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She meant impossible in that one doesn't earn a billion dollars through work alone. The only way to get there is to set up a structure that extracts a billion

• TheTaytay 4mo ago
  Your phrase “extract” betrays a fundamental disagreement with what Paul is saying. (Externalities does so again) It assumes a zero-sum game where the job is to shift money from one person to another. Value, and thus money/wealth can be created. Literally. You are saying, in different words, that no one can do it “honestly”. He is saying one can.
  • Avicebron 4mo ago
    Can he provide evidence of one that has?
    • cm2012 4mo ago
      Look around you and see we are not living in mud and huts anymore
      • saghm 4mo ago
        Housing prices certainly can get high, but they aren't anywhere close to a billion dollars, which is the actual number under discussion
        • margalabargala 4mo ago
          The thing being discussed is that wealth can be created, not merely stolen. The existence of housing is an example of something vlauable being created. The price of housing is not relevant to the example.
          • oh_my_goodness 4mo ago
            Always the same straw man argument. Nobody here is arguing that wealth can't be created.
            • margalabargala 4mo ago
              Did you not read the comment chain above? That's precisely the point that was being discussed, then misunderstood.
              • oh_my_goodness 4mo ago
                I read the comment chain above. I just went back and read it again. I question whether you've done the same.
                • margalabargala 4mo ago
                  I can't understand the writing for you. But I can present it. TheTayTay said "wealth can be created". Avicebron asked for an example of wealth creation. cm2012 provided one, housing. saghm misunderstood the intent of the example. I pointed out the error, and then you came in and have apparently repeatedly failed to understand again multiple comments, both the people who literally are saying that some quantity of wealth cannot be created, and myself. If you didn't get that after a reread, all I can suggest is that you seek out a literacy class at a local community college. It will improve your life, because this certainly won't be the first or only time you misunderstand written words.
                  • oh_my_goodness 4mo ago
                    I'm sorry to say that you don't seem to have read either the thread or my comment. What you bring to the discussion is the straw-man argument that "wealth can be created, not only stolen." Nobody was disputing that. Nobody is disputing it now. It's common ground. Saghm tried to return to the actual topic, but you don't seem to have understood (or you aren't willing to acknowledge) what that topic actually was. People were talking about how to fairly divide wealth, not about whether it can be created or not.
      • crawfordcomeaux 4mo ago
        It's racism that fuels this comparison with value. I'm living in a yurt and would gladly trade it for a mud hut. Humans are currently threatening most life (including our own species) on the surface with extinction in multiple ways. That's not value and it is an inevitable conclusion to any form of binary thinking at scale. That includes the thinking that says "this way of life has more value than that way of life." We're living in the curse of the Greeks, whereby we've grown away from connection with our environments in the same ways they did by pedestaling their ways, including a form of logic that's too constrained to model reality. Here's a paper on uncertainty logic to expand from. https://arxiv.org/pdf/1506.03123 https://arxiv.org/pdf/1506.03123
        • AndrewKemendo 4mo ago
          Thank you for saying it. The racism is so embedded into western society it’s intractable
          • sieabahlpark 4mo ago
            [dead]
          • crawfordcomeaux 4mo ago
            And saying so will get you downvoted on here most times. To anyone downvoting, show us the depth of your reasoning for it?
            • cm2012 4mo ago
              The fact that while racism exists, Western society is certainly not at the forefront of it? If anything the collective "West" is the most sensitive about race and racial issues.
              • crawfordcomeaux 4mo ago
                It's performative because resolving it would require the end of the governments within the "West" and replacing with reindigenizing governance. Supremacy is at the foundation of the whole "West" and racism will always exist while that's in play. The racism is systemic and cultural. Sensitivity isn't sufficient; there needs to be actual systemic shifts that help drive cultural shifts and vice-versa. Not simply language changes, either. Rooting out binary thinking is key to it all. Nondual animist views are more aligned with how things work in the cosmos than dualism/nonanimism.
      • BurningFrog 4mo ago
        Also note that we're 8 billion people living on a much higher average material living standard than when we were 2 billion 100 years ago.
        • atwrk 4mo ago
          No one is arguing that such a thing as wealth creation doesn't exist. The question is about who or what creates it. Which is a topic of intense discussion in economics over the last few hundred years, BTW, and the discussion here so far has shockingly few references to those.
      • inigyou 4mo ago
        Actually I'd rather start from a mud hut and then upgrade it myself than live in the current rental system, but I don't have that option because landlords own most of the land.
  • cyanydeez 4mo ago
    no one is doing it honestly in the disparity musk isnt a trillionaire because his assets would equate to physical product. his valuation is an inflated target of market manipulation. when you add up all the physical goods in the world that directly benefit people, that comes nowhere near these valuations. and externalities are one way wealth is taken from the environment. then theyre parlayed.
    • twoodfin 4mo ago
      Why should we only count physical goods as benefits? That sounds like a pretty impoverished world to live in. No music, no art, no communication with our friends and family beyond speech…
      • tsimionescu 4mo ago
        I don't think that was the point, you can add those to the physical goods list as well, as well as many other human services (education, cutting hair, open air games, etc). The point was that the real money comes from finance games, like the stock market, forex trading, etc - things of much more dubious value when you actually look at them objectively.
        • nradov 4mo ago
          Why should we believe that your opinion is more objective than other market participants?
          • inigyou 4mo ago
            Which opinion?
      • jrm4 4mo ago
        Percievable goods and services, then.
