The question if billionaires are bad for society is pretty much the same question as asking if the aristocracy was bad for previous societies. The existence of billionaires clearly undermines the core principles of democracy which is that all people have essentially the same political power. The existence of many laws which clearly aim to benefit billionaires only is enough evidence that this power balance does not exist when there are billionaires. Essentially strong wealth imbalance leads to unstable societies.
I find it ironic that the US which was largely founded by people who left their home because of entrenched economics and limited opportunities and who used to have some of the highest taxes for the top brackets and strong eversion to the development of a new aristocracy have after Reagan developed into a nation of defenders log the superrich.
> is pretty much the same question as asking if the aristocracy was bad for previous societies.
Well... that's stacking the deck somewhat. We were talking about how to add nuance. Nuance would be "what do we expect the economic result to be" or "this is a matter of right and wrong, not money."
>I find it ironic that the US which was largely founded by people who left their home because of entrenched economics
This gets abstract, but... The individuals most influential in the Revolution itself were mostly high ranking colonial officials from British nouveau aristocracy families of the empire. Granting voting rights only to property owners was the default position. "Universal" suffrage limited to european males was the radical position.
Not a criticism of them. Just... we can't solve these things with history. If you think billionaires are harmful, why? Equality? Economics?
Contrast between a growing/innovative/free society and a stagnant/authoritarian one. Key difference is meritocracy -- can competent newcomers displace incumbents?
This is mirrored at smaller scales -- good leaders of healthy teams want newcomers to grow and learn and surpass them. Bad leaders are afraid of failure and don't want their people to fundamentally grow and change. Likewise good parents want their children to surpass them; bad parents harass and belittle and shame.
When Apple makes it painful to build sizable businesses on their platform, this is intentional stagnation to maximize profit.
When billionaires run think tanks, fund political campaigns, and rig laws to increase their power at the expense of the common good, this is intentional stagnation to maximize profit.
When you look at the data, most millionaires and billionaires don’t come from family wealth. Don’t misunderstand, I’m sure they’ve had “leg-ups” like going to private school, or having an SAT tutor, or having a professor at a top20 school as a family friend. So, we don’t really have stagnation of wealth.
35% of the Forbes 400 list was born into a middle class or lower household.
22% inherited up to $1m.
12% inherited between $1m and $50m
7% inherited more than $50m.
21% inherited enough for that alone ensure they are on the Forbes 400 list.
The first bucket is clearly self made. The last two buckets are clearly not self made. Depending on your definition of "self made" that would leave somewhere between 35% and 69% of these people as self made.
Self Made is interesting. Does your family background have enough to cushion you if your startup fails.
It costs at least 20k a year to live (rent and food). You can gamble if you have 100k of funding, but that's setting you back a lot on things like 401ks and property ladders. If you have security from your family then shoot for the stars, great.
Same applies in many cases, it's not always as simple as how much wealth has been transferred from one generation to the next.
One example want to get a traditional 'good job' in London, lawyer, jouranalists, finance, etc, you need to take an unpaid internship and low paid start to your career for 5 years, all while maintaining London expenses. If you live with parents in commuterville you can do that, if you 're from Newcastle you're screwed. After 5 years of rent free living with parents you're £60k better off even with no cash injection, that's enough buy a house which means you're paying far less than renting, you start building your wealth.
But taht assumes you get the entry level jobs on merit, and not because of parental contacts, which happens a lot. Work experience at your Dad's squash partner's firm will get you rolling, yet wouldn't factor into your 'self made' list.
No man is an island, no man is self made. Those who 'succeed' do so through grit and luck and are often blind to their own advantages. Those that fail do so despite working hard.
The American dream of 'work hard and be rewarded' is bollocks. So much relies on advantages you don't even realise you've had.
> The American dream of 'work hard and be rewarded' is bollocks.
It is indeed bollocks, because it is "work smart and be rewarded". You have to work on the right things. Working hard at digging holes and filling them in again will get you nowhere. Looking around for an unfilled need, then starting a business to fill that need, will get you everywhere. Preparing yourself to become a valuable employee is another path.
You are of course right, but lets not conflate someone saving 5 figures by living with their parents for a few years with people who inherited 8+ figures which seems to be roughly a third of the Forbes 400 list. I don't know exactly where the appropriate place is to draw a line between these groups, but it is clear that these are vastly different scenarios.
>35% of the Forbes 400 list was born into a middle class or lower household.
Just to provide a little more clarity. Those numbers are from 2012. In 1997, 31% were in born "in the batters box"
However, there is a wide range of circumstances in the batter box. Defined as: "individuals and families whose parents did not have great wealth or own a business with more than a few employees."
Perhaps we differentiate on self-made, but some of those 35% I would not consider self-made either.
I think focusing on “self-made” is a red herring. No one is truly self-made. The point is, a good portion of the top wealthy people were not born into families of the top wealthy people, 1 generation ago.
It depends on definitions of "good portion" and "top wealthy people", but I don't think the numbers show the conclusions you are drawing from them.
The numbers vary by year as people enter or drop out of the Forbes list. However generally speaking you can probably divide that list into rough thirds. One third is the first generation experiencing any wealth. One third was born into enough wealth that they likely would never have to work a day in their life, except they decided to work and were able to compound that wealth into a obscene amount of money. The last third was already born with that extravagant wealth and may or may not have done anything to increase it.
Back to the topic at hand, a wealth tax would not have prevented those first two-thirds from earning their fortune. It would only negatively impact the starting position of that last third. The primary impact of a wealth tax would be to decrease generational billionaires which serves to increases the meritocracy.
The percent of totally self-made rich seems to be around 56%, and partially self-made is at around 30%. Note also that the proportion of self-made rich people is actually growing, even as the amount of wealth the rich has has decreased a bit[1] (methodology of the quoted study[2]). Also take a look at this intergenerational income mobility chart in figure 3 of a Pew study[3]; it says that people are
"likely" to stay poor, but that's actually less than half, so I would say it's more like "unlikely."
That Pew study you cited is from 2012. It's an interesting read, for sure, but do you have any more recent studies? It seems that some factors that dampen economic mobility have been worsening since then[1] and the wealth gap has grown significantly since then, especially between the top 5% and the rest of us[2]
Shorter timescale than generational. Once anyone becomes a billionaire incentives push them towards extracting rents rather than creating wealth.
Rich founders who get pushed out often start new companies (Pixar, SpaceX, Square, etc..)
Rich founders who stay waste their talent & access to capital on moat digging.
Why did Gates, after inventing personal computing, spend the 90s killing Netscape and stagnating browser standards?
The trend of wealthy founders leaving their companies to become mentors/investors for the next batch of startups is likely the biggest contributor to the ongoing success and prosperity of Silicon Valley.
A "rotating" ruling class is a lot more contestable than a hereditary one. That makes it at least potentially more meritocratic. (It could also theoretically be less meritocratic, depending on how power is contended in any given case. But typically, the "hereditary" case involves battle-axes, dark intrigues and treacheries, which is the polar opposite of actual merit.)
It’s not very democratic. Someone was in the right place at the right time as much as they earned it, do they then deserve to have basically 100s of orders of magnitude more influence for their life? Just doesn’t add up.
> If you think billionaires are harmful, why? Equality? Economics?
They already answered that:
> The existence of billionaires clearly undermines the core principles of democracy which is that all people have essentially the same political power. The existence of many laws which clearly aim to benefit billionaires only is enough evidence that this power balance does not exist when there are billionaires.
I don't understand this. Clearly not all people have the same political power, regardless of the existence of billionaires.
AOC, as a party firebrand, has more political power than Jeff Bezos, although it manifests differently. You can argue that the power was "earned" (in the sense that AOC won a primary), but how is the power that Bezos has any less earned? The same argument applies not just to politicians, but literally any influential public figure (artists, authors, journalists, actors, etc.).
AOC's power stems from democratic support. Jeff Bezos' power stems from monetary wealth. It's the difference between oligopoly and democracy.
No, there will never be absolute equality of power. Certain people will always have a louder voice in the culture than others. But cultural power is fickle and comes and goes easily unlike wealth.
