Jeff Bezos Is Now the World's Second Richest Person
bloomberg.com
bloomberg.com
[1] https://www.oxfam.org/en/pressroom/pressreleases/2017-01-16/...
Bezos making billions doesnt mean that the money was taken from someone else in the sense that that person cannot have it anymore.
The opposite is also true. If he was poor it doesn't mean that I would have more money.
Value creation is a weird but beautiful thing.
The many displaced multi-generational residents of Seattle and San Francisco might not refer to this phenomenon as beautiful.
That being said, I don't think money has much to do with merit, either. It's just the output of a function that you are either good at optimizing or not.
A nurse will be paid a substantial sum if she is one of very few that can save the CEO's life.
Now, preventing it can be done in two ways, and only two ways - either limit Amazon's appreciation in value (curb the company), or limit the person's holding in Amazon, meaning that if you started as a founder of a company having 50% of the total shares, your holdings will decline as the company's worth rises. Does this seem reasonable to you?
A corporation allows the average person to get paid while someone else takes on a risk with their money.
Idk about "working hard" or "merit" because who cares if someone has to work super hard for 2 days to produce the same results another person can produce in 10 minutes.
All those "serfs" are not really risking their own personal wealth. They take home their pay win or lose for amazon. They are not serfs. They are getting paid for their work.
healthcare.gov is one visible and notable example where thousands of "trained and certified professionals" made a huge mess, and like 10 volunteers from silicon valley cleaned it up.
You could hire 100000 or 200000 such contracted professionals and the value produced would be even lower. Sure, most of the blame is with the management structure, which the ~10 volunteers bypassed and overrode. But the results stand. A few people in the right place can produce more value than orders of magnitude more people doing the wrong thing for whatever reason.
EDIT to better address your point: very few people could have done as well as Bezos in his position. Take any of the CEOs HP has had in the last decade, put them at the head of Amazon, and it would have done a lot worse. Put them all there, it would have done worse. Bezos gets a huge value multiplier for practical reasons.
Now imagine instead I give away 100 loaves for free. How much value have I created for everyone else? 100 dollars. How much money have I made? Zero.
Do you now see the problem with estimating a person's usefulness to society by looking at their net worth?
Also, there is no actor in the world economy who is having an effect like your metaphorical bread-give-away-er. So while it might hypothetically have been better if someone had built Amazon out of the goodness of their heart and operated at cost to all users, that is not one of the alternatives we have to decide between. There doesn't seem to be any evidence that such altruists are out there waiting in the wings. If anything, they'd have a competitive advantage, if they did exist, because they'd be able to offer lower prices.
Those employees are free to start their own companies. If you take the risk of starting a business then you should get the rewards if it succeeds.
Starting and running a successful business is not easy which is why the rewards should go to the risk taker.
A large portion of HN readers are entrepreneurs, a lot of stories here tell the tale of failure, the burden and how to bear it. Yes it's not easy.
And then there are people for the "not easy" is virtually impossible. Because they can't even start a business with any chance to succeed.
I'm not saying, that because of this Bezos should give more to the employees, but it'd be good if these inherent inequalities were better managed by society.
I am not talking about the people making ~40-50K each year. I am talking about the software engineers in Amazon.
Creating a better managed society is a complete different conversation.
I don't understand if this is supposed to be a joke or you are really that sheltered and clueless. Just get a loan from your family and get started? You are aware that for the vast, vast, vast majority of people this is not an option that's available to them, right? Get a high paying job and save money? Jesus Christ, but how?? How do you do that if there are no such jobs for you, either because of your location or because of your lack of education? Surely you would tell a 14 year old working 12h a day making cheap sneakers in Bangladesh to either ask his parents for money or to save his 0.25$ an hour salary and start a company, without an education. After all, this is perfectly feasible and if you don't so it you deserve to stay poor.
It's frightening.
What of the risks taken by others? Are there uncompensated risk-bearing activities?
Are there activities with low risk but high return?
Suppose, say, dropping a drill bit next to the guy who's just blown in a gusher? Or securing control of the pipelines, railroads, and refineries by which that oil must make its way to market?
What risks do employees take, they are getting a salary. If they are not happy they can leave and get another job. The founder has to put everything in it, his money, time, relationships, reputation. This is not "some risk", he cannot just walk away.
I did it, so I know it can be done.
Founders reap rewards of their risk-taking almost immediately, and it accelerates exponentially from there.
This really cuts to a major point of contention in modern politics - exaggerated pity party for the hardships of the most powerful people in society.
It is a privilege to take such risks, and if you are in doubt, go get a soul-crushing treadmill job and watch the fruits of your labour flow elsewhere.
He/she can do that but the sacrifices are greater compared to just being an employee.
> go get a soul-crushing treadmill job and watch the fruits of your labour flow elsewhere
I am from India, I have seen abject poverty. I know it's a privilege to take such risks, my original point was focussed more on HN demographics not the poor people who I know cannot take such risks. Poor people who cannot take such risks is a totally different conversation
Sunk cost fallacy.
Jobs mobility may be limited by blacklists or other forms of discrimination: H1-B visas or other immigration status, social, religious, gender/sex, issues (not legally, in most cases, but de-facto), and more.
Employees are committing just as much of their fungible time, and often appreciably all of their available resources, which for roughly half the population net out to roughly zero. Figures I've seen suggest that about that number could not come up with $500 - $2000 (amount varies) on a 1-2 week notice -- that's far less than the amount required for, say, a business-appropriate wardrobe, transit or transport access, apartment deposit, and a month's food.
And that's within the US/EU/AU/JP/UK. It's considerably worse in much the rest of the world.
90% of people are strapped into financial obligations and have families. None of these people can afford to risk starting a business, even if they would be good at it and had the money, support and contacts required. Even among the usually already wealthy people who can afford to risk a startup, 90% of them fail.
What you're really saying is: if you inherited the freedom to risk creating a startup, and you are one of the lucky 10% who make it a success, then you deserve to enjoy the rewards.
But that doesn't change the fact that every single one of Amazon employees is free to leave the company and start their own tomorrow. You don't have to have complete financial security to be "free" to do something.
You don't. You can start small, out of your own bedroom if you have to, and then grow from there. There's plenty of stupid advice like "if you're not making million dollars within 3 years of starting then there's no point" but it's just not true.
So they have to prioritise what is important, if they feel that starting a business is more important, they will avoid getting financial obligations and starting a family.
This is also part of the overall risks, you might be better off just being an employee with a normal life instead of being a failed entrepreneur.
Of Course a rich kid won't have to do these sacrifices but the rich kid will probably not have the same intensity and drive as the middle class person who wants to succeed.
Other than their initial investments business owners are protected from almost all the risks their businesses take on. Company debts aren't personal debts and individuals can't be forced to work to repay the debts they cause the business to take on. Worse still these safety nets aren't paid for as these companies don't make a profit.
Whilst I won't discount the work Bezos has done the reason he's come out 1000s of times better off than other Amazon workers is because of his initial gamble.
It's not like the workers don't take on risks either. Almost all paid work is paid after the fact. If your employer goes bust you don't get paid
Financial, health, relationships, reputation, opportunity are some of the risks.
Are you saying that an employee getting a salary has the same risks as an entrepreneur?
Whilst I imagine a lot of people on HN see these risks as negligible they do still exist and it can go wrong.
The degree of risk is completely different. We can keep on arguing but there are some things you will only understand when you take the leap yourself.
All of that is done by his employees. The ideas, the innovation and the execution are done by people other than him, while the credit and most of the value they create is taken by him.
"Hey, here's this cool electronic device called the Amazon Echo for $50."
is a markedly different from
"Farm here or I'll decapitate you."
The fact that you harbor a resentment as if the former is anything like the latter is slightly terrifying.
EDIT: sentence structure change
And have you considered how much of your lifestyle, the best parts of your lifestyle, is impossible under any system other than capitalism? I can't think of a better vehicle for diversity and indeed there certainly isn't one. It's almost insulting when people so casually dismiss these things.
And I've also stolen things from both poor and from large businesses and:
a) confessed to it (thankfully before 18 years old, my advice from the experience : do not ever, ever, ever do this, no matter how obvious the situation is)
b) gotten away with it
Comparing the reactions of the authorities between what happened when I offended a large business, who wanted to make an example (I didn't realize this at the time but they never even want restitution or the stolen item back), and what happened when I tried to recover my own stolen property and attempted in vain to get ANYTHING done (other than "fill in this paper and add to this huge stack here")
Just a piece of advice : DO NOT learn kids to not steal by having them return a stolen item, unless you know and trust the store owner.
Does this count as violence ?
Perhaps they knew or were related to one of the dozens of people murdered by police. Perhaps they were turned away from a favorite recreational activity by armed BLM agents and snipers violently confiscating cattle. (Why does the BLM have snipers?) Maybe they were affected by government murders at Ruby Ridge, or police peppering of Occupy protesters, or maybe they were attacked by trained dogs near the Dakota pipeline. Maybe their children were threatened when they spoke out about a tax hike to hire more police. Maybe their relative is in lockup for crossing an imaginary line that arbitrarily bounds Arizona. Maybe their property was taken from them because it could generate higher tax revenue if a strip mall were built there instead. Maybe they read about somebody who fled for their life after exposing illegal activity on the part of the government.
