Comment by drorco

Comment by drorco 4 days ago

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Then the next question is why does wealth, in practically all industrious countries seem to distribute disproportionally and not uniformly?

One argument could be that maybe entrepreneurial personality traits aren't normally distributed, and unless you find a way change people's personalities in mass, the imbalance in wealth attraction will remain inherent.

Then you might ask, if that's true, do you I want to enforce equality, potentially dragging down the economy to mediocracy (for example many stagnating European economies) or maybe accept that current nature does not meet our societal desire for equality.

mcntsh 4 days ago

> Then the next question is why does wealth, in practically all industrious countries seem to distribute disproportionally and not uniformly?

It's simply because money is compoundable. The more money you have the more you can make, and the more you make means less other people have.

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  • cbolton 3 days ago

    I think you have the right idea, if poorly worded. The economy is not a zero sum game, but the idea works when you apply it not on wealth but on wealth increase. That's more or less the famous r > g formula of Piketty: when the rate of return of capital is larger than the growth rate of the economy, wealth gets more concentrated. Its application has been disputed but the basic principle certainly applies in many situations.

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  • kjshsh123 4 days ago

    There's a finite amount of money. There's not a finite amount of wealth.

    Having lots of wealth does not mean other people have less. If that were the case, there'd be as much wealth today as there was 1000 years ago. Making a company and having it valued at whatever value, does not remove that amount of wealth from other people.

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    • Supermancho 4 days ago

      Not trying to argue, per se. I'm saying that you gave me a lot to think about.

      > There's not a finite amount of wealth.

      I think there is a finite amount of wealth, at any given time, same as "money". Money is a transactable medium to measure value, rather than as a type of good on its own. The medium can change region to region and over time.

      Wealth is an aggregate of all valuables you possess, including expected gains. Wealth is also subjective, because of these properties. People agree on some approximations for the purposes of transactions with money.

      > Making a company and having it valued at whatever value, does not remove that amount of wealth from other people.

      Depends on perspective, I would say. When the value rises in a public company, even when it's just the expectation, you have people dumping their wealth (as money) into the company. So yes, it does for large public companies. While it does grant some rights, in a practical sense it's a hole you dump money into with the expectation that you can reach in and take out some amount in the future. I can understand this is what is envisioned, when people talk about wealth as zero sum. I don't agree, but I get what they are going at.

      > If that were the case, there'd be as much wealth today as there was 1000 years ago.

      Wealth is partially based on expectation. The growth in population fuels increases in wealth, because that's the part of the equation that is speculative.

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    • ryandrake 4 days ago

      But relative wealth is all that matters, when it comes to lifestyle. If I have $100K net worth, and I'm living in a city where the first standard deviation net worth range is $80K to $120K, then I'm living a pretty average lifestyle, can afford my groceries and entertainment, and feel middle class.

      If I have a $200K net worth, and I'm living in a city where the range is $1M to $500M, then I'm pretty much living in poverty, even though I have "more wealth" than in scenario 1.

      This is also why, although my absolute wealth today is hundreds or thousands of times more than a king in the middle ages, I'm not actually living like a king today.

      It's also how gentrification works. You're living somewhere and all of a sudden a bunch of very wealthy people move in, raising the prices of everything. You're no more or less wealthy than before, but everything has become slightly worse.

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      • AnimalMuppet 4 days ago

        Can everyone be rich enough to not be food insecure or medically insecure? I'd like to think so.

        Can everyone be rich enough to not be in the bottom 20%? No, no matter how rich we become.

        Can everyone be rich enough to have servants? No, unless you count machines as servants. But if you do, then I'm rich enough to have several.

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    • temp84858696945 4 days ago

      There is not a finite about of wealth, but the wealthy are currently using their position to reduce the amount of wealth the average person has, by driving up prices of everyday requirements so that they can make more money.

      It's not an issue that they are wealthy, it's that they are abusing that position to gain even more wealth at the expense of the rest of the population.

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    • jibal 4 days ago

      That there is more wealth now than in the past does not even remotely imply that there is infinite wealth.

      > Making a company and having it valued at whatever value, does not remove that amount of wealth from other people.

      This is a strawman. The ability of people to accumulate wealth is affected by every aspect of the economic system, including the means by which those companies are acquiring wealth.

