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Comment by breck | Hacker News Reader

I think there's an important point here. Bill Gates wouldn't be a billionaire if he didn't build amazing things, but he also exploited at scale the unjust IP ("ImaginaryProperty") system, which was a critical part of achieving the scale Microsoft achieved.

Startups like Airbnb and Lyft likewise have built amazing things, and would easily make their founders 100' millionaires, but there is a point where to reach a certain level you need to leverage some flawed, unjust legal system at scale (stupid regulations around housing/hospitality/and taxis, in these examples).

None of these founders created these legal systems, but their rapid success and scale I can't see happening without those dumb legal environments they found when they started.

Now, maybe the best method to fix unjust laws is exactly this: when you see a stupid legal system, found a company to exploit it, become a billionaire and then finally society will take notice that the legal system is stupid and will fix it.

So I could see an argument that maybe not only should we not penalize billionaires who built their wealth from scratch, but we should thank them, like we thank white-hats, for identifying inequitable laws that they were able to leverage at scale.

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It's less "your product is exploitative" and "you underpay (exploit) your workers for their labor."

Bill Gates didn't write Windows 95. Steve Ballmer didn't write Microsoft Office. But they owned stock in a company that employed people that did (and all the various other labor that goes into building software products). Why did they make so much more money from it than the people who were more directly involved?

This dynamic is reducible. If Person A starts a software company, Person B, C and D build the product, and then Person A gets $10,000 while Person B, C and D each get $1, something is off there.

The capitalist defense of this is more or less, "B/C/D agreed to those terms", but this ignores the context. If every B/C/D wanted to be As, there would be no B/C/Ds to build things. And it's not always possible to choose to be an A--it usually requires a fair amount of privilege to start a business. But nonetheless, their work is equally important, and even if it isn't, it's certainly not the case that A's work is 100,000x more important.

We need to recognize this kind of bonkers concentration of wealth is a huge problem, and fix it with profit sharing and taxation.

Didn’t Microsoft create hundreds of millionaires out of it’s initial employees? I mean, the people building the next generation of Microsoft products aren’t going to have trouble entering the upper income brackets of American society.

I would say a couple things here:

- Your argument could be rephrased as "profit-sharing isn't necessary as long as you pay people enough." This may work at mega-successful businesses like Microsoft, but doesn't work so well at something like a restaurant chain (or Amazon), where income inequality is far more pronounced. And those cases are far more common.

- Concentrations of wealth and capital have a destabilizing effect on society. It leads to political corruption. Further, even if we have a handful of companies where income inequality is relatively low, that's not the case for most Americans, even at those same companies. In other words, sure software engineers are doing fine, but most people aren't, including many people working for the same companies as those software engineers.

What is the point of being person A if you don't get any benefit over person B/C/D? Why would anyone take on the extra work and risk of being the person that starts the business when you can just be the person that joins and effectively get the exact same things with 1. less work 2. less risk?

Yeah that's a great point. I think we should make it a lot less risky to start businesses. You shouldn't have to risk give up earning years or career building years, to say nothing of the financial burden of raising money (or competing with people who are able to raise money while you have to bootstrap instead). I think we should do this both generally, but also specifically for women, people of color, and other groups who are underrepresented in the universe of small business owners.

Overall I think it would actually be really cool if we could get to where we think we are, where I can essentially pick from a menu of career options based on a risk/reward profile (OK not literally a menu but, yeah). But we're pretty far away from that right now; very few people are making these decisions based on that kind of calculus.

I agree that we should encourage everyone to be an entrepreneur. I disagree that the right way to approach it is by focusing on underserved groups. The right way to approach it is to make it easy for anyone to start a business.

The unfortunate reality is that you will never be able to pick from a menu of all possible career options because you (whoever you are) are not cut out for all possible careers. There are many people in the world who are better suited to doing job X, even if you think you'd like to do job X more.

> I disagree that the right way to approach [encouraging entrepreneurship] is by focusing on underserved groups. The right way to approach it is to make it easy for anyone to start a business.

The numbers are real bad though [1] [2] [3]. White people own 80% of small businesses, and men own 64%. In 2012 (admittedly old but, the Census site is very bad) white men owned 2,933,198 firms with employees on the payroll. Everyone else owned 356,816 firms. Those same white men's firms had sales receipts of $8,221,010,815. Other firms had $88,657,443. That's nuts. Even more so when you consider white men are only ~33% of Americans. My guess is that COVID-19 makes this even worse, but who knows really.

> The unfortunate reality is that you will never be able to pick from a menu of all possible career options because you (whoever you are) are not cut out for all possible careers. There are many people in the world who are better suited to doing job X, even if you think you'd like to do job X more.

I 100% agree but, I wouldn't say it's unfortunate. I just think people should get equal pay for equal work, and CEOs aren't 270x more valuable than average workers. Maybe it's 5x, maybe even 10x, but not 270x. And that's salary difference, we're not even factoring in lifetime earnings.

[1]: https://www.pewresearch.org/fact-tank/2020/04/23/the-financi...

[2]: http://www.experian.com/whitepapers/BOLStudy_Experian.pdf

[3]: https://data.census.gov/cedsci/table?tid=SBOCS2012.SB1200CSA...

> white people own 80% of small businesses

But white people are 73% of the US population. Obviously it'd be nice if everything was proportional, but all things considered (how recently black people got fully equal rights, for example), I think 7% over-representation is pretty damn good, not "real bad", and the trend is heading in the right direction. Seems like a gap that is very doable to close with purely "encourage everyone to start a business" policies, and egalitarian policies like those should be the preference when possible. With respect to men vs. women, I think a similar argument should be made. Women were < 30% of the workforce ~70 years ago, and still haven't even made it to 50%. Given the importance and biological realities around childbirth, I'm not sure women ever will be 50% (until we grow babies ex-vivo, that is). But as long as trends are positive, it is better not to use regulation as an attempt to overcompensate for perceived inequalities, as that can (and does) frequently backfire. Even if the number of women-led businesses is not going up, you can't just assume this is because women are actively being prevented/discouraged from doing so, you need to demonstrate that. Because an alternate explanation is that women (for whatever reason, maybe they like healthy work/life balances?) are choosing, very much of their own free will and without undue pressure from society, to not start businesses at a higher rate than men.

