Similar huge fortunes are made any time more technology breaks out and scales better. That's what he means.
And, as Melting_Harps pointed out, weapons are a technology. And so is communication and methods of organizing a larger society.
Storing grain is a technology too. Even agriculture is a technology.
But now we have many more ways to do this. If I write an app and millions install and use it, I am multiplying the amount of work I can get done for people and what they are willing to pay for it.
Much better for them than threatening them with my army. Especially since I have been unable to find it. :-)
A poor, non-existing fanciful hypothetical argument that cannot stand on it's own, but is made to illustrate an ill-convinced point: because since the advent of anatomical Humans (~200k-300k) we see evidence of Man was using clubs or spears fashioned from wood, or arrowheads with the art in caves to go with it.
All of which fall under technology of some sort.
In short, its a poorly reasoned hypothetical to support one's own biases and perhaps disdain for tech and the inherent inequality that follows from those who benefit from it.
Of course, the same is true for modern society. Even so-called "tech entrepreneurs" like Elon Musk do much better at seeking profits than "leveraging technologies" -- as paying people to develop technologies isn't the same thing as leveraging them for increasing the productivity of oneself, at all.
However, of course, the argument is hardly surprising. After all, much of the ideology of modern capitalism rests on the ideal of the Iron Man, the genius inventor who, by his smartness (and benevolent white masculinity) embodies the excuse for the exploitation of the Earth's natural resources, for the creeping destruction of our democracy and the huge disparities in wealth and power that go along with it. You just have to believe this is real, otherwise all you ever learned from Coca Cola advertising would be wrong, at that is too painful to admit.
Not exactly.
Crassus amassed his fortune first through conquest, and then through real estate speculation. Caesar and Pompey's fortunes were a mixture of family wealth and the spoils of war.
There was certainly a class of wealthy Romans that derived their wealth -- and Rome's food supply! -- from land worked by slaves (mostly captured in war and brought in from all over Europe). But the wealthiest were, by far, the political-military ruling class, who accrued their wealth through bribes and conquest.
It was through gaining ownership of land and by capturing slaves.
In short: Weapons.
On the pre-gunpowder battlefield, the mounted, armored knight was roughly equivalent to the modern light tank.
It is incredibly hard to take out an armored knight with the kind of weapons or tools which would have been available to peasants or serfs, so it doesn't take that many knights to keep enough peasants in-line to build a very wealthy kingdom.
Religion during this era functioned much more like the modern civil service than what you or I would recognize as a church, and this also included both education and state security functions.
When firearms became commonplace, this game totally changed. Previously, weapons, even the longbow, took years to master well enough to be combat effective. With muskets, you can turn a group of ignorant peasants into a fighting force capable of taking on armored cavalry in a few months, possibly even weeks.
The Enlightenment, as well as our ideas about "equal treatment under the law", were the direct result of this force parity.
Industry to make gunpowder cheaply and reliably rather than as one-offs for anti-castle siege weapons, and metallurgy and tooling to make the weapons hand-held and not prone to exploding in the operator’s hand, are what I have to assume old Asia lacked.
I'd argue the advent of centralized currencies did more harm than any and all standing armies combined.
When you think about what a parasitical entity does in biology, you realize that simply killing a host is not evolutionary advantageous--their are 3 types of parasitism, not to be confused with the 3 types of symbiosis of which parasitism lies in.
So instead the parasite seeks to keep the host alive as long as possible in order to extract resources/life from it in order to propagate and spread itself and its DNA/RNA into Nature in order to infect other hosts and rinse and repeat.
Simply by demanding that peasants/serfs pay taxes and conduct all commerce in the coin that bares the issuers legacy has brought about so much of Human misery and perpetual serfdom that it baffles me what immense gravity their is in just the last 10,000 years since the supposed advent of Agriculture and therefore modern Society.
I've spent the last ~15 years of my life focused on this very topic, and while I have gained a great deal of insight and probably did a PhD's worth of research, it would take my entire Lifetime to really dissect all of this.
People have been warring and exploiting others since civilization... I can't say 10k years back before the move towards grouping in clans and cities...
But technological currency also could "right the wrongs"...
Imagine if each person could only have 1 bank account on a blockchain, verified by identity which is somewhat centralized but governed by a DAO.
