How to earn a billion dollars
paulgraham.com
paulgraham.com
I don't know what the best solution to the problem of wealth inequality is, but I know that we need to collectively get over this "but if people think they will be limited to a mere hundred million dollars in wealth they will have no motivation whatsoever to work" nonsense. You know what the motivation is? It's still a hundred million dollars, that's what.
What does this mean? Without some insane wealth tax this is literally impossible. No founder chooses to become a billionaire. They just keep growing a business that is solving a billion dollar problem.
The only other was is if after 100M they start turning down customers or restricting services.
It might be that if personal wealth alone were (effectively, by taxation) capped to $100m, we would still have exactly as much collective wealth, innovation, and value creation as we do today. Possibly more, because of more wealth distributed onto shared infrastructure and into the fluid economy.
You can just cap total compensation for executives relative to the lowest paid worker and include equity in that calculation. If you want to pay yourself, 10 million a year in stock, great... You need to pay the lowest paid person 10k in stock or whatever.
Or, you can mandate that after a certain size a worker owned trust/union will own some percentage of the company.
There's dozens of ways you could address this problem. Each have pros/cons. It's not that hard to fix if we actually wanted to fix it though.
Executives do get equity as part of their compensation and it’s a huge reason for the massive disparity in wealth.
This is well studied stuff.
Since you aren't willing to engage in a discussion in good faith, implying whatever I have to say about your 5th-grader-level economic plan to just seize all the shares is bs, I recommend you ask chatgpt why it doesn't work.
Imagine you lived in a feudal kingdom. Would you just shrug at all the wealth of kings and lords made off your back? Most people did, but thank god times have changed for the better. Perhaps we can change them to be better still.
The problem is that when you cap earnings to $100m, most investors lose motivation to invest in startups, because their investment isn’t likely to yield a reward. Unless you think all investments should be less than $100m, this kills large investment rounds. That would have killed OpenAI, for example, since their recent round was larger.
In other words, it’s fine to say “you can only earn a hundred million dollars.” The hard part is implementing it without killing the investment ecosystem. Every investor is chasing the big return that covers the 20 investments that didn’t pan out. If that big return is capped, there won’t be investment, and hence no startups.
The ultimate point of money is for someone to have it. And since corporations are owned by people, it’s not enough to say that corporations aren’t bound to the $100m cap. Otherwise people will just hoard money using corporations, and take loans against their value, a bit like how it already works today.
What counts as $100m? If you buy a million dollar house, then sell it a few years later for a million dollars, are you now limited to $99m since you already spent $1m? Does the money from selling the house go to taxes, or to you? If it goes to you, what’s to prevent someone from hoarding equity and only taking out $100m at a time, effectively living the life of a billionaire while keeping their balance under $100m?
If you own some stock, and it rises in value to $150m, you forfeit $50m to taxes, right? But then if the value of the stock goes down by half, would you have $75m or $50m?
And if the answer is “you have $150m, the cap only applies when selling stock,” then what stops people from putting the money under the custody of a business (which you said isn’t bound by the cap) and then taking loans against that extra $50m?
These aren’t contrived scenarios. Stock goes up and down all the time, and it’s important to be clear about how the proposed system will work.
I’m genuinely interested in answers. It’s easy to say “just cap someone’s wealth at $100m,” but people seem to shy away from proposing specifics.
Yes, divestment.
Sure you must pick a point in time. But no matter. This is what we all do on Tax day. This how home owners pay property tax.
There does not need to be an exception for stock.
This argument you make, as if "but who can say how much it really is worth?" Sure. Just like a house. Somebody builds a freeway right next to you, guess what, your house is not worth as much as it was yesterday.
Your argument, "but you can hide your money in a company." Actually, this is good point. Perhaps companies shouldn't be allowed to hoard wealth, then buy up their competitors in order to skew the market.
Maybe this is a problem. Maybe we wouldn't the google/apple phone duopoly, maybe we wouldn't have Meta owning Facebook, and Whatsapp and etc, and all this AI, if they weren't able to hoard cash.
Maybe there should be some law that says, the maximum a company can pay the top is 100 times what they pay the bottom, including the janitors.
There are lots of solutions. If you stop trying to defend some random human having the wealth of a god, it's easy to come up with many, many ideas.
Instead of say, "but this, but that", say, "what if we tried that."
The trouble with economics is that if you get the incentives slightly wrong, people will relentlessly exploit the difference. So when I ask "but this, but that," I’m asking "have you thought of this exploit or that exploit?" Because unfortunately you can’t just ignore that they exist. Each of them needs a concrete answer, or the system will reward those who exploit it. (You can argue that’s true for the current system too, but at least it’s hard to exploit. The loopholes I listed above are all straightforward.)
Instead of, "but this, but that," you say, "what about this?"
You use your considerable brain power, to, instead of finding faults and leaving it there, you suggest something better, that you believe can accomplish the overall goal. The overall goal, I believe, is fixing wealth disparity before violence becomes the only answer.
In this manner, we come to some solution that benefits society, rather than keeping the status quo which is obviously, without doubt, broken.
Things he doesn’t want = mob rule
So you know, agree to disagree, I'm not going to argue anything other than that I don't particularly care for the framing of it as dictatorial or mob rule because the same can be done for other taxes. Which I have done and it doesn't appear you wish to dispute anyway.
Professional athletes and lottery winners prove otherwise.
People who work a job they don't like because they need money to live, view money as the objective in life, because the equivocate it to escaping and freedom. So wearing that lens, and looking at billionaires, these motherfuckers are greed driven psychopaths who blew past the "escape with freedom" bank account ages ago, and are now just taking money off the table from others trying to get ahead.
But that is not how it is at all. Virtually every billionaire is crazy focused on their work, and the money is a side effect that they don't really care that much about, besides it being a tool to enable more work they can do.
It's very hard to get this across when speaking to people who view work as an obstacle, money as god, don't have personal business experience, and whose passions are things that aren't very productive.
There is a reason Bill Gates didn't just write the IRS a check for $175B and created the Gates foundation instead.
They're in it for the money as it allows them to exert control. That's still being in it for the money.
A better way to frame it that doesn't hinge on the colloquial vs literal meaning of "in it for the money".
I can assure you, with the utmost in direct observation, that they are extraordinarily obsessed with money. It is, in fact, the defining characteristic of their entire existence, literally by definition.
Any argument to the contrary is profoundly hilarious. Imagine if you came across someone that had over one billion model trains in his basement who was claiming that he wasn't super interested in model trains.
From a billionaire POV, money is what you use to build valuable things (what the lenses are to photographers). Unlike photography, it also happens to be the thing that the market rewards you with for doing a good job (although a successful photographer could convert their profit to new/better lenses).
I would eat my hat if you could find a single billionaire (outside trust fundees / inheritance) that is grinding it out doing something they hate, selling a product(s) they think is shit, all so they can hit whatever number, cash out, retire to a private island or whatever and never work again.
Let's phrase this a different way. Everyone has values that they live by.
Some people value family and community above all else. For example, even if their town has very little economic opportunity, they will stay there to support their grandparents, their parents, their cousins, and so on.
Some people might value artistic expression, and they will forsake money for the chance to be, let's say, a musician. They might become incredibly successful, or they might not, but they will always focus on playing music. That's the thing that they value whenever they have to make a choice. That one goes first.
Billionaires value money. I'm 100% certain of this. I've had a sort of interesting life and happen to have been quite close to and worked with at least twenty billionaires, some of whom I've known for decades and watched their progression. I'm telling you for certain that they value money incredibly highly.
This, of course, really should be obvious to even your average child or anyone who takes even a passing interest in the topic. A couple of million dollars here or there can be an oddball side effect of some luck or strange life choices. A billion dollars cannot, it is an absolutely staggering amount of money, and anyone who has achieved it has aggressively sought it out and has been given dozens, if not hundreds, of opportunities to focus on something else instead and settle for some large amount of money that is short of a billion dollars.
Again, this should not surprise anybody at all who has a functioning brain. Imagine Jane Goodall heads into the jungle to study a tribe of gorillas and discovers that most gorillas have a dozen or so bananas, but then discovers a gorilla with a pile of bananas several thousand feet tall.
How do you think she'd fare trying to make the argument that this gorilla was actually focused on other things besides bananas for most of their life and the pile just kind of happened as a side effect?
Then she didn't discover the billionaire gorilla, she discovered the lottery winner or the trust fund kid.
The billionaire gorilla has thousands of acres of banana trees, with enough bananas to reach the moon and back if all picked and stacked.
The billionaire gorilla is laser focused on generating bananas. A complex machine with fractal parts whose ultimate output is bananas.
Meanwhile the other gorillas are laser focused on the height of their banana stack (which is rotting and half aren't even aware). Telling themselves if they had a stack 1000ft high they would never work a day again.
I'm pretty sure you understand this, and part of me thinks we are saying the same thing.
Yeah exactly. And the billionaire is laser focused on generating dollars.
Not just more dollars in the world though. More dollars for themselves, specifically.
We can re-ground ourselves in your original comment that I am responding to though, which is this:
> I think the most chronic misunderstanding in the "billionaire" rhetoric is that billionaires are in it for money.
Nope. There's no misunderstanding. Billionaires are definitely in it for the money.
This is an illusion. A share has value because it represents the hypothetical future productivity of an abstract entity that may or may not even exist in the future.
At the margin, you can take an Amazon share and buy bananas with it. However you absolutely can't take the entirety of Amazon and exchange it for a trillion bananas. Those bananas don't exist.
More importantly, you can't take the entirety of Amazon and transform it into housing supply. I think people are often too careful about "missing the forest for the trees" and then conceive of problems as overly abstract. The affordability crisis is, first and foremost, a housing shortage.
Young people can't afford homes. Millennials are hitting 40 and realizing they may never afford one. Being secure in housing is pretty damn low on the Maslow hierarchy of needs. Sure maybe we need a more progressive tax policy, but this myopic focus on billionaires distracts from the real problem which is a housing shortage.
2. A $1T market cap is not $1T of spendable cash. This is exactly the point I was making that people don't understand the difference.
2. You can borrow 1T dollars in cash, effectively maxing out what the physical world will allow you to spend it on.
Making a billion dollars doesn’t require becoming a billionaire. Someone who makes a billion dollars in a balanced society generates wealth and taxes. (One who does in an unbalanced one has the choice to donate.)
Also, liquid versus illiquid. Founders shouldn’t be under obligation to cap their ambition or force liquidate if their companies do well.
You might think: I can argue with them.
No. You can't. They literally couldn't care less about you or anyone else. They do, however fear retribution.
There is legitimate debate around whether the French aristocracy came out of the Revolution richer than they were before.
> They do, however fear retribution
They don’t. They haven’t been targeted. Luigi potted a middle manager with a glorified title. The billionaire who owns the group is fine.
We need to raise taxes. We need new tax brackets. But pretending violence is a check on a globalized rich is just self-congratulatory fantasy. Worst case, they lose billions when they flee.
Post-Trump. The mask is off, and they are evil.
How many billionaires are there? I don't think we'd miss them if they were gone.
And it goes farther than this actually.
Should we have publicly executed the cigarette CEOs, and those CEOs of the drug companies who knowingly destroyed so many lives with opiates? What about the company CEOs who poison water.
Before Trump I would have said, "no." But now, "yes." They deserved it, and by not sufficiently punishing them for their crimes against humanity we sent a message to the likes of Facebook and OpenAI and the new batch of psychopaths, that there are no real consequences for their actions, no matter how base they are.
If Trump and his family does not sit in jail after he leaves office, if the democrats do not exact retribution for all he and his ilk have done, I think there will be rioting against both sides.
I don't know. Maybe I'm wrong. I actually hope I'm wrong.
But I think I'm right. And even though this post will be down-voted for referencing violence as leverage, I think these ideas are mainstream now.
We wouldn’t. I’m not arguing that. I’m saying they don’t believe they are at risk. Because they aren’t. None of them have been even close to being harmed.
That's hilarious. I guess. Maybe not?
I’m saying it was symbolic but inconsequential to the richest and most powerful. If you’re a billionaire, Luigi didn’t show you’re at risk. He showed that the folks who work for the folks who work for you might be.
And for the record, I think what hd did is wrong. But that’s orthogonal to the question of effectiveness.
When are you gonna stop acting like you are an authority on all things?
ELon has said many times he fears being taken out in a public setting, therefore he does not present himself in public.
If the world's wealthiest man says this, he is far more indicative of the ultra-wealth class than you.
Elon has said lots of things. His behavior, in this regard, reflects limited concern.
The alternative to your wet dream is that both Bernie and Luigi are hapless and actually incapable of altering the systems they rail against besides symbolic token gestures meant to appease the hopes of someone, anyone to serve as a messianic figurehead.
Bernie Sanders has de facto been in the ruling party for multiple years in his career. (As in aligned with Democrats when they controlled all branches of government.) Taxes on the rich went down each time.
Meanwhile, Luigi potter a middle manager. No billionaires harmed in his schemes.
These are hapless symbols of class warfare. That’s problematic, because we need competent leaders to channel this rage. Not another eighty-something who refuses to retire.
You force the founder to give up their private property just because it is valuable?
Remember these are not dollar bills in the founders bank account. It is just the company they created is now very valuable. It does not mean it is liquid.
Which party is the IRS partisan towards? What do you mean by partisan?
That's how taxes work.
On the business income, on the sale of shares, on their wealth, on loans, on estate and inheritance, etc.
Breaking up the company is another avenue, it could increase competitiveness and make the markets freer, open up more options for employees to shop around for employer, etc.
Raising minimum wage, stronger overtime rules, paid family leave, mandatory paid vacation and sick leave, non-compete restrictions, profit-sharing requirements, and other regulation that favors the employee is yet another avenue...
There are ways if the will is there.
Owe 1M$ in taxes and have ownership stakes in a company worth 1B$? Fine, transfer a 0.1% share of ownership in the company into the SWF.
You tax them. Wealth inequality of this magnitude is toxic to democracy. It's simply too much power. These men aren't gods, they are just flesh and blood and usually really terrible people. We are not staff at their resort. Let them live in luxury for the rest of their life, great. But they don't get to have more political power than half a million people put together.
Please don't do this.
> When disagreeing, please reply to the argument instead of calling names. "That is idiotic; 1 + 1 is 2, not 3" can be shortened to "1 + 1 is 2, not 3."
On the point of democracy, none of the candidates who spend the most on major elections seem to be winning much lately, Bloomberg, Harris, Cuomo, Steyer, etc.
Thomas Massie was just ousted in the most expensive house primary in US history.
The difference between 1-2 mil that is normally spent and the $30+ million spent on that election alone.
The problem isn’t necessarily that some one can buy a seat for themselves (though some people out there could spend 1000x as much as half a billion and still have 500 billion to spend), it's that for less than half a billion, someone can buy 20 house or senate seats for more conventional candidates that are willing to vote the way the financier wants.
