Wealth Inequalities Shown to the Scale | Hacker News Reader

Wealth Inequalities Shown to the Scale

mkorostoff.github.io

101 pointssubrat_rout48 comments

This is often the problem I see with people mixing up Wealth and Income. A person with $100K income could also have millions of wealth or asset from stocks to property. Jeff Bezos has most of this wealth from Stocks. And I am willing to bet $100 given the current market cap and PE or PEG, his resignation from the company and liquidations of his Amazon Asset will trigger a sell off that its value differs quite a lot to his current value.

Someone might as well set up a gaming site called How to Become A Billionaire. Simply paid the cheapest amount of money to set a a company somewhere, issues a billion shares and get someone to buy one share for a dollar.

While I do agree on the world in large has inequality problem. Focusing on the ultra rich doesn't fix it.

You gotta wonder about the morality of a society that allows a person to amass 40,000 lifetimes of wealth and lets others starve. The ultra rich are a mathematical anomaly that exposes what a sham this "meritocracy" is. It is physically impossible to create $140 billion dollars of actual value for people in a single human lifetime (2.5 billion seconds). The only way is the amplification and exponentiation of that work through millions of other people, and to make the incremental cost of adding that value essentially zero. Which means that the market has absolutely failed to price the "goods" created by these people according to their incremental cost.

>> physically impossible to create $140 billion dollars of actual value for people in a single human lifetime

Source? I think Linus Torvalds and Norman Borlaug both easily did this. Jeff Bezos and Bill Gates certainly might be up there. $140 billion is not that much when you compare the productivity gains just these four people have given the world.

Why aren't teachers or scientists billionaires?

Because they don't scale.

This is like asking why JK Rowling is a billionaire but your neighbor who only sold 10 children's books is not.

Teachers and Scientists who scale are billionaires[1][2] or centimillionaires [3]

1. https://www.cnbc.com/2019/07/30/indias-newest-billionaire-is...

2. James Watson, Ronda Stryker, Gordon Moore

3. Stephen Hawking, Richard Dawkins, Jane Goodall, Noam Chomsky

> Source?

The reality of physics and human capability?

> I think Linus Torvalds and Norman Borlaug both easily did this.

They had a part in it, but it's the people/ecosystem that creates the wealth, not an individual. Linus didn't create all the distros. He didn't install it on all the servers around the world.

> Jeff Bezos and Bill Gates certainly might be up there.

They themselves didn't create $140 billion of anything. It took the efforts of hundreds of thousands/millions of people, along with highly favorable laws and the society in which they lived in. Also, Bezos and Gates destroyed a lot of businesses as well with their monopolistic practices. As a matter of fact, when it comes to gates/microsoft, I'd say it's an overall net negative as microsoft set back computing/computer literacy more than anything.

I thought the fallacy/myth of the "great man" nonsense died with Jobs. There were plenty of people who thought Apple was over when Jobs died. But I guess it's alive and well today.

What's the right wealth level for people? I don't know. Personally, I think the best way combat wealth inequality is to create laws to foster competition so that one company doesn't become a monopoly. But instead, we are in an era of mergers, monopolies and consolidation. So wealth inequality will inevitably continue to grow.

>> They had a part in it, but it's the people/ecosystem that creates the wealth, not an individual. Linus didn't create all the distros. He didn't install it on all the servers around the world.

One is a much more replaceable skill than the other in this equation. That's why Torvalds has contributed more to world productivity than most.

> One is a much more replaceable skill than the other in this equation. That's why Torvalds has contributed more to world productivity than most.

What is? It takes as plenty of skill to build a distro ( along with the package management systems, etc ) as it does to write a kernel. I understand that to most people, "kernel" = magic, but it really isn't. Not to mention many people helped develop the linux kernel.

Linus deserves credit, but so does red hat, slackware, debian, etc. Without those distros and GNU project, nobody would know of linus or the linux kernel. And the vast majority most of the GNU/Linux OS ecosystem is non-linux.

> That's why Torvalds has contributed more to world productivity than most.

The "great man" nonsense really has staying power. Using your logic, Torvalds' mother has contributed even more than torvalds to world productivity because she created linus...

No! The burden of proof is on you. Please explain in detail exactly how Torvalds in 50 years of living has created $140 billion dollars of value. How many billions of value did he create this year? How many did he create last year? And so on.