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  • rayiner 4 days ago

    Is compounding interest why Jeff Bezos is rich? Or is it because you get three Amazon deliveries a day?

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    • jacquesm 4 days ago

      No, he's rich because (1) he had first mover advantage (credit to him) (2) he has a good sense of how to run a business (3) he exploits a large number of people to his own benefit.

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      • cbolton 3 days ago

        Isn't there also an effect like the second billion dollar being easier to get than the first? I mean all your points are good but the fact that the system allows you to leverage your wealth to increase it is probably the most important factor to get to $250B.

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      • dangus 4 days ago

        Don’t forget the giant investment from his parents.

        Lots of people with great ideas, skills, and work ethic don’t have $250,000 lying around to invest.

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      • graemep 3 days ago

        He also had a lot of startup capital.

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    • kg 4 days ago

      This reply has very strong "the average human does not eat 10 spiders a day; the average was thrown off by Spiders Georg who eats 10000 spiders a day" energy.

      Amazon does not have an exceedingly high profit margin, and my understanding is that a lot of it comes from stuff like AWS, not Amazon deliveries - correct me if I'm wrong here. So I'm not sure that "three amazon deliveries a day" - if this is even common - is why that man is personally rich. Even if it were a big source of revenue, that would go into Amazon's coffers, not necessarily his directly.

      Another way to look at this: Even if Amazon is wildly successful, does that mean Jeff Bezos specifically should become filthy rich as a result, instead of all its employees and investors? How should the gains from successful entrepreneurship be distributed?

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      • rayiner 4 days ago

        > why that man is personally rich. Even if it were a big source of revenue, that would go into Amazon's coffers, not necessarily his directly.

        Jeff Bezos owns 9% of Amazon. So 9% of the expected value of the money going "into Amazon's coffers" indefinitely into the future is counted as part of his current "wealth." It's not money under his mattress.

        Is your argument that people shouldn't be allowed to own 9% of a company that they started?

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      • lotsofpulp 4 days ago

        > Another way to look at this: Even if Amazon is wildly successful, does that mean Jeff Bezos specifically should become filthy rich as a result, instead of all its employees and investors? How should the gains from successful entrepreneurship be distributed?

        The answer depends on how should the losses from unsuccessful entrepreneurship be distributed?

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    • Starman_Jones 3 days ago

      Why are people getting three deliveries a day from a company that was founded as a bookseller? How many books do they need?

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      • crop_rotation 3 days ago

        This is like asking why are people buying so much stuff from a company that was founded as compiler/language tool seller. How much compiler do they need.

        The above would be Microsoft for context. For some reason your comment assumes that what a company was "founded as" should dictate what they do decades later.

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        • Starman_Jones 3 days ago

          I think you've just explained how compounding wealth made Jeff Bezos rich.

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  • Manuel_D 4 days ago

    > and the more you make means less other people have

    This is a false zero sum view of wealth that is unfortunately all too common.

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    • N_Lens 4 days ago

      Economy growing at 3-5% in the US. Rich people's wealth growing at a far higher rate. Which means the middle class wealth is getting siphoned to the rich. The middle class is getting poorer and we can all see that.

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      • Manuel_D 3 days ago

        > Rich people's wealth growing at a far higher rate. Which means the middle class wealth is getting siphoned to the rich.

        No, that logic doesn't follow. Say my wealth grew by 3% and my neighbor's grew by 5%. That doesn't imply any sort of "siphoning" at play.

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        • JackSlateur 3 days ago

          Which is exactly the same as "my wealth was constant and my neighbor's grew"

          Which is exactly the same as "my neighbor's the same and my wealth decreased"

          Which is exactly the same as "getting siphoned to the rich"

          Money have no intrinsic value: its only value is relative the others (and also depends on what can be bought ..)

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      • votepaunchy 3 days ago

        Or the wealthy are pulling up the average and most of the rest are not “growing the economy” with increased productivity.

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  • drorco 4 days ago

    OK that's one thing, but still there are many new billionaires that didn't exist a few decades ago, let alone a few years ago. Why did they become billionaires and the wealth didn't distribute over a much larger group?

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    • mcntsh 4 days ago

      Wealth doesn't go straight up, it bubbles up.