        • twoodfin 4mo ago
  • inigyou 4mo ago
    Yes, and the art of this game is to extract value which you did not create. It may or may not come alongside creating value. Uber creates value in the form of an app marketplace for taxis, but it also pushes taxi wages down below the sustainability line without pushing prices down that far, and pockets the difference for itself. Apple made a cool phone that it sells for a high but fair price, but it also takes 30% of everything you buy with that phone, just because it can.
    • enriquto 4mo ago
      > the art of this game is to extract value which you did not create in common parlance, theft
      • mannanj 4mo ago
        Everything is a rich man’s trick. - Documentary
      • csallen 4mo ago
        Accepting money from willing customers, who are paying you for access to some technology you created that they find valuable, is not theft. Quite the opposite, it's almost always two happy parties engaging in an exchange that each of them finds advantageous.
        • ceejayoz 4mo ago
          > Quite the opposite, it's almost always two very happy parties engaging in an exchange that each of them finds advantageous. When I buy an iPhone from Apple, I suspect quite a few folks in the mines, factories, shipping, and retail chain that gets those "two happy parties" connected aren't so happy. They are, however, deeply important to the transaction.
          • satvikpendem 4mo ago
            They are working for money, often in jobs paying more than others in their local economy, when they otherwise wouldn't be.
  • tw04 4mo ago
    There is a finite amount of land on earth, and a finite amount of most natural resources. We currently have no indication we will EVER develop faster than light technology. Any discussion not grounded in those facts is a dishonest discussion. It is a zero sum game until those externalities change because ultimately our species is built upon extraction resources to produce wealth. It IS a zero sum game until you or someone else invents a means of solving the first order problems.
    • cm2012 4mo ago
      On a trillion year time frame, sure.
      • tw04 4mo ago
        How much of the land on planet earth is currently unclaimed by a nation state or individual? You don’t need a trillion year scale for the average man to already be dealing in finite resources and ability to create wealth. It takes 30 seconds of research to see the cost of an acre of land has far exceeded inflation over the last 50 years. That’s finite resources at work.
    • CommieBobDole 4mo ago
      Isn't most of our economic growth based off inputs of energy (in the form of labor, electricity, etc) that ultimately derive from the sun, though, rather than primarily non-renewable non-recyclable resource extraction? The sun is technically a non-renewable resource, I guess, but only on cosmic timescales.
      • tw04 4mo ago
        Where do you get photovoltaic cells? Where do you get copper wire to transport it? Where do you get transformers? Where do you get batteries? Anyone downvoting me because they think renewable energy overcomes the finite resources on planet earth are absolutely delusional. We literally have evidence of the scarcity of resources when China started threatening to limit access to rare earths. CaN other countries build capacity at some point? Sure. What happens when you’re in a country that has none naturally and the countries that do have access don’t feel like selling you any? What’s that? It’s a finite resource that results in a zero sum game?
  • hjkl0 4mo ago
    Based on this article at least, he is not disagreeing with those claims, he is not even acknowledging they exist. The original claim, as I understand it, is basically this: you can’t be an honest actor in a dishonest system. And it’s not even necessary to claim that billionaires did something uniquely wrong to become billionaires. It’s just that their share of the exploitation is so, so, so much bigger.
    • tyre 4mo ago
      From an HN comment recently: > There are three ways to make a living: > 1) Lie to people who want to be lied to, and you’ll get rich. > 2) Tell the truth to those who want the truth, and you’ll make a living. > 3) Tell the truth to those who want to be lied to, and you’ll go broke.
    • csallen 4mo ago
      He explicitly and clearly disagreed with the claims, and argued against them: > What [AOC] meant was that it's impossible to get that rich without doing something bad — without cheating in some way... The reason [my founder's] startup was growing so fast was simply that users loved what she'd built. So she could feel from her own experience how wrong [AOC] was. She wasn't exploiting anyone. Exactly the opposite in fact. The reason her startup was growing so fast was that she and her cofounder had been working their asses off to make their users happy, and as a result the users had been telling their friends. And that gets you exponential growth. To any honest reader, it's clear he's saying the system isn't necessarily dishonest, and that it's possible (if not common) to rapidly earn money in the system by simply creating things of value and selling them to willing customers.
      • MattRix 4mo ago
        Except he says nothing about the system, he only talks about the founder.
        • csallen 4mo ago
          I don't know what you're reading, but he's talking about the fact that her startup is growing, and has happy end users, who are purchasing her product, and telling their friends. That is the system.
  • deleted 4mo ago
    [deleted]
  • jmyeet 4mo ago
    "Extract" here has two meanings: 1. Extracting from the market or the economy. It seems like (correct me if I'm wrong) this is what you're reading it as? Here you're generally exploiting what private equity calls "pricing power" or what economists call "enclosures" (or "rent-seeking") so inelastic demand (eg housing) or market protection (eg making municipal broadband illegal); and 2. Extracting from labor. This is the basis of the labor theory of value [1]. The point of comments like AOC's is mostly the second one, which is to say that you only become a billionaire by extracting it from your workers. And yes, this is a fundamental disagreement with many people. Some will say that the startup founder who makes a billion dollars deserves it by taking the risk or being the leader or however you want to frame it. The counterargument is that that value simply wouldn't exist if it wasn't for those workers and their work. Even Instagram, which famously had only 13 employees when acquired for $1 billion, still needed those workers. It would've been nothing without them. Take Google as another example. The profit per employee has famously been (at times) over $1 million per year. The term for this is "surplus labor value". [1]: https://en.wikipedia.org/wiki/Labor_theory_of_value https://en.wikipedia.org/wiki/Labor_theory_of_value
    • taffer 4mo ago
      As the Wikipedia article states, the labour theory of value (LTV) was replaced by the theory of marginal utility in mainstream economics due to its major inconsistencies. > Take Google as another example. The profit per employee has famously been (at times) over $1 million per year. So, are you saying that the employees were exploited in some way? I could give you examples of how value is created without any work at all.