That's strictly not true. People vote for Amazon the product (over Walmart's web experience), they don't vote for Amazon the Jeff Bezos Political Agenda. Those are two totally different things. For instance, there's plenty of right-wing folks who shop on Amazon while simultaneously hating the Washington Post.
As mentioned upthread, this is the difference between democracy and rule by wealth.
Excellently put. And put differently: even if people actually thought that Bezos was just a brilliant businessman, why would anyone think that he's a brilliant social strategist? Or resource planner? Or commander-in-chief? Just because someone knows how to build and run a company that's great at selling stuff tells you absolutely about their qualities as a political/national leader.
Amazon tried to unseat a couple Seattle City Council members in the last election. It backfired, and Amazon faces a Council that has voted a huge payroll tax onto Amazon in revenge.
So if Amazon can't even control local elections, I wonder where all this supposed political power is?
Also, AOC was instrumental in preventing Amazon from establishing a second headquarters in NY. As a freshman Congressman.
You're welcome to take a hit to your wallet when you don't want to enrich a certain business leader. What you shouldn't have to do is take a hit to your wallet because you don't want to politically empower a certain business leader. This is especially true as there's less and less competition, and a few huge players control a disproportionate amount of the market (which is an issue on its own, albeit a separate one).
The idea behind a democracy for better or worse is one individual gets one vote. When you start having to figure out how you're voting by proxy through the leadership of each company you do business with, I'd wager, that wouldn't be within the spirit of the system.
Companies should compete for individual walletshare by merit, and it really should be apolitical. It won't always be, of course, but I think we're better off if we try and limit it. Conflating the two weakens both imo.
AOC's power will vanish the moment she breaks with the interests of her constituency. Bezos' wealth does not represent a continuing endorsement of his actions.
How would Bezos continue to have power if people stopped using Amazon? Most of his wealth is in Amazon stock. Sure, he'd have a few billion left over, but his real political power comes from his companies, not his money.
"A few billion" places his wealth in the top .0001%. It's telling that even in this far-fetched scenario where Amazon and Bezos' "real political power" are destroyed, he's still much more powerful than the vast majority of US citizens.
You seem to be equating wealth and power. Wealth and power are certainly related, but probably on a logarithmic scale. Someone worth $20,000 isn't twice as powerful as someone worth $10,000.
The primary source of political power Jeff Bezos has is his control of a very large employer. Employing lots of people gives you some power over local politics in the areas where you employ those people, and it gives you some level of influence with politicians who might be interested in ensuring you continue to employ lots of people, because it's good for the economy.
Your run of the mill billionaire heir/heiress that doesn't really do any useful economic activity doesn't have a huge amount of political power, in general. They probably have more than you or I do, but not a ton more. Certainly not more in (linear* proportion to the wealth difference.
Once you realize that the relationship between wealth and power is logarithmic, it's not really a super concerning relationship. There are other sources of power that are much more important, and much less transparent.
I would guess that most of Bezos' wealth is stilled tied to the stock price of Amazon, and thus actually represents an endorsement of his actions at least a bit more than if it were all in cash.
His monetary wealth shouldn't give him power over anyone but his own company, nor should it allow him to exercise his right to speech that are denied others for reasons directly related to wealth.
It does in both instances. They're not orthogonal.
Actually your example of newspaper and TV stations exactly examplifies why billionaires have such a vast political power which is unhealthy for society. No single TV station, newspaper by itself would ever yield so much power as to be able to shape public opinion in one direction. However take the media empire of the Murdochs which yields a disproportionate amount of power in several countries, very directly pushing the ideology of it's owners.
I can't believe that we are seriously discussing that using some online retailer is somewhat a voting process equivalent to democratic elections. This really shakes my faith in humanity and the HN community.
I think you have some very distorted concept of democracy. I don't know any definition which includes voting by where you shop.
Also I note that the strategy to paint the political class (as opposed to e.g. the business class or some "new" political class) as all corrupt is a common strategy by totalitarians to undermine democratic processes.
A capitalist-ish economy is designed to create winners. If it wasn't Bezos, it would be someone else. What matters about Bezos' wealth (in this context) is not that this specific person controls it, but that we live in a society/economy where there will always be people who accrue this level of power and wealth. The problem isn't that Jeff Bezos is this rich, it's that we live in a society designed to concentrate money in this way.
ps. I was the 2nd employee at amazon, and worked closely with Bezos for 14 months.
Buying from Amazon does not imply endorsement of Jeff Bezo's politics and economic interests. Your equivalence between that and AOC's grassroots support is completely nonsensical.
Democratic support of a vocal minority and remember her power is predicated on violence, where bezos's power is based on voluntary interaction -- a big difference.
Bezos's power is entirely predicated on violence, as the ownership of any assets he holds are marked as belonging to him through the backing of violent institutions. This is arguably moreso than AOC as she has no executive authority.
She, as most politicians, compete in a primary - that is where the real election is. Her district was going to vote for the Democrat candidate no matter who was selected in the primary. Lastly 57% may seem like a lot or whatever, but it's ~16,000 votes out of a potential ~700,000 for the district. Hell, 16k out of ~100,000 that voted last time isn't a huge amount.
AOC does not have more political power than Jeff Bezos and to suggest otherwise is tremendously foolish. Political power is far more than just the ability to change federal statutes, it includes things like being able to get faster approval for the zoning of your particular projects or getting your company tax breaks.
Bezos has vastly more power than AOC. His decisions affect the lives of 840,000 direct employees and at least as many again - I'm not sure the figures even exist - "freelance" content suppliers, small businesses, and casual workers.
His tax avoidance policies have a significant impact on the budgets of the larger Western countries.
AOC has a media profile, but - so far - almost no influence at all on US policy. That may change in the future, but given that the Dem Establishment seem to consider her a dangerous extremist, it's possible she'll be sidelined into becoming her generation's powerless token left-leaning icon.
I said that different sorts of power were fungible. I did not say that a specific sum can be used to acquire a highly specific office by any particular individual. It's entirely possible to use vast wealth inefficiently and fail to acquire political power or influence.
It's possible to use the same wealth efficiently to pay individuals to study the problem of which individuals to contribute to in order to acquire increasing and undue influence.
Your argument is that you shot at someone five times and failed to injure them thus guns doing kill people.
He didn't, but with his donations to the DNC and the creation of Hawkfish, he'll have an inordinate amount of power in the direction of the party for years to come regardless because of his money.
Certainly in some ways. But AOC (with others) arguably shifted an entire mainstream party's platform. I think that the "hard power" that Bezos has is larger, but the "soft power" wielded by political and cultural elites is massive and easy to underestimate.
I would like to introduce you to a family which is called the Murdochs. This family alone has probably yielded more political power than most elected officials in many western democracies combined. You don't even need to look at Fox news, but only look at Australien politics, where Rupert Murdoch (who isn't even an Australien citizen or taxpayer anymore) has had the most intimate access to politicians. I encourage you to look at the repeal of the NBN (which was very popular) and the role of Murdoch newspapers in getting the labor government voted out.
AOC has to actually work for her political power. Billionaires can sic 1000 lawyers and lobbyists at whatever initiative they want, without lifting a finger.
And that's just an example :-)
Activists do it as their day job, for billionaires it's just one of the many side effects of their wealth.
I'm not sure how this is apparently a controversial point. There's vast and obvious evidence that this is the case. More Dunning-Krugerism from the tech industry.
"Political power" is an unavoidable side effect of having power, simply – this almost reads like a tautology, but it's worth keeping in mind that the former is effectively an extension of the latter.
I argue money is power in a free market society. I'm not sure there is a way to fix the first part of that sentence without completely modifying the latter.
Actually there is significant research that successful people significantly overestimate their skills/contributions even if they rely largely on luck or advantageous starting conditions. There is also significant research that shows that even in a relatively "fair" trading scenario wealth distribution very quickly becomes completely unequal, just based on luck in the first couple of trades [1]
It was actually gifted to him by his parents, in the form of a $300,000 loan. How is it so difficult to accept that the vast majority of the wealthy were helped by having wealthy parents rather than pulling themselves up their bootstraps?
How many people with $300k go on to build Amazon? Nobody is saying he didn't have any help, and that's frankly not the bar we want to measure people by.
Statistically, people with wealthy parents are far more likely to be wealthy than those of poor parents. Bezos would have been far less likely to create Amazon did he not get that loan. Do you dispute this?