      And thinking about bubbles, imagine what happens when the GenAI one pops. The wealth some new billionaires had will go up in smoke, their assets will go on sale, and they'll be gobbled up by the old billionaires.

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    • hrimfaxi 4 days ago

      Is the rate of billionaire generation increasing? Maybe that is the distribution in practice.

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      • drorco 4 days ago

        Maybe, I think it definitely happened with millionaires, there are probably many more millionaires these days compared to a few decades ago. Inflation helped too for sure.

        But I think still a lot of people would argue the distribution is too unequal.

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  • Lionga 4 days ago

    money (or more exact wealth) is not a null sum game.

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koe123 4 days ago

> Then the next question is why does wealth, in practically all industrious countries seem to distribute disproportionally and not uniformly?

Compound interest, and as (admittedly) an armchair economist I buy into the argument that goes along the lines of:

"when the rate of return on capital (r) is greater than the rate of economic growth (g) over the long term, the result is concentration of wealth".

In my view, r has been greater than g for some time now.

> Then you might ask, if that's true, do you I want to enforce equality, potentially dragging down the economy to mediocracy (for example many stagnating European economies) or maybe accept that current nature does not meet our societal desire for equality.

To me, it is clear that while Europe optimizes for quality of life to a large extent, Americans really drink the coo-laid and enthusiastically optimize for shareholder value. I highly encourage you to give life in Europe a go at some point. I hope you'll return (or stay) also having reached the same perspective.

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  • drorco 4 days ago

    I'm not American. I did stay for months though in the US (SF, NY) and Europe (Italy, France, Greece, PT, DE, more) at times.

    I think for competitive and talented people, US in general offers much more lucrative opportunities as long as you're OK with the US specific drawbacks. For non-competitive people, living in Europe would probably be a more convenient.

    I think the problem though is in the future, both the US and Europe has grave societal and economic issues but from the different angles. Europe lacks economical drive and seems to discourage change on a cultural level. The US on the other hand seems to be an extreme catalyst.

    I'm not familiar enough with quantitative data to judge on the compound interest, nevertheless I think in the last few decades we have already been witness on the global level to major changes in wealth: empires like UK have shrank, giants like China have risen. This had been very different a few decades ago and is an anecdote at least that compound interest can only do so much for empires, in the face of major changes.

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palmotea 4 days ago

> One argument could be that maybe entrepreneurial personality traits aren't normally distributed, and unless you find a way change people's personalities in mass, the imbalance in wealth attraction will remain inherent.

Luck always plays the biggest role. Maybe the billionaires would have always been successful in some way, but not be a billionaire or even a millionaire.

Also, your argument sounds like a just-so story designed to support the status quo.

> the imbalance in wealth attraction will remain inherent.

Is is really a good idea to be ruled by the people with the greatest "wealth attraction?"

> Then you might ask, if that's true, do you I want to enforce equality, potentially dragging down the economy to mediocracy (for example many stagnating European economies) or maybe accept that current nature does not meet our societal desire for equality.

Yes, because regardless of anything else, the wealth imbalance has been politically destabilizing. Your comment strikes me as out-of-touch quantitative thinking: making certain easily-measured numbers going up the highest goal, while ignoring other things that are harder to quantify. That's a blind spot shared by a lot of people, especially tech people.

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  • drorco 4 days ago

    I'm mostly trying to make sense of the world and so far I found out that looking at it as a chaotic thermodynamic-like system makes the most sense.

    So in regards to this economic issue, it seems that human personality traits that lead to disproportionate power/influence/money are distributed non-uniformly to an extreme extent.

    We can try and moderate it as a system (e.g some forms of democracy, socialism, etc.) to maybe lower the amplitudes, but it would be ignorant to deny that this might be a core part of current human nature. Humans themselves are a specie with disproportionate power & influence compared to other species, so I think it would only make sense if this trait would also apply within the specie.

    Now imagine, there'd be some alien government, who'd be like "whoa humans are making way too disproportionate progress compared to the other species, let's tax/prune them so they don't get too much power".

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    • ahf8Aithaex7Nai 4 days ago

      > ... so far I found out that looking at it as a chaotic thermodynamic-like system makes the most sense.

      What do you mean, you found that out? And what does that have to do with anything?

