No, but he did make a million times more risky bet than the typical minimum wage worker. He quit a lucrative job at a financial company to start a company where he owned 100% of nothing and he has held onto that stock for 23 years. Common financial wisdom is to diversify your investments but instead, he took a massive pay decrease to start a company in the hopes that the stock would one day pay off, then held onto the stock of his company and led it to the massive valuation it currently has. He could have cashed out at any time but he didn't because our system rewards those who take risks/keep investing.
If you massively taxed outsized earnings and/or capped it, he probably would have never even started the company because why would you take the extreme risk of doing a startup when most of them fail? He probably would have just stayed at the financial company and if he did do the startup, then he probably would have cashed out when the taxes/cap got too large and retired instead of working to continuously increase the company's value which increases everyone's standard of living.
Compare this to someone who has a background in retail or a warehouse worker, the personal and financial risk of starting a business is arguably higher. In order to accrue the savings to start their business they would have to work far more hours, and if it doesn't work out they may never have the opportunity to try again. They have less job security if the business fails. They have less savings, and may completely deplete their savings and incur a large debt if it doesn't work out.
I'm not saying that Jeff Bezos didn't earn some of his keep, or that Amazon doesn't provide a lot of service, but I would say the risk vs reward of his business is atronomical compared to the average business startup. The entire idea that he took a risker bet starting a business than a minimum wage worker is, I think, totally wrong, it's utterly ridiculous, and lacks any perspective on what minimum wage workers have to stress about.
What is the marginal utility of another billion dollars to someone who is already a billionaire? What motivates Jeff to get out of bed in the morning?
The answer: winning.
Guys like Jeff Bezos and Elon Musk are the business equivalent of professional athletes. The money they continue to make is only a trophy at this point. To them, the real prize is to enter new markets and succeed, challenging and disrupting the status quo.
He took a risk in absolute monetary terms perhaps, but not risk in terms of consequence. Having spent a few years being relatively high up in DE Shaw, the worst that might have happened to him if his business failed is that he'd move to a smaller house.
Contrast that situation with someone who might struggle to make rent if their business failed, and tell me who's really taking the bigger risk.
Even ignoring the signaling value of D.E. Shaw and Princeton, are you arguing that the wealth he'd accumulated in his career up till that point is comparable to that of the "typical minimum wage worker"?
Then are you arguing that a hedge fund manager and a "typical minimum wage worker" face the same relative risk when they invest the same amount of money? In other words, are you saying that someone who has 110,000 dollars in savings and someone who has 11,000 dollars in savings face the same risk if they both invest 10,000 dollars?
No, definitely not.
The rhetoric here is missing the nature of power: power gives leverage and enables entities to extract money and surpluses. Knowledge and talent is just one means to power. A more common means is patronage. The highest earning individuals are generally more talented and intelligent, but not that much more so.
Major corps have access to information, systems, lobbying that individuals do not have, any 'salary negotiation' is like playing poker against the house: the tables are tilted.
I think European taxation is excessive after income, payroll and VAT it's well beyond 50% for many income earners (though they get healthcare from that), there's no reason that those earning $1M a year can't pay the tax rates on the books, and opt to hide their money offshore.
Especially in US/Canada where taxes aren't crazy, there's really no excuse for these folks. It's just criminal.
What a ridiculous statement! A bet one million times riskier than the average person makes would be one where there's a 1% chance of achieving great wealth and a 99% chance of everybody you love dying immediately.
An already affluent person starting a business is not that risky.
“To change the world”
I find it hard to believe there was any sort of real “risk” to Bezos future ability to earn a more than average wage.
It’s an information and networking game. You can say there’s some sort of numerical or quantifiable risk. But I suspect Bezos status pre-Amazon, in an early 90’s economy, with a very different wealth equality and cost of living scenario for the masses, he was well buffered from any long term ruin.
Just consider how much it’s changed: 22 people invested $50k according to Google. What’s that get you in 1994? My after tax take home is $110ish/year depending on bonus. My purchase power is a fraction of what it was a generation ago. I should be taking home $500k/yr to enjoy the same purchase power as someone making $110k in the 80s. And this is “normal”, we’re told.
Most people don’t even get anywhere near the network access and education he had.
The notion that we exist in a meritocracy is mind bogglingly engrained in the masses. Bezos earned every cent, it seems. They pay economists a lot to measure very carefully and confirm as much.
Bezos is not that good and that special, and took very little real risk. Society is rewarding him so much because that’s what society is told is correct.
You are ignoring opportunity costs [0]. He quit a highly lucrative job in finance to attempt a startup where he probably payed himself like 1/10th the wages of his old job during the initial years while he established his business.
With like 90% of startups failing [1], that is a massive risk in the hope of future stock worth for decreased current wages.
[0]: https://en.wikipedia.org/wiki/Opportunity_cost
[1]: https://medium.com/swlh/why-90-of-startups-fail-and-what-to-...
If it failed, he would have had plenty of options relative to the average worker.
A single person could discover the cure to cancer tomorrow, and he would save billions of lives, even though he has the human labor of one.
Good luck getting the word out if one person solved it rather than a member of a team in a large lab and yadda. More likely outcome: The "one guy" who cures cancer will be written off as a member of the lunatic fringe and have endless doors slammed shut in his face.
[1] https://www.yalelawjournal.org/pdf/e.710.Khan.805_zuvfyyeh.p...
And if your argument is that the government should fund all drug research, realize that they are fully capable of doing so and then patenting the drug and giving it out for free in our current system. Thus, both funding models can work in cohesion.
I agree, that is done by the state. They put the rules.
There was a time when it was considered none of the government's business to know how much people earned, hence taxes on fireplaces and windows. If you had a fireplace then you were probably a family unit and needed to pay up, if you had two fireplaces then you were a bit rich and could pay up double.
We take for granted so much of the tax system that we do not question it, there are also entrenched left wing and right wing viewpoints.
When it comes to value added tax, a.k.a. sales tax, we let businesses off but make sure individuals pay. It is all skewed in favour of capitalism rather than the individual.
Clearly a company can move to wherever it wants to avoid taxes. Individuals don't have quite the same freedom unless they are of the capitalist company owning class.
So we need to stop confusing individuals - businessmen - with businesses. Bezos and Amazon are not one and the same. If Amazon paid all its taxes then Bezos the individual as well as all Amazon employees should be afforded zero income tax and have zero motivation to squirrel gains away in some tax haven.
We also have a slight problem of rents and property being too expensive with property being insufficiently taxed. The whole system is designed to screw the little guy over with the corporations getting a free ride.
Did Jeff Bezos put in a million times as much effort as a typical minimum wage worker?
The reason why it's fair to make Jeff pay way more taxes than the average person is because he benefits way more from public services than the average person. Where would Amazon be without public roads, electricity, or water services?
You can perform this exercise with any big company. The idea that an entrepreneur builds a billion dollar business entirely on their own and so they deserve all of the wealth produced is the most pernicious idea in our societies today. Unfortunately, as the Monopoly study showed [1], this idea may be universal to humans who obtain an advantage.
[1] https://tedsummaries.com/2014/09/05/paul-piff-does-money-mak...