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Comment by nindalf | Hacker News Reader

It's a classic PG article. Many true facts in there, lots of good analysis with just a few questionable claims thrown in here and there. At the end, there's a massive claim that isn't fully stated but implied. "Of course the Gini coefficient is increasing" translated means "income inequality is not a problem".

Firstly, Gini coefficient is based on income, not wealth. That isn't stated clearly. Secondly, there's absolutely no data on what proportion of income flows to which decile. The conclusion (income inequality isn't a problem) is simply based on an assumption that the rise in the Gini coefficient is based entirely on the wealth accumulated by founders, and that this is a good thing.

I think this post boils down to "people like me are creating a lot of value, please acknowledge it. Also there are no downsides to this accumulation of wealth". This would be fine if PG also didn't argue that policies like wealth taxes are harmful (http://www.paulgraham.com/wtax.html). It just seems like a desperate play to keep his wealth intact.

View on HN

Paul Graham's articles always shoot immediately up to the top of HN, but I agree with you, they're generally cursory and pithy thoughts which don't convince my skeptical mind. I don't know, can someone explain why his work is so popular?

Think of all the amazing writers across our civilization whose work is linkable, and we're worshipping these decent but not amazing blog posts?

There's a cycle with blogs. The author starts a blog and they have a distinct, somewhat original voice with distinct, somewhat original views. In PG's case, the startup advice about building stuff that doesn't scale, not worrying about competitors, Lisp, etc. were quite fresh, at least to me. The author's blog becomes successful and their ideas become well understood throughout a community. But a person's ideas don't evolve that quickly. They start repeating themselves. The posts become variations on a theme. Maybe the author goes outside their area of expertise (No offense, but I trust PG's advice on startups a lot more than his advice on macroeconomics). By the end people are wondering what you're wondering. Why are we listening to this person?

> No offense, but I trust PG's advice on startups a lot more than his advice on macroeconomics

That's the key bit for me. I've found his writing about startups, software, hacker culture, product development, etc. to be mostly great and informative. But whenever I see anything he writes about society as a whole, I tend to find the conclusions he draws to be pretty out of line with reality, or at least (in the cases where I don't have data) counter to my experience and opinion.

Unpopular opinion: this is similar to Stephen Hawking's gloomy predictions for AI

You liked his idea that for a startup to scale, you should be doing things that don't scale. That article has mostly anecdotal evidence, and yet nobody ever pushed back on it. How do we know PG was right back then? (He was.)

A few years later, that same guy writes an extensive essay with footnotes and data that must have taken days to compile (going all the way back to 1892). And yet, this one rubs you the wrong way.

I am not defending PG or attacking you, but just consider this explanation as a possibility: when it comes to how to build a startup, you don't really have skin in the game. Whatever he says, it's unlikely to impact your life. But the minute we start talking about the Gini coefficient, the stakes are higher - it's getting political. Suddenly, it's like listening to Rush Limbaugh make an argument - isn't it clear that no Democrat will ever agree with anything that Rush has ever said, no matter how factual or not it is?

I, for one, appreciate PG's ability to tie together global macro movements in a way that I've never heard anyone else summarize. You might agree or not with his take on the Gini coefficient (and especially his lack of acknowledgement or suggestions on how to deal with its consequences), and you might also get frustrated that PG is starting to dabble in politics, which is going to make him very polarized no matter how right or wrong he is. But there's still a ton of useful advice in this essay no matter which side of the political fence you stand on (eg: in 2021, if you're debating between entrepreneurship and finance/VC, choose entrepreneurship).

While pg has extensive foot notes for this essay, there is a vast amount of research with orders of magnitude more citations contradicting him on the gini coefficient.

There is no argument about his footnotes. Quite likely the very richest might not be inheriting it. This has no bearing on the gini coefficient. And his essay on wealth tax is downright stupid. Are his essays as meticulously researched as Pikketys? Why does pg fail to refer to the most famous recent book on the subject in his footnotes? What could be the reason?

https://en.m.wikipedia.org/wiki/Capital_in_the_Twenty-First_...

I appreciate this argument, except for one detail:

> his essay on wealth tax is downright stupid

What's everyone's deal with that essay? It literally has no subjective opinion stated anywhere - all it does is calculate how much percent of your wealth you're left with after 60 years of wealth tax [0]. You definitionally cannot push back on anything stated in that article, or otherwise your problem is not with PG's views but with math in general.

I appreciate the thoughtful reference to Thomas Piketty's book, which I think everyone should read. But IMO attacking algebra takes away from your overall argument.

[0] http://paulgraham.com/wtax.html

The book's central thesis is that when the rate of return on capital (r) is greater than the rate of economic growth (g) over the long term, the result is concentration of wealth, and this unequal distribution of wealth causes social and economic instability. Piketty proposes a global system of progressive wealth taxes to help reduce inequality and avoid the vast majority of wealth coming under the control of a tiny minority.

PGs attack on the wealth tax is how much a zero effort investor could lose in 60 years. 45% in one case. 40hr per week income tax rates are very often higher than that. PGs paen to the idle rich is absolutely ridiculous. Some one who works hard like Musk will be barely affected by such a tax. It only mildly hurts the idle rich.

> 40hr per week income tax rates are very often higher than that.

You do realize that the wealth tax is on top of the income tax, right?

> It only mildly hurts the idle rich.

And therefore there's no issue! Lol. I shared elsewhere that France tried the wealth tax and then killed it after 42k French millionaires left the country. Why would it work in the US when it didn't work in France and 8 other European countries?

You do realize that a wealth tax of 1% on 5% gain is basically a 20% tax on idle asset appreciation. American middle class pays 1% property tax on their primary asset without flinching.

It is not applying taxes on income. There is a separate tax for it - it is called income tax. A tax cut friendly premier repealing tax laws means nothing. France did not implode in the decades it had a wealth tax. Its not like the USA with a rapidly declining middle class is a fine counter example.

And why are you so hurt at the thought of a 20% tax on asset appreciation on the idle rich? No one really gives a shit.

I come here to learn and hopefully also share some insights with others. I thought you were genuinely trying to teach me something, which is why I engaged with you. But justifying sloppy arguments with "no one really gives a shit" doesn't really do it for me.

Does learning for you involve responding with

1. Lol

2. You do realize

3. Pretending to be the only person who understands algebra

If so, I thought you must be made of thicker skin; able to take what you dish out. My adoption of your style might not do it for you, but no one really gives a shit.

No billionaire is hiding his cash under a mattress. Investment assets typically compound at 4% above inflation with zero effort by the investor.

Pg completely ignores the zero effort compounding of wealth and pretends that the investors wealth will be "reduced" by 45% and that too over 60 years!

He forgets to state by how much the zero effort investors assets inflate exponentially in 60 years! If he thought he was making a case against wealth tax, he failed hard!

Also, its really silly of you to assume I don't understand algebra! I thought that pgs article was obviously ridiculous on its face. Clearly, it wasn't obvious to everyone.

> Clearly, it wasn't obvious to everyone.

Nope, it wasn't. You do realize that the concept you're so stoked on was actually tested in Mr. Piketty's homeland and failed miserably? Oh, the irony!

From NPR [0]:

> Normally progressives like to point to Europe for policy success. Not this time. The experiment with the wealth tax in Europe was a failure in many countries. France's wealth tax contributed to the exodus of an estimated 42,000 millionaires between 2000 and 2012, among other problems. Only last year, French president Emmanuel Macron killed it.

Capital is like water - it flows in the direction of least resistance. That part should be obvious.

[0] https://www.npr.org/sections/money/2019/02/26/698057356/if-a...

You do realize that using the phrase "you do realize" does not make your argument any stronger.

France did quite well in the decades it applied a wealth tax, irrespective of Macron's actions.

You seem to be obsessed with France. Have you considered Switzerland, one of the wealthiest countries with the highest standard of living and super high minimum wage.

https://www.bloomberg.com/news/articles/2021-02-16/swiss-wea...

NPR disagrees with you. Good night.

Edit: seems like you added some more info to your comment. Ok, I'll bite. Nobody ever uses Switzerland in an apples to apples comparison with Western democracies because Switzerland employs bank secrecy laws that make it a crime to identify owners of bank accounts (which brings into question the legitimacy of much of the capital in those bank accounts). This is straight from Wikipedia [0]:

> Swiss banks have served as safe havens for the wealth of dictators, despots, mobsters, arms dealers, corrupt officials, and tax cheats of all kinds. In 2018, London-based Tax Justice Network ranks Switzerland's banking sector as the "most corrupt" in the world due to a large offshore banking industry and very strict secrecy laws. The ranking attempts to measure how much assistance the country's legal systems provide to money laundering, and to protecting corruptly obtained wealth.

Also, I mentioned elsewhere that a total of 9 countries in Europe implemented and then killed the wealth tax. This has nothing to do with just one politician in one country.