Uh, Linux and its derivations drive over half of the computing power in the world, yielding insane productivity gains for people of all classes, races, ages, and geographic locations.

I think that speaks for itself.

Thought experiment: we discover a whole new planet the size and population of Earth that just happens to run x86 computers, but no Linux. We introduce them to Linux, which can be copied onto every single one of them at essentially zero cost. Should Linus and co's fortune instantly double? Do they deserve a "cut" of every single person's productivity gain, forever, everywhere, in perpetuity?

This is the principle we are discussing.

Linus isn't worth billions of dollars, so probably not. I imagine his net worth due to residuals would increase, and yes, he would be deserving of it.

Thanks for missing the point, uh. Explain exactly which of Torvalds actions that together created $150 billion of value. How many billions was uploading the Linux kernel to ftp in 1991 worth? How many billions was created when git was launched?

There's no missing the point. Torvalds developing Linux rocketed productivity which as any economist can tell you is worth a lot, lot of money. The scale at which the Fed is pumping money into the economy hoping to get a fraction of that productivity should tell you how much its worth.

You disagree with economic principles and productivity. That's fine. There's nothing to continue to discuss, then.

TBH my original comment skirted the line on trolling, mostly because of its terseness. But it's a genuine thing to consider unquestioned, unstated assumptions like the idea that an inventor is entitled to a percentage of every single productivity gain everywhere that results from their invention, regardless of the incremental cost to them. You can see the discussion elsewhere in this thread about that. But maybe on your own time you can consider why you accept and defend this principle which so obviously benefits rich people and powerful corporations the most.

There is nothing about morality in the billionaires that are mentioned.

People find value in the companies they create and willingly give their money to the companies in exchange for their services. Nobody is forced to give money to these companies.

The huge amount of wealth that is created from this process comes in part from the globalization and scale of their operations.

The lobbying, tax loopholes, anticompetition behaviors are a separate issue. Many of these are patently unfair and true competition starts to break down.

You cannot dismiss the argument in one breath saying that no one is forced to give money to these companies and in the next breath say that anti-trust and lobbying is separate. It’s a fallacy of choice.

These companies and C-suite individuals are taking advantage of a system which serves capital first and foremost. Amazon is able to extract large amounts of value from both workers foreign and domestic within the laws written and lobbied by the capitalists of the last generation.

Look, human nature is to actually amass wealth without creating value. We are lucky we live in a society where value creation and wealth acquisition are at least tangentially related.

The problem in my opinion is not that a single person gets so much wealth, but rather what they receive the wealth for. Amazon just made life easier for the masses to consume goods. IMO someone like Einstein deserves a lot more money and someone like Bezos less. The people inventing the actual science that then enables something like Amazon don't really get compensated -- and perhaps they should.

> the market has absolutely failed to price the "goods" created by these people according to their incremental cost.

Your right. The wealth Jeff has vastly comes from his ownership of his business, of which he alone didn't make it what it is today. Many workers helped contribute and make it what it is today, but they're not anywhere as wealthy as they're weren't fairly given part ownership in the business they contributed in making...

You could argue the workers were paid a wage which they could of invested into a share of ownership in the business, but it's still unfair. There's a limited amount of stock to go around (unless the company issues more stock), existing owners stand to benefit more when this happens.

Stock behaves just like money in regards to it's store of value. Print alot of it, without making goods, and it becomes worthless and vice versa.

Therefore for fairness, ideally companies should print stock equal to the growth in their value and given to those who made the value. But lol at this pipe dream, as share prices wouldn't ever change much, so existing owners would be against it as they wouldn't benefit from it (unless they also worked in adding more value). Nevermind the difficulties in objectively attributing value...

Couple of issues I have when I see such graphs or scale of inequality. I'm referring to those wealthy people who want to use their good fortune for benefit of society, not all of them.

1. Usually these comparisons imply that the super rich have a major chunk of their wealth sitting as cold hard cash. That's hardly the case. Most of the wealth is in assets or illiquid forms. Take Bezos for ex, a good chunk of his wealth is in AMZN stock. If he sells all of it to fund a philanthropic scheme, that'd trigger a massive selloff in the stock market and impact a lot of people negatively. Not saying that they're helpless, but I think they may be doing some good with all the excess cash that we may not be aware of.

