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Comment by mulmen | Hacker News Reader

I'm not making the argument that the economy is a zero sum game. I'm saying we don't allocate wealth properly. My concept of the "elite" is based on them having so much more than the poor. With more equal income distribution there would be no "elites". Of course there will always be people with more and less but that doesn't mean we need the elite for the economy to work or that its healthy to load so much of our collective wealth to the top.

For example: good for Rowling but why aren't more authors able to make a living writing?

In my opinion the fact that it's possible to win the economic lottery like Rowling or Notch is a symptom of a greater problem.

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I think that "information cascades" is the concept you're looking for.

J.K. Rowling made hundreds of millions because hundreds of millions of people bought her book. Why did hundreds of millions of people buy her book while most authors struggle to get tens of thousands? Mostly because people recommended it to their friends, and their kids all passed it around school, and news stories got written about it, and major motion pictures came out, and it became a cultural phenomena where Harry Potter references snuck into every corner of life.

Look at any other billionaire and you see a similar story. Minecraft got huge because everyone was like "Yeah, I totally wasted a week playing Minecraft. No regrets" and so everyone checked it out. Facebook got huge because everyone was like "Are you on Facebook? Here, I'll friend you." Ditto LinkedIn and Whatsapp and every other social network. Uber got there because at parties people would casually say "Oh, I'll just Uber home." Google got big because people would be like "Just fucking Google it" instead of telling you the information.

Basically, when you can get your customers to do your marketing for you, you rapidly expand into the whole set of potential customers, which numbers in the billions. Provide just $1 of value to them and you're a billionaire. Most business owners and employees, by contrast, are forced to explain why it's worth giving money to them, which is a process that doesn't scale. Then you're forced to only deal with customers who will pay you more than it costs to convince them to fork over that money.

The way you can break this cycle and eliminate this inequality is to convince people to make their own damn consumption decisions and ignore what their friends say. Good luck on that.

You've basically just defined "went viral".

Yep, exactly. Virality as we think of it on the Internet is just a specific form of information cascade, along with word of mouth advertising, financial bubbles, fashion, social proof, populist movements, etc.

I don’t have a problem with this cycle. I just don’t think everyone wins when someone wins this lottery. Some people receive far more reward than others even though they were all involved.

This doesn’t mean J.K. Rowling wrote a bad book or doesn’t deserve the money. That is a apparently very distracting example that misses the actual point.

I’m saying that when a person makes billions (read: lots) of dollars in a society that has people starving to death or otherwise unable to meet their basic needs then there is some exploitation happening somewhere. The economic rewards of that work are larger than the individuals contribution, someone is getting screwed.

Because their books don't address a wide enough audience? You can write an amazing horror thriller book about zombies, but the total addressable audience will be smaller than a well written fantasy book that can be read by someone ranging from 13 to 75.

As an example: artists often have this feeling that they need to stay "pure" to their air to make it. Yet, the best artists that often "make it" are actually businesspeople first and artists second. They will think about creating art that can and will sell.

Second to this is the fact that money generally ends up making more money. If I have $10m in the bank (a small amount of money in the grand scheme of things and looking at how much money goes around in the world), then on average, if invested properly, this should generate you about $1m in capital gains per year. Most people don't spend a million a year.

Add to that any income you might be making from whatever you're doing (entrepreneurial stuff, etc) and it's generally very hard to drop out of the elite once you're there.

You're simultaneously missing and making my point.

Sure Rowling wrote a great book and the economic gods smiled on her and we got a new pop culture staple. But what about the authors of other books that are similar but made orders of magnitude less money? Does it make sense that there is such a gap? Is everyone involved being fairly compensated? Even the people running the printing presses and delivering the books?

Is it beneficial that "money makes money" without the promised trickle down effects to the middle class? Why is it possible to make a million dollars in a year with 10 million (10%!) but not just as easy to make say $100.00 with $1000.00? If $10,000,000.00 is such a small sum why will the overwhelming majority of people never see that amount of money in their lifetimes?

