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This article was flagged by users, presumably because it is a dupe of the discussion at https://news.ycombinator.com/item?id=10826838 .
I thought it was an interesting read (though I don't agree with all, only some) and would be a good complement to PG's article.
I think it is important to evaluate PG's essay within context. He, like most people in Silicon Valley, is stuck in a bubble and views the rest of the world through a very distorted lens. That's where much of his rhetoric about wealth creation comes from: he's surrounded by people (founders) who create value in the form of software. When a portion of those founders become rich, he looks at himself as a promoter of inequality.
What he doesn't realize is that the vast majority of wealthy people did not become wealthy by creating value, but by playing zero-sum games -- and then by influencing politicians and bending the system to their will so as to guarantee that they will hold on to as much of that wealth as possible.
I think the question PG needs to address is this: what is the justification for non-founder executives getting paid tens of millions of dollars at the expense of other employees? What is the justification for those top-level salaries to exist even when the company is doing badly and regular employees don't see a dime in raises or bonuses that year?
Bottom line is that the type of wealth PG enables founders to create, and the subsequent inequality, is not the type society has a problem with. Sure, some people may balk at the idea of an instant-messaging app being valued in the billions, but those controversies tend to be completely detached from the inequality debate.
Now, if PG ever starts preaching that founder CEOs should pay themselves millions of dollars while keeping salaries as low as possible... that would be a different story. As things stand though, I don't think he's part of the problem and measures to address inequality won't really affect him and his crew.
I hope I didn't go too overboard by dissecting PG's essay like this, but I felt it was necessary to correct many of the items that I read. It may seem spurious now, but economic inequality is relevant for the tech industry, too. The massively increased productivity that information technology provides is very infrequently distributed proportionally to the people who actually forged it-- exactly the same condition as…
It would have been helpful if the many quotes were visually distinct, it would make for an easier read.
I also think both you and PG aren't in as much disagreement as your response indicates.
My interpretation of PG's article was that he primarily wanted to highlight the wealth-creation aspect, and contrast it to rent-seeking. I think you'd both agree on many concrete fixes (reduce rent-seeking in the financial system, a political system mainly driven by money, health-system reform, etc). Though this is my guess obviously.
This article was flagged by users, presumably because it is a dupe of the discussion at https://news.ycombinator.com/item?id=10826838 .
We have had many submissions in the past that were responses to another submission. In my opinion, this submission was wrongfully flagged, and should be unflagged so that it can go back to the top where it belongs.
This article was flagged by users, presumably because it is a dupe of the discussion at https://news.ycombinator.com/item?id=10826838 .
With all due respect, content like this is better served in an article format, rather than a comment to an existing (and already very crowded) discussion. We have had many submissions in the past that were responses to another submission. In my opinion, this submission was wrongfully flagged, and should be unflagged so that it can go back to the top where it belongs.
Some users would like to see two heated discussions about income inequality on the front page, but I can assure you that many others would not.
An HFT isn't entirely useless. You might want to sell 66 shares of Apple stock and somebody else wants to buy 145 and for you both to get a timely fill, there has to be some kind of middleman. If you think HFTs are bad, just take a look at floor traders -- the kind of people who will front run you if they see you coming and they know what you want, or will take a bathroom break if they don't want to trade with you. R…
http://www.bloombergview.com/articles/2014-04-02/high-freque...
This is spot on. I think it is important to evaluate PG's essay within context. He, like most people in Silicon Valley, is stuck in a bubble and views the rest of the world through a very distorted lens. That's where much of his rhetoric about wealth creation comes from: he's surrounded by people (founders) who create value in the form of software. When a portion of those founders become rich, he looks at himself as…
I definitely agree that its a shitty situation. However, as far as I understand it the justification is that executive salaries are public which led to a salary arms-race where companies are forced to throw more and more ridiculous sums of money at executives.
This is spot on. I think it is important to evaluate PG's essay within context. He, like most people in Silicon Valley, is stuck in a bubble and views the rest of the world through a very distorted lens. That's where much of his rhetoric about wealth creation comes from: he's surrounded by people (founders) who create value in the form of software. When a portion of those founders become rich, he looks at himself as…
Seems like people are increasingly displeased at founders' preferential tax treatment of their shares though.
PGs articles aren't wrong - but they are second order, when we need a first order response to a current evil [ before it leads to bloody revolution ] If you look at income distribution its a hockey stick - you really have to slap yourself on the face and realise there is no middle class - what you thought of as professional-middle-class-contributor is actually college-debt-burdened-lower-class - no matter how many ye…
You're going to compare working graveyards at 7-Eleven to slavery?
You should read a little bit about slavery and human trafficking. https://en.wikipedia.org/wiki/Slavery I suspect most slaves would not agree with you.
What makes successful startups so profitable is they displace a large and less-efficient system with a small, efficient one. Efficient in terms of human capital, oftentimes: look how few people AirBNB employs directly, yet have a market cap larger than Marriott. The returns on capital its investors have seen is a result of the substitution of capital for labor (in part).
Of course, to the extent that the creation of a marketplace unlocks value, it can create value de novo, rather than shifting wealth from one sector/company to another. But with 'smart' startup founders seeking monopoly rents (cf. Peter Thiel, writing/speaking virtually anywhere), those returns are also concentrated, and will not trickle down to the larger population.
Furthermore, the wealth inequality cryoshon is writing about is not driven by startups, it's driven by a general breakdown in the implicit social contract between capital and labor. As OP notes, Piketty goes into great detail about the historical causes and likely effects, but the tl;dr (and his book is _very_ tl) break down to: when returns on capital are higher than overall economic growth, wealth will tend to aggregate.
As fans of numbers and algorithms, I hope HN readers can appreciate the simple beauty of that formulation. Piketty's suggested policy response is simple: high taxes on aggregated wealth. Which, after reading (~80%, honestly) of his book, I have to agree with.