Maybe. So what? No one is an individual. “He” is also a product of his parents’ DNA mixing to produce an intellectually healthy and superior brain. His parents also stuffed copious amounts of useful information into that brain. As did people around him growing up. And his parents used savings, likely derived from many generations of people passing on their wealth/culture/knowledge, to aid in the continuation of their DNA’s importance to humanity.
I don't exactly give a shit, I googled Bezos current net worth. I'm savvy enough to know it's not liquid cash, if you're trying to make a snarky remark. Or you could just say what you mean.
You say clearly, but it isn't clear. I would argue the existence of billionaires is a symptom and not the root of the problem. This country was founded with all people created equal under the law, but the system of kickbacks and corruption allows the wealthy to commit all manner of civil, financial, antitrust, and even criminal acts without any repercussions. How many people were charged in the financial crisis that wiped out half the wealth of Main St? 1 person? Google is larger than all of it's search competitors combined and yet Congress rolls over when Pichai says it isn't not a monopoly? Give me a break. It will only get worse, whether UBI and Universal Healthcare are implemented or not. There's a reason Big Tech CEOs are all card carrying Democrats. Modern Communism won't see the seizure of the means of production by the State. Instead it will consolidate the working class under a smaller and smaller group of larger and larger corporations that work in concert with politicians. Progressive regulation and taxation schemes support this. We even have on-campus housing for employees now so you can dedicate your whole life to a company. All that's missing is childhood education and you can be birthed into Amazon employment, get educated and trained, and live your life inside the bubble.
Every person has the same political power, though. One vote is one vote, one voice is one voice. Why do politicians pander to the wealthy and influential? Well, precisely because they are influential and connected to many of the people in society.
You contradict yourself. You literally just said that everyone has equal political power, but rich people have more political power. Rich people aren't influential because they have a lot of friends. Rich people are influential because they have a lot of money.
Isn't it because the wealthy and influential can donate/raise huge sums of money for politician's superpac and help them win elections term after term and stay in power for decades?
To get rid of that incentive you need to advocate for separating government from economy, in the same manner and for the same reason why state is supposed to be separated from church in a modern secular society. No lobbying from economic players and no government intervention into economics.
If government is responsible for running common infrastructure, just by their choice of which infra to grow or let decay, they are affecting economy.
If government is responsible for social welfare (for the poor), they are affecting economy.
If government is collecting taxes, by their choice of what to tax how much etc, they are affecting economy.
If you take economic affections away from the government, what remains with the government?
With gerrymandering of districts votes are diluted or concentrated specifically to create imbalance of each vote being equal.
They pander to wealthy and influential because they will receive donations in unlimited amounts for such pandering. If they don't, they'll be primaried out by that spending being directed toward another candidate willing to pander.
> The existence of billionaires clearly undermines the core principles of democracy which is that all people have essentially the same political power.
I'm very pro-democracy; but that isn't a principle that has ever shown to have massive success at scale. There are a lot of fools out there.
Notably, some of the most successful experiments in democracy (British, American & Indian traditions) all have pretty clear principles of not having people with equal political power. Eg, a judge simply has more political power than an ordinary person. Britain and India have appointed members of their upper houses and the US has several safeguards to stop power defaulting to a majority.
Democracy hasn't achieved success due to some rosy concept of equality, it achieves success because the insufferable can't hold power and it provides an excellent method for different interest groups to negotiate and play mock-battle to work out who is stronger. There is plenty of evidence that dictatorship would be a better model if there were some magic method of keeping the dictator focused on good results - and indeed the US political system has tendencies in that direction. The creation of billionaires as replaceable aristocracy is a potential strength.
Plus most of the top US billionaires are self-created. It isn't really comparable to aristocracy either.
> Plus most of the top US billionaires are self-created. It isn't really comparable to aristocracy either.
That's just a function of accretion. The pearl has just begun to be produced. Do you think that the kids of the current top billionaires will not be at least middling billionaires? The US has lower social mobility than most European countries. Considering the fact that Europe is part of the "Old World", that's a worrying fact in my opinion.
Broke aristocrats are a trope. Broke billionaires are an oxymoron.
Just looking at https://en.wikipedia.org/wiki/List_of_Americans_by_net_worth I don't see a lot of hereditary names. There is the Mars family I suppose. I don't see names like Getty, Bruce, Mellon, Carnegie, Rockefeller or Vanderblit. There is a Hunt.
The wealth doesn't look like it accretes faster than family growth divides it at that level.
Leaving aside George Spencer-Churchill, Marquess of Blandford, and a few other aristocrats, the latest-born of the descendants of Cornelius Vanderbilt is James Vanderbilt (https://en.wikipedia.org/wiki/James_Vanderbilt), currently worth by somebody's estimate $20M. The family also includes Anderson Cooper, a fair stock of earls and such, and a number of artists.
All but 5 of those families have less wealth than MacKenzie Scott; whose claim to fame is marrying the son of a bike shop owner.
The odds of breaking in to that list are something like 1 / 300,000,000 but evidence is anyone can do it. MacKenzie is also my subtle counterargument to "Look at the Waltons". Breaking up the wealth ain't always voluntary.
*grandson of one of the first nuclear engineers and nephew of one of the most successful musicians of the 20th century, whose parents had nearly a million (2020) dollars to spare to help him get in on the dotcom boom. But anyway.
Those are about the same odds as breaking in to the House of Lords.
Would the explanation that "while it is statistically impossible, it is strictly speaking plausible for an extremely devoted and lucky regular person to join the club" be a good enough excuse for re-introducing a landed aristocracy to American government, in your estimation?
I just remember when I was school in the 60's there were a lot of games played where one person out of 30 would 'win'. Very much like professional sports. Talked to my dad whose much older. He said they didn't do that when he was a kid. I think schools don't do that shit as much because they realize that one kid has a very temporary positive experience and 29 kids have a negative one.
Seems to me where the system is fair is unimportant, first we know it's not. Second is it designed to create disparities and a negative experience for most people. From a societal point of view that probably bad. And as I like say, the needs and wants of a couple of super wealthy people shouldn't be anything society cares about.
Yes and what happened every time in between? Significant civil unrest or wars. The first and second world wars actually acted as great equalizers (as did the civil war, the French revolution etc.) everytime after a new "aristocracy" develops and tries to keep keep the wealth to themselves. So I guess we need another upheaval, is that the argument?
> The pearl has just begun to be produced. Do you think that the kids of the current top billionaires will not be at least middling billionaires? ... The US has lower social mobility than most European countries. Considering the fact that Europe is part of the "Old World", that's a worrying fact in my opinion.
I'm not sure that this is actually true, wrt. "old" wealth. Mostly, because Europe's high income taxes and broadly business-hostile environment makes it very hard for new wealth to compete with old wealth, and especially unattractive for "old" wealth to get involved in riskier, more innovative ventures of their own as opposed to just kicking the can down the generational road.
Money is a poor form of meritocracy because once you have it you can tilt the board towards you and yours forever regardless of future merit.
Worse the portion of wealth from true merit is cover for just how much is graft, rent, and corruption.
The end point of any system whereby power gives one the ability to further consolidate power needs to be balanced with redistribution else all power naturally concentrates in a shrinking few.
No man is self made. Billionaires are generally the children of lesser wealth.
Professional meritocracies where groups of professionals judge the efficacy of fellow practitioners? Licensing boards. Colleges, testing, professional memberships, peer review.
We can also acknowledge that we are incapable of making such systems optimal and take from all to give to all in terms of public works, education, health.
This insures that even if capitalism doesn't properly reward all participants aptly for their contributions to society all get a chance to live and contribute. If you look at true believers in capitalism one would suppose that the market is the only guide to worth and how we should allocate capital. Neither is true.
And there are multiple members of the Rockefeller family that have net worths in the billions. There is substantial swaths of land in this country that have been held by the same families since the 1700s.
> The question if billionaires are bad for society is pretty much the same question as asking if the aristocracy was bad for previous societies
I think the main difference is that aristocracy was zero sum and rent seeking where billionaires aren’t necessarily (and with recent tech ones not) zero sum. Bezos having a billion dollars doesn’t limit anyone else from having a billion dollars.