Not to mention that the Norwegian Pension Funds holds $2 trillion in assets. UAE and KSA have ones over $1 trillion each.
And that's ignoring that currently an even smaller group of people owns everything, who don't even represent the public on paper. Quite stupid to assume that this is a better idea.
What can happen though is that companies figure out how to prevent meaningful competition to preserve high margins. They're worth millions for the innovation but they get to billions through anti-competitive and extractive practices.
But we can start by not forgiving CG on death. That seems like a no brainer with no downsides.
No downsides I respect, at least. "We want to keep the business in the family" should be ignored.
When Bezos divorced, Mackenzie Bezos was awarded 25% of their Amazon shares valued at over 38 billion dollars.
Just by the above being possible, that means there's no reason why such a "divorce" couldn't happen once per year, and there's also no reason why it has to be 25% rather than "everything above 100M". It means that the tools for this exist. The government takes the place of Mackenzie Bezos. During the divorce, not a single mention of "oh it's just _impossible_ to take 25% of Jeff Bezos' Amazon shares, it will cause collapse". Just all of a sudden if you replace MacKenzie Bezos with "the government" or "the pension fund", suddenly there's all kinds of supposed reasons why it can't happen - even though there's zero reason why it couldn't.
No "but technically they will temporarily have over 100M in the intermediary period" please.
Because it doesn't work that way at that level of wealth, especially for tech CEOs. You can't just hide billions worth of shares in a company.
There's so many possible options.
It's hard. But if we make CG inescapable it should as a second order effect close the Buy Borrow Die loophole, and the super rich must fund their life some other way. Probably by selling assets to consume.
And putting a tamper on inheritance (which could be progressively taxed or capped) it has a second order effect of discouraging hoarding while alive.
So increasing inheritance tax (effectively) would mean a change of incentives for hoarding money. Which is the only thing that actually works.
Obviously, being a hard problem, there's no quick fix. But in the choice between slowing down the problem and not, we should do the former.
How do we "prevent" it? Well, we can throw the baby out with the bathwater. Is that your proposal?
As for your question: no intransigence please.
That net worth is, under our current system, tightly linked with his interest and control in his various enterprises.
He can borrow against it which gets around taxes and that should probably be addressed, but he like the hypothetical fresh billionaire startup founder don’t have that money. And the mega rich on paper can’t access more than a small percentage of that money without reducing their control of the company they built or are building.
Ideas like a wealth tax, or the new sovereign fund paid into by an equities tax or grant are all interesting, but they are all more complicated on the ground than “wouldn’t $100m be motivating enough?”
FWIW, I think that some sort of public endowment and/or sponsored healthcare, education and safety net and/or tax or management of hyper wealth is one of the problems of our age.
But part of that problem is that it’s not clear how to do that in a way that is workable in an increasingly multipolar world of tech and soon healthcare giants that are as powerful as small but growing nation states. Economically and in some cases militarily linked to great powers.
Seems like a solved problem to me.
Yes, this is a good take. I wish more people understood this. Things like sales taxes could address this. Land value tax, with single homestead exemptions are another.
Folks who lend money against stock insist on being repaid. (In fact, they typically have the right to sell the stock to be repaid.) The money to replay was taxed. (It comes from salaries and/or stock sales. Borrowing more to repay previous loans just kicks the can down the road.)
And it’s not like he took the money from somebody else.
He spent a ton of time to create something that he owned the majority of and to make that thing more valuable. He paid other people to help him and they were happy with that exchange. The government also helped them and they were happy with that exchange.
Suddenly, people have assigned a concrete value to the thing via the IPO and it is very valuable.
It’s not like he suddenly has $1 trillion in his account. It’s just the thing that he made and has ownership of is suddenly worth that much.
Is your theory that he dug it out of the ground with a shovel or something?
You can be assured I understand the concept of wealth creation.
But the fact that there are, in fact, other people involved here is hilariously hand-woven away here:
> He paid other people to help him and they were happy with that exchange. The government also helped them and they were happy with that exchange.
OK I will bite. Who determines what "the government" thinks in a democracy? The general public, right? Does the general public seem happy?
Regardless:
1. Starlink is amazing (literally never want to fly on an airplane without it ever again, wish I could search for flights based on having it)
2. Starship is amazing. (ensures American space dominance for generations)
3. Being able to manufacture hard things at scale and employ hundreds of thousands of people and making thousands of millionaires is amazing for our economy!!
Unless they are fools, the general public should be stoked AF.
With that said, it might also be instructive to realize that most people in the country are coming to fucking hate this bullshit. They're exhausted at the fact that our economy is now dominated by financial extraction and that nearly all of the resources of the country are accruing to a tiny group of people.
They're increasingly unable to afford housing in the places that they grew up. They're unable to raise their families. They're unable to have any sense of security or continuity in their life whatsoever.
And the best part is that they have to listen to people like you calling them fools for wanting to live healthy and productive lives, for valuing human connection over technology, for value and tradition over innovation. They get to be told that they're lazy for not having built some sort of financial engineering machine to extract money like you guys did.
The problem for you guys is there's a lot more of them than there are of you. At a certain point, they will kill you and eat you for your protein content.
It's happened quite a few times in history before. So good luck with all that.
If you want a tip, you might want to think about how we can harness the power of all this incredible innovation and still get exciting new toys and quality of life improvements while also having a society that's more balanced, fair, and healthy for all the participants, including the ones who aren't as smart or weren't born into money.
I like it because it’s useful.
Life is objectively much better today for the average person than it has been for 99% of humans in 99% of history.
(“They will kill us and eat us for our protein” makes you sound totally insane and in this ludicrous scenario I think the rich peoples army of drones/optimus robots would simply say “no”.)
Life is objectively much worse for many communities in this country.
Get on a plane to Detroit if you don't understand what I'm talking about.
We allowed one of the most powerful and sophisticated industrial economies in history to be taken over by bankers who shipped the jobs to a different country, bought off our politicians, and spend most of their time coming up with new ways to use monopolies to overcharge us for shit.
You can talk about 99% of history all day long, but if you're standing in a town and the stores are boarded up and the jobs are all gone, or alternately, if you have to move further and further away from the community that you were born in because you can't afford to live in the same neighborhood that your parents raised you in, then you're not interested in statistics or people telling you it's the best we've ever had it.
Real median household income is the highest its ever been and risen steadily for 50 years: https://fred.stlouisfed.org/series/MEHOINUSA672N
Unemployment rate is 4.3%
Also, I go to Detroit about once a year. Every year it is more vibrant than the lows of 2010. Real estate prices support this argument. https://fred.stlouisfed.org/series/ATNHPIUS19804Q
Not saying some people somewhere don’t have it rough but overall we are doing better than we ever have.
Yep, this is it. This is the fundamental disconnect in our culture. Who do you mean by "we"? And why do you think that Detroit being increasingly unaffordable is a sign that things are going well for working people? Huh?
For a large group of working people you are definitely wrong about this, and the signs of the crisis are literally everywhere in our politics right now, but if you can't see it, I can't make you see it.
Perhaps file this conversation in the back of your head as you go about your business in the coming weeks and months, and see if you can see any examples of what I'm talking about after all.
Instead of taking me at my word, just consider it as a hypothesis that you'll objectively try to verify or disprove.
My hypothesis is this: for regular working people who don't have access to excess capital by virtue of birth, connections, or high levels of education, life has increasingly become a living hellscape of being ripped off and exploited in every aspect of their economic life. They are more precarious and less able to control their own destiny than at any time in the modern post-war era, and they are increasingly mad about it.
Show me a plane ticket stub or gtfo
https://endhomelessness.org/state-of-homelessness/
So we are possibly having more record highs in wealth, and more record lows.
But I do agree and have noticed that the tone here is radically different than it would have been five or ten years ago. I've been around for a while here as well.
I think that's a sign of the cultural shift underneath our feet. Silicon Valley and the tech sector in general has almost no goodwill left. They've harmed too many people for that at this point.
Just waiting for my company’s top 10 shareholders to be anonymous entities owned by other companies based in the Cayman Islands.
Every American economic miracle has been precipitated by the government building basic infrastructure and doing basic research.
You don't /know/ that people need to collectively get over "this" -- you have a feeling that it seems more fair to do that than the alternative. But you can look at what happens elsewhere in the world with regimes that implement exactly what you are describing. And what happens is the people who are most equipped to be the golden gooses that you are proposing are just as equipped to simply most somewhere they can do so unencumbered.
That's why what you're proposing will just never really work.
How so?
Well, suppose we say, nobody should be a trillionaire - is this an arbitrary number, or is it aimed at the richest person? Clearly, the latter. Now if we carried this out, now there are billionaires remaining. Well, nobody should be a billionaire, one might say. Most will agree. So the wealth of billionaires is taken away, and redistributed evenly.
This will continue, with the majority of people below the average wealth level, demanding a more equal playing field. You can see how it ends
The fact people say 1 billion is too much money, or 1 trillion is too much is something to dig into - the number is relative! 1 billion is only a lot because not many people have a billion dollars. If inflation keeps up, one day everybody will be a billionaire.
Why is that a bad thing? Or will it exemplify some other non-financial inferior trait of the person which might be existentially 'scary?'
In this case, I feel there’s no shared foundation. Half of the commenters here don’t seem to understand what money is or how it works. There's no soil in which to plant an argument, because there's no understanding of what a billion dollars represents. There’s no genuine desire to understand the counterparty either.
Very disturbing.
So even if the debate reveals that no, there wasn’t a viable reconciliation, the debate was still worthwhile.
I read the first half of PG’s essay and was left wondering if I should read the whole thing, just in case there was something in half 2 that redeemed half 1.
Most startups fail! Ignoring that reality, and only focusing on the slope of money growth is like saying that if you hit the right drafts you will survive falling out of a high rise window.
There is no such thing as a free lunch. The payoff for doing startups is the (incredibly small chance that you succeed) * (the absurd payout if you do).
Even VC funds fail.
If PG brought up survivorship bias at any point, it would have significantly armored his case.
I've observed this in a lot of internet arguments, but have not been able to put it into words until you said this. It feels like everyone is more concerned about 'winning' the argument more than anything else.
Every global economic statistic backs this up
It consumes childhood and adulthood. Only when workers have power can the engines of innovation benefit the many.
Of course history is littered with failed autocracies aspiring to be capitalist/socialist/insert-econ-system utopia. I'd argue the current US administration is in an autocratic mode right now. And doesn't seem to be going well for any except the richest asset owners.
It's an ugly ugly post, and that's what set the tone.
I hope your kids grow up to become better people than those who would write what PG wrote, and not spread lies about their interlocutors with straw man BS.
It's also an insulting post. Yeah we can add, thanks. That was never the problem. PG think math is what we were missing?
"Earned income", for tax purposes, matches pretty closely the kinds of income many people consider genuinely earned in the moral sense. From this perspective, if a startup grows organically and the founders become rich, they have earned it. But if the growth requires capital (an investment, a loan, or the wealth the founders already have), the situation becomes less clear. How much of the success can be attributed to the contributions of the founders and how much is based on arbitrary choices made by wealthy people?
If you now assume that existing wealth is mostly unearned, any success made possible by arbitrary allocations of that wealth is similarly unearned.
The wealth controlled by a startup investor becomes earned income, in your words, when the founder receives pay for their work, in the form of cash or exercised options or whatever else.
To get that earned income, which is derived from wealth but is not the wealth, they have to earn it in the same way the wagies in your first paragraph earned it. The investor (on the board, presumably) has to vote him in as CEO and approve his pay package.
And just as retail customers don’t give their money away for no good reason, neither do investors.
The intuitive difference is mostly between the many and the few. Between the ordinary people and the elite. If your money comes from many small streams, it looks likely that many people have independently determined that what you are doing is valuable. If there are a few large streams, the situation is less clear. Maybe your contributions are genuinely valuable, or maybe someone is picking favorites or choosing winners in advance. From that perspective, capital is a poison that permanently puts the reasons of your success in question.
If anything, I remember when the U.S. Senate Appropriations Committee was picking favourites - and that favourite was ULA. Elon gave them hell.
No. Earned income is salary, and taxed as such. Unearned income is capital gains, exercised options, etc, not taxed as income. It's pretty easy.
If we just use this tax office definition, it's effectively impossible to earn a billion dollars because you'd need to pay yourself ~$1.6 billion dollars in salary (depending on where you live), and very, very, few people can afford to do that
That's a very charitable way to put it. The reality is Graham blatantly lied about what AOC wrote, and then went on and on addressing the strawman of whether you can accumulate a billion dollars.
> as the question was mostly about the meaning of word "earned".
Exactly. Which makes this entire page absurdly misdirected.
I don't get it. If I need to raise money to fund my startup, how are my profits more "earned" if I crowd fund $10m by finding 10,000 wage earners who will lend me $1000 each than if I borrow $10m from a billionaire?
What did the founder have to do to keep growing at 93%? Good solid business fundamentals and identifying a new solution can get you some growth. But eventually you've done all that and the only way to continue growing is extraction -- buy out your competition and raise margins, outsource your workers, enshittify your user experience. THAT is why no one "earns" a billion. The last $900M pretty much always requires using your resources in clever but unethical ways to extract money from customers and financial markets.
I don't see why he should have engaged with them any more than he did, because AOC's claims are BS. He gave them more attention than they deserve.
What he should have engaged with is, what happens when a startup stops being a startup? All three of his poster children for startups, Apple, Google, and Facebook, are now notorious for treating their users badly and making money in ways that at least a substantial number of people don't think are "earning" money, such as monetizing users' data. And at the last of those three, the founder is still in charge, so even if PG can argue that Zuckerberg earned what he got from Facebook in its startup phase, that doesn't mean he's earning the money he makes now from Facebook in the same way. (And the other poster child he mentions, AirBnB, can't be said to have clean hands either at this point.)
To me that's the biggest gap in PG's worldview more generally, that I never see him address in his essays: once the startup phase is over, the company drops off his radar and he pays no attention to the collateral damage it causes when it's a tech giant. (And of course AOC's claims have nothing to do with this genuine issue either.)
> making money in ways that at least a substantial number of people don't think are "earning" money, such as monetizing users' data.
Is this not a contradiction? Or are you splitting hairs between a "true startup" and an enshittified bigCo?
No, because AOC claimed that it was impossible to earn a billion dollars. Not that there are ways to make money other than earning it, which of course there are, but that there are no ways to make that much money by earning it, which is BS.
It used to be if you criticized anything in his blogs you’d get downvoted to oblivion. Now criticism is the norm.
As far as I can tell it’s less a change in pg’s viewpoints (though the topics have evolved, and he has gotten more transparent perhaps), but a change in the public reaction to them.
I’m not sure if it’s the same people though, might just be the new generation.
* There were far fewer tech billionaries.
* The tech billionaries were not publicly associating with far-right figures or cryptofascist belives, or at least were doing so quietly while promoting ideas of technology as social progress
* A lot of the tech startups were seen as fighting entrenched interests grounded in regulatory capture and people had the illusion that the next generation of companies supplanting these wouldn't succumb to the same factors.