Maybe it is possible to use your brain and still be wary of the corrupt use of power in today's society.
Many disagree with the tenants of capitalism regardless of how violent those in power are or how corrupted their authority is, the system itself can occur as strange, especially when it puts a lot of power into the hands of a few people - that causes uneasiness in many cultures and it is certainly something to think about as wealth inequality gaps widen, for better or worse.
I don't really have any stake in the result of this conversation and my views aren't as critical of capitalism generally, I'm commenting because your out of hand dismissal of OP's comment made me think that you might either be erroneously framing the comment or reading his concern as something far more serious than the casual comment would otherwise indicate (at least, that's how I read it).
Another way to read the OP would be something this - "Doesn't this remind anyone of how wealth was distributed in more clearly feudalistic times? Weird, right? - it makes me feel weird. I worry sometimes that this might be the beginnings of what we will consider to be a slip into a dystopian society. It worries me, and I wonder about it from time to time."
EDIT: copy/pasted a little too much and repeated myself
Also, I think it is extremely problematic to compare any system with large disparities of outcome with an essentially violent system like feudalism (or just defining "inequality = violence", which people do) because what you are doing is basically justifying violence against that system. Violence against capitalism has happened historically, multiple times, and has led to huge injustices, the slaughter of innocent people, and the ruin of every society that has tried it (unless they ease off like China). That alone is a great counterexample to the idea of capitalism = feudalism = violence.
What if they just inherited it?
How confident are we that everyone who has a lot of monetary power today got to that place originally through productive economic activity vs. illegitimate/criminal activity, or unproductive economic activity, or inheritance, or just being the first to colonise (or often just plain steal) some land, or some other less savory source?
Like Queen of England's inheritance, for example?
Or anybody inheriting land on American soil?
Totally no violence involved in initially obtaining those assets?
In each of the cases you listed, the person who would've had claims against them has power over the plaintiff
I am not sure about that. A stolen good cannot be legally buyed from the thiefs.
if there's a (prior) theft in the chain of title, then you do not have good title.
hence the market for title insurance and the market for title searches.
I see a problem with the dead ruling over the living. Your will ends when you do with no extension.
That's not to say there might not be legitimate reasons to allow some inheritance, but extending the will of the dead, economically productive in life or not, is not among them.
Sure, for one reason for convenience. But Jefferson, it must be noted, wanted something similar for every law and Constitution (time based, because the alternative is impractical), specifically because the law should represent the will of the people living under it, not the dead hand of the past generation.
http://press-pubs.uchicago.edu/founders/documents/v1ch2s23.h...
The daughter of a wealthy estate might receive the very best in private education, music lessons, etc. She might take her allowance and start a successful business. She might just have a successful business because of all her parents' social connections.
Then dad dies. How do you propose to nullify all the advantages she still enjoys because of her father's wealth?
Can you take away the child's business that was started with a few million dollars from dad? No? But you can take away the million dollars still sitting in the bank?
How about the farm? the house? the boat? Can those not be inherited?
If you reject all inheritance, you reject much of the incentives of capitalism.
EDIT: better English
I reject the idea that inheritance is a matter of right, and particularly that there is any moral right in extending the will of the dead past their death.
I don't, OTOH, disagree that some inheritance may even socially useful and worth permitting, with appropriate conditions and limitations, on that basis. In fact, I said so explicitly in GP.
OTOH, I'm also not a big fan of capitalism as a system, am glad that it has generally been displaced by the modern mixed economy since being described by its critics, and think that the influence it has on the general shape of modern economies needs to be further curtailed, so I'm not particularly worried that limiting inheritance might further undermine the influence of capitalism; that's a benefit, not a cost.
I was born and grew up under an actual communist rule. It was terrible. Also, it didn't really work due to fundamental human nature.
What human nature you ask? Well, mine for example. I'm working my ass of so that I can have more than you have. So that I can leave my wealth to my children (three so far) so that they can continue from a better position than where I started from (almost nothing, except the education my single mother gave me) to get an edge in life.
You want to take that option away from me? Sorry, not gonna work.
But don't worry, there are much bigger fish to fry than you. You probably won't even be impacted, given the amount of wealth that can be recuperated from the leeches at the top, we can probably already make a much more egalitarian society.
So, the problem here is that I don't understand why you think Jeff Bezos is a "leech" exactly. The guy built a business and became very successful. What the heck is wrong with that?
I'm building a house for me and my family. I mean literally building it myself, not hiring people to build it for me. It's fun - sometimes. Other times it's hard and frustrating.
I've also been involved in building three companies so far. That has been fun - sometimes. Other times it's hard and frustrating.
If one of those companies is/was successful, would I also be a "leech" by your definition?
Amazon could run very well without Bezos, at this point, solely through workers. Bezos at this point serves nothing but effectively leeching the wealth produced by employees. But appropriation of the means of production is not the subject.
Bezos being successful is not the issue. However, he is effectively an annuitant, and produces very little of value. This brings up the question of why does he deserve that money now? As he's been building the company, yes, eventually (and even then, his only contribution is capital. The rest of his work can be done by anyone else). Nowadays? I'm doubtful.
Secondly, this fortune would much better serve society as a whole than be passed through generations, effectively creating a lineage of oligarchs. If I have to choose between bettering the living conditions of millions or letting Bezos keep his net worth... I'm not going to cry for him.
The most important question is of course, how much should be taxed, and what amount of wealth is too much? Everyone will have different answers. But there are other solutions to taxation. Capping salaries and profits from shares to a factor of the lowest salary in the company, etc.
If one of those companies is successful, that you have managers upon managers doing most of the work for you, yes, you would be a leech.
Good luck on that house, however. I know from first hand experience that it is a tough thing to do. Make sure everything's done properly.
Your argument seems to be that amazon could and would have run just as well without Bezos. The counterargument for that is - why isn't any other company in the same line of business nearly as successful as Amazon then? Clearly, if the concrete people don't matter and the only contribution of the leader is capital, then there is no particular reason why another, as-well-capitalised company shouldn't be as successful as Amazon? Yet none are. Why?
My argument is that a good manager can bring 10 people who separately would each be capable of making 1 abstract thing per month together into a team and create 100 abstract things per month.
There is a saying - a person is smart, crowds are dumb. What Bezos and other leaders bring is the ability to make crowds smart and work together towards a goal.
So, if a good leader can effectively make the difference between a successful company and a broke company, then I do think he deserves 100x or a 1000x more than some guy who's looking for every possible opportunity to slack off and do as little as possible.
Also, you argue that he has already contributed all he can and is now just reaping the rewards from his previous efforts. Doesn't the same apply for any pension scheme though?
why do you want to have more than someone else? that implies that you derive pleasure from the deprivation of others, which is sadistic.
I think you should work so that you can have the things that you want for yourself, not so you can have more than someone else.
The only reason it gives that freedom though is derived from inequality. The world is an extremely complex system and complex systems have weird emergent and unpredictable behaviours.
Also, some people contribute more than others. I'm certainly not saying that I'm the biggest contributor, but I do know people who can code circles around me (yes, I used to be a software developer, hey, this is HN you know) and really can do things that I could not, because they depend on fundamental understanding of complexity that I'm simply unable to comprehend. There is no way I could have come up with Paxos for example and clearly it has been extremely useful technology. Also I'm sure the inventor (Alan Kay, IIRC) makes a ton more money than I do and he deserves it!
There is no fundamental equality, because people are not equal and peoples contribution to society is not equal.
Bezos already has paid more taxes than I will ever pay - so he has in fact contributed more.
No, I'm not.
I'm saying that once they're dead, what they cared about when they were alive matters, if at all, because and to the extent people still living care about it, and that there is no inherent right that the dead have to have their will dictate actions or rights of the living once they have died.
There has never existed an "ideal society". Power always corrupts.
Well, his mother's family had some wealth. But his mother was a single teenage mom until she married his step-father. His step-father immigrated alone from Cuba at the age of 15. Later, he worked his way through a degree at the University of Albuquerque.
So, I'm not sure how much of a silver spoon he had.
However: I take umbrage with "natural right" (the only right nature guarantees is entropy and death), and "fair share" (as decided by whom?). I think a wealthy, free, and just society would include infrastructure investment and The Commons in addition to free enterprise and private property; but good luck getting every single person to agree on the same definition of "fair".
Edit: forget gas even paying the employees to sort the food that is still edible costs too much.
[0] http://www.nationalreview.com/article/417997/professor-if-yo...
What you have is not the result of your toils.
be careful with your phrasing. better to say "What you have is not solely the result of your toils."
Capitalism is perfectly happy with slavery; it didn't end because it wasn't profitable.
There's still some rather violent things in today's capitalism like "give me all your money or die from cancer" which when the capitalists gave you cancer, isn't much different than the violent king forcing you to farm. You give them what they want or you die.