> Maybe it's 5x, maybe even 10x, but not 270x

This doesn't seem to be a particularly rational stance. If you don't have a good reason behind why it should be one multiple and not another, I don't think its your place to decide that multiple. This sounds a lot like the oft-repeated "nobody should be a billionaire". Um, why not? A billion dollars is an arbitrary amount of value. For example, a billion Zimbabwean dollars in 2008 wouldn't buy a coke[1]. Obviously in the case of USD right now, $1B is a lot of value. But if I make some useful piece of software (entirely on my own) that I sell to 100,000,000 people for $10 each, why should I not be a billionaire? Again, if you don't have a rational (rather than emotional) underlying argument for why X amount of value is "too much", it is not your place to decide that number.

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

The 80/64 numbers are pretty misleading because they count sole proprietorships. I'd reemphasize:

> 2,933,198 firms with employees on the payroll. Everyone else owned 356,816 firms. Those same white men's firms had sales receipts of $8,221,010,815. Other firms had $88,657,443. That's nuts. Even more so when you consider white men are only ~33% of Americans. My guess is that COVID-19 makes this even worse, but who knows really.

White people aren't 89% (or 99%, in the case of sales) of the population. And at numbers this big, 7% is 210,000 firms. That's not nothing.

> This doesn't seem to be a particularly rational stance. If you don't have a good reason behind why it should be one multiple and not another, I don't think its your place to decide that multiple.

CEO pay isn't meritocratic and has all kinds of ills besides [1] [2] [3] [4] [5]. I think generally the argument here is something like, "well, CEOs/CTOs/etc. just provide a lot more value than your average white collar worker", but the studies don't show that. Further, data show that (again) high relative CEO pay is bad for the company and bad for society in general.

I'd be remiss if I didn't also say that while we're spending a lot of time on high incomes here, high levels of wealth are far, far worse. We need policies to reign in disproportionate salaries certainly, but we also need a wealth tax. I could cite some more stuff but, frankly the best thing to do here is read Capital by Piketty.

> This sounds a lot like the oft-repeated "nobody should be a billionaire". Um, why not?

Because people are dying from poverty; they're losing their cars and houses; their kids aren't going to college; their parents aren't getting medicine they need to stay healthy and live; etc. etc. Meanwhile Jeff Bezos could give every person in the US restaurant industry $1,000/mo for a year and still have hundreds of millions of dollars.

You might dismiss that as emotional, but I think these are exactly the reasons people have money: to provide shelter for themselves and their loved ones, to get medicine, to get education. That's not emotional stuff, that's like, what are the basic needs of humanity stuff.

[1]: https://www.epi.org/publication/reining-in-ceo-compensation-...

[2]: https://www.researchgate.net/profile/Steve_Werner2/publicati...

[3]: https://www.wsj.com/articles/ceo-pay-and-performance-dont-ma...

[4]: https://d1wqtxts1xzle7.cloudfront.net/46078405/The_effects_o...

[5]: https://hbr.org/1990/05/ceo-incentives-its-not-how-much-you-...

My problem with both parts of your argument are that they act as if all these are zero-sum games where if "white men" are winning, that means black people or women are losing. This is not the case. Most businesses are providing value to everyone, that's how they are successful businesses. You mention Jeff Bezos. Amazon isn't only selling to white men. In fact, women drive 70-80% of all consumer purchasing[1]. I don't need research to tell me that there are a lot of black families that have been doing a lot of shopping on Amazon during this pandemic. The great thing about GDP is that it can grow. White men (or jews, or any group in history that has been vilified for success) can do well while everyone else does too. Rather than begrudging the success of white men, how about we encourage non-whites and/or non-men to participate in that success. I 100% agree that we should get those numbers up for women and minorities, but the way it should happen is that those groups make successful businesses of their own. Not artificially inflate it with affirmative-action type policies or anything else. White men can maintain that $8B while the other firms build up their own numbers. But nobody wins when you tear the successful people down because you are jealous of their success. It didn't work in Nazi Germany with the Jews and it didn't work in the USSR with Kulak farmers, and it's not a good idea here either.

From there we are on to wealth inequality. Wealth inequality has absolutely nothing to do with poverty. The wealth gap has been growing for the past 50 years while poverty has been going down – not sure how much clearer of a sign is needed. Nobody is starving as a result of Jeff Bezos owning Amazon. And can we please, for the love of god, stop pretending that wealth (especially wealth in the form of owning a significant portion of a very successful business) is liquid? Jeff Bezos absolutely cannot give all those restaurant workers $12k, as the price he would get for selling all of his Amazon shares is nowhere near his current "net worth". The problem with this argument is not that it's "emotional", it is that it is wrong. It is also an emotional appeal, and sometimes those are useful. But only when they are also correct.

[1] https://www.inc.com/amy-nelson/women-drive-majority-of-consu...

> I 100% agree that we should get those numbers up for women and minorities, but the way it should happen is that those groups make successful businesses of their own. Not artificially inflate it with affirmative-action type policies or anything else.

Race-conscious (and gender-conscious etc.) policies like affirmative action are effective because they directly address the systemic and institutional discrimination these groups face. If you're not a cis straight white man of a certain height and background, you aren't starting with the same advantages as those who are. Therefore, if we adopt policies that don't take those disadvantages into account--i.e. they benefit everyone equally--we don't solve anything. We simply magnify the existing inequality.

And it's important that we do solve this. White men hold a disproportionate amount of power in American society because it's easier for them to make more money, own more things, run for office, buy houses in neighborhoods where housing value increases at high rates, start businesses, invest in stocks, network with others who are able to do these things, send their kids to prestigious schools, avoid crime-ridden neighborhoods and food deserts, etc. etc.

> Rather than begrudging the success of white men, how about we encourage non-whites and/or non-men to participate in that success.

Can I ask you where it seems like I was begrudging the success of white men? I think you're reading a lot into what I'm writing. I certainly don't feel that way. I'm not saying we should tax white male owners of SBs and redistribute the wealth to others; I'm saying we should tax Jeff Bezos et al down to $50 million and remake US society.

Further, what are your ideas for encouraging minorities to participate in that success? Is it something other than adopt policies that directly benefit them?