[0] https://en.wikipedia.org/wiki/Banking_in_Switzerland

If you want to engage in cherry picking and rhetoric to insist on justifying your preconceived bias, allow me the same luxury.

High income inequality causes regulatory capture by a minority elite. Any financial discomfort to this tiny elite through popular movements that impose a very modest wealth tax, faces relentless attack by this tiny elite and their chattel, which includes the politicians they sponsor - ultimately resulting in the overturning of tax policies that benefit society as a whole.

High income inequality leads to regulatory capture by a tiny minority and results in a government primarily focused on the coddling of the idle rich. Hence, all examples of overturned wealth taxes you picked can be dismissed outright. Cherry picking is not a luxury available exclusively to you.

Your bias is obvious from the fact that you were fixated on France while completely ignoring their much more successful neighbor.

In other words there is a brand identity associated with the articles. And brand identity is a time/effort savings device employed by human minds when making a determination on what to consume.

You see this with consumer products all the time; for example the audiophile world may turn their nose up at Bose, but in the consumer space Bose is recognized as a known quantity (may be over priced for the quantity of quality you get but is recognized as not being extremely subpar generic).

My two cents on why his writings are popular: - He uses anecdotal evidence which appears to be sound at first. Looking at the top 100 billionaires seems to give a good idea on how wealth is created and distributed, but really it is only a glimpse at a much bigger phenomenon (especially since the data only comes from two years). - His style of writing is very accessible and natural. He wrote an article on his style (http://www.paulgraham.com/simply.html), and it seems to strike a chord with technicians who prefer this over more complicated prose.

I feel these are the same reasons for why effective altruism is so popular among technicians. It offers clear cut answers, and avoids uncomfortable questions.

Also his conclusions are what some people want to hear, that confirms their worldview.

This is not at all unique to PG, you and I and everyone does the same thing, at least to some extent, in choosing what argument/opinion pieces (now the dominant form of textual media?) we are tickled by.

Same reason Malcolm Gladwell is popular — it's pop science/economics/whatever, made to be readable and digestible, but over simplifies (and sometimes falsifies) in the process.

At least Gladwell's writings are not so obviously self-serving.

Could you expand on the last sentence a bit more regarding effective altruism? Are the uncomfortable questions related to the utilitarian nature of how the movement racks and stacks the causes they choose to support or not?

I was more referring to the fact that EA promotes philanthropy instead of asking why we have inequalities in the first place. So it evades questions of redistribution or fairness in a similar fashion as PG.

I'm not quite sure how strong the analogy is though.

Because he's the founder of this website?

And therefore... what?

We listen to him because he founded the website? Do Facebook users listen to Zuckerberg because he founded Facebook? I doubt that many do.

Or do we listen to PG because the kind of people who find his writings to be interesting have some overlap the kind of people who are attracted to the website that he founded?

Just like RMS is highly respected at the FSF :)

I understand the comparison, but the FSF can exist without RMS. PG on the other hand solely supports HN, I doubt he would continue to pay for a site that vilified him.

This is incorrect. HN is run by Y Combinator; yes, PG started YC, but he retired from YC 7 years ago.

Oh, I had thought he stepped down from the day to day role but still had significant investment and control.

There are many firms where the owner is never present, but all employees know not to cross them. (E.g. Washington Post & Jeff Bezos).

WaPo is very critical of Amazon

That wasn’t my impression 3 years ago when I worked there.

This site is mainly supported by its volunteer moderators. I doubt it cost more than a few thousand a year at most to run.

So the fact that PG pays for it doesn't mean much. If the community decided to no longer be under his care, they could easily find a replacement model or benefactor and they're more than capable to arrange such an uprising/migration.

Pretty sure dang is not a "volunteer moderator".

What matters far more than dollars paid is having his name attached to it. I recall Scott Alexander getting the forum started around his community to remove any associations to him because of things people were saying were happening “under his watch.”

Who pays dang? He can't be so cheap to maintain.

PG doesn't run YC anymore (he retired quite a few years back), which is the org that pays for HN.

I love RMS but unfortunately his skepticism doesn't get treated well by the vocal mass. These days people like to view things in a very black and white manner and if you dare to express your skepticism in a topic that is considered clear cut by the mass you get ostracized.

I liked it better when people were religious towards philosophy and universal metaphysics rather than towards technology and science. Now that traditional religion has been in decline for some time now, people have transitioned the concept of orthodoxy towards systems that are antithetical to it. This is nothing new, as there's long been a level of orthodoxy within technology groups, academia, and so forth, but now it's actual heresy to be skeptical towards anything authoritative, especially if that skepticism stems from one's own intuition.

Inversely, the "skeptics" behave so skeptically towards anything contrary their views that it has the effect of making them hardly skeptical in the first place. I'm not even talking about Stallman's form of skepticism, but what I deem "pop skepticism" that's permeated the mainstream narrative. If one is so skeptical that they are potentially missing out on critical new information, that's not actual skepticism. It's a stroke of the ego for someone too insecure to be wrong about anything. This is especially true when the evidence in front of them is sound and they refuse to consider it.

We are living in an intellectual decline. A true skeptic can't have any sort of controversial opinion without being socially burned at the stake.

I don't understand if your insulting RMS but the comparison is definitely insult to RMS. RMS is the legend.

Indeed. Meritocracy, hard at work.

PG is apropos for this forum, but beyond that he is plainly a good writer. I don't know who you consider 'amazing writers across our civilization' -- but whether it is Gracian or Scott Alexander, PG shares one thing with them, namely that his works will be quoted beyond the lifespan of his contemporary readers.

The presumption that Scott Alexander will be quoted long beyond his lifespan really drives home how much of a bubble this site can be at times.

Indeed. How many people know who HL Mencken is?

Alexander is a good writer, and I appreciate how he is able to tackle assumptions and challenge mainstream opinions, and does so systematically.

But he's writing 10 pages of what could be summed up in 10 bullet points.

The intellectual collateral is nice, but he's not really breaking new ground, and I'm not sure what he's going to share with the next generation of readers

Mencken gets quoted pretty regularly in my circles :shrug:

Alexander is extremely difficult to get clear quotes out of - pithy sentences that would fit in a tweet, for example.

It's impossible to know for certain, of course, but it seems highly unlikely that any of those writers will be quoted beyond the lifespan of contemporary readers (except potentially in scholarly books about rationalism/startups/etc). How many authors from the 1940s are still widely read, especially for essays/non-fiction?

Excepting the WWII memoirs (because I'm not sure how I want to count either Anne Frank, Elie Weisel or Winston Churchill in terms of "authors from the 1940s"), among authors whose nonfiction works are still read, there are a few names that do occur to me:

George Orwell, Friedrich Hayek, Simone de Beauvoir, John Maynard Keynes, Jean-Paul Sartre

For fiction there are obviously many more whose works have come through to frequent readership: Hemingway, Shirley Jackson, Albert Camus, C.S. Lewis, Antoine de Saint-Exupéry, Ayn Rand to name a few.

Lewis would be my example for nonfiction. Narnia is fun and all, but it's stuff like "The Inner Ring" (https://www.lewissociety.org/innerring/) where he really shines.

I agree (Planet Narnia also blew my mind), but I tried to make a judgement call over whether his non-fiction was "widely read" (I know very few people who have read any of it, relative to the number who have read the Narnia books).

Normally I wouldn't comment just to say the equivalent of +1, but I hadn't encountered "The Inner Ring" before, and it's great! Thanks for the recommendation.

He’s a good writer in that he’s able to convince people who know next to nothing about the subject matter that he is making good points. Neither history nor economics agree with his hand waving statements.

I don't think that merely being a good writer will allow him to be "quoted beyond the lifespan of his contemporary readers." I agree with OP that I really don't see anything special about his writings, compared even with contemporary writers on technology like RMS.

He's good at rhetoric. The writing is simple with one point per paragraph and requires a low reading age.

It has a single and consistently repeated/implied message without any deviations or uncertainties.

All of that makes it persuasive.

But factually it's mostly wrong.

I'm not going to through it point by point to pick all the inaccuracies about the continuing influence of inherited wealth on success, or the unrealistically rosy implication of small business riches.

I'll just suggest everyone should research for themselves the real survival rates for small businesses, the small business sectors with the best long-term viability, the age group most active in creating new businesses, and the number of tech startups that makes any return at all to investors.

Of all the things posted on this site, this is the comment that is the most wrong. If his writings are ever quoted again after his death, it will be meant as sarcasm.

> namely that his works will be quoted beyond the lifespan of his contemporary readers

I have never seen PG quoted anywhere, not even on HN.

I see people quoting him occasionally. They're always mocking him and this site though.

I see the quote "Do things that don't scale" often enough

OTOH, the top comment is a criticism. So, probably not all is lost :)

The front page giveth and the comments taketh away

This is a really funny and pithy description of both HN and reddit - and according to Google, you're the first person ever to say it.