Actually, it ended because it could not compete with free labor. It was dying around 1800 because of that, and then the cotton gin revived it. It was dying again in the 1850s, and a big driver of the Civil War was the slave states trying to protect their economy from free labor competition.
I don't think it's a coincidence that social justice has tended to follow what works best economically.
The examples go on and on.
Where forced labor still exists there is something else propping it up or subsidizing it - like I mentioned with prison labor.
I'm also dubious of your Kansas claims (Google search comes up with nothing). Again, by the same standard, I can claim that the US "cannot even clothe itself" today. I'm sure reality is a lot more nuanced than that.
I can expand further on history of the USSR and long-term effects of WW2 on that country's population, which had massive waves of effect well into 1990s, but I'll stop here.
citation needed
As for prison labor, most of the cost of that is borne by the taxpayer, not the company using their labor. Keeping people prisoners in the US is very expensive.
1) The Civil War was absolutely about slavery. Here's a professor at West Point talking about: https://youtu.be/pcy7qV-BGF4 (and PragerU is a very conservative source too).
2) The Emancipation Proclamation didn't end slavery. It ended it in states that were still rebelling. It took amendments to the Constitution to end slavery once and for all.
3) I agree that keeping prisoners is very expensive in the US and that most of that cost falls on the taxpayer. But it is very much still (essentially) slavery that the "free market" uses.
the wealth is Amazon's. Bezos owns quite a lot of Amazon. the system permits this level if inequality. that doesn't mean it is deserved or desirable.
Any rookie cop can force you to pull over in your car, and confiscate any cash you have with you. Bezos can do none of that.
Keep in mind that Clinton way outspent Trump, and had most of the media on her side, and still lost. Money and media do not buy elections.
Feudalism was a hierarchical system. Not all nobles went around hacking off heads - they could farm that out to higher ups who kept order. What's the difference between Amazon's reliance on national governments? The business model only works because the US enforces peace on parts of the world and because the Chinese government allows its workers to be used for pennies on the dollar. Within Amazon's kingdom, good luck getting the authorities to help you if you aren't a big player.
Meanwhile the average worker who isn't any less intelligent or hard working is seen as worth a fraction of a percentage of Bezos. Sounds like feudalism, serfdom, slavery, or whatever you'd like to call it. That we can celebrate such disparities of human value and even worse in some places this kind of rampant greed is seen as something good is what is truly terrifying.
Not necessarily true. Luck plays a big role in things like this but Bezos is clearly in the elite when it comes to effective professionals.
A 10% skill difference between two people with shovels will result in a much smaller output difference than a 10% skill difference between two operators of heavy duty earth moving equipment.
With software, this dynamic occurs in the extreme, as the cost to run a software program is so low. A hour of unskilled human labor cost hundreds or thousands of times more than an hour of computation. And the quantity and complexity of output from a single hour of computation is rapidly increasing.
Edit: reworked the comment to make my point much more clearly
Of course with bad managers it can easily go the same amount in the other direction, but it seems that Bezos has extremely effectively leveraged his abilities in management and built a very successful company because of that.
One of them made a hole in the ground; he's going to put a seed in it, which will hopefully grow into something useful.
The other one pushed a button which started an automatic lathe which created an engine piston worth a hundred thousand dollars.
The difference in the productivity of two people is practically limitless.
We're quickly reaching the point where without venture capital, there's no way to enter any market anymore. You can't start a company and just produce good products worth paying for. You have to have enough VC to be able to withstand sustained market pressure from those who do have it and can spend you out of the market by lowering their prices.
There's a reason that these practices are illegal.
Plus they pay fuck all tax.
You can start a tech consulting company without venture capital.
You can start a construction company, a law practice, an auto repair shop, or a dental practice without venture capital.
Oh, you mean that you can't build a multi-billion dollar company overnight without venture capital?
Thank you for your insight.
No, you can't build a large company ever without venture capital. Money begets money. The only way that any company will ever be large in the future is if some other existing billionaire decides they think they deserve funding.
> Nozick's famous Wilt Chamberlain argument is an attempt to show that patterned principles of just distribution are incompatible with liberty. He asks us to assume that the original distribution in society, D1, is ordered by our choice of patterned principle, for instance Rawls's Difference Principle. Wilt Chamberlain is an extremely popular basketball player in this society, and Nozick further assumes 1 million people are willing to freely give Chamberlain 25 cents each to watch him play basketball over the course of a season (we assume no other transactions occur). Chamberlain now has $250,000, a much larger sum than any of the other people in the society. This new distribution in society, call it D2, obviously is no longer ordered by our favored pattern that ordered D1. However Nozick argues that D2 is just. For if each agent freely exchanges some of his D1 share with the basketball player and D1 was a just distribution (we know D1 was just, because it was ordered according to your favorite patterned principle of distribution), how can D2 fail to be a just distribution? Thus Nozick argues that what the Wilt Chamberlain example shows is that no patterned principle of just distribution will be compatible with liberty. In order to preserve the pattern, which arranged D1, the state will have to continually interfere with people's ability to freely exchange their D1 shares, for any exchange of D1 shares explicitly involves violating the pattern that originally ordered it.
State interfence is a direct transgression against an individual's liberty. Thus far the majority has decided that such interfence is a greater evil than the "inequality" that it could reconcile.
I'm kind of anarchic myself, in that I like decentralization of power and resources.
I think the key is to realize that no ideology will work by itself in its absolutist form. Rather we try to get close to it.
So the question to me is, how do we get relative equality without losing the benefits of companies like Google and Amazon.
It's a hard problem. Maybe we're already at the best compromise?
"So is independence!"
https://www.brainyquote.com/quotes/quotes/w/waltwhitma132584...
How do we account for the effects of power or leverage imbalances on free exchange or consent?
If you consider violent force and the like as just one extreme on the broad spectrum of potential leverage between two parties, then we see that a primary focus of most governments is to limit or prevent leverage of cetain forms or intensity.
If it's financial leverage not gifted by regulatory protection, why do we necessarily need to?
The social world is entirely constructed, just as much as societies infrastructure. In capitalism the goal is to make as much as possible doing as little as possible, and the only way you do that is to become the supplier you despise. Personally, I believe a world with reproduction caps and universal income would do a lot to ensure that, at the very least, capitalism is "opt in".
1. Most of the time there is no alternative 2. Even when there's alternative, it's probably crap 3. If the alternative isn't crap, then the existing market players will engage in anti-competitive tactics until there are only crap market players remaining.
Amazon is, by any definition, a company engaging in illegal anti-competitive business practices. Losing money in order to stifle competition is nothing new, and it's still as illegal as it has ever been: very.
Second, none of your three points refute the Chamberlain argument.
1. There were limited alternatives to Wilt. When Wilt was named MVP in 1959, there were 8 NBA teams.
2. Technically, there were 39 other players in the starting lineups of NBA teams that year.
3. Among those starters was Bill Russell, whose Boston Celtics won their second straight NBA championship that year. The NBA has controlled membership very tightly in all the years since. It has been granted exceptions from laws prohibiting anti-competitive behavior.
And yet, Wilt is still featured in this classic thought experiment to illustrate fair distribution of wealth.
Well for a start, loss leading and intentionally lowering prices unsustainably to cut out competitors are different things. Loss leaders don't exist to be anti-competitive, they exist to attract people to your shop so they will buy the other things you have, which is how you make profit.
Selling some things below cost in order to sell other things to make a profit is fine. Selling some things below cost in order to not make a profit, living off of venture capital while your competitors go out of business? Completely different story.
And, quite frankly, 'normal business practice' means fuck all. Lots of things are normal, illegal and unethical.
>Second, none of your three points refute the Chamberlain argument.
No, the argument resting on a false dichotomy refutes itself.
>And yet, Wilt is still featured in this classic thought experiment to illustrate fair distribution of wealth.
I have no fucking idea what NBA is.
Absorbing losses until your competition goes out of business is called price gouging. It's considered unethical and in many current cases is actively punished worldwide. Advantageous access to funding is usually (but not always) the enabler.
In the early 20th century US Industry invaded Brazil with much lower interest rates and absolutely decimated Brazil's budding manufacturing sector, to which it has never recovered. Then there's Wal-mart in the US -- Amazon's strategy is not unlike Wal-mart's was (ream the competition in a price war with lower prices and ginormous investments in logistics technology, which bring competitive cost-savings). It's impossible to beat that triad (low prices, being flush with outside capital, huge investments in cost-savings). Other businesses without all that money can't keep prices low and invest heavily at the same time. Another advantage:You hardly need to advertise. You make a name for yourself with the good deals you give everyone.
I don't think it's fair. I don't shop at a wal-mart, I don't use amazon, and I don't use uber(never have). That's about the only solution I can see: don't patronize scumbags.
Maybe one day the banking system will be less democratic. For now, the bankers pick favorites and those favorites become ever more favorable, because the goal of these schmucks is the centralization of wealth-- so why not get to centralizing it?
No, it's called dumping. Price gouging is a different unethical pricing maneuver.
The solution to what ? Could you describe the problem in the (above) Wilt Chamberlain example ?
