Interview with Paul Graham

Why is disincentivizing the accumulation of massive wealth in a small subset of the population bad for society? What is the advantage to society of an individual accumulating tens of billions of dollars worth of wealth?

Once upon a time I saw pg as a guy that was leveling the playing field, and I think he succeeded because of that.

As another comment pointed out, concerning his writing about the wealth tax, I think he's lost sight of the fact that's there's more wealth to be created that's outside the scope of what the wealth advisors for the uber-wealthy are familiar with.

It's dis-incentivizing wealth creation in general and taking ownership away from people that build companies.

There's a compelling argument that growth (that accounts for human rights and protecting the environment) is the best way to help the most people the fastest: https://press.stripe.com/#stubborn-attachments.

Policy that dis-incentivizes wealth creation creates perverse incentives that limit growth.

We're better off with policy that limits how wealth can be leveraged into political power, and policy that helps protect and improve the lower bound of society. That said, I think it's likely reasonable to limit how wealth can be passed down generations (to prevent things like dynastic wealth, but that's a separate issue and I don't know enough to really comment on it).

Wealth creation isn't zero-sum, just because someone builds a business and creates wealth doesn't mean they're taking it from others. We want a society where people are incentivized to create and grow wealth as much as they can (within bounds for environment protection and human rights), not just to some arbitrary cap before it gets taken by the government.

All of the above ignores real modern examples that directly leverage their wealth to do things that would not be done otherwise (Elon Musk: SpaceX, Tesla, Neuralink, Boring # Bezos: Amazon and Blue Origin # Gates: Health and Public Policy). I think the general argument in favor of growth is better than these specific examples though because it's a more systemic argument about incentives for the structure of a society rather than relying on individuals and their choices.

There's also the implementation issues (which are real), but I'm not going to argue that bit just because a lot of good ideas are hard to implement but still worthwhile. The wealth tax though I think is both a bad idea and hard to implement. The bad idea bit is more important.

> It just comes across to me as a 'hate the rich' policy that creates perverse incentives.

Indeed, wealth tax sounds good because there are problems with income inequality and it's currently fashionable to hate the rich. But that's about where it ends, while second-order effects are ignored or at least not taken seriously.

Andrew Yang was one of the few high-profile Democrats brave enough to push back on it.

"I think the wealth tax is an idea, in spirit, that makes sense, given the wealth distribution. But in practice it would have massive implementation problems. There would be capital flight, wealthy people would renounce their citizenship. And the bigger problem isn’t even the money. It’s the annual inventorying of their assets. The truly wealthy in this country have zero interest in submitting to an annual audit of all of their assets. They barely know what all their assets are. And the last thing they’re going to do is report them every year and then pay a toll. So you would have massive compliance problems. And to me there are better ways to make this economy fair, though I understand the spirit of it and the intent of it. But I agree that it would be somewhere between problematic and a disaster in practice."

https://www.cnbc.com/2019/10/02/andrew-yang-wealth-tax-plans...

Right place, right time, long days.