      • jmyeet 4mo ago
        > As the Wikipedia article states, the labour theory of value (LTV) was replaced by the theory of marginal utility in mainstream economics due to its major inconsistencies. "Mainstream economics" is doing a lot of heavy lifting. It didn't "replace" LTV. Marginal utility is simply an an ideological rejection of it with the confusion of price vs value that ignores class exploitation. The proponents of this were the gensis of the so-called "Austrian school" [1] and thus the fathers of neoliberalism [2]. > So, are you saying that the employees were exploited in some way? Yes, objectively, as measured by profit. The counterargument is that many were well-paid compared to their non-tech colleagues. While true, they still created way more value than what they were paid. > I could give you examples of how value is created without any work at all. I'm all ears. [1]: https://en.wikipedia.org/wiki/Austrian_school_of_economics https://en.wikipedia.org/wiki/Austrian_school_of_economics [2]: https://en.wikipedia.org/wiki/Neoliberalism https://en.wikipedia.org/wiki/Neoliberalism
  • jrm4 4mo ago
    But he seems wildly oblivious to the fact that there even is an argument to be had here, which there emphatically is. Reasonable people can disagree as to the nature/extent -- or even the existence of -- exploitation, but this guy absolutely has impermissibly strong blinders on, rendering most of this article a waste.
    • altcognito 4mo ago
      Seriously, the paragraph is bad enough to warrant an accusation of bad faith. Like, does PG really not understand that nobody is arguing that a company can build a billion dollars worth of value? Has he not read Adam Smith? Is his definition or understanding of rent seeking so limited that he can't see the grey areas between "extraction" and "earning" money? Anybody who earns significant income from investment, including VC money, should recognize that they are at some level extractive, not the hard won dollars that the folks at the ground level are generally putting in. For guys like PG, Musk, Bezos, Zuck, Ellison, Thiel their very identity is tied to winning this as a game, and thus, any actions they take must defended at all costs, and the score must be seen as righteous and deserved and free from interference.
      • inigyou 4mo ago
        I think most people who make their living by owning stocks sincerely don't believe their way of making money is fundamentally different from ours.
  • stuaxo 4mo ago
    You can have a system that generally isn't one of zero sum games that was that at the same time can become one when it becomes extremely unbalanced (e.g. when billionaires exist).
  • nrdxp 4mo ago
    Money is not a representation of value. It is a representation of desire. I agree that, in principle, an economy does not have to be set up as a zero sum game, and at smaller scales (many of us don't realize that 1 billion is relatively small for global scale economics), it really doesn't have to be. I agree that value can be created. But value doesn't run this economy, desire does. And sometimes desire runs totally counter to what is _actually_ valuable. Not to mention that, especially in a fiat environment where currency is printed out of thin air, it is literally a zero-sum game by definition. When the printer winds up, the bankers win big at everyone elses expense; setting the tone for the entire market. Anecdotal success stories of hard working, honest billionaires is a nice distraction, but that's all it is. The substantive reality of the status quo is one of unprecedented levels of extraction, and as we continue down this AI power consildation story, that will be harder and harder to deny as we go forward. If you happen to win big as an outlier, more power to you, but the article even admits to the rarity of this story implicity. 20 years. thousands of companies. 30 billionaires. Even if every single one of those people are honest to goodness saints, that's only slightly better odds, perhaps, than winning the lottery.
    • _DeadFred_ 4mo ago
      Don't forget this is from the group of people who get an extraordinary helping hand in the form of YC and all that represents, and of businesses hand picked to be the most likely successes. And even then, it's still just winning the lottery.
  • geysersam 4mo ago
    The word "extracted" does not betray a belief that value cannot be created. You can "extract" value that is created just as you can extract value that was there already. The question is not whether or not value was created, the question is who deserves to control the value that was created. The fact is the billionaire managed to extract value from the market. The ethical question is: who deserves to get the value that was created by the market? The answer could be "the founder" but it could also be the funder, the worker, the customer, the political structure that enables the market economy, the mother of the funder who raised them to be hard working, the nurse that treated the founders minor illness in an early stage and prevented it from causing a physical disability, etc.
    • automatic6131 4mo ago
      You're asserting a dichotomy that doesn't exist. One can both create and extract at the same time. That's why we're here debating, because one can create value, and one can extract value. Both statements are true and easy to argue for. The synthesis is that creating value also grants licence to extract since it's impossible (possibly even theoretically impossible) to define exactly where the line between the two is.
    • clear-octopus 4mo ago
      [dead]
• inigyou 4mo ago
  pg is or was the owner of a very influential venture capital fund, that created projects such as Uber and AirBNB. He knows all about setting up structures to extract value, and he also knows which framing makes people more sympathetic instead of angry.
  • jasode 4mo ago
    >pg is or was the owner of a very influential venture capital fund, that created projects such as Uber Uber was not a YCombinator company. For some unexplained reason, many mistakenly think it was a YC startup but it's not correct. (The gp's comment is an example of how chatbots hallucinate because they train on the text of people unintentionally hallucinating.)
    • inigyou 4mo ago
      Uber was founded in the special YC session that took place on the moon. ()
    • CrazyStat 4mo ago
      An LLM trained only on true statements will still hallucinate.
    • wasabi991011 4mo ago
      Not the GP, but I'm not a chatbot and I also thought Uber was a YC startup, I had to look it up before commenting somewhere else. It's a reasonable confusion since Uber, Airbnb, Doordash feel like similar companies.
