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a4isms

Would this be the Coinbase whose CEO just spent $133 million on a home?

https://www.ibtimes.com/inside-coinbase-ceo-brian-armstrongs...

Capitalism is a harsh mistress.

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There's nothing wrong with people collectively giving someone money.

With the context of what wealth inequality is doing to society and what political power raw money brings to people, I posit there is a line where it is wrong.

If 1 million people want to give 1 person 10 dollars, and your response is "we should control how those 1 million spend their 10 dollars", and not "we should prevent politicians from selling their influence", then you're hurting the people you want to help.

Bezos is probably the most unpopular person in Washington. We don't have a president Bloomberg. I submit to you that you are vastly overestimating the amount of political power having money automatically brings someone.

Power and office are two different things. Someone can exercise a great deal of power in advancing or killing legislation while never holding office and allowing all the office holders to call them names on TV.

What matters is what policies are enacted. Here's a nice video on the topic that summarizes a Princeton study https://www.youtube.com/watch?v=5tu32CCA_Ig

Powerful people have long weaponised self-deprecation as a means of letting off steam and blunting more serious attacks. (That theme is elaborated very well in the LRB here: https://www.lrb.co.uk/the-paper/v35/n14/jonathan-coe/sinking....) Michael Bloomberg is actually a great example, in how his campaign relied so heavily on irony and self-deprecation to defuse the (anticipated) discomfort around electing an old white billionaire.

If Armstrong was the sole CTO, COO, CPO, CLO, designer, marketer, advertiser, programmer, and researcher, then yes, all money should go to him. But Coinbase was made what it is by many people, the majority of which have nothing close to wealth Armstrong enjoys. Why shouldn’t those people be given money?

I agree there should be some incentive for entrepreneurs and the people who make “the business side” work, but doesn’t the degree of difference between Armstrong and his average employee strike you as unfair?

>Why shouldn’t those people be given money?

They were given money: their compensation that they agreed and accepted as being fair payment for their labor.

Let’s be conservative and say Armstrong has just a net worth of the house he bought: 150,000,000. If the average employee’s salary is 150,000, Armstrong makes 1,000 times more than them. Does this seem fair? Does he deserve higher compensation for his entrepreneurial skills? Absolutely. But 1,000? It’s hard for us to imagine the scale of 1,000 times greater than something but it seems excessive (and remember, this is being extremely conservative). Does he really work 1,000 times harder than the average employee?

These aren’t rhetorical questions by the way. I genuinely want to know, what do you think?

You ignored my response to your post completely and re-iterated the exact same point, so I don't think you are listening or actually care to hear what I think, because if you did, you would know that I already answered you.

Programmers wages in America are for the vast majority of the world obscene as well. It depends where do you draw the line, American programmer is most likely the 1% for the world.

Don’t really see the relevance here? America is also more expensive than the majority of the world. I’m not comparing the wealth of impoverished people to the average American programmer. I am comparing the wealth of Coinbase employees to the wealth of the Coinbase CEO, whose company is successful only because of those employees. If the American programmer is global 1%, then Armstrong would be global 0.001% so the inequality isn’t changed.

If it's really that unfair, why don't you just become an entrepreneur?

If winning the lottery is so great, why don't you just become a lotto winner?

Great analogy actually. The founders own the lottery ticket, but they pay employees cold hard cash despite the fact that the lottery ticket will likely be worthless. When the founder lose the lottery, and lose all of the unpaid hours and resources they personally put into buying the ticket, they don't demand employees reimburse them and share in the losses. But on the rare chance that they win the lottery, we have to have conversations like this about how "unfair" it is that they owned the ticket, despite paying everyone what they agreed to be paid.

So the point that the parent was making was "go buy your own ticket," not "go win the lottery."

The parent was making no point but was making an unreasonable argument in line of "No one can criticize, but if you believe that then why don't you make a profit?".

Similar to people who say "if crypto is a scam, why don't you short it?"

There are various reasons why people choose to or not choose to become an entrepreneur or why people choose to or not to short something. It doesn't mean just because a person doesn't want to be an entrepreneur, then capitalism is perfect.

The argument is a strawman where-in the original discussion was about billionaire entrepreneurs and how much is a fair reward to them.

We understand the entrepreneur deserve to be rewarded but the original question is up to what extent. Like how in some EU countries, CEO pay is capped.