Any hits for the grammatically correct form "The front page giveth and the comments take away"?

Because he's famous (especially among the HN crowd), he's certainly smart, and it appeals to the bubble of internet startuppers that lurk in HN.

Paul, and to a similar or even larger extent Sam Altman, and others, seem detached from reality, in the sense of the common man.

Perhaps each one of us lives in a bubble of sort. His is immediately apparent to me, despite I kind of belong to the same crowd he preaches to.

I don't think his intent is evil nor bad. I think he genuinely enjoys writing and thinking about deep stuff, and I am grateful that he shares his thoughts with the world.

Its the same reason any tweet by Elon Musk saying stupid stuff get 300k likes instantly.. Its about who say and not about what is being said.

If you don't hack your mind from a philosophical perspective you wont stop this tribal hard-coded neural trigger of this automatic authority following.

This is the only thing that can save us from being that person in the 30's Germany photos raising their hands and chanting 'Sieg Heil'.

Remember that this is hardwired, but it worked somehow because we used to be packed in small communities where everyone knew each other.

Now the same "wiring" is being used the same way, but now with a virtual global tribe, where we actually don't really know the people that is being granted authority or why we are supposed to follow them, because we simply follow them giving everybody is also doing it.

Just observe yourself more often and question even the things you take for granted before doing it. You will see a lot of these things are actually unreasonable giving their actual context.

> can someone explain why his work is so popular?

He's an important person to our field, and he's contributed quite a lot to it (including, for example, this forum). That does count for something.

However, to me if anything it really just confirms yet again that even great people can become thoroughly warped by wealth and fame.

His wealth tax piece was quintessentially unconvincing and self-serving, and many of his recent tweets and posts have done much more to pat himself and his peers on the back than to contribute convincing or useful analysis.

> I don't know, can someone explain why his work is so popular?

It's a prosperity gospel for nerds: you are the special chosen ones, therefore you deserve every blessing. Anyone who says otherwise is sinful and blind to the holy truth.

PG's recent articles have changed from what they used to be. Recently (last few years) there is a dramatic change towards defending riches, logical fallacies to explain why being rich is okay, a lot of focus on wealth and how to get it and why it's okay.

A lot less technically interesting than he used to post. I used to send Startup=Growth to everyone I knew. I think people are used to high-quality content from PG and so the upvotes fly - but honestly, recently, the quality isn't there. And often the content of his posts I now find quite offensive and wrong.

Not very interesting any more. Mostly wealth defenses and fallacies.

The political messaging has also changed from “people in poverty have specific material needs that we need money to fix” (war on poverty) to “actually, people having or making different amounts of money is inherently wrong” (war on inequality).

The war on poverty can be waged with a modest tax on the PGs of the world. The war on inequality is different. Venture capital always seeks to create wealth that will flow to some more than others; a very efficient way to fight inequality is to simply abolish venture capital. Along with anything else that facilitates creation of personal (rather than societal) wealth.

> actually, people having or making different amounts of money is inherently wrong” (war on inequality).

This is a misrepresentation though. There isn't anything inherently wrong with people having or making different amounts of money. The complaint, as I see it usually, is that the degree of inequality is unacceptable. That is, millionares aren't inherently unethical, heck people who make millions annually aren't inherently unethical. But people who make billions a week, might be.

That is, I can comfortably and easily donate enough each year to support a few working families. Bezos could match the Child Poverty Tax Credit to every child in poverty in the US each year and still turn a profit.

(For the math here, its ~$3000 * 11 million children, which comes out to ~35 billion, or half his income this year). And remember: he could do that every year and his wealth would increase.

The key issue is that personal wealth, after a point is wasted. Creation of vast personal wealth doesn't really serve society, so why should society encourage it? That, again, doesn't mean that no one should have any personal wealth, just that the ROI, after a point, should lessen.

How much do you really care after your second billion anyway?

> The key issue is that personal wealth, after a point is wasted. Creation of vast personal wealth doesn't really serve society ... How much do you really care after your second billion anyway?

What do you think the billionaires' billions are doing? Sitting in a bank account? I think the majority of their wealth is invested, i.e. it is funding industry, which is a good thing. If we assume for illustration that billionaires will spend $1B on things like private jets and invest the rest, then if we have $1T divided among 10 billionaires, we'll have $10B spent on jets and $990B invested, while if we have $1T divided among 1000 billionaires, we'll have $1T spent on jets and $0 invested. Given that, at least for the concern of "how it's being spent", it's actually best to have the megawealth concentrated among a relative few.

"Its invested" can mean a lot of things. And in general (as another user notes) the velocity of "invested" money is lower than the velocity of money spent. In other words, the 1T spent on jets is actually better for the economy.

Invested money is usually in things like the stock market, which doesn't directly support a company (buying a share of AMZN doesn't put money in Amazon's pocket, although it does, amusingly, make Bezos wealthier on paper). Angel investing might actually be better here from a velocity perspective, I don't actually know for sure.

> What do you think the billionaires' billions are doing? Sitting in a bank account?

Yes. Maybe not their own savings account, but in some organizations' bank accounts.

Money in the hands of the low to middle class is spent far more efficiently. [1]

[1] https://www.americanprogress.org/issues/economy/news/2011/12...

So, let's take Jeff Bezos. Googling a bit, an article allegedly updated Mar 13 says he has 55.5M shares, which at AMZN's price of $3379 is $187 billion; I'm sure both multiplicands have changed but that's probably not far off from the truth. What bank accounts is the $187 billion sitting in? If he sold all his stock, where would that money come from? If he then spent it all on a fleet of private jets, how would that impact the economy?

And if we split Jeff Bezos into 1000 individuals, each of which had about $200 million, and each of which spent half of it on mansions and yachts and invested the rest... would that be an improvement?

Those few would, however, have proportionally much more power and are not going to use that power to threaten the structures which made them their money. I don't think it's by any measure a good idea to have a few billionaires set the course of society; deciding what gets invented and produced, what kinds of ventures get supported, what programs enabled. That is just autocracy with extra steps.

> ~35 billion, or half his income this year

Thanks to $AMZN going up. There's no way he can spend that much per year for prolonged periods of time.

If the utility of money is a suitably concave function, those two become much more similar.

https://www.jasonhickel.org/blog/2021/3/28/extreme-poverty-i... makes a good case that poverty and inequality are quite related historically, too.

PG's articles are like a modern day Siddhartha. He illustrates the glories of growth and change initially, but by the end he illustrates the glories of stability and security.

This isn’t a surprise. The religion that formed here hanging off his every word subscribed to it to get rich, just like he started YC to get rich. Now he’s happily rich, barely even looks in the mirror at these adherents that he left behind, and is writing for his new friends who are also rich. It was always pointless snake oil but the Sand Hill Greed here made everyone overlook that because maybe, just maybe, the key to get into YC and skip the bread line was buried in the ninth paragraph of some polemic from a guy who figured out retail in Lisp and somehow convinced a greed-seeking generation of hackers that he had all the answers.

I’ll take my -4 for hitting close to home. The grayer I get — silencing unpopular ideas by making them grayer was his idea too — the more confident I’m right. We stopped telling you folks you were following someone who only cared about your impact on his RoI because that sort of unwashed heathen isn’t welcome here. Paul Graham, YC, and this creation of his on which we speak now has done more to distort and destroy any foundation of computing remotely paying attention to making the world better than almost anything before it, and while I’m happy to see people finally figuring out that it just might be bullshit, it’s a bit too late.

I don't think it's at all fair to say he started YC to get rich.

His own thoughts about are here:

http://www.paulgraham.com/whyyc.html

http://www.paulgraham.com/ycstart.html

Whether you believe that or not is up to you, but back then there was no guarantee it would work. To look with hindsight and say it was just greed is easy for you to hurl, but not at all what it looked like at the beginning.

He was rich enough not to need more money before starting YC-the acquisition price for viaweb was $49M, and it roughly ~10x'd between then and the peak in late 1999. (cites: https://www.cnet.com/news/yahoo-buys-viaweb-for-49-million/ https://venturebeat.com/2008/10/08/as-other-tech-stocks-rall... ). I don't know how long he spent there or what fraction of the company he still held, but I'd assume that he'd have stayed long enough to get to his personal Fuck You Money.

More generally, I know many many people (maybe literally tons by weight?) who continue to work long after they don't need to, usually because they're just deeply interested in the domain. I've seen this up close with my father, who continues to farm at 70, and with some founders who keep founding despite having more money than they will ever need. So when someone in that situation says they work on a thing because it is interesting to them, I generally believe them.

I'm kind of a contrarian myself, and what you've said resonates with me a lot. Take my upvote!

Dang now that you're back in the black I don't know if you're right or not :-/

Maybe one day, you'll even be confident enough to not make a throwaway account to say something like this.

This is kind of like a Clippy suggestion: hi there, it looks like you’re criticizing the forum. Would you like to establish a reputation on the forum?