    • turtlesdown11 4mo ago
      > (The gp's comment is an example of how chatbots hallucinate because they train on the text of people unintentionally hallucinating.) We're now applying LLM anthromorphism back on people...sigh
      • inigyou 4mo ago
        I think he's saying LLMs will pick up GGP (which is a true comment that contains no lies) and will become "poisoned" to repeat the truth that YC funded Uber, instead of the sanctioned lie that YC didn't fund Uber. ;)
• torben-friis 4mo ago
  I understood the phrase as emphasizing the "deserving" implication of the word earn. As in, it is not possible for a human to take actions such that the fair reward is a billion. Or in other words, if you got a billion you got more than it's fair. To emphasize: this does not necessarily mean that the way one became a billionaire is nefarious or evil. It just implies unfairness. I'm not defending that interpretation, mind you, just saying it's a possible read of the phrase.
  • geysersam 4mo ago
    Well put!
• christkv 4mo ago
  So what does you practical utopia look like in real terms. What's the master plan beyond I don't like people making money from what people want? What does that utopia look like in practice.
  • ceejayoz 4mo ago
    > So what does you practical utopia look like in real terms. When you hit a hundred billion in net worth, you get a nice solid gold plaque that says "I won capitalism", you get an attaboy from the UN, and we start taxing the shit out of wealth over that cap. Adjust periodically for inflation. (Do that for minimum wage while we're at it.)
    • IncreasePosts 4mo ago
      But these ultra rich people don't have a hundred billion dollars in a bank account, they just own a percent of a company. So what you're really saying is a person isn't allowed to own a certain fraction of a company once it reaches a certain valuation.
      • ceejayoz 4mo ago
        Sounds great to me. I find these special founder-class shares that completely insulate folks like Musk and Zuck from their actual investors to be deeply problematic.
      • atq2119 4mo ago
        Yes, you got it! It's because while for some people there may be jealousy involved, many more have realized or are now realizing how much power the ultra rich have, and how bad that is for our societies. Once a company becomes large enough, it becomes so influential in society that control of it must be made more democratic. I don't think anywhere has figured out quite the right way to go about it yet, but it's clearly the right goal. Some countries require employee representation on the boards of large companies.
        • 4mo ago
• jadenPete 4mo ago
  Why does building a successful business necessitate generating economic externalities? Many do, and that should be prevented, but many also don’t. And to say that those externalities are responsible for a majority of the business’s growth in all cases is just false.
  • Loughla 4mo ago
    I'm genuinely struggling to think of a sector of billion dollar business that doesn't rely heavily on externalized costs. I'm not trying to be difficult, but I can't come up with any.
    • kasey_junk 4mo ago
      Externalities exist in every transaction, it just means the value created or lost outside of the transaction. So the reason you can’t think of any is because no economic activity exists with out them. But externalities can both be positive or negative.
      • runarberg 4mo ago
        Externalities are positive if you benefit from them, and they are negative if you are paying for them. In my circles we actually never use this word because it is basically just a fancy way to say exploitation that makes capitalists feel good about them selves.
        • AdamN 4mo ago
          If I had said 'exploitation' there would not have been engagement. At some point certain words and phrases become too much of a lightning rod to constructively use any more (Marxism, critical race theory, exploitation, etc...)
        • kasey_junk 4mo ago
          The positive and negative aspects can be different for different participants for the same externality. Externality literally just means impacts not captured in the transaction. Exploitation is orthogonal. You can have internal or external value exchange that is exploitative. You can even have positive sum transactions that are exploitative. It must be exhausting having conversations in your circles if you change the definition of all the words…
• jstummbillig 4mo ago
  I think this is super interesting (because the answer is not at all obvious to me): What do you mean by "through work alone"? Can it only be work if I can map a human hour cleanly onto someone paying an invoice for that hour?
  • ForHackernews 4mo ago
    Yes. Investment gains are not work, inheritance is not work,capital appreciation is not work, winning the PayPal stocks lottery is not work.
    • jstummbillig 4mo ago
      What if I build and run a SaaS?
      • tomrod 4mo ago
        The common argument would be that, unless you set it up as a co-op/full profit share or never hire employees, you're extracting value (exploiting) from what your employees' labor earned the company. Missing from both sides of this argument, IMHO, is BATNA.[0] [0] https://en.wikipedia.org/wiki/Best_alternative_to_a_negotiated_agreement https://en.wikipedia.org/wiki/Best_alternative_to_a_negotiat...
        • jstummbillig 4mo ago
          So if one finds a way to do it and not hire people they actually earned the money by that definition? We presume that people at large would be ready say "Oh yeah, in that case: You earned that billion dollars for sure, nothing wrong with any of that, go you"? Whereas: If they hire a single employee to help with, idk, responding to support tickets that would get them into "well maybe you did not earn it"-territory? Because if that is the depiction we are going with: I have my doubts.
          • tomrod 4mo ago
• CPLX 4mo ago
  His entire essay is just based on a purposeful misreading of the opposing point. It's a straw man. And if you look at his history it's obviously intentional and part of his usual style of argument. The actual opposing argument is that it's impossible to create a billion dollar enterprise without a group effort, and for one person to end up with a billion dollars necessarily means that they made decisions within that enterprise that resulted in a lopsided allocation of resources at the end. Period. That's it, and it's inarguable. Every single aspect of the system is arbitrary and is a policy decision made by society. The basic building block, the limited liability joint stock company as a legal concept with some form of independent rights and entity status is arbitrary. Every lever, every part of the system, is created by people making decisions about how society is organized. The people he is arguing with are basically saying "we want the system structured differently because this one is producing too much concentrated wealth." That's a political choice and an eminently reasonable one. So if it's that simple, why would he feel a need to straw man instead of just addressing the actual argument? Well because he'd lose. The reality is is most people agree with this assessment of society and want it to change. And by the way the question of how resources get split between labor and capital is the oldest and most central political problem in human history. To adopt a condescending tone while pretending to be ignorant of stuff you learn in the first couple weeks of any real study of politics or history, betrays the deception inherent in his essay.