They deserve to be rewarded by what the market will bear. By introducing ceilings on their income you'd be stifling people's will to "buy the lottery ticket". I can't wrap my head around why people think they know better than the market.

This logic is nonsense; no one is allowed to criticize capitalism's flaws?

It's like a movie critic cannot criticize a movie, since the film-maker can just state "why don't you just make a better movie?"; A diner cannot criticize the chef because chef can say "why don't just prepare a better meal?", etc..

Bringing the personal into it is unrealistic since not everyone is equipped to be a movie maker, chef or entrepreneur but that doesn't mean those jobs are immune from criticism.

Even Warren Buffet has spoken about the excesses of capitalism and pointed-out that the rich are taxed too little as just one example of capitalism's flaws.

Capitalism is still the best system but that doesn't mean it's perfect or can no longer be improved.

Why stop at criticizing? Go prove people wrong and make a company that does things drastically differently. That's why people are tired with the "I'm just criticizing!" attitude. Instead of talking and telling everyone else they need to change, go show everyone that you know better.

So I guess no one can criticize anymore? If my car is broken, then I have to make my own car?

It's a strawman and a diversion to just be talking about the general concept of fair compensation to CEOs and founders and then to just reply with "why don't you make your own company if you think the pay is too high"?

It's not a strawman, you just aren't understanding the fundamental lesson in the idea of starting your own company. "Fair" is what the participating parties agree is fair when they form the agreement. You appear to be speaking from one side of the agreement (the employee side). Starting your own company will give you drastically different view about risks and costs that were previously hidden to you as an employee, and you'll come out with a better understanding of how "fair" is negotiated between the participating parties.

It is a strawman because he brought in the personal by saying "why don't you start your own company if you think pay is too high?" Exactly the same as film maker just saying "why don't you make your own movie if you want to criticize mine?"

Same as crypto defenders "why don't you short crypto if you think it is a scam?"

Anyway, I'm repeating myself already, good conversation, Thanks.

I answered the idea of "fair" compensation, but you don't seem interested in talking about that.

“bringing in the personal” as you put it is a great tool here that separates the wheat from the chaff. It’s very easy to say “I work hard, sometimes for long hours, I don’t see much difference between what I do and founders, surely they shouldn’t be paid that much more than me”, but the reality is that it _is_ that much harder and riskier and beneficial to society, and the profits reaped are evidence.

So you’re more than welcome to criticize, but they’re “cheap seats” comments to a certain degree.

To stay objective about it though, the financial incentive brings a lot of innovation which helps all of society. They’re not taking your piece of the pie, they just baked some more.

No, I don't expect to get profit share from the company I work at unless it's written in the contract. Are you serious? I don't care if the owners work 0 hours a week. It's their company and if I wasn't happy with my compensation I would look for another job.

This is the most fundamental tenant of capitalism. The output is perpetually distributed according to initial risk taken, not according to amount of day-to-day work performed. The property of capital is that it keeps growing (more or less) effortlessly. So you just need to capture initial capital and pay employees only returns from capital, not the capital itself. Fun fact: Bill Gates has made vastly more money just sitting around in his "retirement" than working his ass off for 30 years in Microsoft every day.

What risk did he take, gimme a fucking break. Worst possible outcome for him was he has to settle for a $400k job at a FAANG after his startup fails. Boo fuckin hoo

Of course he did enough to deserve some fuck you money, but hundreds of millions? Slap yourself, fool, cos you dreaming

The risk was in the opportunity cost. How much was he making in the first ~9 years pre IPO? As you said he could have made a comfortable salary working 40hrs/week at many other companies but likely took a significant pay cut for many years to found a startup.

Coinbase was valued at 86B a year ago, so hundreds of millions would have been ~.2% of that valuation.

You didn't do it because you didn't took risk in crypto.

The most fundamental tenet of capitalism. Capitalism's most fundamental tenant, on the other hand, is probably Starbucks.

as someone who has actually tried to start a company - he deserves it and more

You'll be happy to learn that no one is confiscating the private assets of those who have been laid off.

Also, its $133M, but let's be honest it's really like $110M for the land and then a $20M mansion on it.

Since this is Coinbase we're talking about, I assume the last $3M went to fees.

It’s entirely possible that he has used his unique position to make further gains on the crypto market. He may have also secured a loan on the basis of a future sale.

> Capitalism is a harsh mistress.

Not for CEOs, it's not. He already got rich off the IPO.

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