However, if you look at the historical record, there are many groups who are seriously disadvantaged who succeed, while other groups are advantaged or neglected and yet stay poor. One of the key differentiators is cultural isolation. Groups can remain culturally distinct, but still enter into the mainstream of cultural and economic life. These groups generally prosper. (Call these participation communities.) Other groups remain culturally and economically isolated, often through the machinations of their own elites, and they remain poor, often developing in-group militancy. (Call these isolation communities.) German immigrant groups throughout history are interesting in this regard, as some German emigrant groups were participation communities that prospered, while others were isolation communities who fell behind economically. Chinese immigrant groups also contradict the "different opportunities" narrative by arriving on new shores poorer than the poor of the new country, yet pulling themselves up into the middle class in several generations. (So success isn't genetic. It seems to be carried by culture and it's transmissible.)
Bill Gates isn't 100 billion times smarter than the top software people he worked with at IBM. Yet, he is worth that much more than them.
That is how Pareto distributions work. Shakira isn't orders of magnitude more talented than other performers who have remained obscure. Effects akin to Network Effects accrue to lucky individuals who were in the right place at the right time who had implemented "GYST" and made the right moves.
Income inequality destroys the social fabric of a community.
No disagreement there. Crime is correlated with relative poverty. Everyone does need to feel they are full participants, and have pride as such in the community. Then again, the historical record shows that trying to scale egalitarian/communal societies past a relatively small size tends to result in decaying and destroyed social fabrics as well.
Yes. Cultural advantages exist. It's a part of the issue of income inequality.
>That is how Pareto distributions work.
I know. That's my point. Redistributing excessive wealth would counter this.
>Then again, the historical record shows that trying to scale egalitarian/communal societies past a relatively small size tends to result in decaying and destroyed social fabrics as well.
I am not talking about everyone being a hippy and living together in harmony. I am talking about capping wealth or income and redistributing it.
Cultural advantages not only exist, but they clearly have tremendous effects. Not only are the effects large, but they also tend to be very efficient with respect to cost. If people are really serious about addressing poverty, then this should be one of the first places they look.
However, when I look at the policy positions of my chosen tribe (the Left) I see it favoring policies which erode the transmission of wealth-generating cultural knowledge. I see policies which encourage isolation communities. I see policies which have resulted in the dissolution of families. I see the glorification of subcultures which are anti-education.
I am talking about capping wealth or income and redistributing it.
I think some American billionaires would do well to be more like wealthy elites in Japan and Sweden. I think it would be very good to see some of that wealth go towards the building up of the physical and cultural commons. I suspect it would be far better if that were voluntary, than if we set a precedent by making it forced.
People will always have differnet opportunities, because parents always want to help their kids start at better position in life than their peers. It's a completely justified and human desire.
> Income inequality destroys the social fabric of a community.
No, forced and unnatural power relations, like forced equality destroys the fabric of a community. In Soviet Union, my engineer parents and their parents, who have spent years of hard intellectual labour in their craft, have had almost the same lives as workers engaged in the most basic hand labour, who have been coming to their workplace drunk for years and never even faced a danger of unemployment because of their horrible work ethic, because "social country" couldn't allow it. Communities this have created have been so much more toxic and awful than anything I've ever seen in any western country.
Good? As long as your parents were comfortable and safe, why is it a problem that less "deserving" people also were? Comments like yours sound less like "hard work deserves success" and more like "as long as I am above someone else, I'm happy." It comes up a lot in discussions of minimum wages - a nurse was fine with $17/hour until a fast food worker also makes that, suddenly it's an outrage.
Looks like you want to make your own, free will decision about what to do with your money. That's what private charities are for — that way, we both get to decide for ourselves, exercise our choice and you get to feel morally superior (and get the deserved praise), and someone else gets to use their money in other way.
When, however, state takes this money from you without giving you any choice over it, using it's monopoly on violence to force you into doing that, that's no longer your moral decision. That's just inevitability.
And we don't want an end to capitalism, we want a cap on it and limits.
The problem is how much power the elites have vs. a person with median income.
If a billionaire sues me, he will win. There is almost zero I can do about it. It almost doesn't matter what happened. I am powerless to stand up to them. Same with billionaire corporations. I have NO power to stand up to them.
The greater the income inequality, the greater the difference in power dynamics in a market/currency based economy.
There is very little justice for poor people and anyone trying to fight a billionaire.
The people who take by force, the rentiers, the rich who steal by fraud, the ones who just spend their days on yachts and luxurious island estates eating caviar and drinking champagne, these rich elites should be scorned and reviled. We should strive to make laws to punish them and take their wealth and power.
But we do want inequality in the amount of society's assets that can be accessed by people. Hard working people who have the skills, talents, networks, drive, etc. to get important, very difficult, things accomplished should have access to greater wealth so they can do great things for society. Musk created and is the leader of SpaceX that is building reusable rockets. He also spends a great deal of time and effort running Tesla, which made the first great electric cars and is forcing positive change on the whole automobile industry. Jobs and Wozniak built and sold great personal computers. Gates may have been a bit of an asshole when running Microsoft, but he was part of bringing computers to the masses and he seems to be really interested to doing good in the world. A billionaire who has almost all of their productive assets tied up in productive activities in which they are a critical component, can do great good. They are not consuming but producing. Look for people who strive to produce win-win situations. A free market system (a system where people are free to trade with anyone else) with a strong rule of law and allowing people to keep what others give them seems to work pretty well. 80% income tax rates are not a good idea (and shouldn't we really tax wealth and not income, if we want to get rid of the idle rich?).