      > So in regards to this economic issue, it seems that human personality traits that lead to disproportionate power/influence/money are distributed non-uniformly to an extreme extent.

      To me, that doesn't sound like an observation, but rather an interpretation. We could apply various epistemological carpet beaters to see what remains. One would be the critique of ideology. A few others can be found in the philosophy of science. It also seems to contradict your reference to thermodynamics. Wouldn't that mean that personality traits don't play a role at all? We don't look at individual particles, and certainly not at their personality traits.

      > Humans themselves are a specie with disproportionate power & influence compared to other species, so I think it would only make sense if this trait would also apply within the specie.

      I cannot understand this conclusion at all. Why should the structural relationship to other species be reflected within the species itself?

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      • drorco 3 days ago

        > I cannot understand this conclusion at all. Why should the structural relationship to other species be reflected within the species itself?

        It's all an interpretation, never claimed it to be anything beyond a thinking model I like.

        > To me, that doesn't sound like an observation, but rather an interpretation. We could apply various epistemological carpet beaters to see what remains. One would be the critique of ideology. A few others can be found in the philosophy of science. It also seems to contradict your reference to thermodynamics. Wouldn't that mean that personality traits don't play a role at all? We don't look at individual particles, and certainly not at their personality traits.

        No we don't, but I don't think it's necessarily because we don't want to, but because we often can't. Nevertheless, I think my rationale still applies. For example, if you take a bunch of matter, for example water, you'd find out that the distribution of Deuterium and definitely Tritium is really "unfair". Why only so few particles get to have that extra neutron and others do not?

        > I cannot understand this conclusion at all. Why should the structural relationship to other species be reflected within the species itself?

        It doesn't necessarily have to but: 1. It seems to have been very favorable trait evolutionally to force your will on other species. I'm no brain nor social expert but it seems to me that in order to stop this trait internally, there would need to be some pretty strong inhibitors to counter that. 2. Regardless of the species claim, you can see the pattern of exceptional individuals with disproportionate influence in many other places in nature: queen bees, pack leaders, and human kings of sorts. in I think practically every culture on earth in recorded history?

        I really struggle to think of any mass systems, in human society or nature in which power is not distributed disproportionally to a relatively small portion of individuals.

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    • _DeadFred_ 4 days ago

      You know that human civilization exists because of all the people putting in work every day who are not motivated just by by money, right? If everyone was billionaire level money obsessed society would cease to work. There is nothing to indicate billionaires are giving us a disproportionate amount of what makes society work, and without working society to host it there is no progress.

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      • drorco 3 days ago

        > You know that human civilization exists because of all the people putting in work every day who are not motivated just by by money, right?

        Where did I say that?

        > If everyone was billionaire level money obsessed society would cease to work. There is nothing to indicate billionaires are giving us a disproportionate amount of what makes society work, and without working society to host it there is no progress.

        I think if you wouldn't have the crazy risk takers who want the power/influence/money, either other people would need to take the lead on that, or there'd be a lot less advancement and we'd be closer as a society to our ancestors.

        I've yet to see mass systems of groups in which work is being done without the leadership and initiative of a small proportion of people. For example, imagine a movement that is not founded by 1 or few people, but instead a company that is founded Day 1 with thousands of people, instantly. I think that's practically impossible without a hypothetical hivemind, but I'd like to be proven wrong!

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    • jibal 4 days ago

      > I'm mostly trying to make sense of the world

      By completely ignoring the facts about it.

      > So in regards to this economic issue, it seems that human personality traits that lead to disproportionate power/influence/money are distributed non-uniformly to an extreme extent.

      It doesn't seem that way to people who look at ALL factors, not just this one that is chosen to justify a sociopathic ideology.

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mcny 4 days ago

Not to be too glib but my mom would ask counter questions like this:

Why is it that we have to trim out nails when they grow? Why not leave it natural?

Why do we remove the weed in between the pavers in our backyard? Why not let it be natural?

The fact is the world around us needs constant work. Our capitalism is no different. It needs constant pruning or it becomes gluttonous. There was a book I think which said most people involved in illegal drug trafficking are barely getting by, most of the income is soaked up at the top. I don't remember the point the bio was trying to make but it feels like that way for any enterprise these days.

