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Billionaires Build

paulgraham.com

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Re: Billionaires Build

#551

Post by dcolkitt »

alisonkisk wrote: post #511
dcolkitt wrote: post #263

Earlier quoted context omitted.

Average worker compensation has nearly doubled in the past 20 years.[1] Almost exactly in line with aggregate productivity levels.[2] What I'm guessing you're referring to is median household income. Which is a quite different number than mean worker income. The former has stagnated relative to the latter primarily because a massive number of prime-aged workers, in particular young men, have dropped out of the labor…

Adjusted for inflation, income growth is 0. Capital is capturing all the productivity gains. https://www.pewresearch.org/fact-tank/2018/08/07/for-most-us...

The link you're citing is citing median wages. Productivity is measured in terms of mean output. You're comparing apples to oranges.

Mean wages have closely tracked productivity metrics. Median wages have fallen relative to mean wages. That strongly implies that the issue isn't decoupling between wages and productivity, but faster growth in the output of high-skilled workers relative to low-skilled workers.

This is confirmed by the empirical research[1], which shows that 61% of the divergence between median wages and productivity has come from income inequality between workers. Only 25% has come from rising corporate profits.

[1]https://www.epi.org/publication/ib330-productivity-vs-compen...

Re: Billionaires Build

#552

Post by jessaustin »

IanCal wrote: post #248
lotsofpulp wrote: post #228

Earlier quoted context omitted.

So what should happen to your assets when the total of their market capitalization crosses the $1B line?

In good idle games they shift the goal once you hit more boring levels. Stealing partly from someone else I can't find a reference for: Ownership capped at 1 billion, you get a sticker saying "I won capitalism" and all further growth and income goes to the government for social programs. You get a new ticker that estimates lives saved and people homes/fed/educated - that becomes your new boasting figure. Not entirely…

...you get a sticker...

Consider for a moment what privileges would have to attach to this sticker, in order for the billionaires to let this through Congress. Definitely they would still want to have control of dominant cultural narratives, and they'd still want to write all the laws, and those of them who appreciate fabulous personal possessions would still appreciate those. The administration of this sticker would be quite complicated...

Re: Billionaires Build

#553

Post by travisoneill1 »

nicoffeine wrote: post #425
kevas wrote: post #312

About to write some possibly controversial stuff... My early life, I grew up and had middle to upper middle class all around me. In my late teens and early twenties, there were times I had to scrounge my cushions and rummage through my car to find enough change to eat a meal. We live in a society where everyone has access to a computer—personal or local library. We have all the information we need to bring (the major…

This seems like a sheltered view of poverty. When you live in poverty, there is no such thing as peace or thinking about the future. You are trying to cope minute-by-minute with hunger, abuse, fear, and limitless insecurity. You know someone who is in jail, someone who has been shot/stabbed/murdered, and plenty of people who did all the right things and still failed to make it out. In a nutshell, there's no such thin…

Why do I meet so many happy poor people when I'm out of bubble, then?

Re: Billionaires Build

#554

Post by winston_smith »

mactrey wrote: post #411
winston_smith wrote: post #362

Earlier quoted context omitted.

> you have to be able to capture the difference between the value of someone else’s work and what you pay them to do it This is the textbook definition for how wealth is created, and it's exactly what's supposed to happen in every transaction in the marketplace. You buy an apple for $1 and it brings you $1.10 in value. You have captured the difference between its value to you and its value to the seller, and the ten…

This ignores any effects of market power. Amazon is not bargaining with its workers in the way that you are bargaining with Alice for her apple - a lot of these workers have very few other options to sell their labor. And sitting at home and not working is a false choice in today's America. That inequality in pricing power helps maintain the gap between wages and marginal revenue production of labor - and as OP says,…

OP's argument was that capturing value itself is bad. But I suspect you don't check to see if your apple sellers have plenty of other potential buyers before buying apples. If nobody else is buying, then the seller lowers the price until the market clears, and you get a bargain. Lucky you.

Re: Billionaires Build

#555

Post by jessaustin »

cwkoss wrote: post #513
api wrote: post #314

Earlier quoted context omitted.

The pandemic happened to hit while we had a particularly idiotic populist demagogue in the White House, but even if we'd had someone more competent I still agree that China would have done better. Assuming you believe their numbers, China seems to be doing better than most of the world. I chalk up China's governmental competence to the number of scientists and engineers involved in their government. It may be authori…

Plenty of our democratic leaders have made idiotic self-serving decisions concerning the pandemic too (I'm looking at you, Nancy Pelosi)

I don't think she's ever been a scientist or engineer?