How does one get to make more than three comments a day? Maybe that's why some people create new accounts, because they've filled their daily quota on the other ones.

Downvoted not because you're right, but because you're mostly wrong.

I mean, you're maybe 10% right. You take that 10% and inflate it to the point that it's almost completely wrong, though.

I appreciate your well-defended and reasoned argument. I learned a lot from your countless examples of what I got wrong and given that I’ve missed the mark on earning your vote, I’ll be sure to factor your feedback into my future comments.

They come definitely from a privileged niche point of view although they usually have some really interesting insights. For instance this one article about how suburbs are created and that kids in the past were at their parents' workplaces and learned how they work. [1] Or another article about quality of discussion, ranging from collaboration to ad hominem. Still I hesitate to share them outside of the typical startup crowd because parts of them might offend people. [2]

[1] http://www.paulgraham.com/nerds.html [2] http://www.paulgraham.com/disagree.html

>"being rich is okay"

Sure being rich is ok. As long as they make mortals better off which is not what is happening now. Rather majority of the people are getting worse for wear in the process.

> Think of all the amazing writers across our civilization whose work is linkable

Can you give some, please? I'm probably one those folks who cannot distinguish decent from amazing blog posts.

There's a bias some people hold that people who are very wealthy must also be very wise.

It is funny to read pg's take on wealth tax, given that Piketty has produced massive scholarly literature suggesting the exact opposite of what pg writes.

If the pg's wealth tax blog was supposed to counter Piketty's work, it is comically pedestrian.

"It turns out" (to use a popular pg phrase used when proof is too inconvet to produce) that pg is well liked among pg's fan club website users.

He is rich, and makes people rich. All the kids starting their tech company want to suck up to the man with the golden touch.

I agree. To me, the post reads a bit like this: "Back then, we did not have as much inequality, but the super-rich did not deserve their wealth. Now, we have more inequality, but the super-rich [like PG himself] really deserve it, because they are innovators." The post does not cover the arguably more important questions like "Are the working and middle classes better off?", "Was there less innovation back then or were lesser paid innovators just as innovative?", and "Can we have as much or even more innovation with less inequality?".

Yep, I think there’s a lazy argument that tends to get made to justify the status quo, namely that inequality is necessary for innovation.

Of course it is, otherwise why take risks?

But this does not justify the 1000x inequality that we have today separating CEOs from laborers and 10000x separating founders from laborers.

What if those numbers were 100x and 5000x? Might we see even more innovation, and stronger communities?

The payoffs figures of today are also used to justify truly stupid risks. There are ponzi scheme type people who would rather masquerade at being a founder 10 times over in search of getting lucky once, screwing over investors and laborers in the process. Maybe if the disparity weren’t so eye popping, the same people would go into other fields instead.

> "Back then, we did not have as much inequality, but the super-rich did not deserve their wealth. Now, we have more inequality, but the super-rich [like PG himself] really deserve it, because they are innovators."

Indeed. Or to elaborate a little:

"Back then, we did not have as much inequality, but the super-rich did not deserve their wealth. Now, we have substantially more inequality and compounding human misery, and I am super-rich.

Because I am unable to identify any specific moment in my life when I made unethical decisions personally it is not possible for me to understand a view of the world that sees my current existence as the product of an unjust system."

You hit the nail on the head!

It also didn't discuss that it seems more so that there is a new technology which is enabling a shift on riches, but it's likely that the next phase is one of inherited wealth again. Unless he believes that the children of those new fortunes won't inherit anything or will keep being surpassed in riches by the next generation startups. But I'm not so sure, I think it's just a cycle, refresh most company from a non tech based one to a tech one, and once that's done, it'll go back to consolidation and inheritance, until the next big technology.

Moreover, people seem to continuously forget the fact that half of all wealth in the United States is inherited by the top 5% wealthiest households, not 'earned' via value creation.

In general, I tend to agree with Rawls that this notion of 'deserving' is irrelevant to the question of how we ought to distribute goods/welfare in society.

Yes, not only good old Rawls, but many contemporary writers make arguments about the limits of meritocracy. Some books I can recommend:

Robert H. Frank: Success and Luck: Good Fortune and the Myth of Meritocracy

https://press.princeton.edu/books/hardcover/9780691167404/su...

https://blogs.lse.ac.uk/lsereviewofbooks/2016/06/28/book-rev...

Michael Sandel: The Tyranny of Merit: What’s Become of the Common Good?

https://www.nytimes.com/2020/09/15/books/review/the-tyranny-...

Add to that that tech companies concentrate wealth line never before. Airbnb takes a cut of transactions not only around the US but across the world. Not everyone works in the Bay Area, but how many of the founders, early employees, and VCs do? The ones who really make massive wealth? Not 100%, but most. Same with Stripe, the same with Facebook, Google, etc. we’re pulling tremendous wealth into a small area, with technology that can scale tremendously large businesses with fewer people.

This isn’t to say that, for example, wealth from finance companies doesn’t centralize in New York and London. That’s bad too. It’s not to say that good things don’t come from these companies (though Facebook seems to be a net negative for humanity.)

But this level of wealth concentration and inequality is detrimental to the fabric of a society. We’re not better off, we’re not more innovative, we’re not healthier or more cohesive or happier when this happens.

> But this level of wealth concentration and inequality is detrimental to the fabric of a society. We’re not better off, we’re not more innovative, we’re not healthier or more cohesive or happier when this happens.

I agree 100%, but you're ignoring the other factor that is detrimental to society: social factors. Notably, the divorce rate and single-parent rate among poor and working class Americans of all races has skyrocketed. Now, top earners will often tell you that there's nothing wrong with divorce or single-parenthood, but observe what they're actually doing themselves! Their low divorce and single-parent rates have remained steady over the past few decades, even as everyone else's is plummeting [1].

In addition, the middle and working class are losing their social support networks. Church attendance is down, union membership is down, and volunteer organization participation is down among those groups. In contrast, most top earners have large and robust social networks.

I could go on and on about other social issues. Yes, wealth and income inequality is a big problem, but it's only one aspect of the decline of America's middle and working class (excluding the upper-middle class, which has continued to rise). We need to stress and incentivize social factors as well. The non-wealth and non-upper-middle-class should emulate what the top earners do in their social lives, not what they say.

I still strongly support a wealth tax, and higher income taxes, as long as they're distributed directly to our citizens and not used to build additional government bureaucracy.

1. https://www.brookings.edu/research/middle-class-marriage-is-...

Finances are generally a big cause of divorces. Have you considered that upper-class couples have low divorce rates because they have money? Rather than they are upper-class because they don't get divorced.

Don't get me wrong, divorce is a massive destroyer of wealth. But happy couples don't generally get divorced. And financial stability is a big contributor to happiness.

Yes, I acknowledge that correlation != causation. And these are reasonable questions.

Could also be the tail wagging the dog. People arrested for say being drunk in public are gonna be broke, because they don’t have mansions to drink in.

Could be that the cultural problems you’re describing follow whole towns being hollowed out as all wealth is transferred to winner take all cities, as free trade knocks out industries with no help nor replacement.

Yes. It's also very possible that the two aspects are synergistic.

undoubtedly, i think theres a sweet spot for letting people gain rewards from their own hard work/talent/value creation, but i think as a society we are moving into the dangerous territory where that balance is totally skewed in one direction.

First off, I really like your username! I'm sure you had a particular robotic animal in mind when you chose it.

Secondly, a gain from one's own rewards is supposed to be in one direction. A person is entitled to the fruits of his labor. Not anyone else. There are only a few people at the top of any profession or activity. But this fact seems to be ignored for some "utopian" dream where the guilt or coercion of the successful compels, via self-abnegation, some "compensation" to the masses for the latter's lack of success. That the best are merely cogs to keep churning to the rhythms and dictates of his fellow man and of his government. That the best see no value in their own work or selves without others as their chief barometer.

However, I don't see it argued that Usain Bolt should slow down so that he doesn't ruin the Olympic Sprint for the rest of his competitors. I don't see it argued that intelligent students should stop going to Harvard/Stanford/{take your pick} because such academic success makes everyone else look mediocre by comparison. Why should it be any different in Silicon Valley? Why should one accept inefficiency or inadequacy? It benefits no one to either become or accept a prize that is lesser in value than the sum of one's actions. Except perhaps for martyrs and masochists.

Hey fellow zoids fan, first of all i never said people creating value shouldn't be rewarded, i think they should be rewarded extremely well but at the end of the day, no individual can survive without a society, this is a fact. What we need is a more balanced society where people can start at some base level and can gain based on their contributions. As for your Usain Bolt analogy, for me its more like Usain Bolt is a great runner so he gets 99.9% of sponsorships but theres some kid in Uganda with even more potential, yet he becomes a farmer because he can't find a sponsorship. There are talented people all over the world, a good society affords them the opportunity to realize their potential, something which i don't think is possible with uncontrolled winner take all in the economic marketplace.