> But nobody wins when you tear the successful people down because you are jealous of their success. It didn't work in Nazi Germany with the Jews and it didn't work in the USSR with Kulak farmers, and it's not a good idea here either.

That's a little hyperbolic. I don't find it productive when you impugn my motives as "jealousy" and compare my tax prescriptions to the holocaust.

> Wealth inequality has absolutely nothing to do with poverty. The wealth gap has been growing for the past 50 years while poverty has been going down

I think it depends on how you look at it [1], but broadly yeah, I would agree wealth inequality isn't related to poverty. But I'm saying we take money away from billionaires and give it to those in poverty. I think that would have a direct effect on their poverty status. Maybe I wasn't explicit enough about this, I don't always make all the connections clear.

> Nobody is starving as a result of Jeff Bezos owning Amazon.

Not by virtue of owning Amazon, but quite literally because he didn't spend the money to feed them, yes they are. It's also the same for you and me, FWIW, it's just that I could maybe do it for 1-2 people and he can do it for millions.

Maybe that's what we're dancing around here, maybe you're a taxation is theft person and I'm a property is theft person.

> And can we please, for the love of god, stop pretending that wealth (especially wealth in the form of owning a significant portion of a very successful business) is liquid?

It actually seems like it's pretty easy for him to do this [2], and his ex-wife is proving it also [3]. Selling stock is pretty easy. I don't super care about the exact numbers, and I would prefer a better policy framework that prevented him from amassing so much wealth in the first place. But again I think that's profit sharing, taxing inordinately high comp, worker membership on corporate boards, etc.

[1]: https://aspe.hhs.gov/system/files/pdf/154286/50YearTrends.pd...

[2]: https://www.forbes.com/sites/angelauyeung/2020/08/05/jeff-be...

[3]: https://www.cnn.com/2020/07/28/tech/mackenzie-scott-bezos-do...

But what about the value of having A tell you what to build? If A = Jeff Bezos, B/C/D, who would just be making a $150K salary at some other company, are now multi millionaires. The difference in value didn't come from their work, which is much the same as it would be for some other company, but by being told what to build by the right CEO.

This is kind of the "great man" theory of business, but study after study shows that broadly this is just luck (or crime)--with privilege thrown in. As a result, we shouldn't reward people for this by making them billionaires because:

- At best there's no behavior to encourage, person A just got lucky. At worst, person A cheated and by making cheaters super rich, we give them outsized influence on our society

- creating billionaires creates bonkers, destabilizing income inequality, for which we rarely get anything in return (not everyone starts the Bill and Melinda Gates Foundation)

- relying on this dynamic entrenches privilege, because it's much harder for women and people of color to become the next Steve Jobs (which is a weirdly super rare case to structure a society/economy/labor theory on, stipulating you think Steve Jobs was actually good at anything substantial).

> study after study shows that broadly this is just luck

quite confused at this one, what studies? as an example, surely the fact that page and brin created PageRank for web searches led to google being so successful https://www.theverge.com/2019/12/4/20994361/google-alphabet-...

> best there's no behavior to encourage, person A just got lucky

the behavior of ... understanding and creating a useful service like pagerank? or amazon?

> relying on this dynamic entrenches privilege

this is quite ridiculous, this is only believable if you consider having 3-4/5 quintile parents as 'privileged' as having ten billion net worth. equally so when you look at where their parents came from (quite often, poor farmers who immigrated) or their history (jews who had to leave poland or germany due to the nazis js)

> because it's much harder for women and people of color to become the next Steve Jobs

so? heard of 'lisa su'?

> quite confused at [broadly this is just luck], what studies?

I would recommend reading Success and Luck [1]; it's well-researched.

>> relying on this dynamic entrenches privilege

> this is quite ridiculous, this is only believable if you consider...

There are pretty good [2] papers [3] about it, which convinced me and might convince you.

> so? heard of 'lisa su'?

Your post uses a lot of anecdotal evidence, which is a fallacy [4]. I encourage you to build up a habit of diving deeper. Oftentimes our intuitions are wrong because they're influenced by our local experiences, which are very rarely representative. It's why we do things like run studies and experiments, because we've learned we can't trust our experiences and intuitions. This pattern is, unfortunately, widespread and leads to a lot of problems.

This is actually a great little microcosm of one such problem: income inequality is a huge problem in the US; societies with dramatic income inequality are historically corrupt and unstable. However, it's counter to a lot of people's intuitions and experiences. So whenever someone tries to rally people to address it, people like you toss out lots of unrepresentative anecdotes (and employ other common fallacies) to try and convince people either it's not a problem, or that it's a feature and not a bug. And it works, because these fallacies are common bugs in the way people think about things.

It's up to us to recognize these patterns in ourselves and others and work against them.

[1]: https://press.princeton.edu/books/hardcover/9780691167404/su...

[2]: https://www.nber.org/papers/w23733

[3]: http://www.equality-of-opportunity.org/assets/documents/race...

[4]: https://en.wikipedia.org/wiki/Anecdotal_evidence

Anecdotal evidence doesn't really count when it's something you have personal and thorough experience with. Sun sets and rises, don't need study for that. Similarly, people who start and direct large enterprises have a strong command of people and understanding of their field. "Studies" don't disprove that.

> income inequality is a huge problem in the US; societies with dramatic income inequality are historically corrupt and unstable.

This seems ... less than proof of anything. Past societies were highly unequal due to 'half the population gotta farm' at the very least, so comparing them to modern societies seems like a mistake, and at any rate the 'successful' integrating empires were, well, integrating empires. Modern society hasn't existed for that long, and the US (land of inequality!) is quite a bit more stable than many poorer and more income equal (or ... poorer and less income equal!) countries. Historically, societies in europe were much more successful than ones outside europe, yet you wouldn't take that correlation as a causation, so i won't take yours either.

Anyway, you cant just throw a book at me and expect me to read it for a HN comment without laying out its argument at all lol

Your second paper says that 'racial discrimination exists'. The idea that asians somehow derive most of their success from systemic racism and entrenchment - "Overall, these results paint a picture of a rigid income structure by race and ethnicity over time" - seems absurd. Your second paper doesn't say anything about meritocracy though.

