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Challenging the myth that the rich are specially-talented wealth creators

blogs.lse.ac.uk

81–90 of 228 posts

Re: Challenging the myth that the rich are specially-talented wealth creators

#81
post #35

HN tends to be extremely reactionary to posts like this. Perhaps because the tech/startup scene is all about getting rich quick, or perhaps because HN has come to partially reflect the personal views of PG. There will be a reckoning. The world is 'unsustainably unequal' at the moment. There are huge problems on the horizon - superbugs, climate change, resource depletion, environmental degradation, overpopulation. The…

The funny thing is that the leaked memos to the super-rich describe exactly those threats to their wealth and existence.

http://politicalgates.blogspot.com/2011/12/citigroup-plutono...

Re: Challenging the myth that the rich are specially-talented wealth creators

#82

> If you buy some shares in M&S or BP on the stock market, the money you pay goes to the previous owner, not the company. You are what Keynes called a ‘functionless investor.’ When such so-called ‘investments’ pay off they extract wealth from the economy without creating anything in return. This doesn't seem very coherent. How could a company ever sell stock to raise capital, if the people who bought that stock didn'…

I think capital allocation is sometimes too abstract for people to see the value in.

If I bought some land, built a windmill with my bare hands out of stone and wood that I cut and shopped myself, and became the flour producer for the entire region, people tend to say it's a deserved reward.

If I bought that company, paid people to do all the work setting up a dozen more windmills, paid people to manage the new bigger company, and then sold it again to the highest bidder, now suddenly I'm rent-seeking and profiting off of the poor. Even if those things wouldn't have gotten done without this intervention.

It's like a Ship of Theseus: If you split up the flour company into its constituent pieces and slowly hire other people to do them, at what point does it become unethical rent-seeking?

Even someone who buys an income stream solely to ride it out with the minimum amount of maintenance is at least taking a risk to their capital. And even if they protect it with an insurance policy or similar, they're at least locking up the money for a dedicated purpose usually for an extended period of time. People are often afraid of taking risk or limiting their options, so people who do so are providing some value.

Re: Challenging the myth that the rich are specially-talented wealth creators

#83

Part of the reasoning here is that rentiers are not contributing to wealth creation and therefore their earnings on the rent are parasitic, therefore 'unjust and dysfuctional': "Since it’s a payment for nothing that didn’t already exist, it’s a deadweight cost, and so not only unjust but also dysfunctional for the economy. " The practice of renting exists as an option to owning. By renting, renters can engage in an a…

"In the example of home rental, making homes available for rent enables families to live in accommodations that they would not be able to purchase. These accommodations are not without cost to the owner: Taxes, utilities, maintenance, security and administration are all associated costs that rent payments offset. What the rentier provides in most cases, is a better quality of life than the family could have if they w…

Many very desirable localities are experiencing this in US, though people generally still can find lower costs with exceptionally longer commutes.

In Southern California the shortage in these desirable are is mostly driving by locals. In Santa Monica, I have observed a lot of development get killed by local activist groups who are mostly made up of not wealthy people on rent control. They have no upside that I can think of in the skyrocketing prices or rents. Though they are protected from the consequences by rent control. Yet they still very consistently vote against more housing, even if it's 20% mandatory affordable below market units...

The reasoning seems to be "if only all these gentrifiers stopped moving here and those who are here moved out!", but that's not gonna happen so long as jobs are blocked by impassible traffic.

So in Santa Monica, it's not the rich that are creating the problem. They are simply optimizing their lifestyle to have more free time by using resources at their disposal. If slightly more dense housing was built (Santa Monica averages about 1.5 floors from my observation), it could easily double the supply with only a modest gain in height. Utilities would have to be expanded, but that can be funded with the developments.

Re: Challenging the myth that the rich are specially-talented wealth creators

#84

Earlier quoted context omitted.

It is a finger pointing game today. The rich say, it is not our fault, the corporations are doing that. The corporations say: We have to do that, because the "market" is demanding higher interest rates! So, who is to blame: "The Market"?? The politics that do, what the "market" wants, or the workers, that do not work 10% fast every year to secure the rising interest rates? We have created a system, that allows everyb…

They won't need people to clean their rooms and empty their trash. That's what the robots are for. They just stay their safe rooms with Tom Perkins waiting for his kristallnacht.

Then, they also can enjoy the (sole) company of robots.

Re: Challenging the myth that the rich are specially-talented wealth creators

#85
post #41
post #35

HN tends to be extremely reactionary to posts like this. Perhaps because the tech/startup scene is all about getting rich quick, or perhaps because HN has come to partially reflect the personal views of PG. There will be a reckoning. The world is 'unsustainably unequal' at the moment. There are huge problems on the horizon - superbugs, climate change, resource depletion, environmental degradation, overpopulation. The…

i understand your sentiment here, and in the view of history this is true. The problem is that now, or very soon, we are/will be in a state where the 1% can easily put down the 99% politically, socially, financially and yes militarily. So there may be a reckoning at some point. But it will and badly for the 99%. This was mostly true throughout history as well, it's just become a more certainty now.