You're looking mixing up cause and effect

You're mad about "cause": Evil startup stiffs tons of small players across the world

You're lashing out at "effect": Lots of money gets concentrated around the evil startup's headquarters

A lot of really bad stuff has happened in history because of this sort of bad logic, so you really need to rethink your position

The use of Airbnb seems odd to me. People around the world use it because they don't like the alternatives.

Why shouldn't they be allowed to do business?

Noticing some consequences does not mean that they are calling for outlawing them.

I wasn't really picking on the point, I was just noting that Airbnb seems like an increadibly bad example.

Also, using hyperbolic language like

is definitly a dog whistle and not simply "noticing some consequences".

I think the problem here is the consolidation of an entire industry around a single Silicon Valley company. In any other time in history this would be called a monopoly, and that is a problem.

If AirBnB was just an aggregator, say a cooperative standard where hotels and guesthouses could post their services and the profits of AirBnB would go back to the industry, that would be fine. But it is not, the profits go to shareholders and Silicon valley executives. And that is the problem.

There are competitors- VRBO, for example. AirBnB have a significant share, but hardly a monopoly.

If Airbnb were just an aggregator, it'd be pretty worthless. For myself and my wife, finding superhosts on Airbnb is one of the indicators we use to feel comfortable that we probably aren't getting ripped off.

The relatively simple interface for scheduling, requesting changes, paying, seeing up front what taxes and surcharges will be applied etc. are all things the hotel industry has had decades to implement, and they didn't.

In fact, they still haven't. If hotels and guesthouses formed such a cooperative with all the same features, I would use it- especially if they didn't add on their own service charge like Airbnb.

The boom of renting rooms and houses may have come with its downsides, but from the consumer point of view, AirBnB has been a godsend for those of us who don't like hotels, travel with pets, and go to out-of-the-way places that don't otherwise tend to attract a lot of online presence.

Could you point out where my comment implied that they shouldn't be allowed to do business? I didn't mean to (and don't believe that) so it would be helpful to see how I could adjust the way I communicate this.

They should be allowed! It's just that maybe we need to adjust our society to this reality.

I think the language of the post was rather hyperbolic; I have quoted this line a few times now:

When you give Airbnb as an example, I fixated on them mostly because it doesn't jive with the rest of your point.

So Airbnb is part of a group of companies in one geographic area that happen to be successful. Why does it matter? Should we choose to not do business with them, for the sake of geographical monetary equity? Whether group fiat or government breaking them up, it is the same result.

Sorry if all of this came off as too aggressive. It is monday, and I have had too much coffee already :/

Really don't get where you're coming from, that quote is two paragraphs after the mention of many other companies, where he's clearly implying the concentration of wealth in the hands of the founders and investors is the detriment.

I think his very good point is that a global business is comparatively easy to build and that has led to wealth concentration

> "Of course the Gini coefficient is increasing" translated means "income inequality is not a problem".

The book "The Great Leveler" https://www.goodreads.com/book/show/31951505-the-great-level... is probably the most comprehensive dive into history of inequality, and arrives at a fairly unexciting conclusion that periods of great inequality are correlated with significant economic growth (usually related to advances in automation, which tend not to be universally distributed) whereas periods of equality can generally be attributed to stagnation.

there are some very real counterexamples. It's hard to argue that the US did not undergo both decreasing inequality and growth between 1860 and 1900. Decreasing inequality (well a good chunk of the population was no longer chattel slavery, if nothing else), and the US went from "utterly destroyed by a civil war" to "nascent superpower"

more quantitative measures of inequality between 1860-1900 (that probably doesn't take into account slaves) https://voxeu.org/article/american-growth-and-inequality-170...

Growth from whom and stagnation for whom? If during this "stagnation", the level of societal wealth remains the same, but inequality decreases, that indicates massive utility gains due to decreasing marginal utility of wealth.

Moreover, inequality now is extremely high, and growth is decelerating. China has less wealth inequality than the United States, yet is growing substantially faster.

> Moreover, inequality now is extremely high, and growth is decelerating. China has less wealth inequality than the United States, yet is growing substantially faster.

Growth is a second derivative. Income inequality is a function of first derivatives. You can't directly compare the two. If I had to guess, China's wealth inequality in China is growing at a much faster rate than that of the US.

Hmmm. The traditional (1960's) view (Kuznet's "Inverted U") is that starting from low-tech societies where everyone has more or less the same, inequality rises with the advent of technology, then falls again as democracy and the welfare state kick in.

Thomas Piketty in his magnum opus Capital in the Twenty-First Century argues that the rise in inequality is inevitable (his famous r > g) and only interrupted by wars, depression, hyper inflation, and similar catastrophes that destroy a lot of wealth. That's rather more exciting than stagnation.

Branko Milanović’s more recent (2016) Global Inequality: A New Approach for the Age of Globalization (which originated the famous elephant graph [2]) notes that 1) inequality has risen recently within nations, but decreased among nations; 2) the Kuznet inverted-U needs to be replaced by Kuznet waves; 3) there does not seem to be an efficiency-equity trade-off in the long-term 4) social mobility seems to be falling (such that accidents of birth basically determine your station in life again, as in previous centuries).

> periods of great inequality are correlated with significant economic growth (usually related to advances in automation, which tend not to be universally distributed) whereas periods of equality can generally be attributed to stagnation.

Here, Milanović distinguishes "malign" equalisers, which reduce both inequality and average income (namely the ones noted by Piketty: wars, epidemics, depression, etc.), and "benign" ones: widespread education, greater social transfers, and progressive taxation. [3]

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

[2] https://en.wikipedia.org/wiki/The_Elephant_Curve

[3] https://economics.hse.ru/data/2015/12/23/1132608306/TOC_may....

That would seem to indicate that Goodhart's Law is in effect and not much more. At least, not until you demonstrate an analysis of quality of life during those same periods.

That’s a fascinating point!

It definitely takes a bias toward "wealth accumulation is good" to present the following as good news:

> "The reason the percentage of heirs has decreased is not that fewer people are inheriting great fortunes, but that more people are making them."

It's likely that many of the inheritances of 1982 were the echo of the corrupt and monopolistic industrialism in the 19th century. Is it a bad thing that the great individual fortunes that were built a century earlier couldn't be amassed in the 20th? Have we returned to a 19th-century environment now, with technology taking the place of railroads and telegraphs? On that note...

> "the major sectors of the economy were either organized as government-backed cartels or dominated by a few oligopolistic corporations."

Unless I see a FAANG company go out of business, soon, and as abruptly as it appeared, I'm inclined to think we're entering a new oligopolistic era. Just because these companies were recently startups doesn't mean they aren't entrenched now.

(As an aside regarding the wealth tax, that actually would have worked to reduce the number of heirs at the top of the list in 1982 had it been enacted some time earlier.)

--"I'm inclined to think we're entering a new oligopolistic era. Just because these companies were recently start-ups doesn't mean they aren't entrenched"

Your comment is on start to end, just to add, these "companies", are nothing more then dystopian mirrors to the public, their fronts(all individuals in the public eye, greatest example of a nobody(Leon Musk)) are just second rate actors. The virtualization of "finance", it's moral justification, nothing more is at stake.

Real power, ...dwells in the shadows. This goes from the White House, to Hollywood, over Silicon Valley to Mar o Lago in the Swamp State.

The measure of a dollar between a billionaire, and a homeless dweller as to the price of a loaf of bread is meaningless. What counts is the grab for the hard assets, power, control, that probably starts at multiple billions. A second measure of any meaning is the time line power and influence can be stretched. A professional politician is seriously handicapped there, hence the proof of the above as to what is "wealth".

>Firstly, Gini coefficient is based on income, not wealth.

Huh? Gini coefficient can be based on wealth just as well as on income. For example: https://en.wikipedia.org/wiki/List_of_countries_by_wealth_eq.... This essay doesn't specify which one PG is talking about.

Think the implicit meaning here is that Gini coefficient is often used only as an indicator of income inequality, not wealth inequality, despite it being usable for both. Usually one has to specify "wealth Gini coefficient", as most default to income otherwise.

However, this essay is specifically about wealth so at most I'd criticize this use as somewhat ambiguous instead of assuming that PG meant income Gini and therefore confuses income with wealth.

Having read a fair bit of discussion of inequality, I think that in any popular discussion if you see the phrase "gini coefficient" unqualified, you should presume it to be discussing income, even if the rest of the discussion was about wealth.

It's a very pervasive error.

He’s a man of his youth; when you could start a garage band and have a modicum of success, then carry it forward with sound fiscal choices. Concepts like inflation, and buying power are lost on someone of PG’s wealth.

He’s completely detached from the modern reality: content and options are ubiquitous relative to PG’s golden years.