It does not seem to me that governments will spend assets better than the best of the wealthy elite, just move it to someone that is much more unaccountable. One should remember that there are hierarchies that are built on competency and cooperation as opposed to those built on the power of violence. We should support the former and tear down the later. A hard problem, but a least something better to strive for then just generic "tax the rich" refrain.
Of course someone stealing or defrauding needs to be punished, but what's wrong with eating caviar and drinking champagne on a yacht in general? :-D
well, that's certainly a really, really interesting cover for his actions at MS.
he pretty clearly used anti-competitive behavior to gain an advantage. if you acknowledge that as well, then what you seem to be claiming is that it's ok, given that he's now a good guy, doing various good works around the world.
facts as they are, that wealth may not have been concentrated among this individual had his monopolistic behaviors been curbed earlier or crushed outright. so, yeah, we should be grateful that bill is doing good things for the world, but there's no reason to use that as an excuse for this sort of brazen lawlessness-cum-world savior archetype that seems to be what a lot of really, really wealthy people are going for.
It seems to me that history shows that a wealthy "elite" will spend assets in order to, directly or indirectly, increase its own wealth; and will do this without answering to anyone, many times not even the Law.
Whereas a democratically elected government will/should spend assets to increase its society/voters' wealth, and answers to its voters regarding how their money is spent. What's tough about this system is that it requires voters and taxpayers to be active in monitoring their government.
Elon clearly doesn't give a shit about his money. He only wants to own and control his companies. His wealth is simply a byproduct of that.
Capping billionaire wealth won't stop innovation.
If you just let them control their companies, then they probably will work just as hard if you take away their money over a billion dollars.
It will help to stop the growing inequality that will continue to destroy our society.
The government is controlled by the wealthy elite, so I don't get your point. Their job should be just to redistribute wealth with (ideally) an universal basic income.
But, the elites don't want that because it's too simple. Basic income redistribution scares the hell out of them and they will destroy the country rather than give up their beach house.
While I respect Paul Graham's career and his abilities as an entrepreneur (I mean we are doing this on Hacker News), I am always very skeptical of wealthy people talking about "How to get wealthy".
And his essay isn't bad, but it's still coming from a place of insane success, much of it not duplicatable for 99% of the people even in such a opportunistic place like Silicon Valley (I know he addresses this randomness of success in his essay).
The wealthy elite will ruin this country. Look at our president. The asshole is walking example of shitty capitalism at it's worst. He is literally the leader of our country.
Bill Gates leveraged a traffic light data system into a global default OS and productivity suite. It might be because he's lucky, it might also be because he saw things Microsoft's smartest hundred engineers did not.
Fund children to get food and education to the best of their abilities. Healthy adults don't deserve anything and can stand on their own feet.
Let's take a look at Bill Gates' luck. He was at a private high school which was only of a few in the world that had access to super-ish computer. Not only that, he was given control access to do whatever he wanted.
Sure, he was talented, but if he hadn't been at that EXACT high school at that EXACT time, he wouldn't be a billionaire.
Billionaires need a shit of ton of things to go right and ALL their decisions need to work out almost perfectly.
Even when they "lose" something, if you became a billionaire, you found a much better opportunity right after you "lost" something.
The fact is the number one predictor of a person's income, health and net worth is their parents income. How do you explain that the extremely high correlation of parental income and children income?
The parents income doesn't just magically create wealthy kids: money runs out. In the US, wealth controls the child's access to good education, and parental wealth may also result from good genetics (intelligence) or culture around wealth and investment.
An example: friend of mine isn't particularly intelligent, but she's wealthy because she knew the law of 72 and said no when offered a credit card (with compound interest like all credit cards) before her frontal cortex developed. Most young adults would say yes and immediately enter financial slavery.
Parental income is the highest predictor of a person's income. Nothing you have said counters this argument.
If you have any stats or data that counter it, then please provide them.
It would be entirely possible for both to happen: an actual competitive health care market in the US reducing costs to closer to the rest of the first world and the government paying those costs via taxes (pretty close to what people in the US pay now).
Yes, this is it.
People do not become billionaires through sheer determination and leveraging opportunities. They are in the right place at the right time (and often have a pool of capital already), and that is 90% of it. The last 10% is hard work, taking risks, and foresight.
"Rags to riches" is a story we're told so we believe that any of us can climb to the top when, really, it's a way to placate people who have nothing, and not just that, but to enlist them in unbending support for those who have everything (because, one day, THEY might be the billionaire).
Whatever.
Billionaires exist because any system where people are given different opportunities when starting out end in vastly different outcomes.
Modern business scales to the point where you can create something in your basement that people around the world can buy.
Bill Gates isn't 100 billion times smarter than the top software people he worked with at IBM. Yet, he is worth that much more than them.
Income inequality destroys the social fabric of a community. And our country will continue down it's long dark path as long as billionaires and the rich elite hoard their wealth and power from middle and lower class Americans.