Only the king was allowed to hunt in the king’s forest. Aristocracy owning 50% of land (or whatever) means no else could own it and more land wasn’t (usually) created.
If someone is king, then that means no one else can be.
There’s some similarities with aristocracy, especially with generation after generation. But theoretically we have estate taxes and laws against perpetuity that help some and could be prevented.
Perhaps half of billionaires are “self made” [0]. I don’t like that term, but I wish we had “how many billionaires weren’t born to millionaires?”
But Bill Gates being born to a middle class lawyer and making billions is very different from Bill Gates being born to the Earl of Orkney and selling all the potatoes in Ireland to make billions.
Bill Gates was not born middle class. His Father Bill Sr. was a partner in a very prestigious law firm and his Mother Mary was on the board of Regents at the University of Washington.
Despite his wealth, Bill's father reportedly ran the slide projector for Bill's talk in the early days of Comdex. In those pre-powerpoint days a draftsman created a paper version of the "viewgraphs" which were photographed and then displayed with a slide projector or on a overhead projector. The overhead projector used a "burned" transparency created by putting a special type of transparency film instead of paper in a xerox machine and copying the draftman's original.
It doesn't matter if he was the son of Warren Buffet. He flipping made Microsoft let him keep his billions he earned them. I guarantee, if 99% of the population were born under the same circumstances, they could not produce a Microsoft.
You forget how instrumental his lawyer father was in creating the first software license agreements and how his family financed the mainframe computing time he was given before any teenager had ever had access to these machines.
His biography is quite clear on how lucky he was and how much his parents contributed to his success. Denying it is perpetuating a myth of a self made billionaire that simply isn't true.
Being self made is irrelevant, all that matters is society benefited from the value that Microsoft produced, and he was enriched accordingly. It's not complicated. Who cares if he had a leg up. Should we think any less of SpaceX because Elon had rich parents. Progress is hard, we need to welcome it how ever it comes, and reward those who produce.
His parents weren’t billionaires. There’s a big difference between being born poor lowering risk of success and 99.999% being born non-aristocracy preventing success.
I have no doubt that he earned some of what he has. But I have doubt that his work added enough value to the world that he should be so extraordinarily wealthy. The scientists who discovered, and started producing Insulin probably added more net value - yet I don't think any of them became a billionaire as a result.
Bill Gates's mother was on the board of IBM, which helped lead to IBM making a deal with Microsoft. This isn't very different from landed aristocracy marrying only other aristos to maintain power and wealth within their networks.
The same kind of deal making happens in the VC/PE world? Isn't it true that you not only get money investments from VC/PE firms but also get connections and deal-making with their portfolio companies. In that way it is quite similar. Either you are in the club or you are not.
> aristocracy was zero sum and rent seeking where billionaires aren’t necessarily
How can you look at companies like Google, Apple and Facebook and conclude they aren't rent-seeking? Google's entire business is essentially renting space on the most valuable real estate in the world. Apple routinely shuts down or replaces apps that compete with theirs. All of these companies seek to just barely toe the line of not being subject to anti-trust laws. Of course these are companies rather than individuals, but the nature of capitalism is such that rent-seeking happens via corporations controlled by the wealthy.
> But Bill Gates being born to a middle class lawyer and making billions
Other people can litigate the specifics of Bill Gates or others, but the US has poor income mobility compared to other wealthy countries, largely due to the capture of our political system by the billionaire class.
Only the billionaire is allowed to walk on the billionaire's private beach (often in violaton of nominal law).
> If someone is king, then that means no one else can be.
Obiously not true. Each king is only king on the king's property. Much like Ellison and Gates and Walton have their own property.
> Theoretically we have estate taxes and laws against perpetuity that help some and could be prevented.
And maybe if they were practical and not purely theoretical, the democratic populace would be mollified.
> But Bill Gates being born to a middle class lawyer
Bill Gates was born to a multi-millionaire.
> different from Bill Gates being born to the Earl of Orkney and selling all the potatoes in Ireland to make billions.
Bill Gates signed deals with IBM and Dell to sell almost all the OSes in the US, to make billions. Even people who installed other OSes had to pay Bill Gates first.
Typical viewpoint on HN is that a $600k a year is average for someone in their early 30s, therefore there's nothing non-average about a multi-millionaire parent.
Billionaires are not bad for society. However they are a magnate for those who seek to mold society in a particular direction and as such they have to either be exploited or expunged from consideration.
Billionaires are in effect about the only means to challenge the political machine that runs each country. They only occur in countries that protected property rights to the point people could amass sufficient wealth so as not be subject to all the pettiness of the political class.
Their power is their mobility but only if they have staged their wealth in such a way it cannot merely be confiscated with a single action. Billionaires who come into effect outside of those created by the armed forces of countries being used to enrich their leadership are signs of wildly successful economies that others want to be part of. Yes there is disparity between them and the bottom rungs of the society they are part of but those bottom rungs are usually as far apart from those in nations with no respect for property rights.
America isn't suffering from a lack of tax on the wealthy, their wealth or income. America is suffering from misuse of the money taken from all sources used to prop up two political parties so that they are immune to their own actions.
When we talk wealth we need to understand how the political class is fleecing America. All this talk of fair wages, $15 an hour, while they lavish pensions on their public employee buddies to the tune of a 100k or more per year, while they gain seats on various commissions and committees paying them 200k a year for part time work all on our dime.
The real money issue is the theft by the political class. However they have the best marketing and are adept at playing people against each other.
I find this attitude odd. Billionaires are accountable to no one at all, yet have enormous power over all of us. To you this is a good thing? Our political system is obviously a total disaster, but at least we have the power to change it if we want to. In fact, there are popular movements on both the right and the left that are working to make this change happen.
Many of the problems with democratic government are in fact caused by the power of the billionaire class to shape society to their whims. I remember reading a paper that compared people's policy preferences to actual implemented policy. They found no correlation. Instead what they found is that the policy preferences of the wealthy were quite well represented.
> America is suffering from misuse of the money taken from all sources used to prop up two political parties so that they are immune to their own actions.
This makes no sense. Both political parties are in fact propped up by their wealthy and corporate donors. If you look at the establishment of both parties, you will find that they are indeed quite cozy with your beloved billionaire class. Paul Graham has given hundreds of thousands for example: https://www.opensecrets.org/donor-lookup/results?name=paul+g..., and he is a fairly mild example.
> All this talk of fair wages, $15 an hour, while they lavish pensions on their public employee buddies to the tune of a 100k or more per year, while they gain seats on various commissions and committees paying them 200k a year for part time work all on our dime.
Why shouldn't ordinary workers have retirement benefits? It used to be part of the deal: you devote your life to the company, and get to have a decent, comfortable retirement. In the private sector, unions are so weak/nonexistent that these benefits are gone, but why is that a good thing to you? Similarly, if you refuse to pay politicians a good salary, then only the wealthy will become politicians. I guess to you, that would be a good thing, but most of us would prefer having more ordinary people in power, not fewer.
> Billionaires are accountable to no one at all, yet have enormous power over all of us.
it's not an enormous power, it's economical power to create new things. It's a productive force, unless there's a bad incentive to influence politics. No billionare is capable of dictating you how you should live your life. Politicians are. Separate government from economics and make lobbying and interference into economics illegal and punishable, and you will never see these two groups of people seeking favours from each other.
> it's not an enormous power, it's economical power to create new things. It's a productive force, unless there's a bad incentive to influence politics.
Like how the waltons use their great creative power to extract taxpayer money in the form of underpaid workers on assistance? (1) Like how bezos' amazon exploits the generation forced out of retirement by the 2008 crash as an underclass of temporary seasonal workers (2)
Billionaires got there by exploiting loopholes and viscous cycles that drain money from many people, to consolidate it in the hands of a few. There is an inherent problem with any society that allows the existence of billionaires, while some of their citizens starve as a result.
> Like how the waltons use their great creative power to extract taxpayer money in the form of underpaid workers on assistance?
That's mostly returning, not extracting, taxpayer money, since employment by WalMart reduces those workers’ eligibility for means-tested, and where it doesn't (e.g., moving up EITC eligibility) the recipient of additional taxpayer money is the worker, not WalMart. Calling this extracting taxpayer money by WalMart, the Walton family, etc., is ludicrous in the extreme.