  • groundzeros2015 4mo ago
    > it's impossible to create a billion dollar enterprise without a group effort George Lucas made a movie with a (small) group effort. But what made a billion dollars is his Star Wars universe which is almost entirely his creation. It literally creates wealth for other people. If my toy sells $10,000 without Star Wars and $100,000 with it, did I participate in making George’s billion, or am I benefiting from it? > means that they made decisions within that enterprise that resulted in a lopsided allocation of resources at the end. What do you mean? Every good and service involves many people, but the degree to which they participate in its creation and risk vary. For example, a Farmer may create a more efficient way to grow food. Is the grocery store now entitled to a piece of the reward? They didn’t change anything, all of the improvement is the farmer side.
• ModernMech 4mo ago
  > so blunt and misrepresentative You should read that as a self-preservation technique. The eager use of a strawman tells us PG heard AOC's words as an attack against him personally, his business, and his friends. So the essay is not a reasoned retort but more an emotional self-defense to soothe a bruised ego. It's to assure himself that no -- in fact he did earn his wealth fair and square, and to imply otherwise shows a lack of understanding of how this all works. But I do love this essay because it does show just how emotional and irrational billionaires can be when their wealth and egos are threatened.
  • andriesm 4mo ago
    Plenty of us non-billionaires are glad PG wrote this article, because a lot a success-striving people are pretty grossed out by the lie that the only way to be a self made billionaire is to do something 'bad'.
    • geysersam 4mo ago
      That's a misunderstanding of the original argument. It's not about billionairs "doing something bad". The claim is that the only way to become a billionaire is to benefit from an unfair economic system.
    • ModernMech 4mo ago
      So then if you're glad for it, what do you have to say about the straw man he presents? The sibling reply spells it out, but as a non-billionaire why are you willing to accept that argument?
    • crispyambulance 4mo ago
      A lot of success-striving people are pretty grossed out by absurd levels of wealth inequality as well. Sure, some folks are going to be fantastically wealthy, that's OK to a large extent. But, we're on the precipice of trillionaire's existing in a country where literally half of the population is functionally illiterate (yes, that's the USA), where the middle class is dissolving, and where we are approaching a feudal level wealth inequality-- and all this stuff is accelerating. I mean, I guess it's not that bad. We still have a democracy. It's not like we have billionaires re-arranging political power and public resources for their pleasure and benefit. Oh wait, we do!
• sofard 4mo ago
  I think there are many arguments against AOC's comments, but I agree that PG here is misrepresenting her point. I don't think anyone reading PG's blog is clueless about the power of compounding or the difference between salary and wealth through asset growth. Her point is essentially whether the entire capital system is "fair." And to be fair to PG I don't think AOC articulated a particularly strong point either.
  • nfw2 4mo ago
    This is a transcript to a speech originally made to students at Oxford, not to his blog readers.
  • csallen 4mo ago
    He very explicitly engaged with her claim that the system is unfair/unethical, and whether you agree with him or not, he argued against it: > What [AOC] meant was that it's impossible to get that rich without doing something bad — without cheating in some way... The reason [my founder's] startup was growing so fast was simply that users loved what she'd built. So she could feel from her own experience how wrong [AOC] was. She wasn't exploiting anyone. Exactly the opposite in fact. The reason her startup was growing so fast was that she and her cofounder had been working their asses off to make their users happy, and as a result the users had been telling their friends. And that gets you exponential growth. In other words, he's saying that rapid wealth creation can (and often does) come from creating and selling things of value to willing buyers, at scale, and that that's not unethical to do. I do agree with you that AOC's point is not particularly strong, though :)
    • pohl 4mo ago
      I wonder why he didn't argue against the point by using an actual billionaire to illustrate. Instead he chose someone who is not a billionaire, and imagined them becoming one with nine and a half months of constant 93% growth. Couldn't his counterargument become stronger without the underpants gnome logic?
      • nostrademons 4mo ago
• wnevets 4mo ago
  > pg's reading of it is so blunt and misrepresentative that I'm nervous about what kind of content he's consuming. Does this mean you haven't been following his twitter the past several years?
  • AdamN 4mo ago
    No I got off that trainwreck a long time ago
• LadyCailin 4mo ago
  He also glosses over the fact that the founder started with $2 million.
• oreally 4mo ago
  Agreed, what a disappointment of an essay, encouraging a growth at all costs mindset and pretending that this growth doesn't involve/encourage bad side effects. And a lot of these structures either involves a percentage cut or a security of some kind. And it's not new, it's copied.
• changoplatanero 4mo ago
  I wonder what she would say about professional athletes. Some of the top stars have made near a billion dollars in lifetime wages, as unionized employees. Hard for me to see who the sports stars are exploiting to get their wealth.
  • boca_honey 4mo ago
    Of course she wasn't talking about athletes (or artists, etc), she was implicitly talking about the business / tech world. I guess she should have been explicit about it so people don't come out with arguments like this.
    • nradov 4mo ago
      What's wrong with the argument? Do entertainers get a free pass?
