare.com/addiction-demographics/socioeconomic-groups/ https://adcare.com/addiction-demographics/socioeconomic-grou...)
tavavex 1y ago
These things would be positively correlated with income only to some bare minimum level. Most drugs seem to be relatively cheap, so it doesn't strike me as odd that someone with an utterly miserable life would be more likely to use their meager savings towards substance abuse to try and temporarily make themselves feel better.

bbor 1y ago

Traditionally when talking about money as it relates to social class, people refer to an income bracket I think this article is worth the read for the interesting data it highlights with the arbitrary framework, but it's hard to ignore the elephant in the room: the author's "traditional" experience here excludes a huge part of the economic thought of the last 200 years. I know this isn't exactly a forum predisposed to Marx, but I would encourage even the most fervent anti-communists to take some time to appreciate his economic work on a scientific level. Wealth is absolutely more important than income when analyzing society, because a certain amount of wealth makes one a "capitalist" (in a literal sense, not an ideological one). Capitalists live a life of luxury without working, and they are explicitly+intentionally tasked with the lions share of social responsibility (or, more pejoratively, social power). TL;DR: You don't need to be a Marxist to appreciate the utility of labor-based class analysis in our society! Given that the traditional SV goal is to become a capitalist as quickly as possible ("FIRE"), we'd do better to discuss this stuff more frequently...

kuerbel 1y ago
I have a feeling you'll be downvoted, but you are correct. Marx was an economist before he was a political commentator, or philosophist, or activist or whatever you want to call him.
thrance 1y ago
I found that if you omit to mention "Marx" from your comment and replace "Labor/Capital" by "Workers/Billionaires", people will generally upvote.
saulpw 1y ago
(author here) Thanks for this comment. I am remiss to not directly address how this ties into Marxist theory. I'll consider how to add references on the next rewrite. A key point in Mag Wealth is that there are several meaningfully different levels of both labor and capital. "Capital" is generally regarded as $^6 and up, whereas "labor" is below $^6. But just as there's a huge difference in the lives of a waitress vs lawyer (though both are "labor"), there's also a huge difference in the lives of a millionaire vs a billionaire (though both are capital). There are people who are unable to work and have even less opportunity than a minimum-wage worker; are they "labor", or maybe we should call them something else, like "destitute"? And there are people who have hundreds of billions of dollars who buy and control institutions of power; are they "capital" or do they become effectively "sovereign"?

zug_zug 1y ago

I don't get the point of these types of "5 levels of X"... Like yes you can take any continuous variable and draw as many lines in the sand as you'd like (5 levels of tallness, or even 27 levels of tallness, or whatever) and actually say nothing while apparently sound like you're saying something??

p1esk 1y ago
I think these groupings are meaningful: there are pretty clear social boundaries between these levels.
onraglanroad 1y ago
No you can't, because these are orders of magnitude. Try it with "27 levels of tallness" and see what you get.
anal_reactor 1y ago
They're massively overused, but sometimes continuous variables cause effects that are more discrete in nature. Like, sizes of human torsos follow the normal distribution, but t-shirts come in a few very much discrete sizes, so at some point it makes sense to make a simplification that in certain contexts, torsos themselves have a few discrete sizes.

antisthenes 1y ago

Not sure I see the point of these breakdowns. It reads as if written for a school-age child. In fact kids probably know intuitively exactly where they fall on this scale without having to read a blog, unless their parents are ultra-wealthy but hide it from them really well. Also putting someone with 300k vs 3 million in the same "bracket" is wild.

thrance 1y ago

I think writing an article that starts by "We need to have meaningful discussions about structural class differences, and segmenting the population based on wealth is an obvious starting point" and then not even mention Marx once is strange. This article does not give sufficient motivation for the construction of its complex 14-layers scale: why is it needed and how is it more useful to understand power dynamics in our society than the traditional capital vs labor distinction?

p1esk 1y ago
If you’re familiar with Marxism you don’t need this article, but most people are not.

geor9e 1y ago

Is ↑7 a typo? "A person with lower ↑6 wealth is a “high-net-worth individual” (HNWI, $1m)" "About 16 million people (↑7) are designated as HNWI."

aoeusnth1 1y ago
16M = 10^7.2 ~= ↑7
- geor9e 1y ago
  I mean the quotes contradict each other, is $1M HNWI threshold ↑6 or is it ↑7?
  - ffitch 1y ago
    in this quote ↑6 describes the wealth level and ↑7 the number of people at that level. the author gives every number in log form.
    - geor9e 1y ago
      Thanks for finding a steel‑man way to interpret it. That is such a bizarre narrative choice I didn't even consider it. So they used that arrow notation consistantly to refer to the headings, representing the order of magnitude of money, the entire article, which was a great idea. Then for some baffling and unknowable reason, they decided to inform us that a count of people can also be expressed as a power of ten using the same notation.