This bank account is auto-taxed (tx fees), it has a max limit, say 999 million. So essentially, there could not be billionaires. Sitting coin is taxed as well after awhile, and estate transfers would be limited say max 50 million can be transferred to posterity. The rest is paid out to all users as a dividend.
The bank account would also pay out UBI to people based on the size of their wallet and their utilization. The more purchases, the more utilization the more your payouts from UBI. A large portion would also go towards a central "trust" for crowdfunding of businesses, mutual aid for emergencies, and for healthcare.
The DAO would invest in worker/consumer owned grocery stores and try to peg the value of the dollar to prices by owning some of the pricing. Basically start w/ competing with Amazon on some consumer goods via the internet, and brick/mortar stores.
DAO would work w/ devs to develop an algorithm that ensures not too much deflation/inflation, max limits, good taxation, good ubi, good burning/minting via staking protocol, etc... all while being open and transparent.
Are you seriously pitching me the DAO, like I don't know it was one of the biggest exit scams in all of Cryptocurrency History?
Listen, you ETH guys worship Vitalik and walk around pounding that koolaid that you give us all that work in the space a bad name, give it a rest... I mean it, money is something ETH just isn't good at. In fact, I still cannot see any value or a usecase in ETH to this day besides a bunch of pump and dump schemes that tarnish what BTC and other alts have done.
I was forced to use solidity and hyperledger at an enterprise level for a megacorp, tied what the ripple and stellar idiots that were brought on without my consent to a project I had been brought no I had no choice but to leave the project and the Industry for some time. We had to loss weeks/months of work to make something that had worked in BTC (multi-sig escrow) for years just because it sounded better if it had a functionality in those 3 useless alts.
To this day I still cannot believe Vitalik, a former Unsystem developer, didn't just make this all up and his hiding all of exit scam money to contribute to the BTC network in some way; none of it adds up at all, how do you from squatting and working on FOSS in Spain to being best buddies with Putin? Chances are had he just held onto a fraction of his BTC from back then they'd all be millionaires since 2017.
But to answer you question:
Centralized currency: The means to issue and control the medium of exchange in any system (eg: civilization, country) and impose arbitrary and even malicious actions to detriment of those who reject or oppose your currency. Often a role held by Nation States and by extension Central Banks that preclude said entities.
Just tell the peasants you're the hand of the god, and the god wants you to give their cows and grain to you. I think that worked pretty well for a looong time.
It did, until it didn't and you can read all about peasant revolts in a book all you want, which led to things like the Magna Carta.
But I lived in Italy and worked on a farm that sprawled for many KMs in what was a feudal lord's manor and it was baffling just how much absurd complexity from a supply chain and logistics view tending that much land entailed since it was so fractured and disrupted by hills and valleys, and the amount of bureaucratic BS that had to be created and subsequently put up with in order to survive as a serf: it wasn't just cows, wine or grain that had to be rendered, but actual members of your family were taken into the homes as slaves, physical or sexual.
I did the mistake of watching Passolini's Salo when I was there, and the level of somberness still stays with me to this day [0] when I think what horrid forms of cruelty Humans are capable of when they amass so much power and wealth. And this was just a modern take on things, just pondering the things they did openly during the dark ages and even in the height of Rome can send me to some dark places.
In practice, this hasn't happened. As a whole, financial institutions are more risk-adverse than ever. Keep in mind, that they don't want another Dodd-Frank.
And this includes Hedgefunds, like Melvin Capital, Citadel and the like? Doesn't the Robinhood and GME thing DIRECTLY contradict what you're saying?
Furthermore, they are over leveraged on real estate in teh US and BlackRock accounts for every greater RE holdings than post 2008 housing crisis.
I'm not sure what you are talking about, Dodd-Frank is like Glass-Steagall, they'll just make up rules when the bailouts are required (Goldman Sachs 2008), just like airliners laid off a large majority of their staff despite the bailouts in the first Trump bailout being issued to ENSURE they wouldn't and they took the money either way.
Meme stocks are a thing born out of social media just very recently and will most likely not happen that much given that now edge funds are aware of it and have probably already deployed the appropriate counter-measures.
Tesla was called a meme stock, and it turned Elon into the World richest man (depending on the day or week) and he went on to invest in BTC and then pump DOGE in defiance of the SEC who stand on the sidelines with the credit agencies who arbitrarily enforce the 'law' and 'regulate' when it see's fit.