2. From a logistics point of view, it's hard to ensure that money intended to help someone reaches them. Unless you are personally delivering the money, there'll be middle men who take their cut. If a billionaire decides to spend a billion dollars on charity, I'd think a bunch of orgs would want that money, to do charity as well as run their non-profit operation. Which would make it appear that not enough is being done by the billionaire, when it is employing a few and benefiting some more.

Feels like the author keeps making this point over and over that if we could just take x million from these people we could fix so many things. But I don’t see any vision painted for this new world where now everything is OK and fair. Maybe the current system we got is what makes people build things like amazon. Maybe jeff gets to be proud of his wealth and makes his own philanthropy choices.

What’s mind-boggling is that Bezos is still a billionaire after all of the suggested changes. The amount this affects his day-to-day life is slim to none. He’d still get to be proud of his wealth in the new system!

I have a hard time feeling like large-scale preventable deaths of six figures of real human children is worth Jeff Bezos’ warm tummy fuzzies he gets when he thinks about being unfathomably rich. Instead of thinking about whether innovations like Amazon would have materialized in this brave new world where people can actually get their malaria treated and have access to clean drinking water, consider: how many people might have made something just as game-changing as Amazon, but died a preventable death, or lived on, but weren’t given the same resources to survive and thrive as someone like Bezos?

i think what you are missing is it's a game of "whack a mole" way more than a game of a perfect puzzle where if you just do the ethical thing, and just be nice, and cure this and stop that, THEN, THEN everything will be... ok. But the reality is you plow 2 billion dollars into fixing one thing and this displaces something else and you can't get to this desert mirage utopia society we think we see just down the road if we could just get people like Jeff to fork it over.

I fundamentally reject the idea that society is obligated to help Jeff Bezos protect his $100 billion dollar fortune.

I think it is absolutely fair to say that society will not allow you to have more than $1 billion. Flat. Out. Wealth. Cap.

Then maybe instead of corporations squeezing their customers for every nickel and dime and screwing pensioners they can retire to their private islands and enjoy their life.

The biggest problem society faces right now is not how an individual gets from $1 billion net worth to $10 billion net worth, or $100 billion.

Looking at the scale is kind of interesting, but what we really need is more information about options for making things more equal in terms of their relative effectiveness and trade offs. America used to have 90% income tax on the richest. At some level that kind of worked, but it also led to a shell game where executives drove company cars to company condos and so on. Agreeing on reasonable taxation and enforcement could go a long way but we keep on minimizing land value taxation and other such alternatives.

If you made $7000/hr since the birth of Jesus, you'd still have less money than Jeff Bezos.

I wonder if side-scrolling was chosen intentionally. Side-scrolling is so much more annoying because you cant press space or page down to scroll faster.

You can press -> key of <- ->to scroll to right.

I just viewed the source to read the whole content.

A general strike [is needed][1] around the world demanding a basic income of between $1000 to $2000 a month for all human beings, and a one-time payment of around $100,000 to each person when they reach 25 years of age, financed by a [progressive tax][2] on the wealthiest people in the planet.

[1]: https://www.tbray.org/ongoing/When/201x/2014/05/01/Piketty-C...

[2]: https://news.harvard.edu/gazette/story/2020/03/pikettys-new-...

It's in the interest of the super-rich to advocate for a strong social safety net to prevent millions of hungry people with nothing to lose from taking what they need instead of waiting for it to be shared. ...at least until they can build a colony on Mars or something?

It's not clear to me why this is actually true. Food is cheap if you don't waste a bunch of time on anti-science regulations like the EU. California and New York aren't short on space, building is simply heavily regulated with anti-poor laws masquerading as environmentalism because people would rather protect their swamps and property values than see a construction boom. Water isn't scarce, if it was you wouldn't have booming agricultural industries in drought prone regions. And electricity is only expensive because people would rather tear down oil, nat gas, and nuclear now rather than after green energy has become not terrible. The idea that society isn't thriving because the billionaire class has most of the wealth ignores that in many developed countries the cost of living could be much lower if not for the regulatory environment. People have simply been convinced that there are more important issues than helping the poor.

Darned regulatory environment, inflicting clean air, water, and food upon the poor! How dare they!

(I agree with you about the property value stuff tho)

The confusion of wealth and income is big with this one. All of the comparisons, unfortunately, don't make any sense.