* Donald Trump as a phenomenon of current politics did not quite exist yet, so we didn't have to witness these people sucking up to him
That's just for starters.
Freudian slip?
They do if you cherry-pick your economies, starting points, definitions of "capital" and "growth", and cutoff points, yes.
Plotting it vs time makes this clear because you can clearly see what caused what.
It is quite possible for someone to have thought about their views before they formed them and maintain stable opinions over 15 years because they are aligned with objective reality. That is good. Then there is the opposite where they've got ridiculous views that don't make sense and they stick with them despite all evidence out of stubbornness. That's bad. But again, the exact view and the nature of the evidence is what matters.
The world is about as stable as it always has been. World War II isn't even 100 years ago. If someone's view 15 years ago was 'the world is stable' then yes they are going to be facing a lot of contrary evidence. But that is because it is a wildly optimistic view with no foundation in evidence or argument.
I think their point was more - attitudes to pg's posts have changed over the last 15 years - pg's views are pretty consistent about good/bad over the last 15 years - a lot of the public's (and hn's) attitudes to tech have changed for the worse, people trust tech less - pg doesn't seem to have noticed/internalised these changes
Some of these things are nuanced, complicated things to think about and explain. Nobody thinks that pg doesn't know smartphones have been invented.
Ironically:
1. The term you're searching for with "anger/condescension/whateverthisis" is "curiosity". Typically when I feel curious I ask write a response asking a question.
2. If you're tempted to write "Maybe try to approach other people's comments that you're not sure about with a bit more curiosity" and then "less anger/condescension/whateverthisis" you should pause and consider the utility of asking someone to clarify their intention before making assumptions. I know you don't understand, you know you don't understand. Great time for a "hey, do you mean ...?" style post. I have to admit that sentence got a smile out of me.
This is the exact problem. Anyone who thinks they’ve found objective reality isn’t looking hard enough.
To be less glib, that amount of time is more than ample to see a generational change in a sector as fast-moving as technology. Perhaps some robust push-back on his ideas better represents the a zeitgeist of people being less happy with a maximalist winner-takes-all attitude to business or personal success.
I blame the pandemic and social media.
This should not come as a surprise when they are forced to live with roommates because they can't afford a house or even an apartment to themselves because every cent is being analyzed for optimal extraction from them.
Just so you know, the new generation is investing earlier than the previous generation.
Gen Z is also outpacing millenials on home ownership https://www.npr.org/2026/05/15/nx-s1-5791499/gen-z-homeowner...
The idea that the latest generation is not benefiting from the current situation is in your head, not reality.
A has 97% of the wealth.
B has 1% of the wealth.
C has 2% of the wealth.
Your argument is that because C > B, C is benefitting from the status quo.
In the US, the median age for first time homeownership increased from 29 to 40 since the 1980s when the stat began being tracked. That is reality, not an exceptional anecdote that is so out of the statistical ordinary it warrants being paraded as a puff piece in a newspaper.
So that's going to impact any professional class community, whether it's tech or not.
I'd say HN is slowly catching up with traditional SV startup culture dying, and seeing more non-VC-funded people flowing in as sites like Reddit enshittify. Those people identify more as tech workers than as early startup employees who aren't a billionaire yet.
Combine that with recent economic and political developments, and it isn't exactly surprising that a growing part of HN isn't a big fan of the über-wealthy tech elite trying to make their life worse.
These days, most people's experience at a big tech company is a political dystopia where everyone is optimizing for their promo packet.
That's going to get you 2 different audiences.
Yes, big corps suck. Always have, always existed, 20 and 40 years ago. Startups of 20 years ago have become big corps of today; now, new ones are in this "youthuful vigor" stage.
The current boom in AI and the cloud/social media boom in the recent decade have required ungodly amounts of capital for their resident companies to get off the ground. It's no longer a creative endeavour that basement hackers can participate in. In many ways it is toxic to the original nerd/hacker ethos by shutting out newcomers to the field and increasing wealth inequality, hence the hostility you now see on HN.
The good vibes and optimism have left the industry.
From the mid '00s through early '10s, pg was a much more grounded, down-to-earth person. Sure, he'd sold Viaweb and was doing quite well financially, but he was still working hard and was very close to the startups he was advising and was funding. I attended Startup School back in 2006 and thoroughly enjoyed it and thought it was a genuinely useful experience, even though I never went on to start a startup.
Fast forward to today: pg's net worth has gone up a ton, and he's moved on to bigger and different things than his old roles at YC. He's not the same person he was 20 years ago (who is!), and his writing reflects that over time.
Much of his old work still resonates with me (I go back and re-read my favorites from time to time), even though I'm a bit more cynical (or perhaps just more realistic) about startups these days, but most of the new stuff he writes feels out of touch. Plus he sometimes tries to write about things well outside his wheelhouse, and gets much of it trivially wrong, which tends to turn me off.
The thing that really made me shake my head at this particular essay was that he used Facebook and Airbnb as examples in an article about how it's possible to make heaps of money without cheating. Just... wow.
I think it's mostly demographics. Most people my age (I'm 38) have to come to terms with the fact that their most energetic age and most of their opportunities are already behind them. When faced with uncomfortable reality, many start looking for something or somebody else to blame for this. Not only billionaires, but tens of thousands of millionaires have played their cards better than I and others like me. They had the same opportunities, sometimes even less, but they have shown better judgement, strength of character and pure talent. Admitting this is not pleasant.
Things are measurably darker. Hell, we went from “do no evil” being a motto for Google to being removed entirely. Early Tech had a genuine claim on trying to be better than firms that had come before.
Why would it be an unpleasant realization that you are less successful than 0.00012% of the world’s population? There is arguably something sick about a system that can make a significant number of people feel this way.
I'm always curious as to why something that happens to 100% of humans remains 'uncomfortable.' Like there's nothing in genetic code making aging (or death, I suppose) less uncomfortable. It's kind of fascinating.
I still really like some PG essays, but PG used to be a much better writer.
See the post above, where I criticize him and am being downvoted into oblivion...
Which is probably why this immediately devolves into a bunch of silly math and equally silly proclamations that don't seem rooted in any actual defined course of action. This is less than worthless, it's actively harmful.
> I've got kids
And this requires _a billion_ dollars? Perhaps an intentionally narrowed scope would be good for some of the HN audience.
I also have kids. I want them to live in a just society where billionaires, whom Mr. Graham proudly grooms, according to his telling of the matter, don’t actively undermine the ability of ordinary citizens to earn a living wage, to have a say in self-governance, and to enjoy universal healthcare.
People like AOC just pander to uneducated populace who'd prefer to use force to take free stuff of other people who work instead of working themselves.
Very easy to keep electing such politicians — just continue giving out more free stuff, so that people think it's the norm, and working is not required, just always taking is fine. People will vote accordingly
There are a lot of fine shades between a free riding communism and cut-throat capitalism. Finding workable balances is a key aspects of politics.
Funny, to me this describes the investor class.
Price of rent increasing in desirable locations is not due to greed or collusion of bad actors (as long as government prevents monopolies), it's due to more people competing to live in a place that can house only a limited number. Of course everybody wants to live in big cities in the US. But rent is very cheap in dying small towns in the middle of nowhere.
Another reason why WFH should become more of the norm, it will help solve the issue of expensive housing an rent since it means people could live in these less expensive towns and still be able to work.
There needs to be a wealth maximum, afterwards you just get taxed 100%.
The problem is, reality doesn't care whether you think it's grim or not.
I think the environmentalism movement faces this - it's easier to believe that everything is fine and we're not harming the planet and all is good, because the alternative is grim. But if the alternative is real then the fear of facing it is only going to make the reality even more grim.
The definition of "earn" is not on the chopping block. Nor is what it means to "cheat" - which he introduces pretty early on.
And times change. With the announcement: "[Insert name] is a billionaire!"
It used to be: "Congrats to them for making the world better in some way and reaping the rewards."
Now it is: "What did they leverage to force another subscription on us?"
> It used to be: "Congrats to them for making the world better in some way and reaping the rewards."
> Now it is: "What did they leverage to force another subscription on us?"
Much as I appreciate the former, the latter is if questionable benefit to most people, as the cost of launching e.g. GPS constellations and weather satelites was not the limiting factor for them, and direct-to-satelite phones and broadband at whatever the subscription price is, while neat, are not life changing for 99% of the population.
(Space is cool, I like space, he's free to spend his own money how he likes, but the IPO happened because he ran out of his own and private investors' money).
Also Tesla has problems going with that benefit, between court cases over marketing of FSD & if he committed fraud by saying he had secured funding to take it private, and also the P/E ratio is unjustifiable as a mere car company so they're pushing an AI narrative that's also unjustifiable for reasons long enough I can't be bothered to type them in again.
That and him selling Tesla shares worth more than the lifetime revenue of the business, which is sus.
Same guy ships cars that drive themselves, humanoid robots for the factory floor, brain chips that let paralysed people move a cursor with pure thought, and an AI running on a supercomputer his team stood up in months instead of years.
Your are debating people who sincerely believe that money is the economy and is not just a transaction mechanism lying on top of the actual goods and services that make up an economy. That the physical vectors of goods/services/logistics are just formalities relative to hard currency distribution, which, when implemented, would “solve world hunger” with $50 billion or whatever bunk number they claim is enough.
Your are dealing with envious, deeply incurious people who, as history has demonstrated again and again, will kill millions in pursuit of their ideology. There is no convincing them, debating them, enlightening them. It is futile.
SpaceX has a really cool launch and satellite comms business saddled with multiple money-losing other businesses and is currently running at a loss despite the revolutionary aerospace part being profitable.
There's pre-2020 Elon who did cool technical stuff and then there's post-covid Elon who spent $50B on Twitter and then cut it's revenue by 66% so that he could post more cringe memes.
The sad part, relevant to TFA above, is that all of the financial chicanery turns out to have been vastly more profitable than inventing re-usable rockets or shipping the first viable electric car. That's not me being a jealous hater, that's me being mournful about what's rewarded.
It is _hard_ to start a successful car company, let alone one on an untested platform. He did it, and it taught China how to build the future of cars.
It is _impossible_ to build a successful rocket company from nothing. He did it, and SpaceX is now ~60% of _worldwide_ launches.
He's had plenty of failures, but Musk is what people are buying. He's gross and annoying, but I wouldn't count him out, and I'm rooting for his success.
If he were still mission focused, he would have used his time in the Trump administration on cool missions instead of "ctrl-f trans" and defund random projects with "transducer" or "transfusion" in them.
All glory to the guys who started the company (I love my Tesla Y), but I don't believe it would have gone anywhere without Musk.
(I was add something about Stacy Munro and the auto industry, but I'll just link to his first teardown of the Model 3[1].)
- Tesla ain't that successful
- SpaceX isn't even profitable
- Hes tweeting stuff I don't like
- I was rooting for him when "was keeping it real", but "now that financial chicanery is rewarded I can't in good conscience" etc
People love the underdog and love the looser, they hate successful people because of what it tells them about themselves.
I specifically called out a bunch of compliments and things I liked prior to 2020, and I think we'd both agree that "spending all day on twitter" is not great regardless of tweet content.
In my opinion, around that time he stopped being interested in tech and manufacturing of said tech as his top concerns (WHICH HE WAS GOOD AT), and started being more concerned with twitter culture war bullshit. This happened to a lot of people on both sides of the aisle around that time due to the lockdowns, but the lockdowns are well behind us and he's still not focused around "get to mars" or "redefine human energy usage" as his top goals IMO. He's buying twitter, doing what he did at DOGE and repackaging a failed AI company into an IPO on SpaceX's coattails. The stories out of the SpaceX launch business are all about how they effectively "manage up" to get him out of the way and on with their jobs.
I understand the sentiment, and getting as involved into politics as he did was probably a mistake, simply because he is not good at it.
If I may offer a different perspective as to the on-mission part: he realised some years ago that leftism was a grave danger to his plan to make mankind multi-planetary, so he decided he had to get involved, if he wanted to or not. You will probably not agree with this point of view, but perhaps it will help soften the image of him in your own mind.
Yeah, that's just saying "social media addiction" in more words. Also, Star Trek?
Are you seriously saying you think Elon Musk falls into the "now it is" category? That's making up something to get angry about.
He's been a billionaire for quite a while. IE he falls into the "used to be" category.
https://edition.cnn.com/2026/02/04/world/lancet-usaid-global...
Indeed this wouldn't even be front page material if PG's initials were not on it.
So the exact same thing PG is guilty of in the article?
He disagrees with the opposing statement, gives a lazy counterexample with 0 evidence that introduces at least two major assumptions that do the the entirety of the work for his "argument", and then takes another few paragraphs to effectively say "just grow exponentially, bro".
There's nothing to push back against except vague hand-wavey nonsense. PG is washed and the level of discourse in the thread matches the quality bar of his post, so I'd say it's pretty appropriate.
His core premise is terrible if not outright facetious given the case he made. That the girl who is going to become a billionaire in his example has a startup that makes a product that everyone loves does nothing to disprove the point. Billions of people love VLC media player but Jean-Baptiste Kempf didn't become a billionaire.
The difference isn't the product, it's that what makes the startup founder a billionaire is that they're willing to pawn off their invention to people who do all the unethical things, while they laugh on their way to the bank, that's the point of the big check.
In some sense I prefer the robber Barron over the startup founder because at least the former doesn't pretend they're a saint between they've put one level of indirection between themselves and the exploitation.
One can't be held responsible for unethical things done by his creation once it's sold.
In a free market everybody can choose to sell or not, who to sell to and under which terms. Therefore, he should be held morally responsible for giving away control of his creation to the wrong people, or for not ensuring his creation can't be turned into something bad.
Then again, they don't get rich by cheating, abusing or whatever, they build a legal thing and sell it. You wouldn't go after a knife maker if someone used his knife to stab someone.
If you make a successful crowdsourced reviews website by building trust over time with contributors and users, and by any mechanism it ends up getting owned by an advertisement company that makes a business out of making it pay-to-win, should you not be held responsible?
I'm not talking about legal responsibility here, just moral responsibility. Ideally the former should follow the latter but it's not always the case.
Even then, has say Databricks or Canva been guilty of unethical conduct?
OK, PG might have proved it's possible for someone to become a billionaire. But why is that a good thing?
The model is: rich old guys extract money from the populace with threats of violence (just try not paying taxes). The rich old guys get FOMO. They give this money to young people who work really hard. This means foregoing sleep in favor of vibe coding some BS that nobody ever asked for, and making it addictive.
Nobody in their right mind would give a penny to these very hard working young people. In fact they don't: their startups only make money through ads. Nothing they make is worth even a tiny subscription fee. And ads are paid for by resource strip-mining megacorps.
What we have is a two-tier population of a have-nothing underclass and a handful of nobility. If we continue down this path there will be a revolution. There always is. Now that is something you probably don't want your kids to live through.