Are the Waltons’ under taxed, sure. But if they were taxed more to provide broader aid, that would increase the share of their employers receiving some kind of public benefits. Which is a good thing, not a problem.
no need to tax them more to solve THAT one, just make them pay a living wage. Nobody working full time should be below the poverty line, nobody working half-time should require food stamps - otherwise it is exploitation not employment.
> no need to tax them more to solve THAT one, just make them pay a living wage.
Thereby reducing the scope of jobs for which they can hire to ones that return sufficient value for that, sure.
Of course, that will add to the public welfare burden, not reduce it, since it will reduce employment.
There's a very good argument for some minimum wage in the absence of better of minimum support policies like UBI (that is, while it may not be the ideal minimum support mechanism, there's plenty of evidencie that, to a point, minimum wage is a net gain compared to not having it.)
There's also probable a decent argument for “living wage” (sufficient for independent support) as a floor for certain kinds of labor in government contracting, etc.
There's not really a good argument for living wage as the minimum wage floor; making everyone whose most valuable labor is not sufficient valuable to support them independently unemployable rather than employable at a level from which they can gain experience and advance is good for neither the unskilled nor the broader society.
> to solve THAT one, just make them pay a living wage. Nobody working full time should be below the poverty line, nobody working half-time should require food stamps - otherwise it is exploitation not employment.
This argument is equivalent to: “No one whose full time labor returns less value to the employer than would merit pay above the poverty line should be employed at all; nor should anyone whose half-time pay would leave them eligible for food stamps.”
Making the relatively unskilled completely unemployable isn't helping anyone. (Also, food stamp eligibility limit is generally 130% of the poverty line, so aside from the general outline being bad, the specific details you've chosen would set a minimum hourly wage for half-time work at 2.6× the minimum for full-time work.)
It's much better to tax capital income and increase the minimum support floor independent of employment than place increasing demands on employers, which just promotes automation and reduction in employment. You want to improve conditions for workers, especially at the low end? Tax capital income equal to labor income—both the basic income tax and the payroll/self-employment tax employed to labor income (this also includes uncapping the social security portion of payroll taxes.) Use the added income tax equivalent revenue to fund broad, unconditional minimum support (it won't be anywhere close to a mature UBI initially, but that's okay.) Use the added payroll tax equivalent revenue to (1) provide SS and Medicare eligiblity based on qualifying income that isn't labor based, but with (for SS) additional high income “bend points” beyond those in the current formula so that the marginal additional benefit for additional income continues to drop with income, (2) provide additional security for payroll tax funded programs, (3) beyond what is actuarially needed for long-term program security, transfer the excess to fund additional broad, unconditional minimum support. After indexing minimum wages to inflation, reduce the by $0.01/hr for every $40/yr of the minimum unconditional support (that is, full-time minimum wage would be reduced by half the unconditional benefit.)
Workers are, in net, better off. Those unable to find work are better off because of the unconditional benefit. Taxes paid are fair, income is income. There's less incentive to reduce employment, and indeed more people can be employed.
> Thereby reducing the scope of jobs for which they can hire to ones that return sufficient value for that, sure.
The fact that they are BILLIONAIRES seems to indicate there is a decent amount of headroom to their business model.
> This argument is equivalent to: “No one whose full time labor returns less value to the employer than would merit pay above the poverty line should be employed at all; nor should anyone whose half-time pay would leave them eligible for food stamps.”
No. My argument is: if your business model can't sustain people at a living wage, then YOUR BUSINESS SHOULD NOT EXIST. Remember that walmart put a lot of small shops out of businesses - many of those shops paid their employees enough to live without needing food stamps. They sucked up all the air, if they can't sustain their workers, they need to stop sucking up the air and make room for businesses that can.
edit: for details. the article I linked suggested that walmart employees receive $6.2 billion in gov assistance (2014) - wikipedia suggests that walmart made $14.8 billion (2020). Seems like they DEFINITELY have the headroom to pay their employees that difference. Why are we even arguing about this? Walmart would have made $8.6 billion and government would have at least 6.2 billion more for schools, PPE, covid relief, etc. nobody needs to lose their job, NOBODY EVEN NEEDS TO STOP BEING A BILLIONAIRE to at LEAST get people off food stamps.
> The fact that they are BILLIONAIRES seems to indicate there is a decent amount of headroom to their business model.
Does it? If you multiply a small per-labor-hour surplus by 1000+ hours per worker per year and lots of workers, you can accumulate lots of money per year and become a billionaire, but that doesn't mean you have lots of headroom, just lots of scale.
> No. My argument is: if your business model can't sustain people at a living wage, then YOUR BUSINESS SHOULD NOT EXIST.
Sure, and when you kill all the businesses that can't pay every entry level employee enough for a comfortable independent life, who is going to pay the additional public benefit costs to give even minimum poverty support to the much wider pool of unemployed and unemployable? Your plan is lose (for the people who would be employed but now won't)-lose (for the people unemployed in either case for whom there is now less revenue to provide support)-lose (for the capital owners who are now prohibited from employing people whom they otherwise could, mutually profitably). Taxing capital gains fairly and using the proceeds to provide better universal support while reducing employment friction is win-win-mixed for the same groups.
> the article I linked suggested that walmart employees receive $6.2 billion in gov assistance (2014) - wikipedia suggests that walmart made $14.8 billion (2020). Seems like they DEFINITELY have the headroom to pay their employees that difference.
Their 2020 net income was more than double their 2019 net income, of $6.67 billion. Tax net capital income more, and you don't ever switch a profitable business into a losing one by your policy, increase employment costs and you make profitable decisions to employ people into unprofitable ones.
You’ve cherry picked the one bad yearwalmart has had in recent memory: 2019. From 2006 to 2020 they have made over 10 billion per year except for 2018 (9ish billion) and 2019 (6ish). They CAN afford to pay their staff a living wage.
Again, by describing the choice as bad job (walmart) or no job, you are ignoring the fact that walmart did not CREATE jobs - they merely consolidated jobs from many small businesses.
It’s not a choice between walmart or nothing. It’s a choice between an exploitive business model, or non-exploitive business models.
> Again, by describing the choice as bad job (walmart) or no job, you are ignoring the fact that walmart did not CREATE jobs - they merely consolidated jobs from many small businesses.
Driving up the minimum cost of labor isn’t going to bring back smaller, less-efficient businesses, it will make them less viable, too. Higher minimum wage actually reinforces the advantages of scale, since smaller acheivable average returns means the importance of being able to internally diversify (e.g., against regional problems) becomes more important to survival.
> It’s a choice between an exploitive business model, or non-exploitive business models.
It's a choice between a government model that chooses to actively harm the employed, the unemployed, and employers irrespective of business model to express moral outrage at certain business models and one that wants to use the power of taxation and spending to reduce the power of business models to be oppressive.
I think what you are really upset about is that politicians in the US need private funding to get elected. This is usually not the case in European countries where they just ban political ads on television and provide tax-funded funding for parties that gain significant representation.
Retirement benefits were always a terrible deal; no one should be putting all of their eggs in one basket. We should enable people to simply and easily save for their own retirement, without banking on totally-unrealistic rates of return that are never going to materialize.
> We should enable people to simply and easily save for their own retirement
Perhaps that would be reasonable if everyone were paid enough income to handle all their expenses and save for retirement. Of course, that's not the case for probably 30-40% of the population. As things stand now, it's just cruel to lecture those people that they "should have done a better job of saving" (and I hear that a lot these days).
> The question if billionaires are bad for society is pretty much the same question as asking if the aristocracy was bad for previous societies.
Not at all. The aristocracy was a legally special class of people based on your ancestors. The end of aristocracy, especially in America, meant for a long list of rags-to-riches stories, and lots of politicians who came from very poor beginnings. The end of aristocracy also meant the end of officers being drawn solely from the aristocracy, which made for a far more effective military, as talent was not related to your parents.
Economic mobility is more or less the lowest in the US of all OECD countries. This means that it is extremely likely that whatever quartile/quintile/percentile you are born into in the US, you will also die in the same economic bracket.
Yes, you can cite whatever exceptions you like - the statistics are clear.