"I can hire one half of the working class to kill the other half."

Re: Challenging the myth that the rich are specially-talented wealth creators

#86

Honestly, I do not even care about how "fair" the wealth distribution is. They have their billions. All I want is some job security. I think most average people feel the same way.

My feelings exactly. Just because they have an outrageous amount of money doesn't mean there isn't enough for me.

Re: Challenging the myth that the rich are specially-talented wealth creators

#87
post #28

Earlier quoted context omitted.

Yes, it is precisely that. It's very easy to take shots at extremely rich people, because they won't bother to show up and defend themselves and nobody else will either. The main problem I have with this is that it's not very interesting and doesn't solve anything.

Should extremely rich exist as a thing? What benefit does it bring humanity over the alternative?

This is the primary problem with the discourse. People can agree pretty universally a tyrant, dictator, or emperor is a bad thing. You do not want heredity to determine power, and you do not want one individual to have violent dominance over anyone else, because you will often be the "anyone else" if you are not the aggressor.

But that is about the only difference between how the modern gears of power operate versus how they did millennia ago. Rather than just kill your brothers and claim the throne and execute the dissidents and having your firstborn son inherit the crown from you, your children inherit ludicrous wealth that translates into the same power to buy the violent arm of the state for your own ends.

Except now the peasantry cannot just storm the castle, behead the king, and replace him with another. There are kings from across the globe that control your society through its economy, and the present incumbents of radically concentrated power will argue everyone is king when they own wealth in the global capitalistic system.

That, in practice, is pure deception[1], but you will have people by thousands at the bottom congregating to defend those off the chart, despite the ones at the top constantly using their power to harm all those below them.

If we did have what the rich claim we do - democratized distributed power - we would need dramatically less wealth inequality, because that wealth, and the distribution of it, represents who has authority in the global capitalist economy. That is not an argument for socialism, communism, fascism, anything political. It is a reflection of tautological truths about having a global capitalistic market system that determines who is powerful by way of capital and fiat ownership, and that if you want to have a more democratic humanity you must first deal with the fact that money is power, and when power is aggregated into the hands of very few, you don't have democracy.

We are not at the point to argue practicalities, or dogma, or anything else beyond understanding. What we need is just for near universal acknowledgement that this paradigm exists, is how the world operates today, and that you probably would want to do something about it because we can already universally agree we don't like tyrants, and that we should not like tyrants in any form they take, even the ones that are not immediately and obviously apparent to most.

https://www.youtube.com/watch?v=QPKKQnijnsM

Re: Challenging the myth that the rich are specially-talented wealth creators

#88
post #46
post #34

Earlier quoted context omitted.

Revolution is the final answer, as always, the majority will win no matter what. Taxes, welfare etc slow-down/mitigate that, but that's not enough for the so-called 99%.

I'm not sure I call a revolution "a win" - see the French revolution (hundreds of thousands dead in cleansings, country ruled by ruthless dictator) or Bolshevik or Chinese Communist Revolutions. I'm finding it hard to come up with a positive counterexample.

American revolution? Is that one a flop? (I mean for now, future trajectories aside.)

Re: Challenging the myth that the rich are specially-talented wealth creators

#89

Earlier quoted context omitted.

Does not work, will create just another layer of very rich. Look at Russia after 1992.

I don't see how russia proves anything. to me, what didn't work wasn't wealth redistribution, but planned economy. And planned economy has become mire viable since then, thanks to computers.

Russia after 1992 made experiment in wealth redistribution within capitalist system restored. The resjlt was devastated economy and creation of oligarchs. Read 'The Iron Heel' by Jack London, this is what happened in Russia when it turned back to capitalism.

Re: Challenging the myth that the rich are specially-talented wealth creators

#90

> If you buy some shares in M&S or BP on the stock market, the money you pay goes to the previous owner, not the company. You are what Keynes called a ‘functionless investor.’ When such so-called ‘investments’ pay off they extract wealth from the economy without creating anything in return. This doesn't seem very coherent. How could a company ever sell stock to raise capital, if the people who bought that stock didn'…

I think capital allocation is sometimes too abstract for people to see the value in. If I bought some land, built a windmill with my bare hands out of stone and wood that I cut and shopped myself, and became the flour producer for the entire region, people tend to say it's a deserved reward. If I bought that company, paid people to do all the work setting up a dozen more windmills, paid people to manage the new bigge…

Rent seeking is jargon. It doesn't refer to running a business.

https://en.wikipedia.org/wiki/Rent-seeking

https://en.wikipedia.org/wiki/Economic_rent

It refers to the economic consequences of things like regulatory capture and corruption.

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