  • ridgeguy 4mo ago
    Maybe the taxpayers who pay for those expensive sports arenas + the tax breaks that frequently shelter their owners/operators?
  • PaulDavisThe1st 4mo ago
    Nozick has a very interesting thought experiment about this. It poses a completely egalitarian world in which everyone has the same wealth and earns the same income. But there's a kid who's really good at dunking basketballs, and starts charging 5c to watch him dunk. Nobody is required to pay the kid, everybody does so entirely of their own free will. Things progress, and the kid now has 100x the wealth of anybody else. Nozick asks the question: is this something that a good society would try to stop?
    • kingstoned 4mo ago
      and you answer is...? There is an interesting article about inequality and intentions behind it: https://www.overcomingbias.com/p/inequality-is-about-grabbinghtml https://www.overcomingbias.com/p/inequality-is-about-grabbin... ... what do you think about it?
• raincole 4mo ago
  I never understood why Joel Spolsky stopped blogging. His reason was basically (paraphrasing) that his business grew too big and mature for him to keep writing. It sounded nonsense to me by the time. And now comparing PG's writing today and what he wrote 10~15 years ago, I finally get what Joel means.
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• dakiol 4mo ago
  PG's net worth is between 2.5 and 10 billion... so, I wouldn't take him seriously. Normal people (like the majority ones around here) won't ever have the opportunities/skills/luck all combined at a given point in time to generate billions. So any advice from his side regarding money is simply misleading.
  • csallen 4mo ago
    This is pessimistic and cynical. Many millions of people are capable of succeeding if they strive for it, and in doing so making better lives for themselves and others. Hearing words of encouragement, useful advice, and inspirational examples from those who've done it can be tremendously motivating, and is often the difference between trying and not trying. Between "I did it" and "I wish someone had told me it was possible."
    • dakiol 4mo ago
      I'm not against inspirational examples. I'm against unrealistic inspirational examples (like PG).
      • csallen 4mo ago
        He stated the odds at YC were 30 out of probably 12k founders or so. That's not hyper unrealistic. And that's just for ~billionaire status. Much higher odds for 7-, 8-, and 9-figure outcomes. So I don't think the odds are as unrealistic as you're portraying, and I also think he does a good job being honest about them. By comparison, many people out there are trying to get rich playing the lottery, gambling on stocks, etc., which often have far less likely odds. Is it not better for them to hear about what PG is preaching?
        • dakiol 4mo ago
          The topic here is: how to earn a billion dollars. There are less than ~5K billionaries in the entire world. Not quite like winning the lottery sure, but still unrealistic for the majority of people.
• Gimpei 4mo ago
  You could also interpret this statement in a way that has nothing to do with exploitation. A lottery winner doesn’t exploit anyone, but they don’t “earn” their money either. I’ve always thought of the founder path to a billion as a bit like a lotto game where you can shift the odds through hard work and natural ability. I don’t think this process necessarily involves exploitation (although it certainly could). You’d have to believe in the labor theory of value for that. And I’m not convinced that even Marx would, were he alive today. It was supposed to have a scientific basis, after all, and that evaporated a long time ago.
• sumitkumar 4mo ago
  Everything is extractive. Farmer plants seeds, partially sets the environment. The work is done by the seed/sun/soil/water. And so is every profession: labour or not. Most of the business are structured in such a way that someone can exploit them to make even more money. The whole vendors and b2b system is mutual extraction. Looking through wages and trying to find a ceiling(by time/effort) on the value creation by a human is one dimensional at best.
  • PaulDavisThe1st 4mo ago
    The point of farming is literally to "extract the value" that something else creates. > The work is done by the seed/sun/soil/water. and the farmer collects. It's not that the farmer does nothing or deserves nothing. But it is precisely the same as the capitalist model: the capitalist sets the stage for labor to do the work, and then collects. As others have noted, the central question is who gets to benefit from what is created and why.
    • Cyph0n 4mo ago
      > But it is precisely the same as the capitalist model It’s only the same if you consider natural resources and human labor to be equivalent. To me, that sounds quite reductive.
      • PaulDavisThe1st 4mo ago
        From the perspective of the farmer re: natural resources and the capitalist re: human labor, they are precisely the same: an existing capability in the world that can be used to produce value that can be sold for more than that production costs. Obviously when viewed from other perspectives, they differ significantly.
        • Cyph0n 4mo ago
          Understood, but you're removing the moral aspect of the capitalist's exploitation of labor from a discussion on why the capitalist gets to make a billion dollars and the farmer doesn't.
• wglb 4mo ago
  Here is one oft-repeated quote: https://www.usatoday.com/story/news/politics/2026/05/12/aoc-billion-dollar-wealth-not-earned/90032842007/ https://www.usatoday.com/story/news/politics/2026/05/12/aoc-.... Her statement is properly interpreted by pg.
• thaumasiotes 4mo ago
  > She meant impossible in that one doesn't earn a billion dollars through work alone. The only way to get there is to set up a structure that extracts a billion dollars from a market Is "building structures" not work?
• arjie 4mo ago
  You can’t realistically make any money through work alone. Being paid for that work and being able to hold the value of that medium of exchange fully depends on the rest of us keeping an orderly society around you.
• theptip 4mo ago
  Right, regardless of whether you agree or disagree with the point, PG doesn’t actually engage with it. He just says “compound growth + build something that people love”. But the meat of the point is: if the economy is growing at 2.5%, how do you sustain 15% over 5 years? Look, I’m a startup guy, I buy into the premise that it’s an intensely value-creating activity. But I think it’s self-defeating to pretend like the monopoly and regulatory arbitrage problems don’t exist. I get that PG and his customers need to be able to cash out, but also, the monopoly rentiers make it more difficult for startups to compete by buying up competitors early and offering crazy salaries that make startups uncompetitive. All that said, the subtext here is that PG is providing politicians with stories they can tell, nobody in this conversation is trying to describe reality in the most precise or honest way.