The richest people in the US have reportedly increased their net worth by over 1.5T over the course of the last year or so.

How is this sustainable?

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  • drorco 4 days ago

    Isn't this basically Entropy? Why do stars fuse and spread out their energy? Can't they just keep it all in? They are going to blow up/die out eventually, how is this sustainable?

    The notion I'm getting is that these forces that drive change are bigger than all of us, and they are inherently unsustainable in the larger scale of things, pretty similar to how solar systems are not really sustainable in a scale much larger than us, but not that is still pretty small in a universal scale.

    So for your perspective it might be unsustainable, but for the bigger system what you describe is smaller than a grain of sand.

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    • mcny 4 days ago

      The point is everything needs work. We can't just say oh capitalism produces billionaires so billionaires must be good.

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      • drorco 3 days ago

        Or in the absence of other competing systems which can be shown to be more efficient, we could say OK seems like billionaires are part of this ecosystem. If you'd like, similar to how we don't like mosquitos but they are nevertheless an important part of the current ecosystem, whether we like it or not. Though if we ever find a better alternative, they'd definitely be in a hard spot.

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  • kjshsh123 4 days ago

    US homeowners have increased their net worth like $15 trillion since the start of the pandemic.

    Besides, there's this thing called tax incidence and it's not as simple as "tax the billionaires" because it's not clear how that plays out in terms of people's wages or middle class investments.

    On the other hand, land value taxes would actually be incident on landowners.

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1718627440 2 days ago

Because a tree has better access times than a list, so some amount of hierarchy results in a better performance than unstructured set of individuals. As directing people means more available work force for ones goals, and money represents ability to do something and availability to resources, some people will have more money than others.

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vladvasiliu 4 days ago

I think there's clearly a question of envy which doesn't seem addressed.

I'm not particularly in favour of high taxation, but I think that the argument is a bit more subtle than that. The general point is that "the ultra rich" are able to benefit from a whole host of loopholes which allow them to pay proportionally less than the plebs.

Now, this specific point seems somewhat debatable, judging by the fact that people don't seem to agree; I personally have not looked into the matter to form an opinion.

Maybe our tax code hasn't kept up with the financialization of the economy. In any case, this whole tax increase thing, at least as I see it in France, since to spill over to "regular rich people", as in engineers or similar who "just" have a relatively high salary.

Another issue, which I think is different but is rolled into complaints about rising tax rates is what the state actually does with the money. As in "I'm ok with paying tax, but not to fund this or that thing". In France, specifically, many "public service" offices have closed, having people either travel great distances or fight half-assed computer systems, while, at the same time, the number of public servants (so, cost) has increased.

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rawgabbit 4 days ago

You could have asked the same question when slavery was legal. Why is slavery not evenly distributed. Social injustice has been the default since the beginning of known history. Social justice is something that has to be fought for.

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dv_dt 4 days ago

Look for the Sugarscape model research studies. With uniform equally distributed starting point, fairly unbiased rules, and a set of random early wins, large disparities tend to accumulate over time without active policy to counteract it.

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  • jibal 4 days ago

    Which is why there should be active policy to counteract it.

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RGamma 4 days ago

There's many shades of grey between financial laissez faire and enforced equality. This entire "taxes are theft/unnecessary" (and frankly extremist in the neutral definition of the word) thinking is destroying the US politically and socially right now.

Do you not see this? Probably because you don't feel it in your pocket (yet, let's see what happens when the USD crashes. I will feel it too, no doubt.)

There's the belief that the economy can be a mighty tool to improve our lives, but isn't it going pretty much overboard since some time? Is this materialistic growth-at-all-costs ideology really making average US lives better these days?

From the outside the US feels like a runner that is stretching its arm towards the finish line (total automation) while also falling on their ass.

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jibal 4 days ago

> One argument could be that maybe entrepreneurial personality traits aren't normally distributed

That's not an argument, it's a completely counterfactual assertion ... or rather, the assertion that this is the cause of uneven distribution of wealth.

> Then you might ask, if that's true, do you I want to enforce equality, potentially dragging down the economy to mediocracy (for example many stagnating European economies) or maybe accept that current nature does not meet our societal desire for equality.

But of course it's not true, it's just an attempt to justify a morally bankrupt sociopathic ideology.

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