It’s the same with Marc Andreesen and his call to build; hey Marc why not build a progressive tax system that enabled your generation and your parents to explore as they chose instead of suggesting we all just rally behind a billionaires blog post?

These guys are visible because they “won” an ephemeral challenge most people aren’t even aware of.

It’s stunning how smart folks seem oblivious to the extent which relativity commands reality.

> A French critic cleverly wrote that "with Autumn Sonata Bergman does Bergman." It is witty but unfortunate. For me, that is. I think it is only too true that Bergman (Ingmar, that is) did a Bergman.... I love and admire the filmmaker Tarkovsky and believe him to be one of the greatest of all time. My admiration for Fellini is limitless. But I also feel that Tarkovsky began to make Tarkovsky films and that Fellini began to make Fellini films. -- Ingmar Bergman

And PG does PG. It's a classic pseudo-contrarian, startup rally cry, PG post. Which isn't to say it's worth getting annoyed at it. It's simply on brand.

Can I ask a related question? Why all the focus on income/wealth "inequality"? Shouldn't we be looking at the absolute baseline quality of life? Hasn't it been increasing dramatically despite increasing inequality? Due to technological advances, hasn't the baseline quality of healthcare, education, sanitation, nutrition, shelter, comfort, convenience, etc. significantly improved from the 60s or the 80s? If so, why begrudge the rich, especially those who have driven this advancement, their fleets of yachts?

Three problems:

1. Humans are humans, and they pretty much always judge their success by comparing themselves to others. Or, rather, humans are primates. Take a look at the famous study of the monkey that got cucumber while the other monkey got tastier grapes.

2. Income inequality in and of itself can be a problem because the mega wealthy can essentially buy laws that benefit themselves. There have been many studies that show that politicians are much more responsive to the desires of the rich than the desires of the average person.

3. In any economy, limited resources always go to those on the top of the wealth graph, regardless of cost to produce. So while you may be able to say everyone's standard of living is better, that's cold comfort to someone who won't be able to buy a house in their lifetime because limited land supply goes to the richest.

> pretty much always judge their success by comparing themselves to others

Yes but that doesn't mean this comparison has moral standing. Also this behaviour is pretty low-level, neurologically, and we can train our higher executive functions to override and disregard it. I would argue that should be the expectation.

> can essentially buy laws that benefit themselves

Again - so what? As long as everyone's lives are improving on every metric, who cares that the wealthy mess with the tax laws or enact regulatory capture.

> that's cold comfort to someone who won't be able to buy a house in their lifetime because limited land supply goes to the richest.

No, the person (and all other people) should derive their comfort from the gratitude for being able to live in a modern, extremely comfortable world.

Edit: to rephrase, isn't the problem here the expectation/belief that you should have/are entitled to a detached house?

For many people in the US, over the past couple of decades:

1. Housing has become much more unaffordable.

2. Higher education has become much more unaffordable.

3. Retirement income has become much less guaranteed.

4. Employment is much less stable than it used to be.

Just look at the coming eviction tidal wave that will happen after the eviction moratoriums in the US end. Telling people "But look at all the other modern comforts you have now!" will smack as "Let them eat cake" when someone gets kicked out of their house, while the rich got much richer over the past year.

> Housing has become much more unaffordable.

That's hardly surprising though is it? The number of people in the US has almost doubled since 1960, and urban population density has increased much more than that. Any expecation that everyone will be able to afford a detached house in any proximity to a metropolis is clearly unreasonable.

> Higher education has become much more unaffordable.

Again, the admissions rate hasn't really kept up with the population has it? Also there's a labour shortage in lots of skilled trades, construction and agricultural labour; and a labour surplus in finance and law. Do you think it's reasonable that everyone expects to attend higher education?

> Retirement income has become much less guaranteed.

I'm not sure how you'd measure retirement income "guaranteedness". Also see "Pension Timebomb" for how actually guaranteed those pensions are.

> Employment is much less stable than it used to be

Do you have a source for this? Ideally one that controls for people changing employment to advance their careers? This is much more common these days for the reasons outlined in the article.

Yes, after being evicted from a place you cannot afford, or after any other trying circumstance, telling people to focus on what they can be grateful for instead of what to be angry about is exactly the right thing to do. What business is it of yours or anyone elses how much money someone else has? Who cares if they have more or less than last year? How is that related to you personally being unable to affort rent due to being unemployed during a pandemic?

Because there are people being left behind. Productivity per person has increased massively over the last half century, yet income per worker has been stagnant unless you break into a few specific contexts. This doesn't appear to be a necessary part of innovation as PG and others claim, but rather is a reflection of concentrated wealth's ability to restructure the market and even the legal system to better serve those concentrated interests. This is the pernicious problem we have to fight. It is in no way somehow exogenously necessary for people to have half billion dollar yachts in order to advance the life of the typical human. "Markets measure merit" is a lie told by those best positioned to control markets to manufacture their own "merit."

>Why all the focus on income/wealth "inequality". Shouldn't we be looking at the absolute baseline quality of life? Hasn't it been increasing dramatically despite increasing inequality? Due to technological advances, hasn't the baseline quality of healthcare, education, sanitation, nutrition, shelter, comfort, convenience, etc. significantly improved from the 60s or the 80s?

If people are feeling more volatility, and that it can all slip out from under them at any time, then all that baseline quality improvement is not worth much. Also, just like many other animals, we are playing a game rooted in the mechanics of mating involving social hierarchy and various tribal mechanics that are key to securing desired resources and reducing the aforementioned volatility. I do not imagine vast gaps in income/wealth/security help the tribe as a whole in this game.

> If people are feeling more volatility

Do you think this feeling is reflected in actual risk though? If so, how would you quantify it? If not, shouldn't we expect/teach people not to feel so volatile and be more grateful and content?

Yes, the easiest way to see it is in the lack of income security and wage stagnation for the vast majority. You have to hustle, your employer may not be around for your working lifespan, or they might be obviated by cheaper labor from overseas and/or technology and automation.

Edit: Another example is health insurance is tied to your employer in the US. It costs anywhere from $400 per child per month to $1k per month per adult, with a $17k out of pocket annual maximum. Imagine you've scraped together some savings for a house or a business or kids' education, and a wage earner becomes ill or injured, and can't work. Now you have giant expenses coming your way at your most vulnerable, and government help from Medicaid (for subpar quality healthcare) doesn't kick in until after you've exhausted all your assets, so you are at risk of getting sent back to square 1.

Doesn't the article point out that this is pretty much the normal condition of life, with a brief interlude from the 50s into the 80s? Yes, life is unpredictable, bad things happen for no reason. This is a moral condition we all have to accustom ourselves to. I'd speculate that the pain our society seems to be going through now represents a correction towards the normal condition, and that we should adjust our expectations accordingly.

The gist of your original comment was that life has been getting better for everyone. But if you also claim people need to adjust their expectations downward, then some things are not getting better for everyone.

I know that people from the 50s to the 80s didn't have internet, healthcare technology, medicines, smartphones, etc like today. But obviously there is something to be said for the stability or utility of knowing that your children will most likely have a better future than you did, and the demise of this fact (or belief) is causing friction in society.

> stability or utility of knowing that your children will most likely have a better future than you did

Depends on how you qualify "better". By the listed measures, this is still the case. By available land/population this is clearly not. Do we have any reason to believe our children will not have better healthcare, nutrition, access to information, etc than we do?

If we don't, then what justification is there for agitation?

>By the listed measures, this is still the case.

What measures? The ones in your original comment?

>healthcare, education, sanitation, nutrition, shelter, comfort, convenience, etc.

In the US, you can trace all of these back to wages, especially since healthcare is tied to your employer in the US, and you can look up any a variety of data to show that wages stagnated decades ago, length of tenure at employers decreased, increased participation in "gig" economy and service industry which don't offer benefits (i.e. loss in wages), consolidation of growing economies in fewer areas of US resulting in cost of land rising disproportionally to income, etc.

> Do we have any reason to believe our children will not have better healthcare, nutrition, access to information, etc than we do?

I don't know who "we" is here, but it's reality for people who spent 20 to 30 years at a manufacturing facility that was then outsourced and who now live in a town with no significant business, whose kids' only hope is to use college to boost themselves into an in demand career, but that involves moving to a HCOL area where they now have to sink a significant amount of money into their land purchase (house) to establish themselves, away from the rest of their family.

>If we don't, then what justification is there for agitation?

I don't know what other sources of information you want, but I know pretty much everyone in my parents' generation got married, had kids, raised families, and now the number of people that are coupled up is around half in my family and friends, and those with kids by mid 30s is even lower, maybe a third.

There's shortages of healthcare providers in rural areas because no one wants to live there, there's more and more competition for in demand areas as everyone tries to get in before they can't afford it.

This is all volatility. This didn't happen when everywhere was growing, but this happens when you have a divergence, and you're either on the upswing or the downswing.