Yes it is hard to drop out of the elite, because they're keeping the wealth, they can't even help it. This is the neck stepping I referred to.

On the first matter. Yes, it makes perfect sense. Her books are superb, and very well written. The story flows great. She is an excellent writer _AND_ great at marketing.

Nothing ever stands alone and you generally need help from other people to achieve things. Her story is rags to riches -- if she can do it, literally anyone can do it. Was luck involved? Of course, to some extent. But hang out with the right people and you would be surprised at how much is possible in life. There is a reason why success often seems contagious.

On the second part: it's an effect from a capitalistic society. In fact, you can easily achieve the same returns (even higher) with lower capital. It's just that the outcome matters less: you can't live off of $100.

Have an open mind. $10m is literally one good idea away. Invested in Bitcoin in 2011? There you go. Made a great app in 2007? Maybe not $10m, but at least a few. Etc. Opportunities pop up all over the place -- most people are just not looking and too busy working a job and living life.

Literally everyone can make millions, IF that is what they desire and want to achieve in life. You just have to work towards it. Is it easy? Hell no. Should it be easy? Hell no.

Last: the elite isn't really keeping the wealth. They obviously won't just give it to you, but there are plenty of opportunities for people with good ideas but no money to team up with people who do have the money, and make something happen. And most will gladly share the gain.

Yes it is possible for anyone* to be a JK Rowling. It's not possible for everyone to be a JK Rowling. That is my point.

In order to create a system where it's possible to become a billionaire by writing a book we also create a system where a lot of people can't become millionaires by doing essentially the same thing.

I'm speaking philosophically here, you're describing our current civilization.

* a specific subset of all people who posses the correct personal traits and opportunities.

"It's not possible for everyone to be a JK Rowling. That is my point."

So?

"In order to create a system where it's possible to become a billionaire by writing a book we also create a system where a lot of people can't become millionaires by doing essentially the same thing."

But they are not doing the same thing. They also write, yes, but not so good. Or maybe also good, but not what the masses wants.

And that's the other point, the masses decided to buy it - so the masses decided to make Rowling a star and rich.

Where is the problem? That not everyone can have big fame and big success? Well, that's the nature of things.

It only gets problematic if the elite use their power to bend the rules of the game, so that not those who deserve it (those who create big value) get successful and rewarded, but those of other traits ... so the game should still be fair. But I think we made progress with that. Some decades ago, it mattered much more, where you came from (nobleman) than today.

He's basically pointing out that JK Rowling's success partly benefited from a feedback loop. For example, once everybody was talking about it, free publicity.

If somebody else had all the same skills and wrote another book that was just as good, there probably still wouldn't really be room for both of them. Only one series can be the pop culture youth fiction darling at a time.

Now you're back to the article! JK Rowling's success story is singular because the masses don't have oodles of disposable income. This is why companies are finding niches where they can earn income from "whales" rather than having to score the masses lottery.

JK Rowling's success story is singular because the masses don't have oodles of disposable income

Hardly, she could still be a huge success story if she split that pie of disposable income halfway with another author who was her equal- but public attention doesn't really work like that, is the problem.

But targeting whales to avoid the masses lottery, yes, I'm with you & the article there.

> But hang out with the right people and you would be surprised at how much is possible in life. There is a reason why success often seems contagious.

This has the potential to paint the wrong picture as is. The wrong picture being that growth breeds connections to successful people -> breed success -> breed wealth.

Another way to view it is, connections to successful people breed growth -> breed success -> breed wealth. This way "lucky" connections only aid in developing a better product, and not in practicing unfair marketing for existing products.

Her books are not that good; she's much closer to Dan Brown in terms of her success than people would think. The right product at the right time, quality is not paramount. Same as the Hunger Games, or Twilight, or Goosebumps.

If it were quality, Diane Duane or many, many other skilled writers would see success.

Sorry for picking out such aminor point but I think you are overestimating capital gains. Or at least I would be very interested on how to achieve capital gains of 10%.