Your third study is also just 'black people are poorer'. That doesn't mean understanding of an opportunity (not 'general skill', but local, specific skill) doesn't lead to success. So i'm left with a book (i don't have time to read it, it's midnight) and two papers that don't relate to your point. Maybe asians are just really smart? Maybe they work really hard as kids while the whites play tennis or soccer, which explains why despite being 13% of the population they're 52% of the coders?

You are just gonna have to get a different account for me to respond to you. That username is super offensive.

Persons B, C, and D are being paid a rate proportionate to the available labor market for their product building skill set. There was nothing stopping persons B, C, or D from being person A and founding a company for that idea.

If B, C, and D chose to strike for a higher wage then they could but there might be an E, F, and G which could take over for them at their previous rates.

Anybody can make a giant sized, billion dollar company. Those workers chose to work as employees under standard labor terms.

The early Microsoft employees that made lots of money from their stock options probably aren't bitter about their compensation.

> Persons B, C, and D are being paid a rate proportionate to the available labor market for their product building skill set.

The labor market doesn't set prices based on value to society and scarcity. If it did, nurses and teachers would be millionaires (there's a shortage of both and they provide high value to society) and middle managers would make very little (there's a glut and they provide very little value to society). It assigns value based on prestige. Capitalist labor market folks would argue strongly otherwise, but the evidence is very clear.

The law of supply and demand also doesn't explain or account for things like race/gender pay gaps, monopsonies, and collusion. And generally this doesn't pass the sniff test--if the labor market shifts and suddenly people in your profession are in higher demand, it's extremely rare that companies offer pay raises to keep their employees. That's because they know that while theoretically their employees can reenter the labor market to negotiate a higher salary with a different employer, in practice employment is very sticky and employees tend not to--for lots of rational reasons (some of which are "oh you're a job hopper, declined").

> There was nothing stopping persons B, C, or D from being person A and founding a company for that idea.

This is generally untrue. Companies build moats with patents, litigation, monopolistic business practices, and corrupt, ladder pulling litigation. I think a lot of committed capitalists believe the market will sort this out, but it clearly doesn't. How many upstart chip design houses are there? How many upstart medical device companies are there? Etc. Etc.

Furthermore and again, not everyone has the privilege required to be A. Being A takes more risk, and you have to have more resources to reasonably take that risk. It's also been shown that it's far harder for women, recent immigrants, and people of color to become As.

> Anybody can make a giant sized, billion dollar company.

What?

> Those workers chose to work as employees under standard labor terms.

Often people don't have the resources to start businesses (let alone billion dollar businesses). It requires a lot of privilege, and it's even harder for women and people of color. It's not at all a simple choice.

> The early Microsoft employees that made lots of money from their stock options probably aren't bitter about their compensation.

While being pretty tough to prove, I would say a couple things here:

- Microsoft continues to post multi-billion dollar profits, and people still work there. I don't understand why early employees are valued more than current employees here.

- It's conceivable that even if you made a few million dollars, you might be bitter if the person next to you who didn't work appreciably harder than you made a billion. Everyone's different but, that seems possible.

- Even if these effects are less pronounced or acceptable at a place like Microsoft, concentrations of wealth and capital have destabilizing, corrupting effects on society and governments. Taking a per-company view is short sighted. It's also worth saying that most companies aren't made up of relatively wealth software engineers, and income inequality will be more pronounced.

> If it did, nurses [...] would be millionaires (there's a shortage of both and they provide high value to society)

I know the situation in Germany will be quite different to that in the US, but the reason we have a shortage of nurses is that the pay is not decided on supply and demand in order to have enough of them, but rather as a political decision.

> The law of supply and demand also doesn't explain or account for things like race/gender pay gaps, monopsonies, and collusion.

I'll mostly (but not completely) agree here. Humans are never fully rational, and that irrationality is certainly a relevant element.

> employment is very sticky

Of course it is. Teaching an employee on your systems/way of working costs money and is an element in the decision of whether or not to hire an employee. This decision affects demand and therefore price/wages.

> I know the situation in Germany will be quite different to that in the US, but the reason we have a shortage of nurses is that the pay is not decided on supply and demand in order to have enough of them, but rather as a political decision.

Totally and this is the danger of state-controlled markets. Capitalists have a point here. I tend to argue that at least in democratic societies people have some control over it, whereas in a free labor market they don't. But in practice, like so many things democracy is supposed to fix, people largely aren't concerned with it.

> Of course it is. Teaching an employee on your systems/way of working costs money and is an element in the decision of whether or not to hire an employee. This decision affects demand and therefore price/wages.

Definitely, stickiness works both ways. We've all probably encountered situations where someone's made themselves virtually unfireable because no one can do the things they can. I think generally people characterize that as some kind of selfishness or at least a labor antipattern, but I tend to view it as a rational response to a lack of financial stability: if your employer can completely destabilize you financially, it's pretty rational to take drastic steps to guard against that.

Suffice to say it's complicated; far more complicated than the supply/demand curves charts you get in econ 101.

---

I'll add that my prescription generally is:

- Enshrine the right to organize

- Require equal profit sharing across all employees

- Require significant worker representation on corporate boards

- Heavily tax relatively high salaries, e.g. if everyone makes $1m then 0 tax. If one person makes $100k and 99 others make $1, insane super tax them down to $100 (include tricky stuff like bonuses or whatever)

- Heavily tax nationally high salaries with a progressive income tax

- Heavily punish tax dodging

- Set the minimum wage to a living wage and pin it to the CPI

- Abolish "right to work"

Interested to see how quickly you can completely destroy productivity and an economy with your policies. It just sounds like communism with extra steps.

Eh, it's really just Germany+, and they're a pretty productive country. For example, profit sharing is "stock compensation" rephrased and not terribly uncommon [1]. Some of the most productive companies like Apple, Facebook, Google, Microsoft, and Amazon pay with stock.

[1]: http://www.oecd.org/employment/emp/2409883.pdf

It very much does not sound like Germany+.

> Enshrine the right to organize

As in with a constitutional amendment? Because the NRLA already guarantees this.

> Require equal profit sharing across all employees

Germany does not do this and neither should the US.

