Calpers has a huge deficit, whereas Harvard has far more than they're likely to ever spend (especially considering the fact that colleges with the largest endowments also attract enormous donations from wealth individuals).
The irony of posting this on Hacker News...
Snark aside, to a first approximation, voluntary monetary transactions happen when one party gives another party something of value. If you move money around and end up with more than you started, that's because you moved money around in ways that provided real value to people. Now obviously this is an incredibly crude approximation, but the onus of proof is firmly on you to prove that VCs aren't providing value to the world. And please don't go the "I only said most investments contribute nothing of value" route, unless you also have a way to only pick startups that'll actually provide value (hint: if you knew how to do this, you'd be richer than Masayoshi Son).
In this economy you make the most money by creating the perception of value through psychological manipulation.
Actual use-value creation is different and economically secondary.
WeWork is a perfect example. It's an IPO-brand - barely failed, but it was close - instead of a sustainable business. Like competitor IWG/Regus.
This why branding and marketing are a thing. You use them to increase the perception of value. An unbranded widget or service can have identical use-value to a branded one, but the perception of value can be manipulated to make one far more expensive.
As for VCs - VCs are destroying value, because VC culture is geared towards unicorn farming and IPO cash outs, not stable-but-unspectacular business development.
See e.g.
https://techcrunch.com/2017/06/01/the-meeting-that-showed-me...
There's a huge amount of potential value being lost because sustainable but unspectacular businesses are starved of growth funding.
There's very little capital available anywhere for these businesses. Banks won't touch them, they can't go straight to IPO, and VCs aren't interested.
In fact VCs are mostly a subset of the investment industry, which makes its money from client fees, not from returns. Clients are tolerant of mediocre returns as long as there's the prospect of a lottery-winning unicorn jackpot somewhere in the portfolio.
As for Masayoshi Son - I have no idea what his game plan is. Nor does anyone else, clearly.
> If you move money around and end up with more than you started, that's because you moved money around in ways that provided real value to people.
If I drive the getaway car for my friend's bank heist in return for a 30% cut of the spoils, we can argue I'm moving money around in ways that provide real value to other people (where by "people" we specifically mean my bank-robbing friend).
> providing value to the world
By "providing value to the world" do we mean "providing value to at least one other person ignoring other parties who may have lost value"?
I think as a general rule of thumb it is quite dangerous to conflate "profitable activity" with "providing value to the world".
Conventional accounting excludes externalities, including consequential losses to third parties. AirBnB can pride itself on "providing value" but in fact it massively distorts local economies, and has a very detrimental effect on the availability of affordable long-term rentals.
Tenants in that market suffer directly because their rents are higher, and there are fewer properties available to them.
That's a net cost to them, as a group, and of course it doesn't appear on AirBnB's accounts.
If you want to claim you're "providing value" the burden of proof is on you to provide an economic summary that accounts for externalities and is demonstrably non-zero-sum.
Doing this realistically would reveal that many corporations are essentially rent-seekers, oligopolists, and trivial arbitrageurs, not value creators.
IMO it's going to be impossible to avoid making this change to accounting standards - probably by the middle of the century, at the latest.
Which is good, because genuine value creation is a wonderful thing and deserves all the support it can get.
Are you proposing they not be allowed? That after you hit some arbitrary number of accumulated wealth that you are forced to watch paint dry and disallowed from engaging with the rest of the world? How would that even work?
Your personal sense of morals may label this as undesirable but it's very hard to think of any consistent legal framework for enforcing it past maybe "take their money if you think they have too much money (ie more taxes). Even in that scenario they are allowed to invest what they've got though.
Well, except that with real money you get real power, and having real power is far from a pointless endeavour. See for example those nerds who after earning real money they went off to build electric cars, buy NBA teams, and even build spaceships.
You don't. If you're a multi-billionaire you can spend the rest of your life wasting millions a year on super-expensive toys and prestige houses and whatever else you feel like amusing yourself with, and you're not going to run out.
The irony is that this kind of gameified wealth chasing is itself paper-pushing makework. At best it's a financial version of Minecraft - building a pointless but showy thing just to prove you can - with the markets as the gaming environment.
WeWork, WagLabs, and most VC investments contribute absolutely nothing of value to the world. If they didn't exist, no one would even notice their absence.
Meanwhile real problems - climate change, political stability, creating a dynamic culture of scientific innovation and creativity - go unaddressed.