> In the US, you can trace all of these back to wages

This seems to disregard the trememdous advances in all the fields of healthcare made in the last 40 years. Treatments are readily available for diseases which were previously death sentences. Treatments that were prohibitively expensive in 1980 are cheaply available today. Once we factor this into our analysis I don't think anything has stagnated.

> whose kids' only hope is to use college to boost themselves into an in demand career

What about trade school? There's a shortage of construction labour and skilled trades throught the country.

> have to sink a significant amount of money into their land purchase (house) to establish themselves, away from the rest of their family

I don't recally anyone being forced to buy houses. Plenty of folks raise families in apartments. I myself was raised in one. Yes when you live in a metropolis you can't afford as much space. And?

> and now the number of people that are coupled up is around half in my family and friends, and those with kids by mid 30s is even lower, maybe a third.

And how much of this would you attribute to people making different choices and having different priorities? How would you control for people's willingness to be poorer and still have children?

Social status is by comparison, that's why. I assume the vast majority of people would choose to be in the aristocracy somewhere in 1300 Europe, compared to middle class today. Even if objectively the middle class has better quality of life.

Why on earth would you assume that? Middle Ages aristocracy lived comparatively miserable lives - no daily hot shower, no climate control, nothing resembling health care, no running water or sanitation, no access to information, no international supply chain for food or products (eat only what your community can preserve for the winter). I would wager that any of those aristocrats would gladly amputate their limbs to live as an average person today.

Interesting to think of, let's say, one of our society's upper class given the opportunity to be a 'regular' person X years from now. Rejuvenation, instant cure for any illness, pain or wound, immersion into world spanning super intelligence, gratification of any physical or emotional desire, personal host of robotic servants, etc. The price is that they would be regular, that is, devoid of superior wealth or power. Would they take it?

>At the end, there's a massive claim that isn't fully stated but implied. "Of course the Gini coefficient is increasing" translated means "income inequality is not a problem".

To me, the implied message simply reads as "Startups and private equity is the number way to make money in 2021. Come do business with us."

Makes sense given PG's primary business.

> Firstly, Gini coefficient is based on income, not wealth.

The Gini coefficient can be applied to any statistical distribution, including wealth.

From Wiki:

> The Gini index or Gini ratio, is a measure of statistical dispersion intended to represent the income inequality or wealth inequality within a nation or any other group of people

It’s probably rich man guilt, plus some attempt at rationalization through cherry picked facts and data.. Also why I think bill gates >>> pg

>It’s probably rich man guilt

it's hilarious to me how so many talking heads think the solution to guilt is more speech instead of praxis. you feel guilty about all of your wealth? give large sums of it away. charity works wonders for the guilty conscience (speaking from experience here). but that's unthinkable so they just go on engaging in this kind of sophistry. lays bare that they're not actually trying to cure their guilt but justify themselves.

The kind of people who use the word "praxis" don't end up having good praxis 99% of the time.

not sure what this means since i'm not a native english speaker - i understand praxis to mean something that you do instead of something that you say.

In standard American English, 'praxis' is a Marxist shibboleth. For a non-loaded term, you can just use 'practice.'

I'm not sure what marxism has to do with this (I don't think Marx wrote about charity) and although I'm not a native speaker I'm pretty good at syntax/semantics:

>the solution to guilt is more speech instead of praxis

>the solution to guilt is more speech instead of practice

Second one is vague and unclear.

In English, the usual terms are theory and practice. Praxis is a synonym of practice, but it is rare and formal (for the marxist connection, see https://en.wikipedia.org/wiki/Praxis_School).

At any rate, what you wanted to say is maybe best expressed as "the solution to guilt is more speech instead of action."

I'm well aware of both the colloquial use of practice and "marxist praxis". I was simply implying that, as written, my statement didn't intersect marxism in any way and therefore couldn't have been misunderstood as such without willful misunderstanding.

Note that there are other uses of the word that also themselves don't intersect marxism in any way

https://www.ets.org/praxis https://www.luc.edu/socialwork/praxis/ https://en.wikipedia.org/wiki/Apraxia

Furthermore the precise definition of praxis:

>Praxis (from Ancient Greek: πρᾶξις, romanized: praxis) is the process by which a theory, lesson, or skill is enacted, embodied, or realized. "Praxis" may also refer to the act of engaging, applying, exercising, realizing, or practicing ideas.

is exactly what I intended (since I believe pg, and others I was implicating, pontificate but don't do much).

I feel a certain degree of guilt over my (relatively low, even in Canada) developer salary. I didn't do anything to deserve my comfortable life. I can't imagine how people with billions sleep at night.

Thanks for posting the PG wealth tax article. It is a highly flawed analysis.

First wealth appreciates over time. So if your wealth appreciates at 15% / year, and the govt. taxes it at 1%, the net effect is growth rate is slowed to 14%. With these assumptions, someone starting with $1mm in wealth ends up with $2.6 billion after 60 years!

Second - PG ignores that most wealth tax proposals have a high minimum wealth - in the $50mm range. So there is no early compounding of the tax. Adding this into the model, the wealthy founder ends up with $3.3 billion after 60 years.

With no wealth tax, this hypothetical founder ends up with $4.3 billion. So, yes the government has taxed a total of ~ 25% over 60 years, but the founder ends up quite wealthy.

> At the end, there's a massive claim that isn't fully stated but implied. "Of course the Gini coefficient is increasing" translated means "income inequality is not a problem".

Now, I can't speak to whether or not pg's implication here was intended and unsaid, or not intended: it is likely intentionally ambiguous.

One thing I can speak to though is that it seems common now to read something as if the thing it implies is the thing the author actually intended to communicate. We should be quite careful with this sort of assumption. Sometimes it's a safe one, other times it is not.

It would be very interesting to re-order the list by the amount of liquid wealth that each person owns, not including fake founder stock wealth that can't be e.g. theoretically sold overnight to avert a world disaster -- very different from someone with an actual pile of cash or bonds or gold.

Consider someone's effective wealth as the amount of liquid USD they could hypothetically produce in a 24 hour period by selling all of their assets, including market dynamics, and then tell me who the top 100 richest people are.

>Secondly, there's absolutely no data on what proportion of income flows to which decile.

Is this true?

If I simply look at the Gini wiki, there are clearly tables showing this data with percentages of population by income brackets[0].

[0] https://en.wikipedia.org/wiki/Gini_coefficient#Limitations

See [Table C. Household money income distributions and Gini Index, US]

> Of course the Gini coefficient is increasing

Ya this confused me, because the geni coefficient measures inequality, the higher the number, the more inequality.

> A Gini coefficient of one (or 100%) expresses maximal inequality among values

So is PG saying it's normal the world is becoming less equal? Because of more people starting companies?

> people like me are creating a lot of value, please acknowledge it. Also there are no downsides to this accumulation of wealth

That is an overstatement of the article, but the article is actually defending the rise in inequality as a nature of the world today with no guilt (of participation) about it.

Reminds me of the call girls in H2G2 who specialize in sociology telling executives that it is okay to be rich and they earned every dollar in a dystopian war field (HanDod city?).

It is extremely important for a creator to truly believe that "they built all this value" (non zero sum value and that is often true) and not merely built an efficient transfer mechanism into their pocket. This in contrast to something like Warren Buffet's "lottery of birth" statements.

He is right about something though, the rules are the same as before.

"Welcome all. Everyone can play, the winners get to keep playing, the rich can play longer even if they lose - those who play longest, win big. Just remember there are no second acts in american life".

The winner-take-all only benefits those who can actually spread their investments around ,so that the investors can spread their money, but the workers can't spread their time around 10 possible jobs.

Also, picking oil and 1982 feels odd considering half the "gas crisis of the 70s" highlighted why oil is critical.

If I said medical tech would boom in the next five years, with vaccines for HIV and bespoke immune therapy for cancers, that would not be a bad bet because of the usual "events leading up to".

Sloppy thinking too.

> But at the moment at least, there is definitely something they share in common that distinguishes them. What retailer starts AWS? What car maker is run by someone who also has a rocket company?

So your justification for how you're classify Amazon is something the company does (good) but your justification for how you're classifying Tesla is other things the CEO owns? Very sloppy, Paul. Very lazy.

I'm dying lol

There's also the unstated implication that "anyone can do it if they work hard for it" - basically saying it used to be you had to be born into a wealthy family to be one of the richest people in the world and now you can be the richest person in the world based on merit alone (thus rich people are inherently meritorious).

Somehow all of those explanations seem to gloss over the fact that you generally need to be born into a wealthy family in order to have the cushion to take the risks that allow you to collect billions. As an example, Paul Graham would have been far less likely to attend Cornell and Harvard if his father had a blue collar factory job instead of being a nuclear physicist. Almost none of the 'bootstrap billionaires' of the tech world come from less than an upper middle-class background, but like PG they are quite fond of suggesting that their success was entirely due to 'merit'.