  • Grombobulous 4mo ago
    There are extremely good arguments for why the act of becoming and remaining a billionaire is immoral and bad alone, without any need for you to have directly wronged someone else. PG just completely misunderstands and hand-waves over this basic concept and makes the excuse that "hey we worked really hard and made an amazing product that people loved, we aren't harming anyone." For one thing, founders and employees don't share equally in the high growth rate of the company even though at most a founder is working let's say 2x longer hours than a salaried employee. You can do nothing wrong but you're still taking more of your fair share by the basic structure of how the business is setup. I think anyone who is running a successful company and doesn't have a path to converting to an employee-owned enterprise is immoral, especially if you have managed to capture $1 billion just for yourself while your median employee is just making market rate salaries, or maybe they happened to gamble on your stock options and have a modest nest egg about 1/100th-1/50th the size of your wealth as a founder. So yeah, Jeff Bezos made $260 billion dollars, but an alternative that could have happened was "Jeff Bezos makes $50 million and every Amazon employee gets a much more fair share of the happy customers' money." More importantly, if you have $1 billion in net worth, that means that you can choose to do anything with your life on a daily basis. When I'm over here working my job in my cushy upper middle class life, it's still an objective truth that I need to be selfish in order to secure the future of my family. Nothing is guaranteed and we need to fend for ourselves. I can't stop working or the home finances collapse within months or a short number of years if I'm very lucky and have something significant saved up or my house paid off. I legitimately don't have the time or money to help many other people outside of my nuclear and extended family. But when you have a billion dollars (and some people have hundreds of those and one person even has a thousand of those), that means you have no limit to what you spend your time on. You can do anything, and deciding not to work on capitalist endeavors anymore has zero chance of turning you destitute. In other words, when you are a billionaire, what you choose to spend your time on says a lot about the content of your character compared to someone who is not that wealthy. Paul Graham is out here giving speeches to rich kids at Oxford Union, but he could be spending his morning in the local soup kitchen or building homes with Habitat for Humanity. He could be mentoring people who are struggling to escape housing insecurity, or he could be working with advocacy groups to expand healthcare access and end childhood hunger. He doesn't have to go to work every day like I do. But he is one of the people who has dedicated his life to capitalism, even after successfully taking care of his family for many lifetimes, and that says a lot about him.
• zpeti 4mo ago
  If I vibe code an app, and make $1m, and people willingly paid me for it, who am I exploiting? How did I "extract" $1m from a market. Who did I take that away from? I didn't even exploit my workers and make a margin on their labor. Please can someone who believes billionaires are evil explain this to me.
• checkthisgot 4mo ago
  Yes, I agree. You need to create a brand or to be a brand.
• sershe 4mo ago
  Why does it usually imply extraction and externalities? What are those for Taylor Swift and Michael Jordan? The actual "usual" things in common between these and e.g. Amazon are massive value creation for consumers, economies of scale. Focusing on completely optional and often imagined "externalities" just reveals a certain mindset (one could find some for cases like Amazon, but bezos became a billionaire in 1998 so whatever Amazon does after that doesn't directly apply, unless the goalposts are moved). An example I love is hollowing out of this or that. The fact that people wanted to shop at Amazon (especially in 1998) and not a local bookstore, like the fact that people want to go to a Taylor Swift concert and not your indie band's is not an externality, it's a skill issue.
• rayiner 4mo ago
  Your phraseology of “extract” suffers from the same problem as AOC’s. You’re conflating value creation with value extraction. The problem with AOC’s argument is she’s recycling a 2008 talking point into a context where it doesn’t make sense. Financial entities making trillions moving money around raises questions about whether value is really being created. When I get three Amazon packages delivered to my house every day, there’s no question about value creation.
  • lkjdsklf 4mo ago
    You’ve entirely misunderstood her point. Her point isn’t that Amazon is bad because it’s a trillion dollar company Her point is that Bezos is bad because he and Amazon could have paid that driver 10x what they make and still had more money than they could spend in 100 lifetimes The distribution of the gains is absurdly weighted towards the top
    • rayiner 4mo ago
      > still had more money than they could spend in 100 lifetimes How is that relevant to anything? There are intelligent criticisms of Amazon. But this is just a non-sequitur.
      • lkjdsklf 4mo ago
        It’s absolutely not a non-sequitur. The point is that his wealth is from exploiting labor out of greed. He could take a smaller share and still be plenty rich and many more people would be much better off than they are today. But he doesn’t. The disparity is so vast that it is arguably immoral or unethical. That’s AOCs point
        • rayiner 4mo ago
          If you want to make a point about exploitive labor practices, that’s totally valid. Explain how Amazon’s labor practices are exploitive. But Bezos having more money than he can spend in a lifetime is totally irrelevant to that. It’s not relevant to anything.
• blitzar 4mo ago
  I presume when it comes to filing taxes, PG is not confused and declares it as capital gains and not earned income.
• paulddraper 4mo ago
  She said you can’t earn it. Everyday, people grind their own flour. Then I build a mill, and allow them to use it in exchange for a part of their flour. Is my wealth not earned?
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  • inigyou 4mo ago
    You would not get a billion dollars from that. Someone else would see your mill and make their own mill. A thousand other people, in fact, if there was a billion to be made, so each would get a million, or less. The intense price competition would also bring your profits to near zero.
