1. Assuming wealth is earned (counter-example: inheritances, rent-seeking)
2. Assuming wealth is compensation for contributing to society (counter-example: rent-seeking)
Even if those two bullet points were true as you've assumed, I'd still argue that capitalism in its current form of extreme wealth inequality is NOT leading to a socially, economically, and technologically optimal society.
For one, poverty is a very real man-made problem. When all your energy is dedicated solely to surviving and you live paycheck to paycheck, of course you won't be able to do things like contemplate and pursue business opportunities (and then people like you call them lazy).
.01% of the population having more wealth than the other 90% is akin to being on an island of 100,000 people where 10 people own more land, bananas, etc. than 90,000 people.
Even if these 10 people were all Einsteins and Elon Musks like you'd probably claim, it's clear that this most likely isn't an optimum allocation of resources. Land that could be put to better use for the community (eg. farming, manufacturing) is hoarded for the pleasure of a few people. Resources are allocated for the pleasure and whims of 10 people (eg. luxury goods). Money sits vacant in bank accounts while business opportunities and opportunities to otherwise help the community go unrealized. Capital and power is so concentrated that it's effectively a monopoly, leading to a totally lopsided system that places the interests of these 10 people above the other 99,990. Want to start a business requiring a large investment? Not happening unless the "owners" approve, and probably not on favorable terms to you. You start to see things like debt slavery being required simply to partake in society (eg. education). The list goes on.
Also, you need to recognize that making a profit does not necessarily correlate to contributing to society (eg. renting out land you own, jacking up an HIV drug's price 5,000%, high-frequency trading, planned obsolescence), and contributing to society does not necessarily correlate to making a profit (eg. open source software, scientific research, taking care of a kid, teaching and having an educated populace). I'm not saying we need to abolish capitalism. Just that we need to recognize the imperfect nature of it, and seek to alleviate those problems.
I do not appreciate victim mentality because i am the grandson of genocide survivors who made it despite having not a dime to their name, no education, no language and the most tragic experience one could possibly imagine. I have zero sympathy for victim mentality.
That does not mean I am not sensitive to the plight of those trapped by circumstances almost impossible to escape. We, as a society, must help them. I do what I can as often as possible.
I see lots of people complaining about the poor while sipping their $5 latte from Starbucks and typing their comments from a $2,000 Apple laptop. Very few of them will stop drinking their lattes and buy a $400 computer so they can donate money and time to help others. As they finish their latte they blame the rich and capitalism for all of the worlds problems. A mirror is a powerful device.
Why not let them eat cake while they are at it too.
Your argument would hold merit as soon as the the single mother of three in Somalia has every opportunity to do what you did. We are decades, if not centuries away from that. And until that point, I don't find it unreasonable that people will take issue with wealth imbalances.
Let's make sure we are discussing things that are actually related.
Yes, we have to do more for people like the woman you describe. And, in some cases, they have to do something for themselves as well. In your hypothetical scenario (and that's all it is) it would be fair to ask why and how she ended-up with three kids before being able to provide for them. Is there a limit? Should anyone be able to have eleven kids, or fifteen, and we still look at them as responsible individuals?
The Venture Capitalists who invested in her idea could have just as easily put the 10s of millions of USD toward supporting single mothers in sub-Saharan Africa.
> Yes, we have to do more for people like the woman you describe. And, in some cases, they have to do something for themselves as well. In your hypothetical scenario (and that's all it is) it would be fair to ask why and how she ended-up with three kids before being able to provide for them. Is there a limit? Should anyone be able to have eleven kids, or fifteen, and we still look at them as responsible individuals?
There's a good chance it's some combination of having been raped, forced into an arranged marriage, and living in a community which punishes women harshly for undertaking abortions and having careers.
PS. Using "she" for a prototypical entrepreneur is just as sexist as using "he". Try using "they" next time.
Oh, please.