> Require significant worker representation on corporate boards

Germany does not do this and neither should the US.

> Heavily tax relatively high salaries, e.g. if everyone makes $1m then 0 tax. If one person makes $100k and 99 others make $1, insane super tax them down to $100 (include tricky stuff like bonuses or whatever)

Germany doesn't do this and neither should the US.

> Heavily tax nationally high salaries with a progressive income tax.

The US already does this, as the US does not have a flat tax rate for income tax.

> Heavily punish tax dodging

Addressing symptoms not causes. Reduce tax avoidance by simplifying the tax code. It's that simple.

> Set the minimum wage to a living wage and pin it to the CPI

Probably a good idea.

> Abolish "right to work"

Terrible idea.

I don't know how to say this without sounding super condescending but, if you want to have a discussion, please contribute to it in a meaningful way. You aren't asking questions, citing sources, or even making good new points. Beyond that, you're really uninformed.

Here's an example where you could have done even a little token searching; the title of this article is "Workers on Corporate Boards? Germany’s Had Them for Decades" [1].

Another example is when you write:

> Addressing symptoms not causes. Reduce tax avoidance by simplifying the tax code. It's that simple.

It truly is not that simple. There's a reason tax codes are complicated and broadly speaking, it's that you have to choose winners and losers to simplify them and that's politically and policy-wise very, very difficult.

I'm sure you'd like to dispute that, but the way you'll dispute it is with normative, opaque statements like "it's that simple" or "terrible idea" which will take you 8 minutes. The way I'll engage is by searching the internet and citing a post, and asking good questions to keep the conversation going. That will take an hour.

I'm not gonna do that, and I think this breakdown makes it clear why. I think you should keep in mind what you're asking of people you're having a discussion with, either implicitly or explicitly, and how your responses indicate what you're expecting to get out of a discussion. From where I sit, you're not looking to learn anything or to inform me of something, you're looking to win an argument. Sometimes that's productive but it's surprisingly rare, and besides that, I'm not interested. I haven't learned anything from you over the 3-4 threads you've chased me down on, but I do feel a little worse about humanity, and I get enough of that already.

And overall, I'd urge you to take a moment to consider the damage you do by logging onto public forums and spreading your ill-informed, normative opinions around. It greatly reduces the signal to noise ratio, and because it takes a lot of time to respond to things like this, it effectively DoS's productive conversations. I love a good internet argument as much as the next mega-arrogant software engineer but, we need to keep in mind the effect that has.

[1]: https://www.nytimes.com/2019/01/06/opinion/warren-workers-bo...

What is all this research you are talking about you doing? I don't see it. You've provided two links in response to two of your many points. You've made claims like "this is Germany+" without actually supporting that claim. The burden of proof is on you to prove this is Germany+ (as the one making the claim), not me.

I have no interest in winning the argument, I have an interest in the truth and sound fiscal and social policies that result in a good balance of strong economy + innovation + lack of exploitation.

For all the things in the discussion that you claim Germany does that make its economy stronger, you need to demonstrate that. For all the things in the discussion that Germany is not doing, you need to justify why they are good, as the one making the claim that they are good ideas. You have not done so. You made a list, and are now claiming everyone else is arguing in bad faith when they ask you to justify that list. My response was not very high effort because I was not actually responded to a thoroughly sourced list. It was just a list.

You accurately stated that I was incorrect about co-determination in Germany. I read your point as "majority representation on boards", when what you actually said was "significant" – an error on my part. Germany does indeed do that, and as such the policy would indeed fall under "Germany+". However, I maintain that amongst all your other bullet points, the only other point that 1. Germany does 2. US does not is living wage. And one (good) argument for why the federal minimum wage is not particularly looked after / updated is because the US is a federation of strong states, so minimum wage is better handled by states individually (which they currently do). Cost of living in Montana is very different from NYC.

Nice, this is great! I now feel like digging in might be productive here.

> You've made claims like "this is Germany+" without actually supporting that claim.

I wasn't like, making a legal statement or whatever. You're arguing "this is communism with extra steps" and my point generally is that these prescriptions largely exist in democratically socialist, productive, EU countries. There are actually not that many communist countries that aren't also authoritarian so, I don't think the "communist" characterization is super useful. But, either way I'll expound.

- Enshrine the right to organize

You wrote that the NLRA already created this "right", but it's been hobbled by the Taft-Hartley act [1] and subsequent legislation in multiple states [2].

On the other hand, Germany (like many other EU countries but unlike the US) has ratified the "Right to Organise and Collective Bargaining Convention", which, well it's in the name [3].

- Require equal profit sharing across all employees

Profit sharing is pretty common across EU countries, but it takes different forms and certainly isn't equal. The coop corporate structure is closer to my thinking here but, admittedly it's not mainstream yet.

- Require significant worker representation on corporate boards

We covered this one but, yeah generally the idea here is for workers to have a big say in how their company is run. Definitely not the majority though; my personal preference would be that there were no majority and representation would be equally divided between workers, c-suite/owners, and shareholders, but baby steps.

High CEO pay is (variously) subject to tax penalties in Germany [4] [5]. And it seems to be working; their ratio of CEO pay to average worker pay is 136x, just over half the US' at 265x [6]. That's not wonderful and I'm sure there are other factors but, these problems are tricky and one policy probably won't fix it all in one fell swoop.

It's also worth saying CEO pay is generally bad and not meritocratic [7].

- Heavily tax nationally high salaries with a progressive income tax

Germany's 3rd tax bracket is higher than anything in the US and kicks in around $69k (USD) [8].

- Heavily punish tax dodging

Germany does this a little [9] [10] but, obviously not enough. Re: simplify the US tax code, no administration since Reagan has done this, for reasons outlined here [11] [12]. TLDR tax prep is big business, and--like I said before--our tax code does a lot, and changing it creates winners and losers.

- Set the minimum wage to a living wage and pin it to the CPI

Germany has a comparatively high minimum wage of €9.35 ($11.33), but I don't know enough to say if that's a living wage or not. Something that's nice about their (relatively new, 2015) law is they have to update it at least every 2 years [13].

- Abolish "right to work"

I've been wrong about what this is called my whole life. Apparently what I mean is "at-will employment". Mea culpa. But, still the US has it and Germany doesn't. We should get rid of it.