Billionaires are a sign of a failing systems because nobody earns a billion dollars.
What do you think why many important jobs are badly paid while some CEO gets a billion dollars.
Didn’t you see in the pandemic where the real important jobs are and did you realize how low their payment is?
BTW it’s interesting you see you kids working in a startup but not creating one.
et tu hn?
I am tired of seeing this nonsense on social media (it's particularly bad on reddit, where /r/antiwork and it's offshoots keep hitting the front page)
- Wealth is not a zero-sum game
- Yes, billionaires shouldn't exist because they're a symptom of a broken system
- And they don't exist on a long enough timescale, there's a reason why oil barons and railroad tycoon families are a shadow of their former selves, and why the richest people are all in tech/oil
- Billionaires and increasing income inequality are a symptom of a bigger problem. Musk wouldn't have as much money if his publicly traded stock wasn't as popular... among the public.
- Modern day securities are broken because they're poorly regulated because the public doesn't vote for people that would do the regulation.
It literally is, though. For one's wealth to grow, the wealth of others must shrink. You could print more money, but that'd just result in inflation reducing everyone's wealth.
If you intend to say value is not a zero-sum game, I agree.
https://commons.wikimedia.org/wiki/File:Global_Distribution_...
> Modern day securities are broken because they're poorly regulated because the public doesn't vote for people that would do the regulation
And Billionaires and their media power has nothing to do with it
got some bad news for ya pal
The exponential growth model that pg presents is an obvious lie - you could use his exact explanation to claim that good founders will soon become trillionaires, all it takes is 9 months of 93% growth after your first few billions; quadrillionaires will soon follow. The obvious reality is that exponential growth is just a small phase in any company's history, and it is anyway limited by the size of the market(s) it is operating in. A company can quickly capture a market, but not quickly grow forever.
Then, he completely hand waves away the externalities, lawlessness, self dealing and similar issues that are the supporting power of all such growth events. He claims this is all powered by "making your users happy", which makes them tell others about your business, as if every restaurant that people fawn over becomes a billion dollar business in 1-5 years. Even the examples he can think of of companies that did this are infamously bad companies that have become rightly hated and accused of spreading various forms of social ills - e.g. social media addiction induced by Meta, spy ads by Google, excessive tourism and house price increases by Airbnb, or the erosion of worker protections by Uber. There isn't a single billion dollar company that doesn't at least get accused of similar problems, which represent t the meat of the argument, and pg ignores this completely in favor of the "build something useful" model.
There will not be next quadrillionaire soon because there are economic crashes that kick economy down each time so it has space to climb again.
That is how its been historically and how it will continue unless the math underpinning it will change.
She also pays full UK tax on her earnings, the 36th most of any individual.
For authors, the arguments are again quite simple - billionaire authors or directors don't become billionaires by selling books or movies, they become billionaires from much larger businesses that employ way more people who were collectively much more critical to the success of said businesses than the authors themselves. JK Rowling didn't become a billionaire until the movie franchise and the toy mega production began. If the movies hadn't happened, or the toys hadn't happened, she would have just been an extremely rich multimillionaire.
Now with a 6bil market cap is seems.
https://news.ycombinator.com/item?id=8863
(Apologies to BrandonM for reminding everybody...)
It's just grepping logs on steroids
> Sentry
Hooks on error handlers in JavaScript
> Snowflake
Anyone can just use parquet or DuckDB
>Okta
No digital sovereignty for those who can't manage users' passwords
> MongoDB
JSONB fields in Postgres, anyone?
/s
BrandonM doesn’t mind:
> I really don’t mind the commentary. I’m long past being frustrated about being misinterpreted, and I learned a lot from it, anyway.
https://news.ycombinator.com/item?id=27070138
But dang does:
> my heart sinks a little every time I see this brought up
https://news.ycombinator.com/item?id=27067281
It’s thoughtful context that I think everyone mentioning BrandonM and Dropbox should be familiar with.
If only we could trust such big hearted people who selflessly donate their time and expertise for thinking and researching - without asking those pesky little questions like "what do they stand to gain? what hidden agenda do they have? what ideology dictates their value system? what axes to grind and biases do they harbor?"
I'd rather trust the people directly involved, whose interests are mostly clear and known.
PS I'm not a fan of Meta.
That seems like a wild statement to me. Just so I understand what you're saying. Are you saying you would trust Meta's statements on if their algorithms are harmful to youth/society over independent researchers because those researchers might have some hidden bias?
I am old enough to remember when "researchers" and "experts" where warning us about the evils of violent FPS gaming, the whole panic over teens and kids playing Doom. The Columbine shooting. The end was nigh! Of course, it was all blown out of proportions...
You and Paul are both claiming it's extremely hard.
A restaurant won't scale - most ideas won't scale - because they're not useful enough.
These companies are not criminal enterprise and they don't steal money or threaten them with violence: they just offer them products and ecosystem and most people are dumb enough to ruin their life with it. Don't get me wrong: I hate them and I ban social media for my kids, but it doesn't make them evil.
The bad actors are thugs with guns stealing your purse and the government stealing your tax money or threatening you with jail.
To give another, less controversial example, I don't think companies selling products with sugar and seed oils are bad, even though they likely have the highest combined reduction of life expectancy across all people - but I hate them too.
Also an argument for El Chapo and friends (if we didn't criminalize their products and add the violence around the trade, see Alcohol and Tobacco).
> - but I hate them too.
Why do you hate them if you don't think they are bad?
You seem to be saying, "it's not illegal; I will hate it, but it is not bad". What is "illegal" is an arbitrary classification that different countries choose. That's the point of what the unnamed politician (it's AoC I think?) is saying: those things should be illegal.
Counterexample, a restaurant worth $202 billion: https://stockanalysis.com/stocks/mcd/market-cap/
One of the arguments against billionaires really deserving that much money is that while they own the shares, the scaling up is done by a labour force that doesn't capture this growth, "only" (so goes the argument, I do know about share options) "their wages".
How many burger flippers get compensation in the form of shares in the parent company? I genuinely don't know, but I do expect it to mostly be in the form of pension funds rather than stuff they can see in their working lives. Pension funds are a lot of money, they need to be so those with them can retire, same logic as FIRE because being a pensioner is the first three initials of FIRE.
This is probably for the best, owing to something not explicitly mentioned in the article: startups are risky. This is as much a lottery question as it is an effort question, because "cool idea" absolutely does not mean "make it and they will come", no matter how hard working the founders (and first hires) are.
PG made the error thinking that this is just people misunderstanding math and exponential growth, which created a convoluted math section that could have simply been explained as - if you start with a million dollar and double every month, you'll be a Billionaire in less than a year. He also didn't really touch well on why many people hate large companies / billionaires.
You are making the mistake of using a moralization framework that equivocate being accused of something to being bad for society + not looking at the alternative (i.e. even if it's true that every Billion dollar company is "bad/exploitative/etc.", that doesn't mean that the (realistic) alternative is better for society or people.
The reality is that companies like Google, Amazon, NVidia, etc. have create an immense amount of wealth for their founders and investors, but also created an immense amount of value in society. There is a real problem of incentives when you prioritize growth endlessly, as it leads to perverse incentives such as that ones these companies are accused of - leading you to progressively take more and more less positive actions in order to achieve this growth. So I don't disagree with the general premise that growth leads to moral problems, but I do disagree with saying that building big companies is bad for society.
Like poet/warrior/advisor that convinces the King to give them one grain of rice on the first square of the chessboard, two grains of rice on the second square, four grains of on the third square, eight on the fourth - and so on, doubling the number of grains each square until the 64th square. The King can no more deliver 2^64 grains of rice that PG's founder keep her 93% growth rate consistent for 64 months (or even the calculated 9.5 months to make her a billionaire).
Yes, it's true that a very few tech startup founders create billion dollar wealth by "making what the people want" - but anybody trying to tell you the naive compound interest math makes it inevitable, is trying to sell you something (like perhaps their companies startup accelerator program or venture capital investment opportunities).
I would say value is subjective. For example, some people might consider a successful game as having created value. Others might view it as too addictive and see the negative value on society as a whole.
It could be very true that in the long arc of history, most of the "value" these companies have created is seen as a net negative. Take smartphones for example. They have created "value" but it's very possible that in 100 years when we better can evaluate what they have done to kids who grew up with them, we well conclude that they were a net negative until their usage was rained in. The only opposing force is government regulation and that's exactly what is wrong with these types of companies (and billionaires in general). They are the ones that stop reasonable legislation from happening because they have too much power because they are so large/rich.
What negative actions has Google Amazon and Nvidia done due to them prioritizing growth endlessly?
For Google, they didn't prioritize growth or they would have moved on AI a decade ago, but they were afraid of having tech journalists who hate them already write mean articles about how their AI is harmful.
Amazon just .. I don't know, keeps squeezing out operational efficiencies that get me next day delivery? Or developing AWS to enable other people to build apps?
Nvidia sells GPUs. Maybe you're a gamer and the push into AI means higher GPU prices?
I'm at a loss here. I don't think anyone is mad at these companies outside of a tiny vocal terminally online minority.
There's a human cost to this. Amazon warehouses are famous for their bad working conditions.
More specific criticisms:
Amazon
- They exploit factory workers that have to piss in bottles to keep up with productivity quotas and have high workplace injury rates. When they take time off to recover they are fired.
- They commit intellectual property theft, by copying top selling products and putting their hands on the scales to divert traffic to their clones.
NVidia
- Used software lock-in of CUDA to gain advantage in hardware sales.
- Steals your information. Uses its browser to compete unfairly in other markets (mobile phone OS, etc).
Elon Musk / Tesla / SpaceX
- Bought Twitter and used it to influence elections and voters, promote racism / nazi sympathizers.
>- Used software lock-in of CUDA to gain advantage in hardware sales.
PG> I don't want anyone to accuse me of using unrealistic numbers, so let's take a more conservative growth rate. Let's see what happens at 15% a month. That's not rare at all.
You> it is anyway limited by the size of the market(s) it is operating in
PG> how long you can continue to grow at that rate depends on the size of the market.
You> Then, he completely hand waves away the externalities, lawlessness, self dealing and similar issues
Not addressing an issue, that doesn't undermine the points he does make, is not hand waving.
Hallmarks of clear instead of reactionary thinking: you don't lash out at people for things they said, that you agree with, or things they didn't say, that you would have disagreed with.
Make your own (good) points. No need for framing around disagreement or other misleading tie ins.
I feel just as disgusted and frustrated by some rich people. But lots of people quietly become billionaires now, from normal companies that produce sensible services or goods people want. Substitute "rich" for "billionaire" to account for inflation, and increased globalization, and this has been true for a long time.
Again, if all it takes to become a billionaire is 15% growth rate for 5 years, which is easy, then if you start with two billion dollars and grow at 15% per month, you'll be a trillionaire in 5 years. And 5 years after that, a quadrillionaire. If the billionaires are literally generating billions of new value, what explains why trillions can't be generated in the same way?
If the market is limited, then it means that you can't grow your way to a billion dollars, you have to displace others - either competitors in the same market, or other markets as well. So now there's a much clearer chance that you're using underhanded means to actually get your billions - you're not growing a new pristine market that people just love, you might just be edging out competitors or snuffing out other markets that had existed before - and perhaps were limited by things like regulations or externalities that you simply choose to ignore.
And the question of externalities and unfair competition and corruption is not tangential, it is the whole point that Alexandria Ocasio-Cortez or Bernie Sanders or others in this anti-billionaire movement are making. Not talking about it is simply ignoring their argument. The problem isn't "oh, I didn't realize that simply growing at 15% every month for 5 years will make a million dollar business into a billion dollar business". It's "the actions that you need to take in order to continue growing at 15% every month for 5 years are going to include things like un priced externalities, corruption, cartel behaviors, etc". Addressing how you can sustain this growth, and how the markets can have so much money in them, are exactly the most important things - not the trivial math of exponential growth that he discusses, condescendingly, at length.
Except: you don't have to be a scourge to make a billion dollars. Even though some do, or go down that road later.
And your points would be just as valid and relevant, without re-framing a straightforward tautologically correct post as the foil.
Let's take Y combinator. He is in the money lending business - where he sells the idea of becoming a billionaire ( which is possible in software as it so easily scales relative to other types of businesses ) to young people so they work crazily hard. Most of them fail ( which he doesn't focus on ), but just like a bookie who profits from gambling - he always wins as he controls the rules ( odds/investment percentages - ie lending rates ) of the game.
So he has set up a system that extracts value from others.
Nothing wrong with startups - not only to the founders get to keep more of their value, they can also set company culture and values etc.
However you could argue, particular in software where capital isn't really needed, that taking money from a VC is very expensive - and also somewhat abrogates that founder control.
Sometimes you need investment, and good VC's can really add value ( both to the investor and investee ) - but his ideal investment is going to be to companies that don't really need it - where he can reap a huge reward for little effort.
That's a very negative way to describe buying a share in a company.
As I said, I'm not a person that thinks that correct allocation of capital isn't a useful role. Really good VCs and investors are really really important.
However like art - it can be both simultaneously true that art has intrinsic value and that the art market is seriously corrupt.
Sure Paul adds value - but I'd humbly suggest not as much as he has extracted.
If Airbnb, DoorDash, Instacart, Coinbase, Reddit, Brex, Deel, or Flexport disappeared tomorrow, humanity would not lose a vaccine, a new energy source, a scientific discovery, or a cure for disease. We would mostly switch apps.
Only depressing aspect is pretending jackpot level, private wealth, equals meaningful progress. There is a reason not once, he used the word entrepreneur in the essay...
Paul is my favorite example of "brain gout." I learned what gout was as "a disease kings used to get by eating foods that were too rich." Paul's writing when he was closer to reality, in the early 2000's, was a lot more insightful, because he was closer to reality. But if you've spent 21 years never having a material concern, and increasingly interacting with other rich people (or young people who idolize them), it takes a toll on your grasp of things. It's a king eating rich foods for decades.
Like his "wealth tax" piece, he's very proud of doing elementary maths that ignore a major part of the reality at the start (in that case, he was assuming that their money wasn't growing, just being taxed, which... my man). It's sad to see, and I hope anyone who gets financially successful takes the lesson to try as hard as possible to keep living like normal people do. Buy your own groceries. Cook your own meals. Keep close to the friends you made before you were rich.
What's the point of being rich if you're living like a chump!
That's maybe a 30% growth across the last ten years? It's reasonable to expect that in 2040 I'll be eating eighty meals a day and be happier and healthier in similar proportion.
I get your point, but... https://x.com/search?q=(from%3Apaulg)%20cooking%20&src=typed...
I think the way network effects and valuation creates billionaires is a more earnest defense. But that would start to lean into sociology and luck more than the hard-work he must insist upon, so I guess we sweep that under the "exponential because hard work" rug too.