Re: Billionaires Build

#558

Post by aerosmile »

quietbritishjim wrote: post #448
rufus_foreman wrote: post #444

Earlier quoted context omitted.

>> However he does pay less taxes than his secretary No, he does not. He claims he paid $1,850,000 in federal taxes in 2015, do you think his secretary earned that much, let alone paid that much in taxes? In addition: “In 2019, Berkshire sent $3.6 billion to the U.S. Treasury to pay its current income tax,” Buffett said in his annual letter to shareholders. “The U.S. government collected $243 billion from corporate i…

>> However he does pay less taxes than his secretary > No, he does not. He claims he paid $1,850,000 in federal taxes in 2015, do you think his secretary earned that much, let alone paid that much in taxes? I think it was clear that they meant as a fraction of income, not as an absolute value.

The whole Buffett vs his secretary tax thing is just as misunderstood as the 1992 hot coffee lawsuit against McDonald's, which at the time was considered to be frivolous and a sign that the legal system in the US is broken. I recommend reading the actual facts behind this case [1] - it will make you appreciate our legal system.

Similarly, the Buffett story can be traced back to an interview he gave in 2007 where he shared that his tax rate was 17.7%, whereas the average tax rate of the employees in his office was 32.9% [2]. On the surface, this is shocking and will make you want to rebel against the system. But a closer look reveals that the bulk of Buffett's income comes from dividends and long-term capital gains, which are taxed at a much lower rate than ordinary income. We might argue about the specific tax rate numbers, but fundamentally there are good reasons for those tax rates not to be identical [3], and as such Buffett paying a lower tax rate should not be causing any outrage (don't confuse this with my view of the overall tax code, I am just focusing on the specific example above).

By the way, you may wonder why Buffett does what he does, including giving the interview I referenced above and going through the trouble of collecting the tax rate of his employees, sharing his own tax rate, etc. He's coming across as being generous for voicing his support for a higher income tax rate for the wealthy (aka, the Buffett rule). But in reality he's just deflecting from other potential sources of taxes, such as taxing people on wealth vs on income (which someone in his wealth bracket can easily live without). This scheme becomes even more obvious when you observe his attacks on Elizabeth Warren [4] (who is pro-wealth tax), while being more "aligned" with AOC [5].

[1] https://www.caoc.org/?pg=facts [2] https://www.fool.com/taxes/2020/09/25/why-does-billionaire-w... [3] https://taxfoundation.org/why-capital-gains-are-taxed-lower-... [4] https://www.realclearpolitics.com/video/2015/03/02/warren_bu... [5] https://www.cnbc.com/2018/12/04/ocasio-cortez-and-warren-buf...

Re: Billionaires Build

#559

Post by treis »

ac2u wrote: post #534
treis wrote: post #144

Earlier quoted context omitted.

What examples can you remember?

I think this was the thread I remember reading at the time where people came up with examples that don't have to be deceptive. https://news.ycombinator.com/item?id=1197674 There was also a quote from someone in yc saying that the question wasn't really that important (probably why it got removed).

I'm glad you found it, but I don't really see those as really changing my point. They looked for people that beat the system. They're amusing anecdotes when it's a plucky college kid hustling for a job. But when it's a head of a billion+ company beating the system (i.e. laws protecting workers and/or the general populace) it's a different story.

Re: Billionaires Build

#560

Post by pdonis »

curun1r wrote: post #330
throwaway09223 wrote: post #259

Earlier quoted context omitted.

This isn't a straw man, it is an extremely common belief and it deserves to be addressed and debunked. My social media is stuffed to the brim with people posting exactly this sentiment. It is true that there are other, more reasonable beliefs.

I think Paul is fundamentally not understanding the argument behind “billionaires exploit workers.” It isn’t that billionaires are fundamentally bad people or that they’ve accumulated their wealth through misdeeds. But what it is is that it’s basically impossible to accumulate that amount of wealth through work. Instead, you have to be able to capture the difference between the value of someone else’s work and what y…

> Paul would never fund a founder who wanted to divide all profits among employees.

Why not? He explains what YC is looking for in a founder, and I don't see "what will the founders do with the profits" mentioned at all.

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