---

OK that's my prescriptions. I do feel like what I've described is the natural evolution of democratic socialist policies in the EU, exemplified not just by Germany but other big EU countries as well and definitely don't qualify as communism. But I think a lot of people think democratic socialism is communism so, maybe we just have a definitions problem.

I'll quickly respond to your minimum wage point and say that you can peg minimum wage to a State's CPI, and cities can create their own minimum wages. New York/New York City do this, for example. I wouldn't say that States are handling this well; 1 in 4 kids grows up in poverty so, something is off.

[1]: https://en.wikipedia.org/wiki/Taft%E2%80%93Hartley_Act

[2]: https://en.wikipedia.org/wiki/Right-to-work_law

[3]: https://en.wikipedia.org/wiki/Right_to_Organise_and_Collecti...

[4]: https://www.firma.de/en/company-formation/ceo-salary-in-a-gm...

[5]: https://link.springer.com/article/10.1007/s11573-020-00978-y

[6]: https://www.statista.com/statistics/424159/pay-gap-between-c...

[7]: https://www.epi.org/publication/reining-in-ceo-compensation-...

[8]: https://taxsummaries.pwc.com/germany/individual/taxes-on-per...

[9]: https://finance.yahoo.com/news/ubs-group-face-93m-penalty-11...

[10]: https://www.espn.com/soccer/news/story/_/id/1613004/bayern-m...

[11]: https://www.taxpolicycenter.org/briefing-book/why-are-taxes-...

[12]: https://www.vox.com/2016/4/13/11417676/elizabeth-warren-tax-...

[13]: https://en.wikipedia.org/wiki/Minimum_wage_in_Germany

Thank you for the comprehensive response. One overall point I'd like to make is that I think it is much more constructive to cite things that indicate the policies are having a good impact, not just sources showing that the policies exist. I have not done either in this response, however, as most of my questions/responses are about the theory, not the practice. For example, below I talk about CEO pay. You have pointed out that Germany has policies in place that reduce the gap between CEOs and their average workers, but I think first we need to determine why the gap is bad, if at all. Some gaps are fair, some are not. Anyway I have tried to be thorough with my responses, and have condensed our talking points into more cohesive groups when sensible.

-- re: unions

Right to organize is not the same as "right to force people to join a union". That is what right to work laws prevent. Anyone should be able to join a union. Any group of workers in any industry should be able to form a union. Unions should not be able to force people to join their union. This is a gross violation of individual liberty.

Right to organize and right to work are not conflicting goals. If unions need to force workers to join them, they're arguably not good unions.

I agree that unions are important. But unions are not universally good – they sometimes have serious downsides. Any push for unions need to be met with a measured understanding of this. Do you have a solution for the problem that unions with too much power are actually bad for the economy in that they stifle competition and decrease efficiency? Monopolies in general are bad, and that includes monopolies on labour.

-- re: profit sharing

You can start a coop in the US today. But a coop is not the end-all-be-all of business structures. I'm fine with people starting coops. In fact I think that's great. But requiring it has the potential to stifle innovation / (constructive) risk-taking while fixing a problem that doesn't need solving (because labour can already join coops if they want). There are many companies that want to re-invest profits into CapEx or similar, which becomes more difficult with a profit-sharing structure.

-- re: co-determination

Probably don't have a problem with this as long as it is not majority. Haven't thought enough about possible negative ramifications of such policies though. Want to steel man the counter?

-- re: CEO pay

I agree that executive compensation seems out of wack, but my real issue is that I don't understand how the problem exists, and am wholeheartedly against slapping band-aids on things until I understand the underlying cause. You seem to be taking the stance that wildly different pay is always bad, which I cannot agree with. Fair pay is pay which is proportional to the value delivered. If you are delivering 100x the value than the average worker, you should get paid 100x more. To be completely frank, I don't even think it is a requirement that people should be paid the same rate for the same work, but that is an argument we don't need to get into, as the aforementioned idea of "fair" comes before that anyway.

What I mean to say here is: assuming a free and competitive market, you'd think disproportionate executive pay (disproportionate not to other employees but to the value being delivered by the executive, as to my mind this is what fairness is about in business) would result in a company that is less competitive than one which is not overpaying its executives. So how did this come to pass? To my mind the only options are: 1. markets aren't actually competitive 2. American CEOs actually are delivering 256x the value of their average worker.

If 1, my preference would be to find ways to solve the underlying problem and make the market more competitive rather than this band-aid solution. If 2, then again I don't think there is a problem that needs solving.

There is a 3rd option that disproportionate (again, wrt value delivered, not wrt other workers) executive compensation somehow makes a company more competitive, but I don't see how that could be the case.

-- re: taxes

For someone that seems to be a bit of an idealist, you don't seem to be following through here. I don't think "tax prep's lobby is strong" is a good reason to not simplify the tax code. It's a reason it might not happen, but if simplifying the tax code is good we should strive to do that anyway. Everyone in US government always trying to find the middle ground is why we have settled on a bunch of highly mediocre yet expensive solutions to many (most?) of our biggest problems. Hell, the best tax prep is literally helping you avoid taxes, so clearly if tax avoidance is the problem then they are a big part of it. Are you actually talking about tax evasion when you say dodging? If so I agree that this should be punished, but again, this is something the US is already doing. You can serve jail-time for evasion.

With regards to progressive income taxes, I stand by my point that we already do this. Sure, Germany's brackets are higher (as are many other places), but in this case I don't think "other people do it" is a good argument. I think the de-facto "fair" way of taxing people is with a flat tax. If you choose not to do a flat tax, you need a good argument for why not. Once you have that argument, it should also be able to justify somewhat specific (evidence/reason based) brackets, not arbitrary ones.

-- re: minimum wage

I stand by the idea that states can determine their own minimum wage and that this isn't something the US federal government needs to concern itself with. If states are not doing so, residents need to make a change in their own state. To this end though (supporting the idea of states with real autonomy), I do think it is important that the federal government has policies in place (not exactly certain what form they would take) that allow people to more easily "vote with their feet", i.e. move to another state if their current one isn't treating them well. Competition is often pretty great at improving things, and I think that includes competition between states. I'm still fine with a US federal minimum wage, but I don't think it should be pegged to an average US CoL, as again, different regions have wildly different CoLs. Pegged to inflation / purchasing power makes sense though.