The log base 1.93 of 301,100,000,000,000,000 is 61.2091. That's about 5 years and 35 days. Is it really impossible to grow 93% month over month for 5 consecutive years? I can imagine some startups that can.
There are two numbers that determine whether you can make one avogadrillion dollars. One is your growth rate, which doesn't matter at all. The other is the size of the available market. Simply identify a market that has on the order of 10^20 times the demand that is currently being met. Understand what your users want. Ask ChatGPT for advice.
However, there obviously exist markets to support billionaire level wealth, as evidenced by the at least 30 billionaires produced by YC, and the many others.
There are markets that can grow fast of course, but once that exceeds the overall economy it can only come from forcing other markets to shrink, and that limits the growth rate to which the fast-growing market can ultimately attain.
Sure, if they have a monopoly. Any market seeing that kind of growth will instantly have competitors and eventually the TAM runs out.
There is no way anyone responding to him has a lazier argument than he does.
Someone who lays bricks, "earns" their income; someone who's wealth increases as a bricklaying company's value increases, does not.
In this sense, it is indeed impossible to "earn" a billion dollars...
We should all go back to being hunter-gatherers? Or how do you propose this is going to work?
I don't think I fully agree with it, but OPs point wasn't about any of that and instead said capital gains (and clarified further - fungible, uninvolved capital without any other contribution). That's really different. If you want to attack that maybe use an example of passive index investors or pension funds allocating capital to a vc.
Capitalism isn't perfect but it's the best system we have. We need to educate people better about how it works and we need to regulate it so it's not abused. But capital gains, or interest, are "earned". They are also taxed, and when those taxes are used for the right goals by the government, result in improving things for everyone.
According to the IRS, "unearned income" is money received from sources other than employment, such as interest, dividends, rental income, and pensions.
We tax it at a vastly lower rate than ordinary income, and we tax it not at all for the purposes of exponential compounding, which is the application in which it is most problematic. What fraction of Elon's capital gains do you think have ever been realized?
We tax capital gains less because we want people to invest their money in companies. As I said, we can debate the tax rates, some might argue we should lower the tax on capital gains (double taxation?) some might argue we should raise it. We should absolutely have an evidence based rational discussion on these topics.
There's a good podcast about the evolution of US income tax: https://99percentinvisible.org/episode/624-tax/
EDIT: So supposedly in 2021 Musk paid $12B in taxes (which was an anomaly) and in most years he pays around 455 million federal taxes. There was one year where he took no income and paid no taxes. So the average American probably pays ~10K I would imagine.
I agree with your intuition, but this is often contested based on the idea that one of the state's services is protecting property, which scales up in cost in some way with the amount of property.
For example, if you have a 10-story building, the cost of protecting it against fire is greater than the cost of protecting a small shack against fire (the kinds of fires it can be involved in and the means of accessing it to fight them are greater).
Or, if you have valuable jewels, the cost of protecting them against theft is greater than the cost of protecting a few items of clothing (more sophisticated attackers like organized crime and otherwise professional criminals may try to steal them using more sophisticated means and resources).
Or, if you own corporations, the cost of protecting your ownership interest against fraudulent transfers may be greater than the cost of protecting someone's ownership interest in a house against such fraud, again because of more sophisticated attackers and also because the rules permitting transfers of the corporate ownership interest may be more complex to formulate and apply.
However, it's likely that the cost of protecting most kinds of property scales sublinearly with the economic value of the property rather than superlinearly, so if people were merely being charged for the increased cost of actually providing them state services that they use or directly benefit from, this would still not justify tax rates increasing with wealth or with income.
I wish I could pay taxes at a rate of 0.25%! What tax rate did you pay last year?
Starting a company that becomes worth $1M by creating $1M in value is a literally a capital gain of $1M for whoever owns that business.
Maybe the person who started that business wants to sell. 10 people buy $100k each in shares. Now they own the business. They hire a manager to grow the business and expand and create more value. Now the business is worth $2M. Those new investors created another $1M in value by hiring the right manager and making good decisions. This is another capital gain.
None of this is accidental or magical. Businesses that do well produce capital gains, and most businesses fail, and produce no capital gians.
It's really not. I don't think you understand the role capital plays in our economy, like at all.
How does this follow? Is the management effort in organising a brick laying company not count as work? Does the RND effort of a bricklaying company not count as work?
I would have used housing speculation as my example tbh.
The house is the capital. Bricks are an intermediate good.
The point is, the bricks do not materialize out of thin air. The act of laying the bricks is not the only labor or capital involved in laying bricks.
The parent post is not saying that some forms of shareholding do not earn, but they are excluding any form of owning a bricklaying firm is definitively not earning. So any arrangement that involves owning a bricklaying firm is within scope. Sole Trader or Partnership for instance.
No, we can't say that at all, because most businesses are small businesses, owned by the people who run them, and capital gains are the owners' income from running the business.
The money startup founders make, from building something as PG describes, is also capital gains. So again, no, we can't say at all that capital gains are unearned.
Yes, we can say this. The IRS classifies capital gains as unearned income.
In fact, in some countries not paying yourself a fair-market-value salary is illegal!
Maybe not zero, but PG's "ramen profitable" basically means the only "salary" the founders take is enough to cover their living expenses, which are kept minimal. So the vast majority of the money they make (remember we're talking about a billion dollars here) is capital gains, not salary.
Of course CEOs of large established companies (not startups) take large salaries--and then usually get stock options and own a considerable amount of company stock, so they get compensated three different ways. Which arguably gets into "unearned" territory--but at that point the company is way past being a startup.
> especially not with small companies which aren't publicly traded
Privately owned companies can still be sold, and the profits from the sale are capital gains. But I agree that in this case that's not the primary way the owners of, say, a mom and pop restaurant get compensation. I should have been more specific that I was talking about startups.
A lot of comments seem to not assume that ownership is equivalent to 'earning'. Why does capital need to pretend their wealth growth is equivalent to the effort of labour.
People are more productive when they have tractors and seed and fertilizer and all the other requisite capital inputs for growing apples. In fact, one can hardly think of anything productive one can do with zero capital inputs.
You do not live on an island. There is trillions of dollars worth of both capital and labor at work underneath your every waking moment that supports your life. Your level of effort means nothing to anybody.
I really wish people weren't so easily seduced by the labor theory of value.
Your labor alone without materials, without tools, or a farm, or a factory, is just you flailing your arms in the air and producing nothing. Capital is as valuable an input to production as labor. You cannot have one without the other.
It's so funny to see people on HN who have clearly overdosed on Marx but have never read Das Kapital, where even the man himself acknowledges the critical role capital plays in production.
The reason her startup was growing so fast was simply that users loved what she'd built.
You don't just make the thing. The founder didn't become a billionaire simply because users loved her product. You market it and you distribute it and you do all the things normally associated with business. Your ability to do those things "well" has lots of room to cheat. Hasn't Uber and Lyft skirted a bunch of laws? Aren't there still a ton of drivers who feel cheated? Aren't there a bunch of share bikes and scooters lying around cities and landfills? Isn't it fairly standard to throw tons of investor money at your CAC to buy "love" and sabotage competitors? He mentioned Facebook, isn't its origin story connoted with theft? I can see angles where these don't count as cheating for some. I can see slivers where there's only so many degrees of separation you hold the billionaire responsible for what happens downstream. Even if not done intentionally, the accumulated wealth still resulted from some cheating though, no?
And there's the stock market. If he means the stock price when he's talking about things people want, then I might agree. You need to manage the thing people love, and by "the thing people love" I mean your product, and by your "product" I mean your stock price. Most of the billionaires became so because of their equity. We're well down normalizing that your product doesn't need to be profitable (where people love it enough to pay more than it costs to make) for the stock price to soar.
It doesn't count as engaging with the argument if he doesn't engage with it. I'm almost surprised he bothered to respond.
Edit: Interesting downvote situation going on throughout the comments.
Anywho, I was really unimpressed with the post.
I think you're reframing his argument as something softer. Not whether they cheat or exploit, but whether they're primarily doing it. Is the cheating low enough or outweighed by the tremendous love for the product? I'm not sure he would agree that's what he's trying to say, but I would count that as cheating. At best, there is cheating, but it's worth it (for them and, I don't know, maybe/hopefully even for society).
You're also nudging it towards whether some billionaires are sometimes able to do it without cheating. It's hard to make a strong assertion whether the senator or PG's claims are meant strictly all or nothing. Both have language of this type. I couldn't say which one means it, though I think it's fair to judge hyperbole. I alluded to this in the prior comment, but I think it's fairly easy for CEOs to benefit from cheating happening downstream. Did Dropbox spam users' contact lists to grow? Did their PM or PMMs abuse push notifications for marketing? Again, I can see versions where this doesn't count as cheating for some. Or it does, just low enough level or normalized such that people redefine cheating. I think there's a lot of (often low level) cheating just built into business and it's mostly a matter of whether anyone will take you to task for it.
I'm going to firmly push back on this. A reasonable, straightforward interpretation of AOC's quote is that "you can't earn a billion dollars" without cheating or abusing others. I'm can believe she may have meant that as hyperbole, but even if she did, PG believes "What she meant was that it's impossible to get that rich without doing something bad — without cheating in some way." He's not doing mental gymnastics to get there; it's a straightforward reading of "you can break rules, you can abuse labor laws, you can pay people less than what they’re worth, but you can’t earn that."
That makes PG very much not strawmanning. He's arguing directly against her stated position. He doesn't steelman her argument (create a stronger or more generous version of her argument and argue against that), which could have made his argument stronger.
That also means I'm not strawmanning. PG's position is exactly what I said: that it's not impossible to become a billionaire without doing something bad. He is quite clear on that. Nowhere does PG use language implying all billionaires don't cheat. Only AOC does that, if you take her words literally.
I think you're basically doing what you accused me of doing here: greatly softening AOC's position. Did Dropbox spam users' contact lists to grow? (They didn't, AFAIK, though they did have a referral program to invite friends.) This is a huge downgrade in accusation of wrongdoing compared to breaking rules and abusing labor laws.
If you soften your definition of cheating to this level, it's no longer a billionaire thing. It's an everyone thing. Does my gardener report all his cash income? Has a friend ever streamed a TV show less than legitimately? AOC isn't trying to nitpick the smallest infractions. She's trying to paint becoming a billionaire as substantially corrupt.
This is not unlike a sibling commenter who hypothesizes earning a $50k margin building a home and all you need to do is do it 20k times. There’s a lot in between doing it once and 20k times. The path has many places where cheating will make things easier and possibly required. If the leader avoids the temptation, their employees may not, society may not. If their competitors cheat and they don't, we should applaud them, but they might not be a billionaire then and we can't count them. I'd guess this is a common way potential billionaires do not become billionaires. It probably catches lots of people getting to a million and then more at ten million and then more.
There's a certain amount of "in theory you could make a billion", that's different than whether we have billionaires that didn't cheat. I think it’s worth noting that you are engaging with the issue in a way that he didn’t. This was the primary argument I was making.
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If you soften your definition of cheating to this level, it's no longer a billionaire thing. It's an everyone thing.
I have no idea if this is what AOC meant, but it’s clearly not possible to earn $1B via wages in compensation for labor.
Often very high compensation packages happen to include shares, but that’s just the form of compensation not an inherent requirement. Of course all paths to a billion dollars are so unlikely it’s really not a reasonable target unless you have already passed most significant hurdles.
Non-founders CEOs have done this, like Tim Cook. Also, Taylor Swift.
I do. I take the $500k from you and then pay $450k to a bunch of employees who put in 40 hours a week. I take home $50k. I earn $50k.
Now, you like the home so much you tell all your friends about it.
I hire more employees and I take $50k profit per house but I build 20k houses and make $1B. I earn $1B.
Market forces decide how much you "earn". There are plenty of blue collar workers who work 3 jobs and live paycheck to paycheck. There are SWEs who work 20 hours a week and make the bank.
This is the "rock star" fantasy. You do something that becomes wildly popular and can then walk away while still making epic amounts of cash. You didn't earn that $1B through continuous effort. It was all made by your initial idea. It just takes time for the cash to be delivered in full.
Do you deserve to profit off a good idea? Yes, and few would contest that. Do you deserve to profit so much that you never have to work another day in your life? Should the system let people retire after having one good idea? That's going to seem like a sub-optimal system to many. However, its important to note that ideas take capital to implement, and it's much more typical for rock star rewards to go to those with the capital than those with the ideas. That's a system that many more will find to be flawed.
Why does it have to be earned through continuous effort? It seems like you’re defending a sweeping assertion (that you can’t “earn” $1 billion), but retreating to a narrower position based on a very specific definition of “earn.”
Yes, you can’t become a billionaire performing fungible labor compensated on a periodic (hourly or annual) basis. But I don’t see why that’s the dividing line between “earned” and “unearned.” A lawyer charging hourly will never become a billionaire. But there’s been a couple of lawyers (Joe Jamail, Mark Lanier) who became billionaires by securing enormous verdicts for their clients. Are you saying lawyers “earn” their money only if they charge hourly, but not if they get a share of the money they recover for their client?
That seems to be a weird definition of “earned” versus “unearned.” Maybe you can say that money is unearned when it’s inherited. Or that it’s unearned when it’s just accrued interest. Or that it’s unearned if it’s through socially questionable activities like high frequency trading. But most billionaires didn’t get their money in those ways.
If we don't have a system for that, then how would you incentivize people to take on bigger risks, bigger projects, etc?
Also, should the lottery not be a thing? What exactly are you advocating by this line of reasoning?
Imagine that making a ground-breaking discovery in physics came with a prize of a billion dollars. One good idea, and you can retire. Would that not harm science? Many scientists would keep working after their first prize because it's what they love to do. Some would accuse them with being greedy after they've made a few more discoveries. "Hey, leave some money for the rest of us!"
What I'm trying to get at is that the rewards for certain things are badly out of whack with what is necessary to keep people both rewarded and motivated. At least, in terms of what is healthy for society and progress. In general, the closer people are to the money the more unreasonable the rewards are. Perhaps people who are further from the money but who contribute just as much (or more) to society are right to be concerned.
P.S. Musk bought companies with people who had a lot of good ideas and convinced governments (mainly the U.S. government) to pay for it. He's always been a capital guy, not an idea guy. He desperately wants to be in idea guy, but his ideas are things like re-branding Twitter to X and the Cybertruck.
Personally speaking, I am sympathetic to the idea that billionaires (especially Musk) are often created more by government policy than market forces. Although for some reason the push to stop governments minting billionaires by fiat seems rather weak, which makes me think a lot of people are being disingenuous on the topic. Or maybe just haven't thought about it much. There is a bizarre zeitgeist where first the government has to give a man billions of dollars because something needs to happen ASAP, then they have to take the billions away because nobody thought the thing needed to happen all that urgently.
There is an overlap in the vibe between the people who are unhappy that the government rewarded Musk and the people who, at the time, were clamouring that the rewards for things Musk was doing were too low. 10, 20 years ago it was all "there isn't enough funding for electric vehicles", "world is literally ending from climate change" and "who is going to put money into batteries".