Most billionaires are born to other billionaires (or at least extraordinarily wealthy people compared to median wealth). As such, they represent an ancestral inheritance just nearly as much as the aristocracy.
There is almost no evidence of de novo great wealth being correlated to great talent. It may (or may not) be a necessary component, but it certainly is not necessary, even if it was possible to quantify precisely what is meant by "great talent".
In a capitalist-ish society, there are always going to be great winners in the competitive economy. Pointing them out as if they are special is absurd: the system is designed to generate such cases.
Back in the 90's, the Seattle Times reported that there were over 10,000 millionaires (excluding home equity) in Seattle as a result of working at Microsoft and getting stock options.
A million bucks is nothing to sneeze at, it's upper middle class. And that's the cutoff - many are in 8 figures.
Without Amazon and Microsoft and their billionaires, Seattle wouldn't be the wealthy city that it is. Not even close, and that wealth has filtered out all over the area. For example, there are all Paul Allen's initiatives and developments in the area, and that's only a tiny bit of what has happened.
Be careful what you wish for in getting rid of billionaires. A lot of very nice things we all have will go away with them.
> I'm not for Paul Allen deciding what's nice or what we get.
The thing is, Allen didn't take anything from you to give those things. He didn't raise your taxes. He didn't impose any levies. They were gifts you could ignore if you chose.
Me, I liked his flying WW2 aircraft museum very much. It's a little thing in the grand scheme of things, but I've enjoyed it a lot. If you read his autobiography "Idea Man" you're sure to find a number of things that have benefited you - without costing you anything.
Musk has given us a space program. Carnegie gave us public libraries. Gates has saved millions of lives through his foundation.
BTW, you don't get to decide what nice things government does for you, either. A vote is not the same thing as a choice. I've lobbied my Congressmen. Did they do what I wished? Absolutely not!
Apaprently you're not aware of the gigantic shift in the proportion of GDP that ends up in the hands of labor vs. capital.
A significant chunk Paul Allen's share of the GDP would have been in the hands of workers had he been economically active during the period 1949-1978.
That's what he "took" from people to be as wealthy as he is.
I am flabbergasted that you feel that the "lack of choice" over what your government does is the same thing as the "lack of choice" over what rich people do with their money. In fact, I feel sorry for you in that you live in a country fundamentally built on formalizing this difference and creating a nation based on a belief in government "of the people". You don't believe that - you're not alone. But I still feel pity for you that you've been forced to give up the dream that this country was built on after just a couple hundred years.
Allen's wealth was neither given to him nor taken by him. He created it.
As for me, I prefer having a choice on what's for dinner than a vote on that. The US was founded on the principle of individual rights and liberty, not communal purpose.
No need to pity me, we are living in a golden age in the US. I have little doubt future historians will see it that way. I have no fear of billionaires. I don't buy that money buys elections. Hillary outspent Trump 2:1 and still lost, Bernie outspent Biden by some huge amount, and lost. Bloomberg flooded money into his campaign, and was completely eviscerated. I confess I daydream sometimes about what I'd do with a billion dollars that I'll never have, but that doesn't translate into any desire to tear down existing billionaires.
I missed several forks in the road in my life that could have led to billionaire status, but my taking the wrong fork each time was entirely my fault. I simply didn't see what in hindsight was obvious.
I'm missing something right now that could make me a billion dollars, and in five years I'll be able to tell you what it was :-)
billionaires definitely can be good for society. they do things that are in the public interest but governments can't attempt because they are inherently risk adverse because politicians want to get re-elected.
Bill Gates does high risk speculative, investments for causes such as eradicating diseases.
Elon Musk is attempting to colonize Mars. Because Presidential administrations are a maximum of 8 years and it takes longer to achieve a big goal in space, such as moon or mars colonization, Nasa has had a hard time sticking to a long term goal for space.
Inflation changes this detail daily. A billion is just a number of units of an arbitrary currency.
The real issue goes beyond the number and is more about generative assets vs liability / depreciating ones.
IMO the real problem is money in politics. Fix that and many of these issues with billionaires will sort themselves out as the system corrects itself.
EDIT: By "money in politics" I mean big money that overwhelms small distributed money. (ie money that does not look democratic) . Obviously it's always going to _take_ money to run campaigns
The problem with trying to separate money and politics is that accumulating money equates to accumulating leverage/power, and that's what gets politics done.
Almost the only thing that could get money out of politics is to make holding money the most shameful thing imaginable, and even that would just force the flow of capital/power underground, not actually curtail anything.
As I get older, I realize more and more that the thirst for power will never go away, and these cycles of accumulation and overthrow will be the overall flavor of human existence for the foreseeable future.
Unless we figure out how to shame people out of wanting power, maybe?
There's nothing to repeal. The aberration is not Citizens United, which has always been the law in the US. The aberration is the McCain-Feingold Campaign Reform Act, which Citizens United overturned. The relevant law is the First Amendment to the US Constitution. McCain-Feingold is the thing which tried to limit this, and was tossed out by the Supreme Court in Citizens United.
Most countries do not have strong protections on speech. The US does. There's no way to distinguish Fox News Media, a for-profit news organization with a distinct partisan slant, from One America News, a money-losing, overtly partisan news organization, from Citizens United, a political action committee trying to air a political documentary critical of Hillary Clinton on Pay-per-View.
You can't donate unlimited sums to candidates, but you can spend as much as you want on political media, including advertising. I'd love to hear how we can overturn Citizens United, but maintain things like Fahrenheit 9/11, a different political documentary critical of George W. Bush, and released right at the height of the 2004 election campaign.
Lawrence Lessig has a proposal to offer political donation vouchers to each and every private citizen. I think this is a great take on public financing that would help to level the playing field, while maintaining this country's strong protections on speech.
Citizens United very much has not "always been the law". Before Citizens United, there was precedent going back about a century. The first amendment does not mean and never has meant that free speech wins in all cases when balanced against other interests. The government can (and still does!) regulate campaign speech. McCain-Feingold was not out of line with that. But the conservative majority flipped the table on that precedent because they wanted to. Citizens United didn't even ask them to overturn the law. They briefed the case on narrower grounds, and then the court asked them to come back and argue to overturn the law.
The facts of the case were this: Citizens United wanted to run ads for its documentary . But it was within the window of time set for increased restrictions on political ads. Citizens United crucially was not a political action committee, but just a non-profit corporation. As such, it could only run the ads by either making a PAC or using money from a segregated fund (you've seen this if you've ever signed up for a union) collected specifically for political activity. Note that the lawsuit was over the ads, not the documentary itself.
Before the ruling, Citizens United was allowed to spend money on political activity. They were allowed to spend money on political activity close to an election. They were allowed to spend money, close to an election, to broadcast issue-based political advertisement (e.g., for or against a ballot initiative) on TV. They were allowed to spend money distributing their documentary in any way other than broadcasting it on TV. They could show it in theaters. They could put it on the internet. They could print DVDs and mail them out. They could distribute it to PACs and campaigns for them to spend their own money distributing it, including broadcasting by on TV. They could pay money, close to an election, from a segregated fund, to broadcast their documentary on TV. All they weren't allowed to do was spend money, close to an election, on broadcasting something expressing views for or against a political candidate, on television or radio, to an audience of at least 50,000.
The courts argument hinged on the unacceptability of "identity-based" restrictions on speech. But there are such restrictions elsewhere. See you, for example, prisoners, or executive branch employees.they just invented a first amendment principle out of thin air and selectively applied it to corporations.
To reach their decision, The court rejected numerous opportunities to rule on narrower grounds. They did no factfinding to determine whether or to what extent the restrictions chilled free speech, substituting congress's research for their own opinions. They gave no opportunity for the government to do their own fact-finding. And they would have if Citizens United hadn't dropped their attempt to overturn the law (until Scotus revived it) while the case was still at the District court. Scotus could have kicked it back down to do that fact-finding, but they had already made up their minds.
Technically... you can in all but one circumstance: modern US constitutional law.
I don't think any country has the same laisezz-faire approach to buying politicians... certainly not in the name of free speech. I don't think the argument has even been made.
That said, even in the US there isn't a real constitutional barrier to doing something about money in politics. You could make candidates wear sponsorships on their jerseys, like racecar drivers. No free impediment. That's a joke example, but you see my point. That particular ruling is not an actual barrier, the barrier is a legislative majority.