-- re: at-will employment

Disagree strongly with this one. If I can hire someone for any reason, I should be able to fire someone for any reason. Just like you can start a job for any reason and you should be able to quit for any reason. Besides, even when you try to prevent this with regulation, most of the time you end up being able to fire people anyway by finding some stupid reason that's valid, which you just have to sit on for a while. There is no possible way such a policy is good for the economy and therefore society. You end up with HR people who's job is to just find excuses to fire the people that you want to fire anyway, and that certainly isn't productive. It also requires involving more bureaucracy to provide the oversight in judging when reasons are valid or not.

I think one of the big reasons Silicon Valley is in California and not anywhere else in the world is Cali's great combination of 1. at-will employment 2. unenforceable non-competes. It is a great combo that supports individual liberty while also encouraging innovation. You can fire me for any reason, but I can immediately go to a competitor and put my skills to good use. Together it is a great balance. One without the other and you have serious downsides:

• At-will, w/o non-competes: good. Mobility encourages competition and innovation, relationship between employer/employee is a balanced one.

• At-will + non-competes: bad – employers can screw employees even when they're not working for them, violates individual liberty without the worker getting anything for it.

• No at-will, w/o non-competes: bad – chilling effect on hiring + training. Employers don't want to invest in employees if they will struggle to fire them without a corresponding incentive for the employee to stay where they are.

• No at-will + non-competes: bad – stifles competition/innovation by discouraging mobility of the workforce on all fronts.

> One overall point I'd like to make is that I think it is much more constructive to cite things that indicate the policies are having a good impact, not just sources showing that the policies exist.

I was responding to your assertion which was "It very much does not sound like Germany+." Further, the EPI article says right up top:

> Why it matters: CEO pay is not just a symbolic issue. High CEO pay spills over into the rest of the economy and helps pull up pay for privileged managers in the corporate and even nonprofit spheres. Because pay for top managers—CEOs and others—is not driven by their contributions to economic growth, this pay can be reduced and others’ incomes boosted if we can figure out a way to restrain CEOs’ market power. Importantly, the most direct damage done by excess CEO pay is to shareholders. Since shareholders are a relatively privileged group themselves (if not as privileged as CEOs), they could potentially wield power in this situation; policymakers should try to figure out how to enlist shareholders in the fight to restrain excess managerial pay.

> Right to organize is not the same as "right to force people to join a union".

I'll try and skip to the end here and say that the union system isn't optimal. It would be a lot better if we had a solid social welfare state and, coop-style profit sharing and worker representation on corporate boards, and better laws protecting workers. But here we are. All of this stuff is to enhance the financial and collective bargaining power of unions so they can effectively advocate for workers (note I specifically didn't say "their members", as unions represent everyone, members or otherwise).

Right to work laws are meant to undermine unions' collective bargaining leverage, and they've worked [1] (those WSJ studies are real bad, anything could've caused those effects). But besides that, you can also choose to just pay agency fees, not contribute to the union's political activities, and not become a member, even without right to work laws.

> re: profit sharing

Can you cite some things here? You write "a coop is not the end-all-be-all of business structures" and "requiring it has the potential to stifle innovation" without any kind of backing. Plus, I'm not at all saying cooperatives are perfect. I think they're a good way to achieve profit sharing, but there may be other models that are better. I'd caution against the stock comp idea though; that turns into short-termism really quickly.

> co-determination

I can imagine some pitfalls a-la term limits in governments, where when they're so short you don't allow anyone time to build experience. I think compared with the management or investment classes workers have less experience making company-level decisions, and that could have some weird effects. Boards also aren't perfect, you can bribe and blackmail people. But I think in the aggregate that probably doesn't have a big effect. I'm just spitballing, I haven't read anything.

> re: taxes

Haha I haven't been called an idealist in a long time, thank you :) I don't think the US will do even a single thing on this list and is doomed in probably a dozen ways. Maybe that's why my list comes off as idealism: if you're sure you won't get anything on it, it doesn't matter what you put on it.

But re: taxes, Paul Ryan tried his whole career to simplify the tax code. Libertarians have been pushing a flat tax for a generation or more. People come out of the woodwork when things like happen [2] [3] [4] and are generally (and understandably) a little flighty at "various" winners and losers [5].

Re: tax evasion/dodging/etc., I mostly mean it all but, in particular corporate tax avoidance should be fixed [6].

Re: progressive income taxes, as you point out the US tax system is really complex. Our income taxes are progressive. But many of the taxes we pay aren't, or are very barely progressive (property taxes are generally either 1, 2, or 3% for example)--e.g. many states have a flat sales tax as their largest revenue source.

But broadly the goal here isn't to technically meet the definition of a progressive income tax, it's to bring down income inequality. Progressive income taxes can do this, but not if the net effect is to lower taxes--such as it has been in the US [7].

So I'm not saying we should do it because other people do it. I'm saying we should do it because it will work and studies show it will work, but we have to do it right, because we've been doing it wrong, and that's made it not work.

re: minimum wage

I don't care if the federal government sets the minimum wage to a living wage and pins it to CPI or if each state/district/territory does it relative to their CPI. To me that's completely beside the point.

> it is important that the federal government has policies in place... that allow people... move to another state if their current one isn't treating them well

I think theoretically this seems like a good idea, but in practice it's not that common. People aren't gonna take their kids away from their grandparents or leave their whole friend/family network because minimum wage is $1.50 higher 2 time zones away. Really this is just like, a privilege measure. Yeah if you're an NBA player you want to play in Miami or Orlando because they're bigger markets with no income tax. But if you're a roofer in Massachusetts? Moving might not even be an option.

Broadly federalism claims to solve a lot of problems but, due to a mixture of weird politics, baked-in shortcomings and geography, it's pretty ineffective most of the time. There were some cases (gay marriage, slavery, weed) it was super effective, but when you consider all the possible policies, it's batting like .00009. I actually wish federalism could work, in particular I think it's really well-suited to gun policy. But gun policy is actually a really good case study for why federalism just doesn't help.

re: at-will employment

I love this topic because I think it's like, one of those icebreaker topics--you quickly learn a lot about someone's world view from their answer to this. I do think that it seems to make a lot of sense that, as you say, "If I can hire someone for any reason, I should be able to fire someone for any reason." But here are my issues with it:

- Can you hire someone just because they're the same religion as you, or fire them because they're not, or not hire them because they're not?