The people closest to the money are the people who have the most control over how and who its allotted to. We really ought to watch them more carefully.
It’s rewriting history to call Musk a “capital guy.” Tesla and SpaceX entered markets with huge, established competitors. Those companies had access to virtually unlimited capital. But EVs and commercial space travel were pipe dreams before Musk got involved. I graduated with a degree in aerospace engineering pre-SpaceX and the field was moribund. Your options were going to Boeing to make airliners 1% more efficient every decade or going to Lockheed or Rockwell to design better missiles for blowing up brown people. The idea that SpaceX was just about a “capital guy” coming in is 100% hindsight bullshit.
You’re also just completely factually wrong about “most of” anything “coming out of government coffers.” The government gave Tesla a $485 million loan that was fully repaid. SpaceX received about $500 million in grants. In both cases, that was a small fraction of the money invested into the companies. Tesla’s cumulative net loss was $6 billion before profitability. SpaceX’s cumulative net loss is $42 billion.
At most you have a fair argument that the government should take equity in companies instead of providing grants with no strings attached. But that would just mean that maybe the government should have a 10% share of SpaceX or whatever.
People got reasonably mad at Apple’s iron fisted control of the App Store and access to its platforms.
It got to the point that there was political will to force Apple to change. (Sort of, in some circumstances)
But during the golden age of the App Store, when Angry Birds came out—-it wasn’t something people were hemming and hawing about the fairness of distribution platforms it was more like: “wow! iPhone! Check out this game! Everyone is playing this thing, Jack White is playing it. You too can have this game for a few bucks, can you believe this?”
It is only after Apple had ridden the horse a good long while and reaped what came to be outsized profits and using the thing to control competition over an extended period that something really was done about it. (Sort of)
There are many other examples of this kind of thing.
Compensated creative expression has somewhat relied on it in the form of intellectual property, which has built in albeit relatively toothless expiration.
But even IP is under greater threat than ever with gen AI. Just look at what fans are doing with the Star Wars franchise on YouTube right now.
Anyhow, I agree with the system is flawed but I mean to point out that deciding a person or company has reaped enough for their thing is something we do on a case by case basis.
It is not easy to say when to say to someone or something has been compensated “enough.”
This hypothetical isn't possible. There's no way you can directly manage the construction of 20k houses in a human lifetime.
So a person figuring out how to scale their homebuilding methodology by teaching others and providing the *capital* with which they can implement that methodology isn't worth anything to you? I can't imagine a society that could work without these features -- we'd all be re-learning best practices every generation because there'd be no incentive to scale up ideas that work.
Do you? Sound like the people you hired built the home. Do you know how to do what they did? Did you do it? What did you do to earn that $50k?
I'm betting it is a tiny fraction. Most modern "wealth" is all based on investment games.
Because I don't think you can build a billion dollar home construction empire where you profit $50k per home in perpetuity. You will have to lower your margins, cut others in on your profits to stop them from competing with you, or manipulate markets to never make a loss on a project.
First of all, you don't know how to build a house, you have some vague idea of it, maybe even some innovative one, and hire people who actually know how to implement that idea to do it for you, but you pocket some of the money because they don't know the exact worth, and because they need to live and no one else is paying them.
Then, what happens next is that some competitor springs up, and they want to poach your people by offering to pay them $475k and only keeping $25k in profits for themselves. You can't have that, so you start paying off government officials to deny or delay their building approvals, paying off mafia thugs to sabotage their construction or threaten workers who try to leave, you sue them for breaching worker non-competes or IP rights on the construction methods, etc.
All of these are part of how the construction industry actually operates, it is well known as one of the most corrupt industries around. Let's also not forget that the value of real estate is location location location - house and business prices are hugely determined by where the plot of land is, much more so than any differences in construction prowess, if we disregard the very top of the most complex projects ever made (of which there are way fewer than 20k).
They know how to do one piece and finding and coordinating all those people (something else they don't know how to do) is work on its own that is valuable.
Sweet, how do you build a house?
> I take the $500k from you and then pay $450k to a bunch of employees
Oh. You don’t know how to build a house. You know people that know how to build a house.
Picking a thing that you literally don’t know how to do as your example of a thing that you know how to do is amazing. You could’ve picked a blanket fort or a spreadsheet that tracks other people’s work or a LinkedIn post but those aren’t really things people pay for
I know doctors but I don’t go around posting that I know how to treat eczema lmao
This is a technology + investing forum and all of us agree that in general creative destruction processes are enormously net positive, but they frequently do kick off a toxic byproduct in the form of said destruction (e.g. Uber and displaced taxi drivers), so there is moral entanglement between creation and destruction. Morally speaking, figuring out how to mitigate this toxic byproduct is part of our remit just as it was part of the remit of earlier industrialists to figure out how not to discharge so much flammable goo into the river that it lit on fire. We neglect this at our peril, because society merely pinches its nose if the toxic byproducts are small, but they are increasingly not small.
We still want to encourage creative destruction to move forward, but paying taxes to clean up the destruction is the very least that the victorious parties can do because the entanglement exists in moral accounting even if it doesn't exist in financial accounting.
The agricultural revolution displaced farm workers with machines. There was unrest and migration to cities, and eventually that fed the Industrial Revolution and created a working class.
Change is tough, but we will all be fine.
What it took was social democracy and unions and other social movements.
Saying that "it's happened before, it'll be alright" is a bit naive and short-sighted.
Just to clarify, are we referring to the American Civil War? The reason I ask is that the idea that it is not a topic that is broadly covered in history books and discussed at depth all throughout schooling is simply false.
It may have worked out fine for humanity as a whole, but it ignores the suffering of a lot of people.
Progress will result in better standards of living for many, and then we take care of the people left behind.
I’m in software - in all likelihood, I will be displaced at some point. But I’ll figure it out (I hope). When I started out, I was writing Perl. Then I had to learn Python.
You don't put on your seat belt during an accident, you don't start driving until it is on.
This is taking a weird tone where it sounds like you’re asking me to change society for you, and blaming me for not doing it fast enough when I haven’t heard you mention a thing you’ve done either.
Like I said man, I voted for people who support sensible welfare programs. That’s my contribution.
Stop taking this out on me - if you’re so fired up about it, go get involved and start knocking on doors.
In a world where AI has not yet taken all the jobs, when a company provides lousy service, why do its employees deserve to keep their jobs more than the customers deserve good service?
So they drivers spend their life Ubering, not learning new skills or anything and next thing you know - AI takes their jobs.
Then what? That's how you get revolutions.
I had cab drivers nearly drive off with me hanging off the car in San Francisco, because they were far more concerned with screening my destination than, say, not killing me. If Uber destroyed that industry, it was only a net benefit to society. They created immense value, and the "destruction" was only to eliminate a layer of corrupt parasites who made money by preventing a free market (in this case, the medallion owners, but the entire industry was corrupt from top to bottom).
Yeah, I don’t believe you. It sounds like you’re making a just-so rationalization for why taxis are good and Uber is bad.
In pretty much any mature taxi market Uber is as expensive (if not more expensive!) than the conventional alternative. And yet Uber survives.
Most of the drivers providing that service split their time between Uber, Lyft and traditional corporate black car service.
Lots of posts on this topic in the UberDrivers subreddit.
The restated version of your comment is simply “I think drivers should get paid more,” which is fine, but not an argument. Everyone who has ever had a job thinks the same thing.
Counterpoint: It is increasingly impossible to get to a human at Uber when you need support, as most of their support channels are gated by LLMs and self-service support workflows.
I mean, maaaaaybe a Jevon's Paradox kicks into play with human labor and replacing people with robots somehow creates even more jobs, but whenever someone says this your immediate response should be: "ok, now put your money where your mouth is and bet on it by strengthening the social safety net."
(Eg agricultural revolution in the US)
I do believe in good safety nets as well and I think that shows in my voting record, so I’m not sure what else you would expect from me, if anything.
I’ve only read the article, not the full book, but I’m not sure I buy the premise.
Maybe we can’t see what the new post-AI society looks like yet, but I tend to believe society progresses as it evolves.
It doesn’t mean it won’t be rocky for many people, and good social safety nets will make this easier, but I generally don’t think there will be some kind of dystopian future where society runs out of work to do for humans.
Easier for them to adopt AI than AI companies to rebuild the networks
Ghost kitchens might since that’s the only sales channel they are utilizing.
The missing part is the crowd sourced delivery. That will be more difficult to build like Uber and DoorDash have, but I’ve noticed the restaurants I use employ their own drivers so maybe we can tap into that.
Over time, profits tend to decrease. To a point you can counter that by expanding and entering new markets but ultaimtely you reach the point where your only options are raising prices and/or cutting costs. To maintain this you often need to engage in rent-seeking behavior (eg national ISPs lobbying to make municipal broadband illegal).
As an intermediary, Uber needs to increase their margin at the expense of the driver, the customer or both. Same with DoorDash and all these others.
You see this when people try and start intermediary businesses like MyClean, TaskRabbit, tutor services and so on. They all face the problem that the customer and provider are always better off leaving the platform and dealing directly because the value-add of the intermediary is a lot less than what they charge to justify their profits.
Not: very flexible hours, not exclusive, driver can switch customer? driver provides tools
Is: driver cannot subcontract, has to follow set rules (maybe that makes is franchise like?)
Of course they took something that was employment and made it not employment at scale.
On the other hand, it’s odd that these “contractors” can’t set prices for their services and risk deactivation if they decline the price Uber offers.
Part of the origin story of taxi regulation is the fact that in the early 20th century unregulated cabs caused an explosion in traffic congestion. People complained and so the amount of cabs was limited. An example of the tragedy of the commons.
I expect that eventually we will see the same thing with Waymo etc but we’ll see.
What's hard to figure out here? You either pay taxes or you build cathedrals. While you are doing neither the communist tendencies keep growing, because people see they are squeezed. It's that communism has any answer to it really, but the tendencies will keep growing until something happens.
Negative externalities are hard to figure out.
Since parent mentions "toxic byproduct": Say you're the company that invented Teflon pans. you made billions. You saved billions in time for all the users of the pans... A true entrepreneurial success.
But, by how many billions did you fuck up the environment, people's health etc with the spread of PFAS everywhere?
Eventually it becomes rational to start buying politicians, and subsequently laws. The next obvious avenue is to then control entire government agencies like the FAA or the FCC and just write favorable laws and regulations they don't even have to circumvent.
But even that isn't the end because they're growing too fast, they actually outgrow the law, so breaking it becomes a rational, profit-driven choice. Huge fines? Regulators breathing down your neck? No worries! Just spend more money then has ever been spent in an election to their favored presidential candidate, and then they get to just shut down investigations into themselves!
But even that isn't enough -- soon it becomes a rational business-forward goal to take over the entire government; or even better become the government. First a city, then a state, then a nation. Guess what folks EVEN THAT won't be enough. Not even everything on this entire planet Earth is enough for them; they also want the Moon and Mars and the entire solar system. They will have to become God at some point for this growth to keep up, and that will still be too little for their egos to bear. Something has to give.
What's broken is accountability. No one will hold those in power accountable, so instead they mutate into criminals because they can. Then they attract the rest of the criminals and it becomes a critical mass of maniacs, kakistocracy.
As soon as the person that has "The Idea" keeps their 60% stake of the company while the army of minions are working their assess off to get that idea to a billion dollar valuations are given crumbs or no stake at all, you know who is swindling who.
To get people to help you make it you offer to pay them and they willingly exchange their time for that money (or equity if they also think it will be very valuable someday or you have a record of making valuable things in the past)
Who is the person swindled here? Who agreed to something and was deceived? Who was stolen from?
This process is net wealth creation. The wealth is generated, not taken from somebody else.
The actual people doing the actual work, day to day, talking to prospects, building the things... But you had the idea, so it's just natural that you get the vast majority of the reward.
Maybe that makes sense to you... And like I disagree, but that's cool... But I cannot picture myself ever becoming a billionaire... I would have shared so much with the people that contributed to make me be a 100-millionaire way too much to reach the next step... And I'm sure I'd be happy to have 100 millions, and have people happy to get great compensation to do that with me...
Still, I agree it's not stealing. But the fairness of the situation is still up for debate.
I am struggling to understand where the unfair part is coming from. Nobody is making anybody do anything. Everything is transparent and above board. Everybody in this scenario is willingly working market wages (except for founders and early hires who work below market and take equity for a couple years because they believe in the idea)
No I feel that's how it should be everywhere.
> Nobody is making anybody do anything.
I strongly disagree with that part. A CEO as an individual is not, indeed. But capitalism and the job market in general is forcing people to work, for sure... And even though the global wealth keeps increasing, and rich people keep getting significantly richer, the situation of the poor does not improve, and sometimes social benefits are reduced, access is made more difficult... Because it's important that some people still "agree" to work low paying jobs...
Is it really a fair choice if the alternative is to lose your home or starve ? This is exactly why child labor is forbidden for example. You can tell it's morally wrong. But it's been explicitely forbidden, because it used to happen, and people who defended it were claiming that it allowed kids to help their families and so on, but it also drove wages down, increase the workers' pool so they would compete more for the job, etc...
Maybe the market feels fair to you because you have skills people compensate for, but for people working minimum wages jobs, the market isn't fair, they absolutely have to get those jobs, otherwise they're on the streets...
Additionally, since most startups fail, the founding engineer is typically better compensated than the founders. It’s only in the success case that it is a raw deal economically. However, in the rare case that it is a successful company, the founding engineer does alright and then also knows more about how to do it again.
The difference between founding engineer and founder is typically the difference between starting before any money came in or joining after (basically guts/conviction)
Maybe it depends on who you work for, but that was my experience.
People need to be educated to ask for equity from every company they work, and society needs to normalise giving every worker in a company a proportional stake.
The wealth creation you talk about is true, the problem is that people creating that wealth are not equally rewarded. Signing a contract makes it legal, not right.
For those who are sympathetic to this idea, look no further than China. They have a very good system (superior to US-style taxes) for ensuring that no one gets “too rich” and that excess returns are captured and redistributed “fairly”
Alternatively, do. Don’t stop at the first bad argument, find the good ones too. You can look at the USA itself, for example.
https://www.factandmyth.com/taxes/eisenhower-tax-rates-90-pe...
Which is why life in North Korea is so wonderful: there are no billionaires there.
Let’s ignore all the political and socio economic dynamics driving the current trends. Squeeze people’s livelihood by rent seeking; pillage public resources while externalizing as much of the risks and cost of doing business back to public; limit access to capital to few networks. Then pretend it’s in people’s power to choose to earn more if they would only work harder.
No one is arguing that founders shouldn’t earn the rewards for their work and risk. But to act like it’s all fair business and freedom of choice is rather glib to the point of being callous.
It is used to underscore the fact that founders (and early investors) are paid ridiculously disproportionately to their employees. There is no labor that a single person can do (without the help of their employees, family, friends, network) that justifies earning $1B.
