An elusive billionaire gives away his good fortune | Hacker News Reader

An elusive billionaire gives away his good fortune

latimes.com

29 pointsgongfudoi21 comments

I'm repeatedly miffed that these articles admire rich people for giving money away, but they never recognize the good that they do for society in making the money in the first place. There's almost an implicit assumption that business is a necessary evil that we have to endure to enjoy the goodness of philanthropy.

Making money is not the same as creating wealth. I generally admire people more for the wealth they create than the money they accumulate.

Making money is not the same as creating wealth.

If you are referring to the fed or anybody who happens to having a high-end printer with a 20 dollar TIFF loaded, yeah.

the way to accumulate money is:

you create wealth. you give it to other people in exchange for money -- for promises to pay you back in wealth later. then accumulating money means you don't call in those promises, you just hold on to them. as long as you do that, other people got wealth you created, and you haven't gotten anything back yet. (well of course you spent some money, but the more you accumulate, the less you've asked in return for what you did)

That's what I would call first-order wealth (i.e. basic goods or services). It's the equivalent of the fish you give (or perhaps sell) that allows someone to eat for a day. Getting rich that way is a matter of knowing how much to charge and how much to spend so that you accumulate a surplus.

The problem with this kind of "wealth" is that it doesn't have much of a network effect.

I admire second-order wealth creators more. This kind of wealth is the knowledge you give (or sell) when you teach someone to fish. This creates the possibility of more first-order wealth without significantly diminishing the seller's wealth (unless the value of the knowledge itself is directly related to its scarcity).

The guy in the original article is clearly a first-order rich guy. While I applaud him for helping worthy causes, I'd admire him more if he were a creator of second-order wealth, perhaps by starting a YC-like company which would help start new companies in that industry.

Since money is fungible, the distinction you suggest is not meaningful. The money that a person saves by buying less expensive goods from a "first-order" business might very well be spent on training or other self-improvement.

If a "first-order" business is better at its business than it would be at a "second-order" business, then, due to comparative advantage, everyone will be better off with the "first-order" business saving people money that they can spend on "second-order" businesses, your admiration for the latter notwithstanding.

Look at amazon, ebay, and walmart -- very useful things to have. Selling lots of 'first-order' goods, cheaply, helps a lot of people tremendously.

It's not clear to me how to judge which is better, but it is clear to me that both are awesome.

While Walmart is basically a ruthlessly efficient first-order company, I'd say eBay is more of a second-order company since it sells a sales-enhancing service and Amazon is somewhere in between since it does both.

I disagree that one needs an implicit assumption that "business is a necessary evil" to admire what people like Feeney do. One simply needs to believe that charity is a virtue. Virtue on such a large scale as this is admirable.

Regardless of what one things of capitalism, wealth-creation, etc. one can still admire Mr. Feeney for his philanthropic activities.

The problem here is that when Feeney made his money, he had a good idea of what people wanted -- it was what they were willing to pay for. He's basically saying that after a lifetime of listening to what people want, he's going to second-guess them and decide for himself. This may be charitable, but it's also arrogant.

He's basically saying that after a lifetime of listening to what people want, he's going to second-guess them and decide for himself. This may be charitable, but it's also arrogant.

I am completely missing how you are making this leap. After reading the article, it seems like the whole point was that this guy wasn't an arrogant prick... paranoid about people seeing him eat grilled cheese sandwiches maybe... but not arrogant.

Would you rather he keep his money? Or are you taking issue with his choice of where to donate it?

Look, if people come to you and say "I would give you $5 if you did X, and $1 if you did Y," it's clear that they value X about five times as much as Y. Feeney is the guy who spends his career doing X superlatively well, until he's accumulated huge sums of money, then starts spending that money on subsidizing people who do Y. This sounds to me like a rich guy manipulating prices in order to accomplish his unpopular goals. The fact that people would rather spend money on what he sells than give money to the causes he supports is a signal, and it's a signal he's ignoring.

It's very easy to understand this in a simpler economy. Imagine that farmers consume coffee and soybeans, and they can grow coffee or soybeans. Different farmers have different preferences, which they express by swapping soybeans for coffee or vice-versa. Assume these cost the same amount to produce, and the ratio of their prices should tell each farmer what to plant: if the market price for one unit of soybeans is two units of coffee, a smart farmer will just grow soybeans, and swap some for coffee when he wants coffee. In this case, Feeney is an incredibly productive farmer, who grows an insane amount of soybeans, sells some for coffee, but just keeps on accumulating the rest. Deciding that he is tired of taking from the community and wants to give something back, he announces that he will trade his soy for coffee at a 1:1 ratio. What does this accomplish? It's 'charitable' because it helps the poor coffee farmers -- but it's also manipulating the market to give people an incentive to do something unproductive (ie. grow coffee) instead of something productive (grow soybeans).

What a jackass! If he just kept growing more soybeans (or maybe even started growing corn, or trading his bean-pile for assets like land) he would have made all the farmers better off. As it is, he's a market manipulator who tweaks price signals so people produce more of what they don't want. This is shameful.

I guess I get what your are arguing now, but it seems like a false analogy. He isn't using his money to prop up an unproductive industry/product, he is giving it away. To the point where he doesn't even allow people to know it comes from him.

You call his goals 'unpopular' ... I personally think that helping restart the higher education system in Ireland to be a fairly admirable goal. Is there anyone out there that honestly campaigns against Big Education? Using his money and influence to help bring Sein Fein to the table seemed admirable. It's not like this guy is handing out eight balls to the poor.

OTOH, you earn points for coming up with an argument that charity is really price manipulation and subsidy in disguise. But I'll make this argument... it's his money to spend. You also have money to spend. If you happen to like buying a steak for dinner instead of dish of corn, are you manipulating the market by deliberately supporting a less productive product? (from an acres/cost to calories standpoint)

"As it is, he's a market manipulator who tweaks price signals so people produce more of what they don't want. This is shameful."

What, exactly, is he manipulating the price of? Poverty isn't an industry and philanthropy is not the subsidizing of flagging companies.

This man made a ton of wealth in his day. And now he's redistributing it. It's axiomatically accepted by most people on News.YC that wealth is not a zero-sum commodity so his giving it away isn't depriving anyone of wealth.

This is besides the fact that not everything is a market and treating poverty and philanthropy like they are puts me in mind of a certain saying about people whose toolbox only contains a hammer.

Dang, that makes me want to be a billionaire too! Inspired, rms?

I want a billionaire friend >_>

Let's team up. How about you become a billionaire and I'll keep working on befriending you.

Hmm...sure, as soon as you give me the money!

It would be interesting to be a venture capitalist though. I could fairly easily save up enough to pay for someone's ramen, and I know at least one directionless hacker. Now all I need is a killer idea!

How about a web 2.0 site for parents (large potential audience) with social features that tells them that their ideas about parenting are deeply mistaken. That's bound to be a big hit.

And one for gamers telling them they shouldn't play so much, and should interact with real people; one for business people telling them they should work less and spend more time with family and friends; and one for all the web addicted geeks out there telling them the same thing.

Then, once they sign up, they can feel good about themselves because they did something! I'll call it webGym, since it serves the same purpose - relieving guilt by paying money:)

Do you count chess as a game?

No, I like chess too, so it doesn't count. You can play chess obsessively without any guilt.

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