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Billionaires Build

paulgraham.com

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Re: Billionaires Build

#451

Post by paxys »

rufus_foreman wrote: post #444
drewrv wrote: post #235

This essay uses a weak straw-man: the only way to become a billionaire is by exploiting people I think the "principle of charity" or "steel-man" criticism of billionaires isn't that every single billionaire is directly exploiting people. It would be closer to something like this: The problem is that our society has feedback loops that make it hard to escape poverty, and feedback loops that let the wealthy amass more…

>> 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…

Warren Buffet pays a smaller percentage of his annual income towards taxes than his secretary. Income tax brackets were created to not make it a regressive tax, but it very clearly is that today. 20% of your income is a lot more valuable to you when you make $50K vs $50M a year.

Re: Billionaires Build

#452

Post by codyb »

lotsofpulp wrote: post #228
chillwaves wrote: post #211

Earlier quoted context omitted.

Neither category should exist. The fact billionaires exist is an indictment against our system and how we allocate resources.

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

I also am not sure how you're supposed to tax something like stock.

If Bezos sold all of his stock in Amazon, well, for one he'd certainly be worth a lot less fairly rapidly as the stock collapsed based on his massive sale of it.

He's taxed on the sale of his stock as far as I understand it, although the capital gains tax should presumably be higher than the tax on earned wages.

It seems sensible that when you're putting hours in, you'd get taxed at a lower rate than someone whose money made them more money.

But... if Bezos has 10 million shares and they're worth 100 billion dollars, do you... take his shares away even if he's not selling them just because his assets are worth more than a billion dollars?

I think it's fair to say the current state of affairs where his employees are working at barely livable wages and getting carted away in ambulances from his warehouses is certainly untenable.

At that point the federal government needs to step in and say that these places aren't paying these workers enough to live a comfortable lifestyle and support a family.

It's too bad the extremely wealthy are also so able to pervert our systems of governance through lobbying efforts which they can afford.

Re: Billionaires Build

#453

Post by akg_67 »

Aunche wrote: post #391
curun1r wrote: post #330

Earlier quoted context omitted.

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…

Bezo's wealth comes from his shares, which he had since the beginning. 20 years ago, anyone who worked at Amazon could have used a small fraction of their wages to buy Amazon shares. If they had, they'd be millionaires. However, that's a risk that only already rich people are willing to take.

Tell that to Amazon warehouse worker making $10-20 an hour that instead of putting food on the table, roof on the head of his family, he should have bought Amazon shares. Bezo is epitome of what’s wrong with America and American “capitalist” system.

Re: Billionaires Build

#454

Post by 8note »

phnofive wrote: post #160

‘Make something people want’ is hard for me to understand - is this a fair expansion? Make something people want that can evolve into a commodity, ensure only the inventor can profit (e.g. with IP protections), and architect your business such that returns scale independently of operation costs.

The last one seems like the most important one for producing billionaires. That ensures that the owner class gets the benefits

Re: Billionaires Build

#456

Post by friedman23 »

drewrv wrote: post #235

This essay uses a weak straw-man: the only way to become a billionaire is by exploiting people I think the "principle of charity" or "steel-man" criticism of billionaires isn't that every single billionaire is directly exploiting people. It would be closer to something like this: The problem is that our society has feedback loops that make it hard to escape poverty, and feedback loops that let the wealthy amass more…

>This essay uses a weak straw-man: the only way to become a billionaire is by exploiting people

It's not a strawman, people repeat this as fact in any far left leaning forum. To socialists all work in a capitalist system is exploitation.

Re: Billionaires Build

#458

Post by justinboogaard »

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…

Bezos is not a billionaire because he pays people less money than what he is able to capture from their work. He is a billionaire because he owns a lot of shares in Amazon, and Amazon is a trillion dollar company.

There are examples where a group of people came together and decided to share in the profit or loss of a venture, and worked on it as employees (REI is a popular US outdoor equipment company that was started this way).

Amazon seems to have chosen a path where instead of asking individual employees to take a loss or break even for 20 years, they paid their employees while the company absorbed those losses and scaled.

The "billionaire" bit here seems arbitrary. Bezos is a billionaire because he owns a lot of shares because he didn't have a lot of cofounders. If he had started Amazon with 20 different cofounders then he (probably) wouldn't be a billionaire. Either way, the concept of exploiting labor for profit doesn't impact his billionaire status.

I'd be open to having a separate discussion around what it means to "exploit" labor, but on this topic I think moving the conversation from the concept of billionaire founders to how the system oppresses those that fall below a certain income would be more productive.

I don't know why Paul funds or doesn't fund certain founders, but if I were Paul I would be funding those founders that I believe can start companies that will eventually have stock collectively worth a lot of money. From the stories I've read - most of the founders that Paul funded DO plan on splitting their profits amongst all their employees - purely by virtue of when he invests in a company, the founders usually were the only employees. If I was Paul my dream would be that a company started by a small group of initial founders would be able to get big without having to "exploit" (or hire) any people at all.

Re: Billionaires Build

#459

Post by somethoughts »

somethoughts wrote: post #442
mightybyte wrote: post #385

Earlier quoted context omitted.

> the only way to become a billionaire is by exploiting people Here's a slightly different take on this idea: The only way to become a billionaire is to use leverage. I think this is a much more defensible argument. You can't become a billionaire by yourself. You have to have some mechanism of leverage to magnify your impact. Hiring employees is a form of leverage. Using a computer is a form of leverage. Putting your…

Yes - perhaps PG should have added qualifiers along the lines of "YC originated billionaires" versus attempting to cover all billionaires that have ever existed. It seems somewhat naive to say that every person with a billion in their bank account has built something and always is the best allocator of capital. Oil and Gas billionaires leverage the fact that society hasn't figured out how to factor in negative enviro…

As a follow-up thought - perhaps when Forbes makes its Billionaires List, instead of a basic sort ranked by on net worth, Forbes should incorporate Environmental, Social and Governance (a.k.a. Triple Bottom Line accounting) like factors similar to those starting to be used for Equity investing [1] and do a final ranking based on ESG x net worth.

[1] https://en.wikipedia.org/wiki/Triple_bottom_line

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