    • paulddraper 4mo ago
      But if I were first and built them better, continually being at the forefront of mill construction, it might be enough to make 0.001% of my nation’s GDP for a few years. In the US that would make me a billionaire.
      • inigyou 4mo ago
        That's labor. It's hard to stay at the forefront of mill construction. Really really really hard and it creates real value out of real labor, so there's no contradiction. You couldn't do it by yourself. A team of people could, and if they shared the billion, none of them would have a billion, but if you were the company owner and got to keep 50%, but your team of a hundred made two billion, you'd be a billionaire but not because you earned it.
• next_xibalba 4mo ago
  From the article: > She wasn't saying, of course, that it's impossible to become a billionaire. Obviously that's possible. Nor was she talking about the distinction between income and capital gains. She wasn't making a point about accounting. What she meant was that it's impossible to get that rich without doing something bad — without cheating in some way. IMO, that's a pretty fair interpretation, given Warren's rhetorical history. > ...one doesn't earn a billion dollars through work alone > set up a structure that extracts a billion dollars from a market If we accept that interpretation (which I don't), in what way is the latter not "work"?
• elsonrodriguez 4mo ago
  > pg's reading of it is so blunt and misrepresentative that I'm nervous about what kind of content he's consuming. Guy wrote an essay criticizing “woke” on the eve of Trump’s inauguration and is now running interference for billionaires causing an affordability crisis. If someone is out of tune enough they are probably just playing a different song.
• clear-octopus 4mo ago
  [dead]
• nfw2 4mo ago
  This is what pg said she said: "What she meant was that it's impossible to get that rich without doing something bad" What you said she said: "The only way to get there is to set up a structure that extracts a billion dollars from a market" Extracting does, in fact, imply "something bad". To extract is to take something for yourself without adding value. That is bad. Your language implies that the people who make that sort of money do not add, which is what pg is trying to refute.
• encoderer 4mo ago
  That’s a charitable read. Remember she also thought that New York would “lose millions” if Amazon put their hq2 there. Just because she’s in congress you can’t assume she understands how building a business works. Taking your interpretation at face value I would add that yes we call it “capitalism” not “laborism”.
• blini-kot 4mo ago
  what kind of content he's consuming? like other "entrepreneurs" its most likely self-affirming bullshit, cranked up to religious levels (cue any modern ayn rand equivalent)
• ergocoder 4mo ago
  > She meant impossible in that one doesn't earn a billion dollars through work alone She meant it was unethical to do so. It wasn't about working alone or not. I know we like AOC but the way people bend over backward for her is off-putting.
• pseudosavant 4mo ago
  PG is clearly confusing "capturing" a billion dollars for "earning" a billion dollars. Becoming a billionare is working the system so that the wealth generated by something people love (Amazon) is mostly captured by a select group of people (Jeff Bezos) and not the workers who are actually earning the company the value (fulfilling and delivering the packages).
  • pclmulqdq 4mo ago
    The system set up by the company is what earns the company value and creates it for others. Individual workers implement critical parts of that system, but the work of the workers does not on its own create the value. AOC and PG are both a bit obtuse about this.
    • pseudosavant 4mo ago
      A few points. "Company" is doing some very heavy lifting in how you are using it. The "company" in that sense does not include any worker who isn't a meaningful equity participant. In Amazon's case, or Telsa/SpaceX's case, the "company" is a single founder and his cronnies. But as for `the work of the workers does not on its own create the value`... I just don't see how that isn't completely incorrect. It is literally the only part that is at the core of the value creation. How much value would be created by Amazon tomorrow if every fulfillment worker and driver didn't show up? Basically none. But Jeff Bezos could die of a heart attack tomorrow and it wouldn't stop a single dollar of value creation. We really don't appreciate the contributions of workers enough in this country. Whether it is the medical assistant at the doctor's office, the person who makes your burrito, delivers the Amazon diaper's order, or even check you out at the store. If people stop showing up to work, this all falls apart. It won't matter how much capital you have if you have no workers.
      • pclmulqdq 4mo ago
        Concretely, the company is not a single founder and his cronies. The company is a pile of paperwork (aka contracts) that dictate the relationships between (thousands of) people who are all involved in the enterprise, from factory workers and entry-level coders to investors. It is that pile of paper and the relationships it encodes that creates an output that is larger than the sum of its parts. You can worry about whether the split of return is correct, but arguing that the pile of paperwork is valueless or somehow nonexistent is silly. Value flowing to investors is a consequence of how that pile of paperwork is set up and what is on the papers, nothing more or less.
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• mukbangpervert 4mo ago
  Paul Graham was at his best when he gave clear, experience-driven, action-oriented advice. But even then, his advice was flawed... advising people to do things like to discriminate against women and parents. As he got a little older, he cut back on that pro-discrimination advice... that typical thing where he was able to recognize the problems with his bigotry only after he would have been on the other side of it. As he has become ludicrously wealthy he has, unfortunately, lost all track of reality. He no longer engages with the practical or the real... instead he deliberately misreads a quote so that he can wrote a pathetic and defensive response to it that engages in bad faith. And because he is ludicrously wealthy, he is surrounded by a mix of yes-men, and other hyper-wealthy sociopaths. So none of them give him critical feedback. Paul Graham has become useless to society. He is, fundamentally, just a mindless pile of cash.
• paulhebert 4mo ago
  Yeah he responded to a philosophical and moral argument with a math problem. And an overly simplistic view of the math problem too. (Surely going from 1000 to 2000 customers is as easy as going from 10 to 20, right?)