The US is what I was talking about re: "money === speech," e.g. Citizens United.
I'll less interested in sound byte-like fixes like "wear sponsorships on their jerseys" and more with what you can realistically change without overturning Supreme Court precedent or ignoring the Constitution entirely.
I think the joke/soundbite example demonstrates a point: The Jersey Rule would be ok constitutionally. Even with that ruling standing, there is plenty of room for legislators to fix "money in politics" practically, without contradicting the SC. Laurence Lessig has some of the best known proposals.
The problem, as I see it, is status quo bias within any congress/parliament. Actually removing money from politics crashes their industry, puts all their friends out of work, and challenges their power. Every unsuccessful candidate, campaign manager, staffer, and such makes their living this way. Every successful candidate was successful at this way of doing politics.
It's a similar problem to legislation (or even customs) that would enable 3rd parties to succeed. It's against the interests of the Republican and Democratic parties, so it won't happen.
Citizens United was not about buying politicians: it was about a group of citizens wishing to show a movie critical of a politician. How is that not legitimately-protected speech?
You can't get money out of politics. Money is power intrinsically it's like getting the stripes out of the zebra. The fix is redistribution of wealth to reduce inequality to a tolerable level.
> EDIT: By "money in politics" I mean big money that overwhelms small distributed money. (ie money that does not look democratic) . Obviously it's always going to _take_ money to run campaigns
in the UK political donations over £500 have to be registered and be by someone on the electoral role.
the Brexit Party was funded by millions of donations of £499 from Russia and US sources via paypal.
the reason why money is in politics is because policy can effect money. You have to address the root cause, or else you are just playing whack-a-mole (thought exercise: if PACs were banned, is there a difference between Bezos buying $500M in paid media vs. buying the washington post?)
America needs to go through a revolution of thought, like the one that lead to the 'Separation of Church and State' principle. For many of the same reasons, we need a 'Separation of of Economy and State' movement. Only then will you get money out of politics.
> IMO the real problem is money in politics. Fix that
You can't. Economic and political power are the exact same thing: the ability to direct other people to do your bidding.
The idea that you can separate them has always been a fiction, and it's a fiction that is perpetuated for exactly one purpose, to support oligarchic capitalism by keeping people distracted by their engagement in the hunt for the “one weird trick” to make politically egalitarian democracy work without dismantling the radical economic inequality of capitalism.
And yet, it is the very potential of radical economic inequality that drive the creation of new inventions and innovations that make the modern world possible. Killing that potential is killing the goose that lays all the golden eggs - that's Graham's point: even small confiscatory wealth taxes will act as a significant deterrent to people who would otherwise start great companies that improve some aspect of the world, including by providing a livelihood to their employees.
I've been CTO for a dozen startups, and this sort of thing would almost certainly deter me from exerting the effort required to go through the always-grueling startup process. It's hard enough not getting screwed over as a founder without wealth taxes!
Assuming that you are incredibly successful, you may need to contribute a bunch of money (mostly from interest, not principal) back to the common good.
I really don't see Mark Zuckerberg (as an example) deciding not to create Facebook because if he was incredibly successful he'd have to pay a wealth tax. It just doesn't strike me as likely at all.
This is (sadly) Paul Graham taking a valid argument and turning it into a reductio-ad-absurdam.
Billionaires are a necessary consequence of having a scale-free market structure in a wealthy society, which is itself necessary for efficient resource allocation in the absence of (hypothetical well-implemented) dictatorial central planning.
> necessary for efficient resource allocation in the absence of (hypothetical well-implemented) dictatorial central planning
Replacing a singular dictator with multiple agents that concentrate power is not necessarily more efficient. The biggest inefficiency with disproportionate wealth/resource accumulation is that the incentives/competence of the wealthy doesn’t match up with the money they sit on. Note that I am not talking about only billionaires, rich corporations that employ the smartest of humanity is equally culpable. Although venture capital tries to cure this problem, it is only a small percentage of the outbound money of the wealthy.
Think it this way, Apple sits on billions and only innovation we get year after year is slightly thinner devices. Google has tons of billions and machine learning PhDs that work on classifying your cat’s pictures. Elon Musk’s puer aeternus dreams fixate on getting out of the planet instead of fixing it.
For all the power they hold, the innovation and improvements in society we get is abysmal. This is not that different that dictatorial central planning, in which a narcissistic entity thinks they can have the wisdom and competence to manage our collective resources and potential as humanity. (Yes, that is exactly what money is, it is being owed other people’s goods and service should you choose to transact it)
Why do we have to be capped by the best these people can think of? Accumulating wealth and using it wisely turns out to be very different skills, just like getting elected and governing wisely has been.
So billionaires are a source of inefficiency and a part of the market, not a consequence of it because they don’t get out of the market once they are rich. If anything, the more rich they get the larger their participation gets, with all its downsides.
That is completely irrelevant, unless you are claiming they are doing absolutely the best that can be done. They are not, and we have a huge headroom. My argument is against singular control points, so I am not suggesting myself or any single person or instuition as a better replacement, I am suggesting not having that concentration of power in the hands of a few in the first place. Kind of like Frodo and co. destroying the ring instead of thinking they can use it for good wisely. In this case nothing is destroyed because money, which expresses goods and services one is owed to, is merely not allowed to concentrate above a certain point. Why does a major chunk of humanity’s goods and services, produced by humanity, is owed to Jeff Bezos etc? It is absurd to assume one person can wield that power properly.
Having billions of dollars is not a magical measure of how much societal good one did or can do. If anything, I would trust anyone who could make billions much less than the average person to use it for good and wise causes.
Indeed. Now imagine how much more of that we could get if he didn’t also obsess about escaping to Mars. His money and attention is a constant sum, anything foolish is going to be replacing something wise.
> The question if billionaires are bad for society is pretty much the same question as asking if the aristocracy was bad for previous societies.
Are you comparing billionaires of today, with dictatorships and monarchies of yesterday? Where people can be killed, jailed, sent to work camps, etc. at will? Are people today working for "the man" essentially indentured servants?
> The existence of billionaires clearly undermines the core principles of democracy which is that all people have essentially the same political power.
I don't think this is a core principal. Every person should have the same voting power, and the laws should apply to everyone equally. But the president and representatives clearly have much more political power than any average citizen.
> Essentially strong wealth imbalance leads to unstable societies.
This is a big claim, and would have to show some sort of evidence to support it.
I’m sorry, what? Wage growth has stagnated for most Americans in the lat few decades. The idea that billionaires are a necessity for the existence of jobs is absurd.
Ask yourself this: if they are paying their employees so well, where are they getting all that money?
The cause for wage growth stagnation isn't immigration. Immigration is a net positive for society. Emigration is the real harm. That much is settled in Economics.
The cause for wage growth is, perhaps, the offshoring of labor to cheaper economies. Better for Nike to pay minimum wage in China than in the US.
Meanwhile, capital gains remain domestic as business owners don't relocate
> I'm not sure why you think having more people to fill a role wouldn't drive the price down.
Immigration indeed lowers wages for competing workers, but it also increases wages for complementary workers and generates surplus to owners of capital – which in the long-term constitute a net gain to all of society, but at a minimum does constitute a net loss to workers at large.
Research suggests negative wage effects are concentrated among low-skilled workers.
Immigration can indeed have disruptive effects, but it can be managed, and its net gains for the whole of society are fairly well established.
I'm curious what you mean by complementary workers.
In the example of immigrants doing hard manual labor, especially agricultural work, who are the complementary workers? I'd infer it's workers like the people who transport crops around or operate the machinery to plant / grow the crops, etc.
Protections for labor have been stripped await as Capitalism has become more and more hegemonic over the last 50 years. Profit seeking corporations have always looked for ways to cut their wages. Combine this with the fact that we have become an increasingly globalized world, where labor standards are much lower in third world countries, and you have many factors that play into wage stagnation.
It is ultimately a race to the bottom when you have a globalized economy, but do not have standardized worker protections across said economy.
Immigration has plenty of benefits on society, and we should not use wage stagnation relative to productivity growth (which can be stopped) justify isolationism and protectionism. Whether we like it or not, we live in an increasingly globalized economy and we should fight to have broader labor protections and give more power to workers to be able to protect themselves and fight for fairer wages. The alternative is, as I previously stated, a race to the bottom.