There are also MILLIONS of people fucking off at work every day who do not deserve to have a job. GM had (has?) a clause in their union contract that did not allow them to fire people if their job was automated away. They had a building where 10,000 people would show up every day, year after year, get paid full salary and benefits only to read the paper and drink coffee all day.
I've worked with so many people, both as just another employee and as an entrepreneur, who fuck off all day or work sub-optimally that I sometimes wonder how some companies run.
I know a guy, a sales guy, who "worked from home" for a large multinational while earning six figures. He spent most of his time doing home improvement projects. He replaced his roof (himself), he built and installed new kitchen cabinets, he remodeled the entire house and painted it all.
My point, in case it isn't clear, is that if we are going to start to pass judgement based on who deserves what they have or they are getting let's make sure we are honest about passing said judgement at all levels. There are millions of people who do not deserve the jobs they have and millions more than are being carried by the work of others.
What do we do about them? Where is the evil?
I don't have a problem with the whole inheritance thing. If someone is born to a wealthy family and they get to float through life because of it, fine with me.
Let's bring it down to a lower level. If you have kids and you are fortunate enough to be able to buy them a car and pay for their college education, that's OK. Is is OK for some guy to think less of your kid or think ill of you for this? No, of course not. You might not be wealthy but you love your kids and want to help them get launched into the world. Different scales? Sure, but it is exactly the same thing.
The right attitude in life isn't to envy those who have more than you do but to try to better yourself and strive to help others as you do better in life. The first sentiment is destructive at a personal and national level. The second is constructive at a personal, national and global level. Only one of these outlooks in life result in improving life for everyone.
Sure, there are lots of assholes with money. There are lots of assholes without money. What else is new? The vast majority of people are good, money or not.
You seem surprisingly judgmental about this given how upset you were about others not recognizing the effort you put into the business in your garage.
Can I get a source for the GM thing? That sounds fascinating. I wonder how the incentives got perverted in that manner.
> My point, in case it isn't clear, is that if we are going to start to pass judgement based on who deserves what they have or they are getting let's make sure we are honest about passing said judgement at all levels. There are millions of people who do not deserve the jobs they have and millions more than are being carried by the work of others.
But I also wanted to point out that it's perfectly fine to pass judgment on these people as well. Do not create a false dichotomy. Addressing the systematic wealth-hoarding of the top 0.01% is far more impactful than addressing wasteful middle managers and workers purely because of the size of wealth involved.
http://mu-warrior.blogspot.com/2006/03/general-motors-paying...
Also, just search for "gm paying people for not working"
Lowering or eliminating estate taxes results in extreme concentrations of wealth in only a few generations. The inheritance tax ("death tax") in the USA should be revived; it was a mistake to reduce it.
Funnier than that is how most people assume that the capitalist earned his/her wealth and thus deserves to keep it, when in actuality wealth is accrued largely through chance rather than skill. Should one be allowed to keep all winnings in a game that are due to chance? Or should one be limited to that portion of the winnings due to one's skill plus a bit of the portion due to chance (and let government take the remainder)?
"Wealth condensation in a simple model of economy Jean-Philippe Bouchaud, Marc Mezard":
http://lptms.u-psud.fr/membres/mezard/Pdf/00_BM_PA.pdf
As jivardo_nucci said once on this very forum:
* The simulation studies of Bouchaud & Mezard show that, regardless of initial conditions, wealth distribution ends up a Pareto distribution with a small percentage taking almost all of the goods. The take-away of Bouchaud & Mezard's studies: the very rich aren't rich because they earned it (i.e., because they are skillful or knowledgeable), they are rich mostly because they are lucky.
All my life I've assumed that, when people had a going concern or were rich, that they _earned_ their wealth. But Bouchaud & Mezard says they're, for the most part, simply very lucky.
If luck, rather than skill, is the source of one's wealth, then has one "earned" that wealth? How can one lay exclusive claim to something given by chance? I would contend that no such claim can be made.