Once you get to a point, preservation of wealth is the most important thing.

pg has been touting the statistics he's pulling out in here for a while on Twitter. I think he read these somewhere and started digging a bit more into it, constructed a narrative, and wrote an essay.

I don’t think PG is necessarily saying that income inequality is not a problem. This is disingenuous on your part. Saying “of course the Gini coefficient is increasing” does not necessarily translate to “income inequality is not a problem.” Rather, what he is to my mind correctly pointing out is that the entire situation regarding wealth accumulation, distribution, and class mobility is perhaps more nuanced than we typically understand it to be. Indeed, he points out that it is in fact easier in some major ways, which is a wonderful thing to realize. This does not necessarily mean that income inequality does not exist or is not a problem. There may still be ways in which it is. Instead, it is good to acknowledge that the ability to build wealth through starting businesses is, in his particular lens, better than it has ever been.

Further, I think it is disingenuous to compact PGs meaning to “‘people like me are creating a lot of value, please acknowledge it. Also there are no downsides to this accumulation of wealth.’ ... it just seems like a desperate play to keep his wealth intact.” So much of the time argument betrays the arguer and rather demonstrates a perverse inclination to emotions such as jealousy rather than reasoned indifference. Why is he desperate in this case? Is he afraid of people taking his money away from him? Are there people actively attempting to do so? Is this not a natural human inclination? Is this something that only affects the wealthy? Do not all of us to a certain degree wisely protect what we have earned? It has indeed gone out of fashion to point out that the rewards of benefitting society are equal to the benefit ie what society is willing to pay for those benefits (if not less so, due to the existence of taxes). We should first admit that society is made of industrious and lucky individuals by varying degrees, admit this, and then stave away jealousy at the success of those more industrious and lucky than you or me - for success coming to the industrious and lucky remains just despite the existence of those who pursue lives of industry and are not as lucky. It is out of fashion to point out the simple and bare fact that ambition to improve the world is amplified in the environment where it is incentivized: if this be done through the respect garnered as a result of benefitting the world, that is great; if this be done as a result of rewarding the creator of those benefits commensurate to the benefits given, that is great also. In either case, the results are amplified; with both cases the results are amplified still further by the addition of the incentives. Yes, indeed the numbers by certain statistical methods appear disproportionate within studies of income inequality. Yet, simply because these figures impress upon us a knee-jerk reaction to decry the accumulation of great wealth by the few as unfair, does not make it so; it does not necessarily mean that something is wrong that these results should be allowed to occur. So long as the majority of we who inhabit the economy are not actively oppressed by the creators of great wealth, so long as our freedoms are not taken away, no reasoned argument can point to why the accumulation of great wealth is a damaging thing. Indeed, if it results from the great mutual benefit to society, this is in fact a very good thing. So long as the accumulators of such great wealth are not oppressing the majority of participants of the economy, the accumulation of great wealth ought to be a sign of the great benefits that the accumulators are providing to society, as it is society, as has now been remarked a number of times in this comment, that is paying for it. Indeed, if we continue to demonize wealth creators and go on to pass reforms that remove incentives to wealth creation, we would only de-incentivize the creation of future benefits to ourselves as members of society. Further, with certain reforms that constitute graded barriers to success, the freedom of economic mobility then being lessened, the entire economy and state as a whole is then oppressed by degrees - the oppression is then rather achieved by those who have sought to fix the “problem”. I’m not saying that income inequality does not exist - I’m saying that in this particular form the fact that there are disparities in income is not unfair, and that results from the just distribution of benefit to society that society is happy to pay for is not necessarily unjust by statistical analysis of income data alone.

> It just seems like a desperate play to keep his wealth intact.

To me this dismissal reads as a little blithe. Is it true that, now more than in the past, the rich are getting rich by innovating? I don't see you engaging with that argument.

Clearly people who create successful businesses add value. Clearly Jeff Bezos has added a lot of value. That doesn't mean he shouldn't be taxed but I constantly see people talking about Bezos as if he's an evil capitalist oppressor who has stolen his wealth from virtuous laborers. To me it seems obvious that Bezos' personal wealth is a drop in the bucket compared to the value he's added to the world (hundreds of thousands of jobs, changed the way we buy things).

It's totally fine to be in favor of higher taxes but it shouldn't be because you hate rich people or you think they are greedy parasites. Unfortunately I see a lot of that going around.

Is income inequality a problem? In my opinion, the real problem would more accurately be defined as peoples inability to afford their basic needs: housing, food, and to a degree healthcare. Some might argue to throw education/training into the mix as well, and I wouldn't fight that too much as long as people remember more affordable options like community/technical colleges. Many who argue income inequality is a problem tend to imply that it means people can't afford their basic needs. I agree if people can't afford basic needs that's a problem. But my neighbor simply having 10000000x more "wealth" than me isn't a problem. Great for them.

Where things become a problem is when people can't afford their needs. But lets be honest about what needs really are. Housing/shelter's needs demand a space for someone to stay dry/warm, with a toilet and running water (to keep things sanitary). We don't "need" a 3500 sq ft mansion even if you are a family of 16. Though the trend year after year, is we're spending more and more money on bigger and bigger homes for smaller and smaller family sizes (see https://www.aei.org/carpe-diem/new-us-homes-today-are-1000-s...), which subsequently cost more and more money to heat/cool. Not to mention the fact that more people are getting mortgages for larger and larger and longer and longer amounts... there are even mentions of > 30 year mortgages on the horizon... while mortgages help you get into a home, the typical 30 year mortgage today results in you paying ~1.5x+ over the cost of the actual home (300k home costs ~450-550k depending on interest rates). Not too long ago, many people built their own homes, mortgage free. Yea, they weren't fancy homes. Typically a box with a roof. But they lived within their means.

Back in the day more people heated homes "for free" using wood they chopped themselves back in the day. And few had AC (none did if you go back far enough). Back in the day people didn't have a microwave, toaster oven, toaster, oven, stove top, panini press, smoker, bbq, coffee maker, etc all in their one home. Depending on how far back you go, they had none of these things and still survived.

Back in the day you didn't "need" the latest iPhone every 12-24 months, or the biggest TV. You didn't need a new car every X years. You didn't "need" an international vacation every few years.

The point I'm trying to make is our spending habits can take on some amount of blame (how much can be argued)... especially when you consider the demand impact of everyone willing to overspend and go into debt on items they don't truly "need". Take a look at the FIRE community (financial independence, early retirement) and you'll see real life examples of people who scale back their living to their needs + a few wants, on small amounts of income and how they're able to still put money aside every month. The community tends to highlight those that can save 50%+ of their income on a 6 figure salary... but there are plenty of examples of people saving on small amounts of income.

With all that being said, I'd agree income to house cost ratio isn't great in a lot of areas in the country, and is trending in the wrong direction. That's a problem. Healthcare's rising costs isn't great--that's a problem. But also keep in mind people are living longer now than ever before (https://www.statista.com/statistics/1040079/life-expectancy-...), and I'd assume the longer people live the more expensive their healthcare becomes... so while this is a problem, I think it's false to say it was "solved" decades ago. Educational costs are skyrocketing too--that could be argued a problem. But there's also more of us spending more money going into more debt to get all of these things, driving the demand up for each of them. Massive corporations using anti-competitive practices to crush small up and coming competition is a problem. Companies failing to pay out a decent salary is a problem.

I think there are things that need to be addressed when it comes to peoples ability to cover basic needs + some ideal wants. However I have yet to hear a convincing argument that my neighbor getting filthly rich somehow leads to my inability to afford my basic needs.

I had the same feeling skimming through the post. What a despicable person this PG turned out to be.

People are entitled to their opinions and there's no need to namecall on HN.

The people he thanks for "having read drafts of this" are:

- his two lifelong friends and business partners

- his wife

- two prominent libertarian economists.

Missing from that list are his children and Peter Thiel.

Yeah. My point is, PG's essays project objectivity and neutrality and even science; but in truth he has an agenda, and it's the same as Thiel's.

These takes freak people out because we want to think of anti-inequality as a virtuous, prosocial belief. But a commitment to hold down inequality is a commitment to prevent the creation of value.

I don’t think it’s controversial to skim the top of the creation of value / rise in inequality to fund services that people need. But as long as a founder’s share of his value creation is greater than the share accruing to the homeless person down the street, his enterprise is still promoting inequality. From an inequality frame, even with a 99% tax rate it ought to be stopped. There are more than 99 other Americans; the founder’s share is still outsized.

Is it? Does most inequality rise from value creation?

Most wealth in America is held by the top 5% wealthiest households directly as a result of inheritance, not hard work or value creation.

How is arguing that the inequality produced by inherited wealth needs to be restrained a "commitment to prevent the creation of value"?

No one is qualifying their discussion of inequality with “produced by inherited wealth.” If they did, it’d be a lot more palatable. About half the inequality discourse I see targets founders. The other half targets workers whose salaries are too high, whose children are too well prepared for college.

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