tmcz26 1y ago

Reminds me of this 2019 post: https://ofdollarsanddata.com/climbing-the-wealth-ladder/ https://ofdollarsanddata.com/climbing-the-wealth-ladder/

silexia 1y ago

[flagged]

saulpw 1y ago
It's a framework for analysis. If you can use it to promote or discuss free market ideas, please do. There's nothing "far left" about noticing that there are 10+ orders of magnitude difference between the assets of the richest and poorest people, and that people's lives are qualitatively different at different magnitudes. For the record, as the author, I generally believe in the virtues of a "free market". Unchecked capitalism, however, seems to devolve into quite the non-free market, captured and controlled by a small number of people. That much seems unsurprising and apolitical. What to do about it is where policy and politics comes in.
- silexia 1y ago
  Patents and licenses, both forms of government granted monopolies, are the primary reason capitalism goes bad. A true free market would vastly reduce prices across the board especially in areas like medical care where supply has been strictly limited for decades.
  - thrance 1y ago
    "Government granted monopolies", as you call them, are the logical endpoint of a "free market". It always devolves into this, as capital accumulates into fewer and fewer hands until some people are able to wrangle the state into doing their bidding.
  - tavavex 1y ago
    Monopolies don't need to be granted by someone, they're innate to a system that targets endless growth and centralization. Governments, despite being partially corrupted by undue influence that lets monopolism seep back into our society, are the only entities standing in between full monopolization and the world we live in now. In the total absence of a government, the wealthiest entities would repeatedly buy out smaller competitors and use their near-endless power to inhibit any new players from joining the scene (if not legally, then militarily). At that level of wealth, there is nothing that would be able to hold them back from further growth. The biggest company would become a de facto totalitarian government after a certain point. If you had an urgent emergency that had to be treated now, your nearest hospital in free-market-land might as well charge you a million dollars. If there's any sort of urgency that prevents you from going elsewhere, what are you gonna do? Die?

marcoc 1y ago

For me the link to forbes.com/billionaires isn't working right now. Archived copy https://web.archive.org/web/20251111072724/https://www.forbes.com/billionaires/ https://web.archive.org/web/20251111072724/https://www.forbe...

Atomic_Torrfisk 1y ago

Why the weird notation? Apart from very high net worth individuals, the metric seems pointless, navel gazing at best. Aside from that, why not just use log10(<individual's wealth>/<average wealth>) as a function of a particular market like EU, USA, Greenland, whatever. That way the metric is agnostic to inflation and differences in currency value.

johnea 1y ago

Denominated in the unpronounceable character, previously known as "up arrow"...

saulpw 1y ago
I pronounce it 'mag', which I talk about at length on the parent pages (saul.pw/mag).
- johnea 1y ago
  I would have just used the letter 'M' or 'W'...
  - saulpw 1y ago
    Then you would have other design challenges :)

globular-toast 1y ago

I think in my ideal society it would be possible to move up a level by hard work alone (and, conversely, laziness would cause one to move down a level). Unfortunately it seems to me almost everyone stays at the level they were born at and changes happen only rarely due to good/bad luck.

QuiEgo 1y ago

This seems very similar to an old book on the subject, which was a fascinating read: https://en.wikipedia.org/wiki/Class:_A_Guide_Through_the_American_Status_System https://en.wikipedia.org/wiki/Class:_A_Guide_Through_the_Ame...

saulpw 1y ago
Thank you for this! I put it in my reading queue.
- QuiEgo 1y ago
  It’s kind of a fun time capsule, there’s this unspoken question of “is there any truth to all that commie propaganda?” constantly floating in the background (the book was written by an American professor at the height of the Cold War). That said, still think it has a lot of great insights.

MuffinFlavored 1y ago

> 5 Wealth: Comfortable ($300k-$3m) Somebody with $300k has a relatively different life than somebody with $3m, no?

Spooky23 1y ago
It depends. My home in a smaller city would be ~$3M in NYC. It’s about $400k where I live.
dmoy 1y ago
$3M translates to indefinite-ish (handwaving) expenditures of about $70k-$120k per year depending on tax rate, etc. In the US, that covers unsubsidized healthcare for two people ($30k-$40k/yr range), rent in a 2-3BR, and like a decent ish standard of living. Without working. So... maybe? But also maybe not by a lot.

deleted 1y ago

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klysm 1y ago

I feel like this is a good way to teach logarithms to layman

saulpw 1y ago
ding ding! That is the point of Mag World.

koliber 1y ago

I like this approach. In finance you have three basic statements: - balance sheet - profit & loss - cash flow It seems like looking at net worth of a person is like only looking at the balance sheet. The mag wealth approach also takes potential cash flow into perspective, by estimating ability to raise cash, even if it is through loans. It does provide a more complete picture.