In particular, I would contend that income gained through luck is fair game for government acquisition through taxation, and if it is possible to distinguish that portion of wealth due to skill from that due to luck (and such appears possible), then the "lucky" portion is open game for acquisition to be spent or redistributed as decided by the powers-that-be.
Wealth Condensation: Why the Rich Get Richer (and the poor poorer): http://iwillknow.jesaurai.net/?p=387 [old broken link]
The Mathematics of Inequality: https://www.austms.org.au/Jobs/Library4.html
FWIW Bouchaud & Mezard are not the only researchers whose models say this:
Chance helps the rich get richer, simulation study finds: http://www.world-science.net/othernews/110722_chance.htm
Let's make it simple: Start a great local coffee shop wherever you live. People like coffee. It's a safe business, right? You know there's demand. All you have to do is create an excellent product that is more appealing than the competition. Then go get some funding, get a loan, mortgage your home or, if you have it, dump your entire life savings into the business to fund it.
Come back in five years and read what you just wrote.
Bouchaud/Mezard's claims have a novel perspective but are consistent with other studies over the years. Society remains in a state of ignorance and denial of this simple idea:
The rich are lucky, not skillful. A person may benefit from his/her skill, but not necessarily from his/her luck. Society should determine the partition of luck/skill in wealth, tax the luck and reward the skill.
[Yes, I would tax lottery winnings very heavily, since they are nearly 100% luck!]
(Would it even take 5 years to go out of business?)
That pretty much sums up my point.
I love heraring the stories of fellow entrreperneurs.
Nothing is wrong or broken.
Have that other 90% start and run their own businesses or go to school and get a degree in business that allows them to become a C level exec or invent a product and launch a startup.
90% of the people on this planet don't do SHIT. Because doing shit is HARD. Most are content working for someone who's willing to take risks, often with consequences to their own personal lives.
And that's OK. There's nothing wrong with that. Not everyone can be an entrepreneur or C level exec. Most people prefer simpler life.
For nearly a decade I lived across the street from a retired fireman. He put twenty years or so on the job and retired with a very generous pension and full benefits, for life. I watched as he amassed RV's, boats, jet ski's, Harley's, cars, etc. Living the life, as they say.
At the same time, almost everyone on the same block got up at five or six in the morning to go to work every day. Office workers, customer service folks, a couple of engineers, a couple of doctors, I know them all. And, in my case, well, it was 18 hours a day 7 days a week in the garage working on developing a product. For two years the external view was that I didn't have a job or didn't go to work, when, in reality, I was doing the equivalent of five jobs and was working every waking hour.
So, a couple of years later the product launches and it does very well. Seven figures per quarter very well. I decided it was time to replace our two cars, which had nearly 200K miles and were in bad shape. When the two mid-range (nothing fancy) cars appeared on my driveway the comments I got were, well, incredible. "Wow! You must have won the lottery!". "Dude! Did you rob a bank!". "You don't work, how did you buy these cars!". "Are you a drug dealer?".
Nobody EVER made a comment about the fireman being set for life when he did not contribute a dime to his pension plan that paid him six figures a year and his gold-plated health plan. No, the entrepreneur was the "drug dealer" on the block.
I created dozens of jobs through an incredible personal effort and sacrifice and somehow didn't deserve what I had. I was compared to the 99% purely based on my wealth.
Funny how everyone sees people who make money as undeserving purely based on how much they make yet have no clue what it may have taken to get there and can't be bothered to ask.
Please stop this nonsense of comparing the N percent to the M percent based on how much money they make or have. If you are going to do that, include HOW they got that money and, in particular, WHY the M percent couldn't be bothered to even try to do better, educationally or in business.
Hint: You are not going to become wealthy working at McDonalds or, in general, working as a employee at 99.99% of companies. The only corner case being joining a startup that goes public and your stock options make you wealthy. Like I said, corner case.
It's funny how people who often make the argument for this unfairness have their brains short-circuited when you ask them if it was unfair for Steve Jobs to become incredibly wealthy or, to use someone who's around today, Elon Musk.