The problem is, nearly never, access to resources: modern society (including in poor countries) puts necessary resources (food, clothing, shelter and even transportation) available to all at a very small price. Our material needs are 100% guaranteed.
The problem is that most of the goods that modern society produces are unavailable for most of the population. By reducing inequality, we could improve life quality for the masses.
So the original argument stands: forced wealth redistribution is incompatible with free will and liberty. The word "force" itself means the removal of freedom.
You van spend your money however you want. Taxes simply mean that everyone benefits from spending, not just WC.
I'm not making a moral statement here. I'm not saying whether it's good or bad for the government to do this. I'm just making an observation that, logically, the parent didn't provide a "solution" to the grandparent's thought experiment.
Or better yet, can someone translate it into plain old equations for me? Words get very slippery, especially since this is a proof by contradiction and it's hard to make sure you've eliminated all the possibilities without enumerating them.
See here: https://www.reddit.com/r/askphilosophy/comments/34r4vg/endst...
This awkward terminology is something that infuriates me about Nozick.
The effects of spending your money can have three types of impact: 1) you spend money in ways that don't directly offer you further capacity to concentrate wealth (food, drugs, entertainment, (clothes, cars, and houses are arguably marks of status which in many societies is a tool for further wealth concentration). 2) you spend money in a way that reduces other's capacity to concentrate wealth (you spend money to abolish the school board in the liberal capital of a rural state in the bible belt, like the Waltons and Stephens just teamed up to accomplish in Little Rock, Arkansas. (thanks guys!)) 3) you spend money in ways that can directly benefit your competitive advantage in making money. In the business world we call this Capex, or capital expenditure. Spending money on things that help you make more money.
I think it's important to say:
What is money? Money is a store of value, which is used to peacefully coerce others to do what you want them to to. It can be used to convince others to do your bidding, or in the case of a well established (specified) civilizatiobn, people have already done the work they expect you to want, and are ready to make the exchange. Changes to the product or process happen over time, with the consumer communicating to the providers what and how he or she wants a specific thing, and will guide businesses with the placement of his or her own dollars. This is why these guys spend more on 2 and 3 of this list: money is a form of power, where you can dictate not only what but the way products and services are rendered. And as a member of the elite class of producers and financiers, it is further advantageous to impede any one unit or subgroup of consumers from having enough money to coerce the elite into business practices that favor consumers
How does that play into rape? I don't understand.
The victim of a rape had to play child support. So, he was forced into having a child.
In general, some men are forced into having children by women who lie about taking birth control, or even by collecting semen by used condoms.
Of course in those situations I would hope that a jury could pardon the responsibility of alimony if there was rape involved and the child is not wanted.
How about when the violence was selling under the normal market value undermining competition, then remaining the only vendor. Also replacing employees with robots.
So in the end, people who would have had a job lost it, no matter if they work directly for Amazon or for the competition.
It's not violence to take people's jobs, but in a society with few social protections, it's as bad as violence.
Using robots instead of human employees is not an act of violence.
You have a very strange world view. Are your clothes hand-stitched? Was the electronic device you used for your post painstakingly constructed by hand? Do you think it is fair for some things to be automated but not others?
Perhaps you think that it was bad to selectively cultivate a variety of wheat that could yield more tons of food per acre? Or maybe you think it is just wrong for a farmer to use a tractor? Should they water a hundred acre field by hand with 1 gallon buckets? That would mean more jobs!
What is your opinion of all these auto-mechanics who have displaced stable hands? Should cities use thousands of laborers to spin manual generators to feed individual street lights? Modern power plants are taking peoples' jobs.
I have witnessed a friend being physically attacked and have seen the aftermath of an physical attack.
From this perspective, I can only conclude that these people equating things to violence are simply attempting to gain political power, or virtue signal or whatever.
If I try to take something that "isn't my property", the state will intervene with violence (e.g. forced imprisonment, etc.) on behalf of the person deemed to be the "lawful owner".
Personally, I quite like owning things that are mine. The cost, that other people can own things that are theirs and not mine, seems well worth it.
I'm just trying to dispel the idea that capitalism (as we experience it, or otherwise) isn't maintained through violence. It very well is more pleasant for most people than feudalism, but they both perpetuate themselves through violence.
That's a nice fallacy you've got here, and that would imply that his opinion is actually uncommon around people who have studied the subject (spoiler : it's not).
>Personally, I quite like owning things that are mine.
Possession and property are not the same thing.
The interpretation I made, and challenged, is that property is violence. I.e. Owning things is violent towards other people.
Broadly speaking, demand is unlimited and supply is limited. With these two as a given, violence is essentially inevitable. Property near as I can tell, is a cultural tool that minimizes violence and maximizes supply.
Only when there is abundance outstripping demand of a population, is violence avoidable. A couple million people spread across North and South America 600 people enjoyed abundance, relatively speaking. 7 billion people spread across 7 continents is an entirely different scenario, and one where violence is unavoidable.
An alternative system that avoids violence is not living the way we live. That ship sailed tens of thousands of years ago though. Too late now. In our current state we just have violence and systems for regulating it.
Hardly what i would call first generation rich... The foundation for his wealth (his education, social status etc) could - his ancestors being texan settlers and all - very well be based on very much violence (theft of land from native americans etc.)
You mean, which funneled a small fraction of it to a single individual. Bezos individually got more of it than anybody else, however to pretend that he got all of it, is silly.
Total non-stock compensation paid by the business. Total stock compensation paid. Total investor return since inception. Total benefit to all consumers in convenience and savings. Total benefit to the investor return derived and that capital being put to further use in the economy. And on and on the calculation goes. The money has been funneled to hundreds of thousands of jobs and hundreds of thousands of investors overall and millions of consumers (savings from aggressive margin pricing, or just value from various useful products Amazon has provided such as Prime), spanning decades.
Bezos has likely gotten a low single digit percentage of all the value Amazon has created for everyone.
I think in a truly just society, the multiplier on the amount that a single individual could be compensated compared to his or her peers would have a hard cap. It would solve so many societal problems and also incentivize corporations to run more like collectives instead of fealties. Companies like Amazon, Google, and Apple would still exist, just as they do today; after all, their founders didn't get started out of the desire to make big bucks. But there wouldn't be any oligarchs on the other end of the pipe.
Not that it's likely to happen, of course! A person can dream...
Imagine kid A studies really hard during his youth and doesn't get to have any fun because he's working so hard. Kid B likes to slack off and party and do drugs. If Kid A grows up and makes it big, why does kid B deserve half? Why should he deserve any portion? You could tax kid A's wealth but you can't tax kid B's youth and pleasure. Why put a cap on on kid A's wealth if you are not putting a cap on kid B's leisure time? We put no such caps on anything else whether it be beauty, intelligence, number of friends, popularity even though all of these things cause disparity.
I strongly believe that in order to build a better world, we have to stop thinking in terms of people "deserving" things and instead focus on what's better for society overall.
If we're talking about fantasy economies, IMO we should move to a system where we don't need money at all. Money is basically a way to partition access to limited resources among people. Except, outside of this planet, resources are near infinite. With complete automation and unlimited access to space, everything would be free with our only real cost being energy - which luckily, is also near infinite given the billions of stars in the universe. Something like Wall-E but less dystopian.
If a person has enough control at a company so as to be able to unilaterally spend its money, its not much different than having the money yourself.
By that logic most scientists, philosophers and mathematicians from ancient times till now wouldn't have had the incentive to do anything.
Einstein didn't discover relativity because he thought he would become a billionaire. Isn't that a "moonshot".
But the people whose contribution is fractional compared to intellectual giants think their ability to sell, market etc should be awarded with insane amount of wealth.
The rampant egotism is forgetting that we stand on shoulders of giants, on the contribution of entire society from the discovery of fire, invention of wheel, language etc till now. To ignore the casual chain of determinism, and claim "I" alone did it through my "efforts" is insane.
While its true that scientists and engineers and everyone else have done a great deal in advancing things, the sad reality is that unless someone fronts the money, nothing will get done.
Its not the natural law of universe which cannot be changed. We humans create the systems of economic organization. So if you agree that profit is not main motivation for many creative jobs, then perhaps the optimization function of the economy should not be to optimize for monetary profits.
So perhaps other modes of economic organization be explored?
Or is the system is designed to give wrong incentives?
I don't think we have enough evidence for what you take as "human nature". On the contrary the anthropological studies in Debt: The First 5000 Years Book by David Graeber, we have evidence of many primitive societies behaving more communal fashion.The resources though scarce is shared with the commune.
there are natural limits on those things whereas there are not natural limits on capital accumulation because capital isn't natural.
In Capitalism, you profit from owning the means of production, not from working hard. Obviously, it can help, but not necessarily. There are plenty of start-up CEOs who worked just as hard as Jeff Bezos their entire lives, but aren't multi-billionaires, or even millionaires.
The problem is if we had your society, there would be no Jeff Bezos or similar capitalistic-minded entrepreneurs to create these mega companies in the first place. Remember it started out small.
And even if you're right, maybe a world without mega-companies wouldn't be such a bad place after all?