>AOC: “There’s a certain level of wealth and accumulation that is unearned. You can’t earn a billion dollars. You just can’t earn that. You can get market power, you can break rules, you can abuse labor laws, you can pay people less than what they’re worth, but you can’t earn that”
there's some truth there in that PG is talking about capital gains as the owner of a company and AOC is talking about earnings as payment for labour which are different things both in reality and in tax policy and law.
The capital gains can be unfair in that most of them go to founders and VCs and not much to other employees and stakeholders who have contributed as well.
I don’t think a definition of “earn” that excludes cases like that captures the generally understood meaning.
How does he get the money to do that?
(And in California where the most profitable crops are perennial fruits and nuts, probably outright stealing water from the aquifer or state irrigation system.)
"Earning" is a subtle word with a variety of usages. One usage is limited to wages or return on labor or effort, and in that sense can refer to anything where a reward is due and proportionate to an effort, like a treat after a hard workout, buying a car after saving for years, or wages. Another usage focuses on profit. When AOC talks in the zone of this first sense, it should be understood that there is only an implied fair reward for sweat and tears, and that past a certain point it's really entirely unrelated to wages or effort.
Maybe the politicians position is that the whole system is based on cheating and everyone who partakes is acting immorally?
Is it fair that the founder got education and some money to start his company while other people are living on the street or have to care for relatives? If they come from a relatively privileged position and manage to build a company that ends up being successful, did they earn that money?
I don’t think the cheating people criticize is necessarily criminal fraud.
Edit: and the second thing people seem to criticize is that just keeping your company growing often seems to involve some unethical things. Basically every company that’s manufacturing hardware is doing that in Asia under inhumane conditions, so they probably can’t really claim they earned their money and it’s just maths.
Im not from the US so I’m probably not doing a good job at the devils advocate thing but I could imagine that you just tax the people that start the business so they still get some healthy personal wealth by redistributing the truly extreme wealth back to the workers/society.
There’s probably some motivation problem to grow the company further at some point but maybe you could limit the percentage any individual can earn by holding the company or something like that?
But luck is also not "earning" in most senses of the word.
I presume it's a company that just has co-founders then? Or everyone is getting an equal % of the share? In which case SHE's not getting 93% richer just cause her start up is.
If the company makes an unexpectedly large profit, the employer is not obligated to redistribute that to her employees in addition to the already agreed-upon and paid compensation. If the employees think that what they agreed to work for is no longer sufficient, they are welcome to renegotiate their compensation or, if they feel they have been wronged and are being paid less than they are worth, to take their talent to a different employer. After all, everything so far has been consensual. The only thing that would be non-consensual would be obligating the employer to redistribute her profit over and above what had already been negotiated.
You think she's doing the heavy lifting there? Creating the billions? While the underperformer at VideoBuster / Radio Shack is responsible for tanking the business? That's just not true.
Speaking of reading comprehension, they didn’t address the core argument of the person they were responding to, which is that labor that falls “beneath the fold” of this class line is not able to negotiate aggressively due to the inelastic costs of food, shelter, and basic necessities. It doesn’t matter how “high impact” you are, if you’re negotiating and need to eat you’ll accept any amount that lets you eat.
In fact, having impact or driving revenue is never the most important factor to reaping the rewards. Anyone who’s worked for a few years with their eyes open should reach this conclusion unless they have some strong motivation not to.
Not to mention the U.S. encourages organization of the capitalist class while breaking up (often by force) organization of the working class, so any attempt at the working class gaining leverage in this negotiation is artificially limited.
My point was simply that some work isn't essential to the business. Be that a cleaning lady, a corporate lawyer, or a CPA. They perform interchangeable work they could perform in the exact same way for a different company.
One obvious problem is that you can't scope the parents of success: Should the utility company get more money for supplying SpaceX than for Walmart? Should the municipal firefighter lady who stands ready for SpaceX share the spoils, should the husband who cares for their kids at home? Who knows.
Second, and you have ignored that, should they also share the defeat? If a company tanks, should we not pay the CPA who worked for that company? Because that's what happens to stocks who are worthless. If you argue the cleaning lady is responsible for success, she is responsible for failure also.
As an aside, I chose a cleaning lady because it's a relatable job. I don't even know what a CPA is but I guess it's an acronym that only makes sense in the US. See, that's what I wanted to avoid. Also it's easier to see how that is detached from the success of the core business, as you're familiar with the work (I presume you clean at home? But don't CPA at home, and don't lawyer at home.) The interchangeable work also works with corporate lawyers performing standard work, but it's not immediately obvious and harder to argue.
More than a billion?
... Let's keep things in perspective here.
What if they were ? That's the whole point of the conversation lol. It's like you're side stepping the entire discourse. Maybe the company should be obligated to redistribute it to her employees, or to the public, etc.
Would you want to take a pay cut if your employer was having financial problems? Why not? Because you have an agreement on what your salary should be. It is fair that it works both ways.
This happens constantly in the form of layoffs…
> It's like you're side stepping the entire discourse.
No, they addressed that with:
> The only thing that would be non-consensual would be obligating the employer to redistribute her profit over and above what had already been negotiated.
Which would be truly immoral.
"lol"
The disagreement is whether a founder who owns 20% of a company that grows from $1M to $100B should personally receive $20B of the resulting value while thousands of employees and customers contributed to creating that value.
That's the debate.
Any asset value can grow or shrink thanks to effects from people, such as paid services, but I don't lose equity on property/companies I don't own if I vandalize them, just like I don't gain equity when I raise their value somehow.
Employees of a company are just contracted service providers with longer duration contracts, and of the company is public, they are free to buy some of that risk and gain or lose more when the company does so. 20% of $100B is $20B, so there is no need for a debate, math has our back.
PG is absolutely right, if you want to be a billionaire, you need accelerated growth, you need to find something that a large number of people will pay for and you need to make sure you own equity into it as it grows, equity that grows with it.
And that's exactly the source of the debate, this trick to billionaire-level wealth, is that a good thing? Because it wasn't earned through labor, no one can earn a billion dollar through labor, you can only accumulate it through vast equity into market capture of a large market.
If your chickens reproduce because of the bread I provided you, your wealth in assets increases if the value of chickens and eggs don't go down at the same rate. We already traded our money and bread. If I wanted stake in your chickens, we could've came with an agreement (if you are willing to share your assets and risk), and I could then demand a share of your gain or loss. Otherwise it is theft.
Regarding employees, labor has never been tied to wealth. An employee provides a service, which is traded based on the supply and demand of that service, and money (not wealth) is the standard asset people prefer. Some people are paid in a different asset, such as share of the company or a combo of both. That is their wealth. Labor is independent if you decide to trade something else, and it is always a gamble, because values of any two different assets (including money) grow and shrink independently.
And there's no guarantee my base pay would stay the same if profit-sharing become the law of the land-- it doesn't seem improbable that my base might decrease in this new economic landscape. Suddenly, part of my income waxes and wanes according to strategic decisions that I don't get to play a part in, according to market forces that I can't fully predict. My life overall becomes more volatile.
I'm not against voluntary profit-sharing. The company I work for now does it, after <x> number of years of employment. I just suspect a blanket mandate would come with some baggage.
But we should at least be able to discuss the problem.
Some people seem to think it's totally fine for wealth accumulation to be effectively uncapped, and for ownership to keep concentrating gains no matter how large the numbers get.
Past some point, that seems hard to justify.
try to get out of the box
Interesting, by that logic every participant in the economy should also be required to bail out any startup that fails otherwise we’re exploiting the founders! They’re taking all the risk and we’re getting all the benefit of the services and goods they create!
The good news is she can be a trillionaire in another 10 months.
This assumption is depressing. That the only alternative to "earn" is "cheat".
A system of diminishing work (i.e. where money makes money), especially combined with inheritance, means every dollar is arguably less earned than the last. That system is fine and actually very useful, but that diminishment becomes a big problem at large enough scales. We've been operating at that scale for many decades.
pg's reading of it is so blunt and misrepresentative that I'm nervous about what kind of content he's consuming.
The existence of housing is an example of something vlauable being created. The price of housing is not relevant to the example.
TheTayTay said "wealth can be created". Avicebron asked for an example of wealth creation. cm2012 provided one, housing. saghm misunderstood the intent of the example. I pointed out the error, and then you came in and have apparently repeatedly failed to understand again multiple comments, both the people who literally are saying that some quantity of wealth cannot be created, and myself.
If you didn't get that after a reread, all I can suggest is that you seek out a literacy class at a local community college. It will improve your life, because this certainly won't be the first or only time you misunderstand written words.
What you bring to the discussion is the straw-man argument that "wealth can be created, not only stolen." Nobody was disputing that. Nobody is disputing it now. It's common ground.
Saghm tried to return to the actual topic, but you don't seem to have understood (or you aren't willing to acknowledge) what that topic actually was. People were talking about how to fairly divide wealth, not about whether it can be created or not.
The thing you say was not claimed, was claimed by multiple commenters.
Considering you are neither truthful nor literate, I won't be replying again. Feel free to get the last word in if you like.
Here's a paper on uncertainty logic to expand from. https://arxiv.org/pdf/1506.03123
If this is indeed the case, then it is very much not unique to the West, nor is it most tightly ingrained in the West. I'm not sure in how many different countries you'd live, but I can tell you this from lived experience. It could well be that most of the West is above average on a global scale in terms of belief in supremacy. I too have not lived in a 100 countries so I can't place "the West" as a block with accuracy. What I can tell you is that it does not land at #1.
Unless you call any vaguely US-aligned high-HDI country "The West" regardless of ethnicity, but that would be completely opposed to how any reasonable person would interpret your stance given the mentions of racism.
It would be in a sense Eurocentric and patronizing to suggest that supremacy-based thinking all the way from the Middle East to East Asia stems from Greek culture. And if you're trying to say that dualism is universal and arises everywhere, then Greece becomes almost irrelevant and there's no real point to be made that the West has particularly relevant unique or exaggerated characteristics when it comes to the pervasive supremacy-based thinking.
Dualism is not universal. And its wide spread in this world was brought about in large part through brutal colonization carried out by Europeans and their descendants with the help of various Christian denominations. They used Christian spirituality and forcing their own languages on people to disconnect them from the land (which includes the people themselves, as we are all land).
Which is a topic of intense discussion in economics over the last few hundred years, BTW, and the discussion here so far has shockingly few references to those.
musk isnt a trillionaire because his assets would equate to physical product. his valuation is an inflated target of market manipulation.
when you add up all the physical goods in the world that directly benefit people, that comes nowhere near these valuations.
and externalities are one way wealth is taken from the environment. then theyre parlayed.
That sounds like a pretty impoverished world to live in. No music, no art, no communication with our friends and family beyond speech…
The point was that the real money comes from finance games, like the stock market, forex trading, etc - things of much more dubious value when you actually look at them objectively.
in common parlance, theft
- Documentary
When I buy an iPhone from Apple, I suspect quite a few folks in the mines, factories, shipping, and retail chain that gets those "two happy parties" connected aren't so happy.
They are, however, deeply important to the transaction.
Sure. The kapos at concentration camps got better food and treatment, too.
That doesn't make it a fair, happy, or good arrangement.
Oh no, not accurately stating history!
https://en.wikipedia.org/wiki/Forced_labour_under_German_rul...
> The use of slave and forced labour in Nazi Germany (German: Zwangsarbeit) and throughout German-occupied Europe during World War II took place on an unprecedented scale. It was a vital part of the German economic exploitation of conquered territories. It also contributed to the mass extermination of populations in occupied Europe.
Titrating the nastiness of it from "will definitely kill you" to "will make you die miserable, broke, and broken" isn't, IMO, a great fix. People are not required to be satisfied with a tiny pittance just because it's more than their neighbor has.
But modern factory conditions are nowhere near what that regime did. If you want to know, work in a factory. That is what I mean by not equating concentration camp contidions to working in a modern factory.
https://www.bbc.com/news/business-53481253
> Reports by the Australian Strategic Policy Institute (ASPI) and the US Congress, among others, have found that thousands of Uighurs have been transferred to work in factories across China, under conditions the ASPI report said "strongly suggest forced labour". It linked those factories to more than 80 high-profile brands, including Nike, Apple and Gap.
> China, which is believed to have detained more than one million Uighurs in internment camps in Xinjiang, has described its programmes - which reportedly include forced sterilisation - as job training and education.
(We're not above doing a little bit of it ourselves, as a treat, either. We left slavery legal in the Thirteenth Amendment, even. https://www.theguardian.com/us-news/2022/jun/15/us-prison-wo...)
This was also bad, yes.
> there's a reason that Roosevelt is looked upon more fondly than goddamn Hitler
Sure, but "less bad" isn't the same as "internment good", and the winners write the history. I am a fan of FDR! But he did some miserable shit to win a war that needed to be won, some of which we cringe at now.
A handful of Nazi war crime prosecutions fell apart because Allied troops widely did the same thing, for example.
Not to make light of poor working conditions, dirt wages, and child labor. They can be and should be addressed. But they're not genocide and throwing out a "Arbeit macht frei!" is gross here.
And as noted elsewhere in the conversation, American companies are benefiting from actual concentration camp labor (https://www.theguardian.com/sport/2025/aug/30/revealed-major...) that some deem genocide (https://www.bbc.com/news/uk-55973215).
https://www.yadvashem.org/articles/academic/poverty-and-pers...
> Jewish institutions sought to grapple with the consequences of a process of structural pauperization as driven by deliberate policy
The question is how much value do they add? If it's more than the money they're making, the people paying them are stealing. You don't like this because it makes it impossible to make money as a capitalist, but that's the entire argument. Making money as a capitalist is always unethical, because it necessarily involves stealing the value of someone else's labor.
Just because you can pay someone $1 to do something that makes you $10 doesn't mean it's ethical. It isn't, ever.
It's funny though, I hadn't read a word of Marx but the first time I understood that I was being paid $15/hr to make websites for a guy who was charging his clients $100 for that same hour of my work, I immediately understood everything about it and its innate truth. I got into the business myself and figured out exactly what value the CEO and the salespeople were bringing, and let me tell you, brother, it wasn't $85. It wasn't even $15. You can call it whatever you want, but you will never convince me that guy wasn't stealing money from me.
> I got into the business myself
Exactly, as capitalism intends. If you don't want to make employee wages then you take on the risk and capital and do it yourself, and are thus rewarded for it. Ironic, if you were actually a socialist you would've tried to help your fellow workers but you instead are the capitalist now.
I'm now in a situation where I could go back to Italy, but the above is one of the reasons that makes me doubt wheter it would be a good outcome or not.
This is to answer your point about purchasing power. With an Italian salary (considering the same tech job), my purchasing power there would still be lower than my purchasing power here with a local salary.
The point is that the “gains” are overwhelmingly absorbed by the top.
There’s no reason they couldn’t pay them a much bigger share of the profits and raise up that entire part of the world.