How exactly are you arriving at your conclusion with any reason or logic behind it?
Meme stocks, an overly used and frankly absurd notion as it is all can be seen that way since it's all just smoke and mirrors hiding a very pernicious casino business model at the end of the day, but lets say they are; what stops any of them from stopping them from what was once called 'vigilante investors' in the early 2000s?
Hell they couldn't even stop ponzi schemes like Bernie Maddof, or outright fraud like credit default swaps that allowed the World economy in 2008 to blow.
If anything it shows just how entrenched the politicla class and the financial class collude to extract wealth from Society with little to no punishment, think MF Global.
Being called a meme stock doesn't mean being a meme stock and popular figures influencing stocks is nothing new. Tesla was never really a thing on WSB and it being overly shorted never really was a motivation to invest in it to "screw over the edge funds".
> How exactly are you arriving at your conclusion with any reason or logic behind it?
I explained my logic. Now that using social media to find and use over shorted stocks to make money has made its way to mainstream culture, fund managers will take this into account.
The alternative now is to disconnect the systems from the possibility of contagion, but the nature of crisis is essentially an acknowledgment of a failure to achieve in those efforts.
So what then, really?
But on the other hand, the rich will lose more, and during the rebuilding a different set of people will gain the upper hand and end up on top.
It's hard to get the political will to actually allow what needs to happen to fix wealth inequality.
Deflation is the same thing in reverse.
Makes it pretty clear why the government is fighting deflation so hard.
Nope, it's a wealth transfer from those who refuse to invest to those who invest and if you fail to invest you deserve it because you are not creating jobs and therefore make the lives of the poor and middle class worse.
>Deflation is the same thing in reverse.
No, since you are not investing your savings you are not creating jobs, you are directly responsible for causing unemployment. Please tell me, if you put cash under your mattress how is that cash supposed to employ anyone?
>Makes it pretty clear why the government is fighting deflation so hard.
The government is fighting deflation because it doesn't want unemployment because it doesn't want the economy to shrink because that requires the population to shrink. Do we just "cull" those useless people by killing them or sending them to Australia?
Now, lets talk about the real damaging wealth transfer. Low interest rates are a wealth transfer from people who invest into safe investments (bank accounts) to people who invest into risky investments (stocks and housing).
Interest rates are a function of inflation. Low inflation means low interest rates and therefore a higher wealth transfer from the poor to the rich.
Currency collapses, bank defaults, asset freeze-ups, international trade stoppage because of debt/credit changes, strikes and work stoppages, demand collapses.
Sometimes do nothing is fine, like the video game crash of 1983. But when it's systemic and big, that strategy has collapsed entire countries
Will they, though?
Going by absolute value, perhaps, but that's nowhere near the whole story. Yes, if owners of a megacorp lose $100M, they've lost more than all their employees combined - but they still have a $1B between them in other assets, offshore bank accounts, whatnot, so they stay rich, while their employees suddenly find themselves in a life-threatening emergency.
I can't think of a single market crisis that kicked down the richest people to the level of the poor. Wars and revolutions, yes, but not a market crisis. The more money you have, the easier it is to protect it - and marginal value of money grows sublinearly, so losing even 50% of your wealth hurts less the bigger that amount is. On top of that, connections and networks don't go away in a crisis. Which brings me to:
> during the rebuilding a different set of people will gain the upper hand and end up on top
One way for a competing upstart to get ahead of the other upstarts would be... to hire some of the "old guard" in advisory roles. After all, the crisis doesn't suddenly invalidate the ex-top people's knowledge experience. On the contrary, not only they still have relevant experience that an upstart doesn't, they also have benefit of hindsight and connections. So while the names of the companies and their CEOs may change, I'm pretty sure many of the old players - ones that didn't choose to retire and enjoy their riches - will quickly find their way back into the game.
As for their employees, maybe they'll find their way back to their original positions too. Some day. After they dig themselves up of debt. That is, if the experience of having to give their kids heated ketchup packets for dinner didn't completely break them.
--
EDIT: To be clear: revolutions and wars aren't the answer either. A big enough wave of death and destruction will be enough to grind down the richest too, but that's only a way to re-roll the dice on who's the rich and who's the poor in the next round. And the poor, again, suffer disproportionately here.