Remember that at some point Musk had poured all his wealth into those companies and they were one failure away from bankruptcy. If Musk had any less money after PayPal, he couldn't have done what he did.
Tell that to the hordes of unemployed people. Amazon is doing it darndest to employ as few people as possible in their warehouses and now are testing drone delivery.
The point was that Jeff Bezos did not violently force anybody to work for him. Nor did he force anybody to buy from him.
Your complaint is that Amazon is profitable because nobody works for them, and that's just feudalistic. That's an absurd argument.
I think you got confused, that's communism. :P And it's not decapitation (too messy) it is a bullet to the back of the head or death in a labor camp.
Feudalism is "you can farm here but you owe me and your promise to fight in my wars".
> The fact that you harbor a resentment as if the former is anything like the latter is slightly terrifying.
Really? Is it terrifying to compare a vassal's contract with the "work for me in the warehouse and I'll pay you a minimum wage, if you don't like, there is a line waiting at the door". They are not the same, it's a bit silly but is that sending shivers down our spine?
I think you're confused about communism. What you're talking about seems more about soviet russia and other countries that run/ran an authoritarian state-capitalism system (often calling it communism).
However, communism has nothing to do with enforcing people to work under a threat of death, rather the contrary.
8. Equal liability of all to work. Establishment of industrial armies, especially for agriculture.
Unsurprisingly this leads to labor camps in every communist government.
That is just a mean to reach the final goal, and it does not mention labor camps or anything like that.
I'm curious on which communist government are you talking about, since pretty much all the "communist" revolutions so far did not actually implement communism but state capitalism (as Lenin himself said), except for some libertarian communist revolutions (e.g. revolutionary Catalogna, Ukraine) that were then defeated militarily.
On one thing I agree with you though, which is that putting all the power into the state is not a good way to achieve communism, as it is dangerous and it pretty much never worked so far.
the Mondragon Corporation[1] is one of the few interesting experiments with a Communism-inspired system that does not immediately degenerate into authoritarian state-capitalism.
>the Mondragon Corporation[1] is one of the few interesting experiments with a Communism-inspired system that does not immediately degenerate into authoritarian state-capitalism.
So there is no logical inconsistency in what you believe?
Mondragon Corporation is a worker syndicate , which is not a "communism inspired system", but a system aspiring for communism. If worker ownership can work in Mondragon, then saying that "communism is impossible without authoritarianism" is flawed.
[0]The "half poor" rally don't care about the top 2 rich.
[0]https://medium.com/incerto/inequality-and-skin-in-the-game-d...
A handful of people control as much wealth as the world's population combined, but there's nothing here to concern any of us, since they didn't do it with sword and cannons like a few hundred years ago.
In fact, since the days of imperial conquest by force are pretty much over (minus the occasional here and there), we really shouldn't worry ever again about the hundred people who own the world.
Not. A. Problem.
Though that doesn't mean we can just completely relax. We should stay vigilant, because tyranny is always just around the corner.
I believe in capitalism, but still when a handful of people own the world, that in itself is a form of tyranny. The article below says EIGHT PEOPLE control as much wealth as over 3 BILLION PEOPLE, 50% of the world's population. And much of that number lives in poverty. It's no ill will against Bezos or his success in business to say, it sure would be nice if the world didn't have 1.3 billion people in extreme poverty, while the world's wealth is controlled by, and for the benefit of, just a roomful of people.
http://www.businessinsider.com/worlds-eight-richest-as-wealt...
But now we also get the carrot - the freedom to consume what you can afford to.
What is the entire United States worth? GDP is 18 Trillion, expenditures are 4 trillion. So if you do something (admittedly kind of dumb), like take the GDP, subtract expenditures, let's pretend the earnings are 14 trillion?
Valuing the US at 10x earnings, that would put it at a valuation of 140 trillion dollars. This is horribly incorrect, but I think it still makes a very important point.
The richest person's entire net worth is orders of magnitude less than the yearly GDP of a moderately sized country.
The key thing in monarchial feudalism is that a single person is the state (Imagine a person worth 'only' 14 trillion dollars, he's got his own airforce, navy, army).
Jeff/Bill/Warren et al. aren't on that scale of wealth yet, and it seems that it would be difficult for them to get there without state intervention.
Economically speaking, the US is not a "moderately sized country". It is the richest country in the world.
There are several moderately sized countries with lower GDP than Bill Gates net worth.
While you are technically correct (the best kind of correct), this was kind of a brain-fart on my part and not really important to the point.
The point is that net worth includes the assumption of future earnings in the valuation. GDP is just one year's production.
Bill gates is orders of magnitude less wealthy than Ukraine, for example, even though his net worth is similar to Ukraine's GDP.
That's a terrible argument for why the amount of money Bill Gates has is not absurd.
(It is indeed a terrible argument for the point I'm not making).
In feudalism a single person is the entire state. His wealth isn't comparable, disregarding the extra rights that are conferred from literally being the law of the land as a monarch.
No, that's not true. That's not at all true.
Your calculation is making my head hurt. I assume by 'expenditures' you mean the US governments budget is about 4 trillion? If so, your $14trillion represents expenditures by the private sector. So if we build a bridge or something it doesn't count into your 10x, for some reason. Sorry this whole argument makes no sense to me.
Argument is humans aren't on the same scale as governments (even comparing exceptionally rich humans and middle of the road governments). It is easy to verify with a few minutes of thought.
No, that's (approximately) monarchical absolutism. Feudalism is completely different, because the state (insofar as that term is even loosely valid for feudalism) is a bunch of people, arranged in heirarchy, but each with both rights and obligations both up and down the heirarchy, not one person with absolute power. That's why the transition from feudal government to absolute monarchies in much of Europe was a big deal.
This is entirely wrong. Other people have already commented on what feudalism is, but I wanted to provide a brief high-level history in case people were interested.
So let's take the historical look! How did we go from ancient Rome, an imperial monarchy, to feudalism being the law of the land?
The seeds of feudalism were sown from the Roman Emperor Diocletian's decision not to tax lords if all commerce took place within a lord's domain. Diocletian was a wonderful Emperor, one of the best, but he was around at a time when the Empire was cannibalizing itself with constant civil wars, making his main goal was peace and stability. To simplify, if I owned a city, and the city blacksmith supplied everyone else in my city, the state (i.e. the Roman Empire) would not take a cut of this. Only if goods flowed into a neighbouring lord's areas would the empire tax it.
What's the incentive structure here for the lords? Build up as much as you can within your domain and make it as self-sufficient as possible. It's legal tax avoidance, baby!
Because of all the civil wars there were labour shortages, both from bloodshed, devastated landscapes, and people fleeing. What's the solution to this? Outlaw moving, making peasants stay where they grew up and work the job of their father. This made economic planning much simpler, and Diocletian was an economic planner. In doing so, we get serfdom going hand in hand with the seeds of feudalism.
Over time, as the Roman Empire waned, this political structure stayed in effect. Power was increasingly ceded to the regional and away from the imperial. Basically, the state collapsed on itself. While we do get the Catholic Church springing up, it only sorta-kinda fills the power vacuum as it's clearly not a state in the same way Rome was.
Ambitious lords take more power, filling the vacuum of the the monolithic state. Without a single arbiter to enforce relationships between the lords, fealty and swearing allegiances become much more important. Literally the only thing holding these states together were a few lords word, some marriages, and often some hostages. If it was worth it to break those things, the 'state' would crumble, and everyone knew it.
That's basically it. From then, feudalism became the law of the land for around a thousand years (let's roughly say 300AD-1500AD). Then we're onto absolute monarchies, the renaissance, and the bourgeoisie throwing a wrench in everything.
In case all that hasn't helped, here's a (probably weak) analogy: monarchies are monoliths, feudalism is microservices.
FYI, Diocletian didn't use the word lord, he used dux. Which is where we get duke, doge, duce, etc. We also get the word dioceses here, which the Catholic Church still uses to this day.
And if the ocean don't have its few blues, krill and algae explode and the whole system, sooner or later collapses. Nature has had a long time to find alternate ways of keeping ecosystems temporarily stable and everywhere you look in nature you see hierarchies prop up.
The only difference with humans is we can "choose" who to collectively prop up.
It's exactly as you say. It's feudalism. Wealth inequality is feudalism.
In other words: Economics is not physics, there you say something like "Well, energy is always conserved" or "This does not work because of the second law of thermodynamics", you can't do that with "Game theory".
Capitalism promotes monetary profits as the incentive because humans are self interested.
is one among them, but is it the other way around? Is the system manufacturing behaviors that it takes for as a cause?
I was reading Debt : The 5000 years, where the author, an anthropologists makes the case of how capitalism destroyed the communal behavior of tribes in different parts of the world.
You're talking about millions of people who have so much less than nothing that they will have to work for years just to get to $0.
With all our technology, our wealth, our sophistication; all the work of our ancestors and the sacrifices they made, all the works and understandings they developed, and the ability to transmit this knowledge at the speed of light and for damn near free; with the incredible bounties of the earth, the ocean, the sun, plants, animals, fungi - with all that, why should so many people be in such a hole, working their arses off as they make wealthy people wealthier?