"I'm saying we don't allocate wealth properly"

But wealth isn't really "allocated". To use the previous examples of Rowling and Notch, no one allocated millions of consumers to buy their product. Millions of individuals decided to freely spend their own money on Harry Potter and Minecraft.

Most authors do not write books that are as desirable as Harry Potter.

Most developers do not make games that are as accessible or extensible as Minecraft.

Would your ideal system deny them the rewards of creating something massively successful?

No my ideal system would allow more people to create things that are massively successful.

How?

>For example: good for Rowling but why aren't more authors able to make a living writing?

Because consumers don't like them as much. The market increasingly is a winner take all, moving away from the 20%-80% split. How many books did you buy this year? How many were from indie/unknown authors?

You're missing the forest for the trees. We provide huge rewards to a small number of people but why? Yes, consumers don't like them as much but if that means some people starve and others make billions maybe that's a problem with our socioeconomic system?

Problem relative to what other system. As far as systems that exist, Democratic capitalism with a social safety net has produced less starvation per capita than any other socioeconomic system that has actually existed. Most stories of people attempting to implement a hand-wavey utopia have results where the human dead measure in millions. At this point theoretical Utopia's meet the standard of extraordinary claims, and consequently they require extraordinary evidence. How does this alternate system of yours work? Can people read what they want to read? Can people work where they want to work? Do companies get revenues based on how successful their products are? If all three of those things are true your premise is basically violated as far as I can tell. I don't like breaking any of those 3 things as I see the first 2 as fundamental rights and the third as the main successful way to reward creating actual value for real humans.

So I guess we can abolish congress then?

Democracy contains a fundamental assumption that society is continually evolving. You're putting a lot of words in my mouth here. I don't think our current system is perfect, that does not mean I want to institute a dystopian centrally managed society. It means I understand the basic concepts of democracy, and nuance.

I don't think our current levels of wealth inequality are healthy or sustainable. Personally I'd like to see a wealth tax where you pay for the portion of the national economy you hold.

Because this matches their usefulness - in services that scale to a huge audience, the less-than-the-best aren't useful much.

Assuming that I'm going to read 50 books of a certain niche genre that has 5000 writers worldwide, the best 50 writers in that niche have a significant economic value (and thus deserve huge rewards, because we want them to continue writing) the next 50 have some value, and the remaining 4900 writers in that niche are useless, they can do it as a hobby if they want but we're not going to support them much - we don't need their writing, because someone else can do it better. Why would I ever want to read the 101st (according to my preferences) best book if I'll never get the time to read the 100 books that I'd like more than that? It might as well have never been written as far as I care.

This is the inevitable result of abundance, of having more choices than you'd possibly need. Think about this from the perspective of food - if you want an apple, and are walking by a tree that has a hundred apples of various ripeness. The few most ripe apples are useful - you pick one of them; if you want a second one or have a friend with you, then you might want a few more... but the 90% that aren't as attractive have zero value if the tree has more apples than anyone could ever want to consume. And this is the case for writing; there's more fiction writing than anyone might ever be able to read, thus you're inevitably reading just a small fraction of it, and if something's good but worse than the many alternatives, then it's worthless.

The same applies in any industry that scales. I want to watch a top-10 footballer, but the top 10000th is useless to watch (although they're really good, they're among the best 0.1% of the millions of soccer players worldwide); the same goes for music, software, all kinds of creative works.

You are way down the rabbit hole of the JK Rowling example here and have completely missed the overall point. My argument is that the difference between the books you want to read and the rest is smaller than the economic outcomes would lead us to believe.

To make this even more clear, economic gain is disproportionately allocated to a few individuals at the expense of all other participants. It stops being a meritocracy and becomes a lottery for the producers funded by the capitalists at the expense of all other participants.

>We provide huge rewards to a small number of people but why?

Thats what I asked you. How many indie authors have you supported by buying their books and spreading the wealth. Or do you have a better way to spread the wealth apart from the government taking it by force from whatever class it deems as enemies of the people this week?

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