For some reason this is seen as controversial these days, but I honestly believe that stability is something that works in favor the poor, not against them. It limits what they can do (the dreaded "status quo"), but it also puts a limit on losses. As long as the society is stable, we can try to make steady adjustments, even if it's a grind. If it starts to collapse, everyone enters survival mode, and everyone is much worse off. Even those who survive the chaos and chance their way into the top will have to live in the smoldering remains of their previous civilization, which is almost surely worse than what they had before.
(Worth remembering we all have more to lose now. 1000 years ago, life before and after war wasn't much different. 70 years ago, the difference was stark. Today, it would be greater still. All the quality of life we enjoy today is very far from "ground state" of humanity, very quick to undo, and very hard to restore.)
As for whether "the rich gaining large sums of money doesn’t matter much either" - if you're asking if it doesn't matter much either to them then yes, this is the flip side of the marginal value of money point. A person with $1000 in the bank will be much happier about getting extra $100 than a person with $1M. It's one of the core (if not the core) argument towards reducing income inequality - moving some money from the rich to the poor is a net increase in happiness and value in society.
One strong caveat being, building things that require big capital expenses, like factories or specialized machinery or infrastructure. These things require being able to front up a lot of money, and at the same time, they don't mesh well with democratic decision-making. So you want to have some way in a society for an individual, or a small group of individuals, to be able to take control over large amounts of money - otherwise factories and bridges and utilities just won't happen. This doesn't necessarily mean you have to allow that small group of people to capture the entire wealth they generated, though.
A system that fails can be fixed by the system in which the failing one is contained. That same outer system can also work to prevent the inner system from failing in the first place.
(And sure, in the analogy, the "outer system" is the homeowner that can buy a new boiler. But wouldn't it be better to make sure the original boiler can't move out of its control envelope? Then the homeowner wouldn't have a bathroom to renovate and a pet to bury, after it caught a flying pressure valve in the eye.)
Panic of 1873 is the closest I know of and it didn't go very well
I'm not taking a stand. It's just that macroeconomics is hard and counterintuitive, especially when we're dealing with something large enough to have currency implications
A superior and not immoral model is investing in said companies, so if they succeed both the investors and company owners profit, otherwise they both lose. It's proper risk sharing.
From [1]:
Early estimates for the total cost of the bailout to the government were as much as $700 billion, however TARP recovered funds totalling $441.7 billion from $426.4 billion invested, earning a $15.3 billion profit or an annualized rate of return of 0.6%...
[1] https://en.m.wikipedia.org/wiki/Emergency_Economic_Stabiliza...
I’m not sure what your point in bringing it up is either. The point is that the bailouts were fully recovered, and that is undisputed. HN loves its pedantry, but there is little value to this particular incarnation of it.
I'm not saying banks are evil but they do have it easy because they are core infrastructure that people don't want to live without.
I’d expand this... It’s easy to make a profit when everyone is strapped for cash.
Taxpayers should have behaved like hedge funds behave with one another...merciless. Want cash cause no one else loans to you? Sure, hand 95% of the business. The difference between what I said and $15.3 Billion is the gift.
It turns out that the architects of this bailout were very smart about the way they did it. Also, relative to the recent stimulus packages that have no hope of ever being recovered, the numbers from 2008 are quaint and the conditions under which it was given were extremely fiscally responsible.
Nah. Keep the management, they run the business not owners. In fact give them raises and bonuses. It's not like managers had other employment options.
But either way, they did get a lifesaving bailout, regardless of the merits or whether US got their money back
They did, and given the systemic importance of the companies that received this money, that was a gift not only to the companies, but to the entire economy. We wouldn’t have an economy today had they not done this. Today we are capable of giving away trillions with no hope of recovery in part because of what was done in 2008 - and it was done at no cost to taxpayers.
The point is that the outcome would not have been the same, because investors would not have treated the companies the same.
People who can leverage multiple technologies can multiply their efforts. Mass communication, mass distribution and automation of all sorts.
But Wall Street bonuses are subsidized by the fact the government socializes their biggest failures. Bailouts just encourage them to take greater risks, leveraging debt in dangerous ways that will blow up the system again.