- What about being gay, or ugly, overweight, or disabled? What if you're a strip club? What if you're a synagogue?

- The power balance between employers and employees is completely different. If an employee quits without warning, it's pretty rare that that employer's housing, health care, retirement savings, college savings, and food supply are threatened. If my employer fires me, it's very likely all those things are threatened, immediately.

You can see how all these things really add up in the aggregate. So much so that we had to amend the Constitution to prevent it for certain groups. But discrimination is still a huge problem, in no small part because many people believe "If I can hire someone for any reason, I should be able to fire someone for any reason." And firing or not hiring is a huge deal to people. Your entire life grows out of your ability to have money--your ability to make friends, your ability to have romantic relationships, your ability to have kids, your ability to save for retirement, etc. etc. It's such an important part of life, and we really need to take it more seriously than essentially, yolo.

> most of the time you end up being able to fire people anyway by finding some stupid reason that's valid

Eh, this can happen but, when there are laws against it, a couple of wrongful termination lawsuits chill that pretty quickly. Ask any hospital lawyer.

> California, etc.

I wouldn't mind seeing some studies about this. You might laugh at this, but I'm innately suspicious of a lot of top-down planning in a policy, and I think there is definitely a ladder-pulling dynamic to putting so many regulations on small businesses. Generally I try and advocate for cutouts for really small businesses--you shouldn't have to jump through a bunch of hoops to open a bar where only you and your family work there for example--but there are serious ill effects in the aggregate absent regulation.

I would say that the only reason at-will employment + unenforceable non-competes works is that the market for software engineers is bonkers and has been for a while. You can imagine it's probably not a party for like, the ops people.

[1]: https://en.wikipedia.org/wiki/Right-to-work_law#Studies_of_e...

[2]: https://www.youtube.com/watch?v=23SXAYWZHc8&feature=emb_logo

[3]: https://www.aei.org/economics/how-border-adjustment-could-tr...

[4]: https://www.bloomberg.com/news/articles/2016-12-08/koch-indu...

[5]: https://www.marketwatch.com/story/meet-the-new-friendlier-al...

[6]: https://www.imf.org/external/pubs/ft/fandd/2019/09/tackling-...

[7]: https://www.taxpolicycenter.org/briefing-book/how-do-taxes-a...

---

Edit: I might be broadly wrong about relocation [8] but, still I think because it's almost entirely for job reasons, the point about not relocating for State policies holds.

[8]: https://www.theatlantic.com/business/archive/2016/10/us-geog...

> If every B/C/D wanted to be As, there would be no B/C/Ds to build things. And it's not always possible to choose to be an A.

1. Person A can be the person that actually builds the product (and often is).

2. It is always possible to be person A.

You offered up 3 examples of billionaires. Other examples might be:

* Tesla

* Twilio

* Stripe

Would you help me see how those 3 leveraged unjust laws? As a software developer, I feel Stripe and Twilio have added a lot of value to me, to small businesses, and the world.

Sorry, I think my writing was a bit muddled (common occurrence). I love those businesses I mentioned. And the 3 you mentioned too. I 100% agree they have added a lot of value to me and the world. What I was trying to say is that to make billions, you need to 1) create a lot of value and 2) have some broken legal system that you are operating in. Maybe for the latter "exploiting" is the wrong word. But the government needs to have created a situation where you can somehow reap a disproportionate reward. Linus created Linux and Git, which have created unimaginable value, but he didn't do #2 which was to use the unjust IP system to make billions of dollars.

In other words. Lyft is a product of hard work and innovation multiplied by corruption and bad government in the taxi industry. The value created by Lyft comes from the former, but the value captured by Lyft is just as dependent on the latter as well. Nothing wrong with that—it's still a big net win for society, but maybe we could do a better job at refactoring our laws so we can get the value without the unnatural inequities. After all, I know a lot of these people and while they are almost all smarter than me, none of them is 10x smarter than me (well maybe pg).

In response to your 3 examples:

* Tesla

Carbons were subsidized and solar/electric better tech. Automotive industry is highly regulated and innovation was sloooow. Elon and company are the best of the best (a shareholder), but still I'm not going to pretend that the business opportunity would be so great if the governments around the world hadn't been creating corruption after corruption (look at the car dealership stuff with the states as a tiny but egregious example).

* Twilio

Oh man the telecom infra went from magic to just rotten in the past few decades. I don't know enough about government here to comment, but I suspect something bad here.

* Stripe

The amount of protection the finance and banking industry has (and their symbiotic relationship with the government) made me sick so many times. Finally someone had the stamina and determination to solve that. But Stripe isn't hitting $100B if US Government wasn't letting the finance industry sit on its ass for 3 decades with protective legislation.

did you forget you were arguing that billionares are inherently bad? all you argue here is that ... if laws were good, we'd hve had 100m tsla/twilio/stripe 30 years ago

Be careful with labels / generalizations like "stupid legal system" and "inequitable laws". What you, some people and some companies might see as such, a whole bunch of other people and other companies might see as exactly the opposite. The world is not black and white. And it's all about perspectives ...

> The world is not black and white.

But it is N and N^N

How is this relevant to the subject? Is this your counterargument to the core of what I wrote above?

I would agree with you about the "be careful" part. A wise quote is "If you want to tell people the truth, you'd better make them laugh or they'll kill you”.

I believe in perspective too, and agree that perspective matters.

But I also believe their is a common perspective (very hard to get at, that is the journey of scientists), and so at some point when you have enough data you can say "well there really is a black and white here".

Fair enough. I'm glad that we seem to be largely on the same page on the subject, then. As for the "common perspective", I usually refer to that as consensus and, indeed, it is very hard - in some cases, I would say, excruciatingly hard - to achieve. Unfortunately, such is life ...

Consensus is a good word. Something for me to chew on. Thanks

It's my pleasure.

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