While you may feel privileged to have a single dollar to your name, 8 people have more dollars than 3.5 billion people. That points to real, catastrophic injustice endemic in our systems and societies, even our belief systems.
The alternative was tried in Soviet Union and Maoist China. The results were not exactly pretty.
Jeff bezos having lots of money is an oligarchy, not feudalism.
This is a hierarchy of oaths. It's just not as ceremonial as you've put it. It's also not directly agrarian (and territorial) as you'd expect from a medieval feudalist regime, but the basic structure is still present.
because you can finally buy more things and own more things and consume more things. how does this make your life better?
[1] https://en.wikipedia.org/wiki/Jeff_Bezos#Early_life_and_educ...
There should always be motivators (like money) for people to work harder, take risks, invent things, and fill a spectrum. I'm not sure if that spectrum needs to be in factors of millions though, instead of say, 100-1000s.
And I'm not saying anything about Bezos in particular. He really is self-made, but for everyone of him there are 100s of (patently less rich) inherited top 0.1%:ers.
But did he work millions of times harder than someone else? Did he risk that much?
I'll gladly work TWICE as much/hard for 5-10 times the reward. A lot of people do, for diminishing returns.
Of course the status quo is hardly comparable with a feudalist system, but the stark inequality you are born into is very much - and even more so the difference in wealth and power between "regular people" and the super-rich.
It would reduce inequality, and increase everyone else's relative economic standing, and probably make many people feel better in comparison.
http://theconcourse.deadspin.com/apocalypse-is-the-only-path...
If you use a metric which is more in line with subjective wealth -- say, assets or sustainable annual consumption -- then the it doesn't seem anywhere near as crazy.
Basically, Oxfam is exploiting a bug in how people misunderstand wealth.
Or should we be saddened that most of society fails to provide similar value, despite having similar access to education, ability, and capital?
It seems to me that the problem with the totem pole is that each level is logarithmic, but always talked about in absolute terms. If my boss makes 10x and her boss makes 10x of what she makes, aspiring to 100x my wealth looks like a completely impossible goal in my lifetime - but it's really just two promotions.
An argument could be made that some people try to sabotage those attempting to climb the totem pole, but once someone has reached the top and did not illegally interact with anyone they passed on the climb, why all the hate?
The graph isn't logarithmic. It's shaped like this:
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____________|If that were problem free, then fine. But it's not. Think of it as a symptom of an illness, and we should work to get the fever down.
spend a few minutes thinking about the politics of wealth and the premise of representative democracy and popular sovereignty.
Bezos' wealth (and all the massive political power it represents) is almost totally unaccountable. This is the real problem of wealth inequality. It's not that some people have more material goods than others. It's that levels of wealth like that undermine the political systems that we have constructed to seek fair, just, and peaceful resolution of disputes. It is a road to tyranny.
I find this assumption incorrect, and desired result unachievable.
Every person has a different picture of what a "just" distribution of wealth is, and what "optimal" society is. Some think that humanity should concentrate on art & philosophy, and those professions should be rewarded the best. Others are more concerned with our self-preservation, and think that science, and foremost climate science should be rewarded the most. Third just want to enjoy the good life right now, and don't really give a crap about any of those global goals or future generations.
Of course, you may consider some of those people to be more correct and others, and it's not the point. Democracy didn't arise in order to get to the truth - democracy have arisen as a tool for people who think each other as complete idiots and fools to solve their differences without killing each other. If you decide that one of those goals should be the goal of the whole humanity, the problem isn't that you will be incorrect - the problem is that a lot of people will disagree with you, and will defend their point of view. Quite possibly, with violence. And whatever your goal for the humanity was, you won't be able to built a society optimized about that metric anyway.
The capitalist system that we have instead is much wiser. It's not built with a "purpose" in mind. It's built for each person to pursue his own purpose, giving him an ability do compete with others. Any kind of influence, any kind of resource other people want that you have - you can use them in a capitalist system to pursue your goals, and you can keep the exploits. If you don't have what other people want, you don't have the influence. The fact that other people think that "an english major shouldn't have to work at McDonalds" don't mean shit unless they're willing to put their money where their mouth is and donate to your literature-related Kickstarter instead of having a Happy Meal.
Of course it's not "fair". Such a concept doesn't exist across many different minds. But it's a system that individual people decide to build using their own resources over series of small decisions and needs throughout their lives. Seems like a much more stable system than something built out of abstract concept of "justice" and "higher purpose" forced by some people on others.
I do have a question though. When you have that much net worth and you get plastered all over the press about how much you have... What do you do then? What's your life then like? Seems like a nightmare, especially if you have kids and family. Do you become a prisoner of your own wealth then, guarded by people - never be able to just roam about, take a random tourist tour with your spouse, a road trip or whatever? Money is nice to have, but there are things you definitely lose, it seems. Is it worth it to be at that level?
[0] The truth is in the middle.
Monopolies mean no choice, no competition, low innovation and high prices
Blue Origin? He does have his own space ship company.
There's simply too much positive sentiment around this company and it makes me very nervous. It reminds me of 2007 when everyone was making a killing on real estate and the idea was laughable that the market would reverse. The stock is way overbought and the only questions I have are "by how much?" And "when is the reversal coming?"
There are other reasons I'm skeptical about Amazon remaining at its current valuation. One major one is that the meteoric rise in the stock price has coincided nicely with the economic recovery. Amazon's ecommerce business is one that's built for good times. It remains to be seen how they fare in downtimes. What I mean by that is that much of what I see people buy on Amazon (myself included) are largely frivolous gadgets that one simply wouldn't buy in a time of economic fear. Right now people largely feel wealthy and feel comfortable shelling out for prime memberships and willing to pay a premium for convenience. In a down economy that's the first thing to go.
Of course a down economy will weigh heavily on most companies, but I believe especially so on Amazon because it is a stock that is already overbought and relies on people buying shit they don't need for the sake of convenience.
Apart from that I believe they will face increasing competition from Alibaba, Walmart, and others.
Finally, there are the numbers. Despite the $400+ billion valuation, Amazon did less that a billion in profit from their ecommerce business last quarter! The stock shot up because that was higher than analysts predicted!
I have serious doubts about the long term profitability of Amazon's ecommerce business. Physical delivery of goods, particularly last mile delivery is just too expensive. Sure, drones might come but I wouldn't base an investment on that hope.
My prediction is that an economic downturn is going to send this stock into a tailspin.
they've been facing tough competition from Walmart since the late 90s. Alibaba is still miles away from competing in the same areas as Amazon although that will change with time. For now, if you're a consumer, aliexpress is only good for buying cheap low quality items.
If there's something they've figured out, it's logistics and how to deliver a product as fast and cheap as possible. Everything about their system is optimized for this. Now with their venture into contract companies to deliver goods they can bypass more expensive UPS delivery.
Now do I think they're stock is overvalued? Yes, but I don't see a doomsday scenario happening.
I think a lot of people assume that because they're amazon that they'll crack the last mile delivery problem, a problem that FedEx and ups, two exceedingly smart and successful and well run companies have not, not to mention the usps. FedEx and UPS want no part of last mile delivery because there's no money in it. The money is in flying it across the country with 300,000 other parcels. I'm very skeptical that Amazon can warehouse and deliver goods to your door with a significant margin, and a significant profit margin is what will eventually be required to justify a $400 billion valuation.
To date, this has not been the case, and the fact is that while they've made shopping an amazingly easy process, they haven't made a lot of money doing so, certainly not compared to the few other companies trading at similar valuations.
I'm not predicting a doomsday scenario in that amazon is going to go belly up. I just think the stock is headed for a dive.
You may want to take a closer look at Amazon's financials and see what kind of free cash flow they're generating before they reinvest that cash in expansion and new businesses. Net operating cash flow for 2016 was $16B and the trend is strongly upwards.
https://secure.marketwatch.com/investing/stock/AMZN/financia...
Just today I saw three separate articles (without seeking them out) giving umpteen reasons
Amazon is going to a trillion, or that Amazon is only getting started.
But I agree that Amazon will become the first $1 trillion dollar enterprise, but after weathering another economic downturn. Amazon is the Walmart of today, and is ruthlessly out competing every retailer (retail is in a recessive state, and I'm wondering what happens when SEARS goes under).
To throw a curve ball back, I do think Amazon is politically vulnerable. I don't shop with Amazon, and I tell everyone not to shop at Amazon. The company doesn't treat their average employees well, and should allow all their workers to form and join a union if they want. USPS is a great place to work, FedEx and USPS are pretty great too, Amazon is a garbage place to work---
In any case, since a lot (I would say most) of Amazon's market cap is based on perceived value and growth of its distribution and ecommerce business, if the fundamentals aren't there to make larger profits long term, there's no way the stock can maintain its current valuation.
I do shop on Amazon a lot, because I live in a city where the convenience factor is too great to drive to a store, and believe all this in spite of that. I agree that their working conditions are awful, but unfortunately I don't think most people care when shopping. Wal-Mart has taken a lot of flack for that over the years and it hasn't slowed them. In fact it was only about five years ago that there was a best selling book about how Wal-Mart was taking over the world and had to be stopped at all costs. I don't hear that as much these days and in fact it seems that they are viewed as an underdog. Things can change very quickly.