In this case it's pretty much a rounding error. Median net worth for college-educated people in the US is < 300K [0] (and it drops fast for all other cases), so it's not far off from the annual income. You could plug the actual educational attainment distribution [1] and get finer numbers, but it won't change much for the purposes of this comparison.

[0] https://www.marketwatch.com/story/whats-your-net-worth-and-h... [1] https://en.wikipedia.org/wiki/Educational_attainment_in_the_...

“Around 800 children will die of malaria today. A small group of super rich people could stop it for a sum of money so small that they would likely never even notice its absence. But they choose not to.”

Brutal.

The theoretical appeal of capitalism is that it allocates resources efficiently, is it not? Can someone explain to me how letting all these children die of malaria is efficient, given the cost/benefit of eliminating it? Is our economic system really allocating those resources in the best way?

Edit: come on guys if you’re going to downvote me then try to think of a reason I’m wrong..

I think the reason that capitalism does not allocate money to save children’s lives is that the investor cannot claim any of the child’s future income. That’s also the reason that capitalism tends to under invest in things like education and nutrition for kids, or environmental protections or fighting climate change- how are you going to recoup that investment?

There is one way. If everyone were slaves, then the capitalist really would own every child they saved. You’d probably see rates of malnutrition and disease plummet. Of course, then we’d all be slaves. But that would be a purer, less dysfunctional capitalism. Maybe that’s the only direction capitalism can go- it might go that way through a maze of debts and complex contracts and property rights rather than legal ownership of persons, but that’s probably the direction capitalism is going to go, if you assume that capitalism is evolving to be the most economically efficient version of itself.

Let's not delude ourselves, workers are already slaves under capitalism. How many times have you heard someone say they were working until they could buy their freedom? That's what saving for retirement is, after all - and most end up failing and having to work in some capacity until they are either unable or dead. Wage slavery is slavery.

It is slavery in the sense that you are slaving your will to another for most of your good waking hours in order to not starve. But I do try to be careful about what I call slavery because that conjures up the gruesome image of hotboxes and whippings, which still do exist in parts of the world, but a wage earning software developer in the USA is in a materially better position than that. I guess I would just say there are gradations of oppression and I want to not give the impression that I’m papering that over by calling it all the same word. Solidarity.

Capitalism requires workers and consumers. The places those children are have plenty of workers and do not generally produce consumers of any volume. Capitalism weighs human life only in terms of profit and loss. It is profitable in capitalism for those children to die because they do not require resources, diminish worker capacity etc. Ugly system probably created by and for evil.

I think this is a false equivalency. How much of the wealth is convertible to cash ? I think its 1% at best ... so bezos is worth 100 million.

Every years budget for U.S is in trillions, so its pointless to go after wealth of private people.

Even if we were to take the wealth of the richest, do you expect the government to spend it, with all the bureaucracy ? Even if you hand wave all the cash ... malaria and hygiene are not going to fix themselves without feet on the ground.

According to last year's 14A [0], Jeff owns 16% of Amazon. I'm pretty sure there are a long list of people and/or institutions who would gladly pay far more than $100M in cash for that.

[0] (see page 41): https://www.sec.gov/Archives/edgar/data/1018724/000119312519...

Yes but the government is sitting on "cash" not stocks and its 100 times more than Bozos.

> I think this is a false equivalency. How much of the wealth is convertible to cash ?

All of it? But why would anyone convert all their wealth into cash?

> I think its 1% at best ... so bezos is worth 100 million.

What? Even if he dumped all his shares on the market, he'd net a lot more than $100 million. Sure dumping the stock would push down the share price and he wouldn't net less than $100 billion, but why would he do that? Even if he did, he'd easily net tens of billions as there is ample support from $2300 to whatever level the price eventually drops to.

> But why would anyone convert all their wealth into cash?

How would you setup a malaria fund of 10 billion, otherwise ?

You give it 10 billion worth of ‘stuff’ (or promise to do so over a number of years)

A charity fund of that size will invest its money, anyways, until it has found a way to spend it (well) on its cause, so you can just as well give it bonds, buildings, or shares.

It's quite clear that billionaires don't care about this. They will part ways with their money in a way they see fit. If it means donations to non-profits they own, or off-shore companies to lessen the amount of taxes they have to pay, then they will do just that.

All this talk about inequality is for naught. You don't have to tell Bezos how big his slice of the pie is. He knows. And he will take more by any means necessary.

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