Do billionaires exist in a vacuum, creating their wealth away from society? What does it mean to be a billionaire? Physically, it means they’ve affected a large amount of the population. For the better, or worse? Take away the companies the billionaires created and imagine life.
You seem to assume that billionaires would throw a hissy fit and go off grid to Galt's Gulch if they faced a wealth tax. But maybe they are motivated by more than the concrete purchasing power of their wealth.
If they are motivated by the desire to build, they would still build. If they are motivated by the desire to beat their peers in a game of "Who Has The Most Money," they would still compete. The winning number would just have fewer digits. If they are motivated by the power money buys, well, maybe the rest of us are better off not playing that game.
To curtail and equalize the political power of the rich with the rest of world, their wealth have to be reduced to such an extent that they also don't have the leisure to engage in deep politics. Let's say, if 75% of the voting population has < $x and if even 1% has 3x of that, then they basically have 2x leisure buffer over everyone else to be more politically engaged and influence the small number representative politicians, to manipulate the narrative for the rest of the 75% etc.
Marx wrote something almost to that effect in the Communist Manifesto. About half the first chapter is intense praise for the advances brought by capitalism.
We may not literally need billionaires for jobs to exist, but we need savings and investment for highly productive jobs. A wealth tax is borne over time by assets that are saved and invested; it obviously isn't by the portion that's consumed. If you tax Bezos' and other billionaires' wealth, Amazon and other firms will face sharply higher costs of capital, which can indeed be seen as a partial "dissolution".
You don't fix this by penalizing people that are successful. You fix this by preventing companies from buying all their competitors, or unfairly running them out of business. If we actually enforced existing anti-trust laws, with an eye toward NEVER allowing any company grow to be too big to fail via acquisition, we wouldn't be in this mess. (Note that companies that actually grow organically (Amazon/AWS is a good example) aren't hindered by this. Their success attracts other competitors (Azure, GCP, even IBM and Oracle), and competition is what should be encouraged for the good of society.)
Interesting, so billionaires directly affect the majority of jobs, and the rest of the jobs may be indirectly affected by billionaires and their job prowess as well. GDP growth is roughly 2% a year. Everyone here ok with GDP contraction for our future? How do we fund all the social experiments that many people want?
> The existence of billionaires clearly undermines the core principles of democracy which is that all people have essentially the same political power.
Why is this axiomatically good, though? We should not be maximizing adherence to some theoretical democracy, but to a more abstract idea of how to best organize a successful society.
Billionaires are good for society. elon musk and jeff bezos are leading the way into space and that is huge for humanity. If you tax them you will literally stop humanity from becoming multi-planetary.
The comparison to aristocracy is absurd. The US was founded abolishing the class system because the wanted equal opportunity, not equal outcome.
>Billionaires are good for society. elon musk and jeff bezos are leading the way into space and that is huge for humanity.
Enough with the blanket statements, Sure bill gates is ok but just yesterday the front page had a story of the Sackler family and how they amassed billions by pumping the united states with opiates. They literally killed thousands and ruined the lives of millions, while destroying American society. Billionaries are people, some evil some good.
Also, the point of a government is to provide for it's citizens (with taxes) not to hope that in a 100years we can settle on other planets. And btw, in that scenario we would not be the ones who end up on Elysium. As much as SV programmers like to think they can be part the billionaire class you are not and will never be an oligarch.
I thought it was Doctors who pumped the United States full of opiates.
I also thought the demand was a result of political policies that didn’t provide support for communities who were impoverished by the globalization of manufacturing and other industries.
Yes, the Sackler’s profited, and were irredeemably bad actors in this, but they are just one part of the story.
> the point of a government is to provide for it's citizens (with taxes)
Isn't this a sort of oxymoron? The taxes come from other citizens. The ones who are paying a majority of the taxes are not provided for by the government. Government should seek to provide everyone equal protection of their rights.
> Billionaires are good for society. elon musk and jeff bezos are leading the way into space and that is huge for humanity. If you tax them you will literally stop humanity from becoming multi-planetary.
This argument really doesn't hold water.
For a start it implies that becoming a multi-planet species would be impossible without Musk or Bezos holding vast personal wealth. There is no reason to believe that.[1]
It also implies that Bezos couldn't possibly fund Blue Origin if he was worth (say) a paltry $100 billion, instead of his current $190 billion.
[1] You could, for example, use some of the money from a "billionaire tax" to fund NASA.
>For a start it implies that becoming a multi-planet species would be impossible without Musk or Bezos holding vast personal wealth. There is no reason to believe that
There is 50+ years of evidence that we will not become multi-planetary without private funding. The only reason NASA was funded enough to get to the moon in the first place was because of the cold war. Very unlikely it would have happened otherwise.
The soviet union was the first one to go into space and had far more of the outer space firsts than the US. They also had no market incentives to begin such projects.
It's ridiculous you could even bring up the cold war without acknowledging the major scientific and engineering breakthroughs done by communist societies.
Both the US and Soviet Union basically stole rocket tech and rocket scientists from Germany after WW2. The only reason the US and soviet governments supported and funded those rocketry efforts was due to the military and intelligence benefits.
> For a start it implies that becoming a multi-planet species would be impossible without Musk or Bezos holding vast personal wealth. There is no reason to believe that.[1]
I'd say there's significant argument that it is indeed impossible. Democratic governments as a rule do optimize for cost where currency is created by fiat. Private capital generally does in order to stay in business and not go bankrupt. There's tons of recent evidence showing that existing space business is incredibly inefficient in cost.
> You could, for example, use some of the money from a "billionaire tax" to fund NASA.
Alternatively, you could allow billionaires to donate some of their billions, untaxed, into non-profits which they control and which have humanity-benefiting goals like space colonisation or clean energy or medical programs.
There could be problems, however, with these non-profits hoarding vast amounts of resources long after the billionaire dies, at which point a wealth tax on the non-profit's unused assets might make sense.
To state it more accurately, a wealth tax will lower the odds that elon musk will colonize mars. even with his wealth... i think it's safe to say the odds are agains musk colonizing mars.
he doesn't pay income tax cuz he usually have income, no salary. he just has stock, and he lives off debt against the stock. he will be forced to sell stock to pay a wealth tax. he will have less control over his companies.
It's true, it's possible a nation-state could colonize mars. But there is a problem for the US.
Presidents come to office, scrap the previous adminstration's space goals, create their own new goals and then their's are scrapped by the next admin before they come to fruition. It takes more than 8 years (the max a president can serve) to really follow through on an ambitious vision for space.
Yeh, that true. It's just hard to create a sustainable program. STS was retired. ISS will be probably be retired in 2025.
George HW Bush wanted to go Mars then scrapped it when he got the price tag.
In 04, George W Bush wanted to go to the moon by 2020.
Obama scrapped the moon 2020 plan and planned to go to Mars by 2030.
Trump is sending them back to the moon then Mars.
read "the case for mars" to get the story on the dysfunction at nasa and the presidents changing every 8 years. It's from the 90s and talks about how bush wanted to go to mars but the space station won out for the funding.
And in the ensuing time, those with money and influence built up the class distinctions in the legal and tax codes. The comparison isn't an exact match, but the class distinction IS.
Bezos may be contributing to the privatization of space, but he's doing it by exploiting the ones who keep the merchandise flowing through the cash cow. 19th century robber barons honed some of that machinery, Amazon has capitalized on and honed to a fine sharpness that blade.
> The US was founded with an extreme class system -- slavery, and aristocratic-only male-only voting.
The US is the story of a country that is constantly struggling to live up to its founding ideology. Slavery was widespread globally at that time, and ended up fighting its most deadly war to end it. Over time its flaws were sought out and eradicated to give way to the most prosperous and free country in human history, all within a couple hundred years.
The founders were not perfect (no one is), but did realize the evils of slavery and some did end up releasing their slaves.
I find it ironic that the US which was largely founded by people who left their home because of entrenched economics and limited opportunities and who used to have some of the highest taxes for the top brackets and strong eversion to the development of a new aristocracy have after Reagan developed into a nation of defenders log the superrich.