I guess these rankings are just rankings. It's an abstract way to value what someone have (or could potentially have) with no relationship to absolute truth.
Is this error being used with intent? I have no interest in shaming grammar errors, it's just that I am seeing this too often here, in the same place where I read great arguments.
English is not my native language, so maybe this is a colloquial use of the word?
Nah its an error.. I don't know why it's made so often..
Maybe it was happening all the time and we only started noticing it?
It irritates me far less than your/you're tho ;)
Thanks to you that specific error is not gonna happen anymore as it was public pointed out. It will help me remember next time.
I just wanted to check if there was some colloquial use of 'loose' that I was not aware of, as I am seeing this a lot and HN sometimes is a benchmark for me of good writing.
I am glad you received that with sportsmanship, I am totally for having my errors checked out too, have a good one!
Would just about any bank be willing to write a multi-million dollar loan to Bezos? Also yes, so there's no need for him to sell. He can take out a loan and collateralize it with AMZN stock and thus spend as much as he likes without selling the stock.
As further proof, corporate-level transactions like mergers and acquisitions typically see prices exceed recent public trading prices.
It's true that selling a large block of stock without influencing price can be difficult, but that's actually a relatively 'solved' problem in modern finance - banks regularly enter into complex transactions with clients that need to liquidate large blocks of stock and are worried about the impact on share price.
So in a sense, his wealth is "all on paper" and somewhat abstract. But especially for a company like Amazon, it's certainly not predictably less value than a back-of-the-envelope calculation would suggest.
For large sums, you always run into expense and abstraction problems: real estate is highly iliquid, gold is expensive to transport and store plus subject to market volatility itself, banks sometimes charge fees for exceptionally large cash accounts... sovereign debt and high-quality short-term corporate debt are often used for holding huge sums of cash-like wealth.
Basically, it's risk and abstractions and hand waiving all the way down.
Normally what people like Bezos do when they want to cash out is take out a big loan using the stock as collateral. That way they don't flood the market with shares.
Obviously if he continued to liquidate his stock at around 2% absolutely per year, he'd reach zero in eight years. Bezos owning zero Amazon shares would be very weird if he was CEO, though. I imagine he could comfortably get down to owning 4-5% of Amazon without damaging the stock too much.
Disclaimer: I own Amazon through VFINX, and if you are Jeff Bezos and taking advice from my comment, uh, don't I guess.
https://en.wikipedia.org/wiki/Medina,_Washington
You can kinda see both of their mansions (covered by privacy hedges) when driving across the SR-520.
[1] N. Wasserman. The Founder's Dilemmas. 2012.
I bought Windows 3.11 from a computer fair. I got Windows 95 from school (proper CD, not a pirate). I bought a computer that came with Windows 98 (and a lame Cyrix processor), got an XP licence from a case someone was throwing out, skipped Vista, bought Windows 7 Pro system builder from eBay (proper version, no pirate copy, I don't like pirating software). I then got a free upgrade to Windows 10.
Hardware, I think I bought an xbox 360 controller for the PC. I got given an old generation 1 xbox (since retired) and a load of games. Bought Office 2003 from eBay (proper version, OEM with hardware to satisfy licence) when Office 2007 was all the rage (so it was cheap). I think my brother once bought a Sidewinder joystick (had the footprint of a large dinosaur, such a big piece of hardware).
Then I used the Express editions of SQL Server (MSDE before that), Express editions of Visual Studio and now the Community as I am a Lone Ranger developer at home.
Oh and I bought a laptop that had Windows 10 on it so I guess they had a cut of its value.
So basically Microsoft have had very little direct money from me, despite basically being responsible for my employment for the last 15 years (I write apps under Windows).
I have spent more money with Parallels Inc as they force me to "upgrade" every year (every other year if I can help it) despite Apple introducing a new virtualisation layer a couple of releases ago.
So thanks Bill.
I'm afraid Amazon thinks they have a lot more time than they actually do to think about what, if anything, they want to do about the problem.
Using Mr. Bezos as the example:
US$ 72,000,000,000
Annualized gain of, say, 10% on AMZN stock
Over a period of 27.6 years
1.1^27.6 * US$72,000,000,000 = ~US$ 1,000,000,000,000
Just in time for his 80th birthday.
March 30, 1990: $7.38
March 29, 2017: $128.84
I am not saying it'll be Bezos, but someone will get there within the next 2-3 decades.
[edit] And while I'm at it, AMZN has returned 36%, annualized, over the last 10 years, encompassing the Subprime Mortgage crash.
That huge fake number - which has been thrown around the Web for more than a decade - is derived from the GDP share.
It goes like this. Rockefeller in 1915 (pick the year), was worth the equivalent of 1/37th of the US GDP. Therefore, adjusted to today, Rockefeller would be worth $bazillion (1/37th of $19 trillion; which used to be more like $12b-$14b when the fake premise originally started floating about).
If you dig into the calculation that was / is used on that $300-$400 billion, that's where it's coming from in every instance.
In fact, Gates is objectively far richer than Rockefeller ever was, just not in relation to the US economy size at present. Rockefeller was worth between $1 and $2 billion at his peak, in his time. The inflation adjustment on $1 from 1910 to now, is not 300x or 400x. It's closer to 20x to 30x. If it were 300x, Ford's famous $5 per day pay rate (from 1914), would be ... $1500 per day. Laughable obviously; the 300x+ doesn't pass any challenge thrown at it.
Just use the proportion 1/37 instead of converting to dollars, or I agree it's misleading.
Also: perhaps, $1500 per day today is reflective of our buying power in a way, if we consider new inventions like TV, smartphones, internet, air-travel, when the closest equivalents back then were much more expensive.
(A little sarcastic, sorry:) Yes, if we ignore all of the things we buy that have gotten more expensive, it's like prices have deflated.</s>
Overall inflation measures a collection of consumer prices, the average of which has trended up since that time. It is a general reflection of buying power, dollar for dollar.
I'm a little intrigued though: shouldn't technological progress and "accelerating returns" have made things cheaper? I do see for land, that location is a monopoly ("they aren't making any more" - at least, in that spot, in that community, with that access). I wonder how much similar market effects have "artificially" kept other prices high? An oligopoly or silent collusion/combination between sellers (e.g. as happened for flat TVs).
Also, I wonder if a different lifestyle is possible, leaning more heavily on those aspects that have gotten cheaper (one e.g. living remotely and working remotely or independently).
Anyway, I'm glad you agreed with my other points, I'm assuming.
Healthcare and education costs have increased hugely, housing costs moderately (moreso in the big cities). Overall inflation is somewhat offset by food and electronics getting much cheaper.
> I wonder how much similar market effects have "artificially" kept other prices high? An oligopoly or silent collusion/combination between sellers (e.g. as happened for flat TVs).
The healthcare marketplace is pretty terrible. Perverse incentives, no pricing transparency, etc is at least part of rapidly increasing costs. Oddly education has gotten much more expensive as well, including K-12, and there doesn't seem to be an obvious reason there.
> Also, I wonder if a different lifestyle is possible, leaning more heavily on those aspects that have gotten cheaper (one e.g. living remotely and working remotely or independently).
Yeah. If you can swing a remote tech job living in a low or moderate cost of living area, you can save enough to retire (in that LCOL location) in a couple years. It can really be single digit years if you can keep your saving rate above 90%.
Patented drugs are at least something new - you're getting better tech, enhancing or even saving your life, to an extent previously impossible. The "standard" cost of drugs increases with our expectations, but also their true value. Inflation measures mightn't account for this. eg basics like aspirin and ibuprofen are dirt cheap these days.
House and education prices are above their actual utility; a bubble, an insidious monopoly, or something else.
Isn;t educatiin high because it's a false ticket to a "good job"? i.e. people get it for that reason (not for the education itself, or for a market demand for that specific skillset/knowledge), but the jobs aren't there, so they double down. Demand for education exceeds supply so the price goes up. Yes, more places are made available to meet demand, but they lack the prestige (and network effects) of the top institutions... On it goes. Mightn't apply to K12 though (that's highschool I guess?).
LCOL is it. BTW I used to want to retire, now I want to be able to work on projects. That's a subset, I guess.
Not at all unreasonable.
They left a note on his profile in the billionaires list that says:
"The net worth history for Bill Gates was changed to reflect a revised approach to the valuation that was applied on Jan. 27, 2017."
Which is probably another way of saying, that he put in a favor with Michael Bloomberg to not show him crossing $100 billion, as he doesn't want the headlines.
Strange because New Mexico consistently ranks near last in quality of life, employment prospects and education.
b) Silicon Valley is 30 miles or so south of San Francisco.
B) 30 miles makes it part of the same metropolitan area.
Though now that you mention it, I have heard that commute times around the valley are terrible....
* Technically Seattle metro area
I'd say Seattleites are some of the most arrogant,
standoffish, and surface-polite people I've met
anywhere in the world.
[1]The 10 most livable cities in the world http://www.marketwatch.com/story/the-10-most-livable-cities-...
Look up "Seattle freeze". It's a real phenomenon sociologists have studied.
Essentially, it's easy to make acquiantences in Seattle, but extremely difficult to make friends. Everyone is polite and friendly on the surface, but any attempt to get to know someone is met with (polite) stonewalling.
edit: Earlier, HN didn't let me reply to you perhaps due to some time threshold I'm not aware of. So replied to myself. Deleted that post now.
There are also costs that developers do not directly pay for but a city pays for. Maintaining all of the miles and miles of road, metro, pipes, power lines, police patrols and so on is more expensive than the equivalent amount of people in a smaller space.
[1]: http://www.citylab.com/tech/2016/02/the-spiky-geography-of-v...
I know myself well enough to know that I am less productive when I don't get sunlight. I suspect many other people are the same.
There are successful companies that eat their workers alive, employee happiness isn't related with their success in a lot of cases.
I guarantee you anyone with a roof and a rain barrel is not hurting for water for their plants.
My previous manager at Amazon told me he recommended everyone who came from California to take a vacation back during the winter lest they get too depressed.
Uhhh, Seattle, Portland, and the rest of the PNW have some of the most outdoorsy people in the country. We're less than 2 hours from the ocean or the mountains.
Kind of hard to build hype if your two main talking points are 20+ and 40+ year old companies.
https://www.forbes.com/sites/emilycanal/2016/03/09/the-citie...
Homes in the Bingham / Hunters Island (south of Mar-A-Lago) and Manalapan areas of Palm Beach are some of the most expensive and outrageous in the world.
Fun to fly around there on Google Maps: https://www.google.com/maps/@26.6676348,-80.0368289,548a,35y...
Since Amazon began showing off AWS financial figures, the stock has more than doubled. The market has priced in AWS as being worth perhaps $150 billion or more. AWS is making a lot of money, and it's going to make a lot more over the next five years.
Investors likely expect that given the immense scale of the business and the fact that it's still growing at 20%+ (remarkably), the future prospect of Amazon generating, say, $16+ billion in net income, is reasonable to expect. One can then debate whether it's rational to be granting that valuation to Amazon today, if it'll take another ten years to produce the $16 billion annually (pulling future returns forward, the cause of Microsoft's 15 years of stagnation in regards to its stock).
[1] https://www.quora.com/What-percentage-of-Amazon-does-Jeff-Be...
I've always admired Amazon and have been a customer of theirs since the late 90s when it was mainly a bookseller. For a while I owned a few hundred shares, but sold them for a slight profit. Had I held onto them... sigh...
Jeff Bezos is one of America's great entrepreneurs, along with Gates, Musk, Ellison, and a handful of others. This is America at its best. We could do worse than to produce such amazing and successful technology innovators.
I would have guessed 160.
https://www.google.com/search?q=Rockefeller&oq=Rockefeller&a...
Both Bezos and Gates had a bit of a leg up as they came from moderately well off families and were afforded expensive educations and opportunities. (Not attributing their wealth exclusively to this but think it was necessary in these cases).
Saddam Hussein obviously had tons of liquid assets but the totality of them was never truly known. It was all squirreled away, and likely stolen by the caretakers when his regime imploded and the threat of retribution was removed.
How much did Pablo Esbobar have at his peak? We can only guess, but given the staggering cash-flow rate of an estimated $500 million per week, perhaps as much as $30 billion. This is 1980s dollars, too. Adjusted for inflation that's absolutely nuts.
He was worth a reportable 70 billion.... and unknown amount off-books...
He was murdered for his money. And anyone who says that is not true is fucking clueless about what the fuck is actually happening in this world at that level.
http://panamapapers.sueddeutsche.de/articles/573aeac75632a39...
So, in your scenario, HRC wants Gaddafi's money. So she orchestrates an attack on a US embassy nearly a year after he died, as a false flag operation. And then we sent people in get the money. Of course, officially we didn't send anyone in Libya in response to the attacks except some more marines to guard the embassy, so this group that went in to get the money did so secretly. But then why did they need to orchestrate the attack on the embassy? Why not just send spies in under cover? Also, where is the money in scenario? Is there some big fucking safe filled with gold bars in his palace that none of the militants have touched in that last year?
Oh, also you don't think Gaddafi's execution had anything to do with a prolonged civil war and numerous human rights violations? Or did Clinton also invent the Arab Spring and force Gaddafi to be a brutal dictator for decades?
I do find all the Benghazi BS to be super weird - but thats just me without all the facts...
However, it is a documentable fact that Gaddafi may have been the richest documentable person (clearly we are ignoring the Rothschilds etc...) in the world...
He had vast assets and liquid cash all over the place. This is known - so do not accuse me of trolling on facts...
Further, it is known that HRC is a corrupt person (proven via her emails and many many other resources -- if you are unaware of this, then you're simply unaware and I am not trolling)
I said that it is RUMORED to have been financial motivation to go after Gaddafi... did you ever see the list of countries that Clark said the .gov was going to go after? Libya was on that list...
now, I shall admit my ignorance - as I am not entirely familiar with the libyan civil war, but I know my CIA history a fair bit... arab spring was an op. to foment a varied amount of things... civil wars here, uprisings there, extremests wherever... and change all over.
I never said Gaddafi was some benevolent anything -- I said he was sought for his money and executed CIA fashion.
so.. let me ask you: What happened to all the 70+++ billion dollars Gaddafi had? He was killed - what happened to his wealth?
I know that you have no fucking clue. So... what is your speculation?
Where did his funds go?
http://panamapapers.sueddeutsche.de/articles/573aeac75632a39...
If your biggest client just got killed in a coup do you really think you'd go through a lot of trouble to track down his various relatives as they're being systematically captured and/or executed by the uprising? No, you'd quietly wrap up all those trusts and funnel the money to safer places, like the bank accounts of yourself and people you trust.
You denigrate my comments yet you just state a reinforcement of my speculation "criminally rich are also, not surprisingly, very good at making money disappear.
this was the premise of my post!
Money went someplace, and we dont know where it went - did HRC profit off it or not....
Come back with a shred of proof, okay?
You've already demonstrated it in spades.
When something seems odd, maybe you don't have all the facts that would instead paint a much better picture. You're like someone with two pieces of a jigsaw puzzle who's convinced it's something perverted but really it's just a fruit bowl.
* Where has Gaddafi's money gone?
If you're going to bring speculation from the "/r/conspiracy" crowd onto this forum, which you won't even admit to believing yourself, you should expect and tolerate the inevitable reaction that follows.
I said that fuckery was afoot -- I didn't give any timeline or sequence to events...
I simply stated that Gaddafi was murdered for his money (and the fact that he refused to bow to the Rothschild central banks, and wanted to run his system on a gold standard) -- I did NOT stand up for anything regarding his character, dictatorship or anything. And yes - I personally do believe that HRC is a criminal (as is trump) I only put faith in Sanders, but almost exclusively I am apolitical.
So keep fucking on topic - Gaddafi got killed for a reason we will never know, and his ~$70 billion dollars evaporated to who-knows-where.
That was my best guess at a timeline for your conspiracy theory. Would you care to give an alternative?
You're also kind of all over the road here. First you say "I simply stated that Gaddafi was murdered for his money" but in the next paragraph you say "Gaddafi got killed for a reason we will never know". And you follow that up with "and his ~$70 billion dollars evaporated to who-knows-where" when just before you proposed that the money was taken by HRC. And you seem really certain at least some part of this is true, saying "He was murdered for his money. And anyone who says that is not true is fucking clueless about what the fuck is actually happening in this world" but then respond to someone calling your theory "a rumor". I honestly don't know what you believe or don't
I apologize for not being salient in my sentiment.
Gaddafi was killed, he MAY have been the richest person alive at the time, the US had many reasons to want him gone... HRC MAY have profited off his death - and we do not know where his money went.
Perhaps the people who worked for/with Gaddafi stole it (at least some of it) -- perhaps HRC profited off it.
its all out in the ether and we shall never know the truth.
Can you please tell us which other people are billionaires?
OR
Are you trusting the same publications that George W Bush and republicans turned into paid propaganda to say that Iraq as Le weaponzzz of mass destruction? Remember NYT, WaPo, CNN were the major trusted news orgs that GOP bought.
Basically, after three generations a single persons wealth is distributed out enough to get dropped from these sorts of lists. Jeff might be the 2nd richest in the world - it's highly unlikely his grandchildren will be ranked as such.
A bank in London had no reason to cash a check drawn on a bank in Paris, or value a Letter of Credit given by a bank in Frankfurt, unless the London bank trusted the other bank would honor the liability, and honor it timely. This was especially true the larger and more complex the transaction.
As a banking consumer you wanted to use a bank that would honor instruments from and have its instruments honored by the most and the most important banks across Europe. Those banks were often part of a consortium of family-owned banks, because under economic stress the family-owned banks would always honor their commitments to each other, and offer each other low-interest loans to help another member bank stay afloat.
It's not even April yet...
In the US, I think this is different. So this is a more dramatic result considering.