But yet, they don’t. Because that would cost them some of their own wealth.
I’m not even saying it should be equally distributed. The disparity is insane right now though.
Why should they pay more than market worth? When you go shop at a store, do you pay double the price tag just because you can? No, you don't, because that would cost you more of your wealth.
Does the average person in a first-world country donate half their wealth to the average person in a second-world countries? Does the average person in a second world country donate half their wealth to the average person in a third world country? No, and no. It's not really a common thing in human nature to give up a lot of what we have in order to support those who are less fortunate. You might say that's sad, but imo it's still a fact.
What is curious about human nature is how, despite this lack of behavior on our own part, we expect those who have more than us to give us what they have.
Market wages and prices are fairly set, largely due to supply and demand.
> The disparity is insane right now though
The disparity is better than ever imo. I'd rather live in this time period than any other, thanks to technology, which is a great equalizer. It provides amazing quality of life improvements across so many areas, from education and healthcare to entertainment and food; then capitalistic competition absolutely demolishes the costs of this tech, to the point where prohibitively expensive tech becomes affordable to billions.
Today, a middle class person can eat a cheeseburger that's just as good as what Bill Gates is eating, drive a car that's 99% as good as his, travel to the same places he travels to, wear clothes that are just as good as his, read the same books, watch movies, listen to the same music, go to the same plays, etc. The rich sit in slightly bigger chairs, enjoy slightly shorter waits, and many other improvements that historically would've been considered negligible compared to the gaps between kings and peasants, nobility and servants, owners and slaves, rich and poor.
In fact, the richest are having to resort to paying insane prices for useless luxury goods and brand names just to differentiate themselves. Or paying outrageous sums for luxury toys like yachts and planes that most wouldn't even want.
I worked my balls off to make millions for CEO founders and other asshole investors and only got a pittance of the wealth that they made off my work.
Have you ever actually worked in a start up?
That's not how it works. You can negotiate whatever you want. The deal can still change out form under you as new investors come on.
Not to mention, you're negotiating from a point of information asymmetry. They know way more about their plans for the company than you do and will often tell you what you want to hear rather than the truth. You can make some attempts at discerning if they're being honest or not, but ultimately you're left to just make a guess.
They also enter the negotiation from a strong position economically. They aren't going to miss a rent payment without a Job. The company itself may be fucked if they can't hire, but not the investors/founders.
So the negotiation is inherently unfair from the start.
> Sounds like many in this thread just have a sort of spilled milk viewpoint. No one forced you to work for these startups.
This is not relevant to whether their actions were moral, ethical or fair.
Ultimately it's possible to get screwed, but you can also choose not to work at startups and get a traditional job with less risk.
And the existence of some bad actors and screwy deals in the startup community is not really valid commentary on the greater picture of "the way wealth is shared." That was one way that wealth was shared, at one company, in one industry, with one or several bad actors.
Except it's not. It's the norm not the exception. It's pervasive through the industry, and YC and pg have done it themselves to multiple companies.
Hence why it was literally turned into a meme plot on a TV show.
You also ignored the bit about the negotiation being inherently unfair from the get go. And again, the deal can (and almost assuredly will) change out from under you because of the structure of the company which isn't really up for negotiation.
Just to be clear, we're talking about the same LLMs that were recently silently tuned to kneecap competitors? https://www.wired.com/story/anthropic-responds-to-backlash-o...
Yes, many in fact. We negotiated the terms up front and if I didn't like them then I went with another offering company. I never had deals change from under me, maybe you're some Eduardo Saverin but I'm not. That you got screwed for not doing your due diligence doesn't mean everyone does. I'm not sure what is immoral, unethical, or unfair about that when again no one is forcing you to work at any particular company or even startups, or even in the tech industry. There are lots of jobs you can do.
I sincerely doubt this. If your start up went through a funding round, the deal changed.
> That you got screwed for not doing your due diligence doesn't mean everyone does.
“Due diligence” is impossible because the negotiation is asymmetrical. You can’t know what their actual exit plan is. You can’t know what their financials look like. You can ask. They can lie.
> I'm not sure what is immoral, unethical, or unfair about that when again no one is forcing you to work at any particular company
No one forced people to invest in Enron. I guess it was ethical. No one was forced to invest were Bernie Madoff. I guess it was ethical.
Just because you aren’t forced to invest your time/money somewhere doesn’t mean they can’t take advantage of you
> No one forced people to invest in Enron. I guess it was ethical. No one was forced to invest were Bernie Madoff. I guess it was ethical.
Yes, there was nothing unethical about being an investor in these, sometimes you cannot predict what a company will do but that doesn't make you an unethical investor unlike investing in say weapons manufacturers.
What if HN hasn't taken a political turn? What if politics took a giant turn, and HN is roughly the same as it was?
Some even have specific agendas as evidenced by their submission history and comments which all seem to follow specific biases too.
That's the whole moral and ethical difference. Paying them their market worth is the minimum. The entire argument is that when something is wildly successful, that success should be shared with everyone. Not necessarily equally, but not as insanely disparate as it is today.
> When you go shop at a store, do you pay double the price tag just because you can? No, you don't, because that would cost you more of your wealth.
I'm not sure if you're aware, but your delivery driver is not an eggplant. There's a fundamental difference between a good you purchase and labor. One of those is an actual human being. For two, I and many others do choose where we shop based on how their employees are treated and how they get their goods. Ironically, it was literally the business model of Whole Foods before Amazon bought it and ruined it. For three, I'm not a billionaire. So what I do isn't remotely relevant to any part of this discussion.
> The disparity is better than ever imo. I'd rather live in this time period than any other, thanks to technology
The disparity is literally, mathematically, the worst it's ever been in human history. That doesn't mean I wouldn't rather live today than another tiem period. That's not even really an important question. The question is how do we make tomorrow even better. How do we allow more people to enjoy the riches that technology has granted us? Those are the real questions.
> What is curious about human nature is how, despite this lack of behavior on our own part, we expect those who have more than us to give us what they have.
Except that isn't true in the slightest. For one, it's a fundamental misunderstanding of the ask. The ask isn't that CEO should give everyone a bunch of money. The ask is that everyone who works at amazon should have more of an equity stake in the company and that likely means giving the CEO less equity. In amazon's case that would mean jeff gives less equity to himself in the early days and more to other workers (or you know.. a union that owns shares.......). I don't really agree that it's the same thing.
but even if we want to say that it is the same thing. I don't want anyone to give me shit. I'm relatively well off. I don't need more. I want the wealth to be shared with more people because there are a lot of people who aren't as well off as me. Also, my actions do reflect my values. It's just, I'm not a trillion dollar company so it's not that much impact.
> Today, a middle class person can eat a cheeseburger that's just as good as what Bill Gates is eating, drive a car that's 99% as good as his, travel to the same places he travels to, wear clothes that are just as good as his, read the same books, watch movies, listen to the same music, go to the same plays, etc.
Outside of music and movies, this isn't even remotely true. Even as someone that is on the very upper side of middle class, I can't eat at the same restaurants as Bill Gates. I'm literally not allowed. I can't buy the same clothes. They literally won't open the store for me. I can't see the same plays, tickets are near unobtainable without connections (not to mention the cost of traveling to venues). Not to mention, a big part of the problem, because of some of these ultra rich nerds, the middle class is smaller and smaller.
This system doesn't work because what people consider to be fair is completely subjective and arbitrary, and of course under a system like that, people with less money are going to just tell people with more money to give it to them. The only actual fair way to decide prices and wages is to let the market decide.
If you truly think that, based on your arbitrary, subjective, personal opinions, that founders should be sharing more wealth with employees, and that the market's pricing is unethically low, then what number would you choose? How do you choose that number exactly? What makes your choice for that number any better than anyone else's choice for that number?
And why don't you apply that thinking to other analogous walks of life, like charity, or taxes? How much of your income do you give to those less fortunate than you in this great project we call our country, or to people in other areas of the world? If you think our taxes are too low, how much extra tax do you pay voluntarily? What number is appropriate? At what point is it unethical?
There are plenty of billions of people who don't live in the first world who consider even a lower-class American to be living a luxurious, privileged life. America is a country built off the back of exploiting other countries. Are lower-class Americans not therefore unethical unless they donate much more to their even less fortunate counterparts in second- and third-world countries?
I don't think we're ever going to agree here, because a central part of your subjective opinion about what counts as ethical behavior is related to how much money/wealth/stuff some other other person has. Whereas that doesn't factor into my ethical belief system at all. At no point in my life have I ever cared how successful anyone else is, let alone wanted to tear them down or blame my problems on their success, nor expected them to give their money away to others according to my personal belief system.
It continues to boggle my mind that people care so much about others' success. It's almost the exact opposite of the teachings of pretty much every religion or book of wisdom ever created.
> The disparity is literally, mathematically, the worst it's ever been in human history.
This is an unprovable claim, an extreme claim, and almost certainly a false claim. It's also extremely subjective and depends entirely upon what metrics you choose to follow, most of which haven't been tracked for very long.
Worse, in my opinion, is that it's a popular a meme of an idea spread by politicians engaging in demagoguery, which has succeeded in getting people riled up in anger against their fellow citizens, as all demagoguery does. People are obsessed with the spending habits of their rich neighbors, but completely ignore the spending of the government -- the party actually responsible for the welfare of the people, which controls and wastes unimaginable sums of money.
I can't tell you how many people I met in San Francisco who believed wholeheartedly that the city should be taking more money from more people, but couldn't recount a single fact about how the city stewards and spends its budget.
> That doesn't mean I wouldn't rather live today than another time period. That's not even really an important question. The question is how do we make tomorrow even better. How do we allow more people to enjoy the riches that technology has granted us? Those are the real questions.
I agree with you about the real questions, but I disagree that the other question is important. I agree with you about the latter questions, but I disagree that the former question is unimportant. In the US, we have an entire generation of people on both the left and the right side of the political aisle who are being brainwashed into believing that things were so much better in the past, for two very different reasons. And it's causing us to blame and distrust social and economic mechanisms that have benefitted millions to an unimaginable degree.
We live in an era of unprecedented wealth creation, technological progress, extreme poverty elimination, and quality of life improvements, and people are literally clamoring to tear it all down because they keep being told that it used to be better. It's important to understand that no, it didn't. Your actual quality of life, the thing that mattered, would not have been better in the past, for the vast majority.
But again, I do agree with you that we should try to make tomorrow even better. The focus should be more on allowing more people to enjoy the riches that technology has granted us.
I just don't see the focus being directed that way. I see far more people discussing how to tear down the rich than how to help the poor. Far, far, far, far, far more people. There's a strong and popular perception that somehow doing the former will lead to the latter.
> Outside of music and movies, this isn't even remotely true. Even as someone that is on the very upper side of middle class, I can't eat at the same restaurants as Bill Gates. I'm literally not allowed. I can't buy the same clothes. They literally won't open the store for me. I can't see the same plays, tickets are near unobtainable without connections (not to mention the cost of traveling to venues).
I don't know what to say to this. By historical standards throughout all of human history, almost every human who ever existed would pretty much agree with me that the differences you point out are trivialities. If you zoom in on incremental 1% improvements, artificial scarcity, exclusivity, designer brands, and things like that, sure, maybe Bill Gates has a lot you don't. I'm sure he's eaten some fancy cheeseburger that you haven't. Maybe he's been in some exclusive room that you haven't. But if this is the level of inequality that we're complaining about, minuscule and artificial differences that would require an education in luxury goods/experiences to even notice, then I don't know what to tell you. How is that not a HUGE victory?
> Not to mention, a big part of the problem, because of some of these ultra rich nerds, the middle class is smaller and smaller.
What a disingenuous statistic! The only reason the middle class in America has shrunk is because the upper class has grown! We are literally moving in an upward direction, creating more and more wealth to more and more people!
It's genuinely depressing to see so many people disillusioned with the state of the country, because they're being barraged by a non-stop deluge of pessimistic messaging by demagogues telling them that everything is terrible, even when things are relatively great and trending in a better direction overall.
It's very poetic though, in a tragic sort of way. Very human. I can't think of anything more human than to live in the best age of all time, one others could scarcely have dreamed of, and yet to complain about it incessantly because some have more than others.
The demagogues have been shockingly effective at telling people that the size of the pie is fixed, the game is rigged, and the only way to get a piece of that limited pie is to steal it. And the people that are most susceptible to this message are the ones that live in the countries that people are literally dying to get in to.
While I believe the spending habits of the ultra wealthy should be monitored, it is astounding how people don't seem to pay any attention to the spending of the government. There are unfortunately many people taking advantage of the system, lining their pockets using funds for programs meant to help the people.
>It's genuinely depressing to see so many people disillusioned with the state of the country, because they're being barraged by a non-stop deluge of pessimistic messaging by demagogues telling them that everything is terrible, even when things are relatively great and trending in a better direction overall.
This is one point I really wish was more emphasized, in fact it should be taught to everyone in school. We are constantly being bombarded by negativity on the internet, even here on HN. I've noticed myself stepping away from here more often due to it, since I find myself and my thinking falling into a negative spiral from its influence.
However, when you take time to step back from the constant bombardment of negativity, you actually begin to better appreciate the blessings you have in life, and the opportunities present. Of course, there are problems and issues to be solved when it comes to our current system, but by taking a step back from the constant negativity from the news, social media, etc, you can better glimpse the real issues at hand.
Okay, if you're going to make such a claim and trust in it, then can I presume you have answers to these two questions?
1. In a world without Apple, what would these people be doing that would make them happier?
2. What exactly is stopping them from doing that now?
I think the rise of China demonstrates they're certainly trying.
2. Economic coercion. The people are forced by the capitalist system - that was shaped by capitalist interests - to participate in a system they don't have any say in. They cannot even opt out.
2. You didn't answer this question either. What specifically is stopping them from opting out? Who is putting a gun to their head and saying they can't live a hunter-gatherer lifestyle or be a subsistence farmer?
The answer is nothing. People are largely making these choices themselves, because they're better options, for reasons that are obvious to anyone who's read a bit of history.
What do you think slavery is?
2. You can't live as a hunter-gatherers because the land has been enclosed and privatized.
There's no choice involved here. Your - and my - freedoms have been taken away a long time ago.
After the chokepoint capitalist: the store has closed so you go to a website and pay $30 to receive the crappiest version of the product in 6 to 10 business days. The website gets $20, the value chain that does 100% of the work (the website didn't add value, just stuck itself in the middle of your transaction) gets $7, the post office gets $3, you get the product. Mutual exchange of value.
This "mutual beneficial exchange" stuff is like that xkcd alt text on free speech: it's as if the best argument you can make to support a political position position is that it's not literally illegal to express support for it. "It's a mutually beneficial exchange" is saying the best thing about a transaction is that it's not literally a scam. Seems we should aim a bit higher than that if we want a society that works, yeah?
Chant “mutually beneficial exchange” all you want but the system and its players have done everything possible to ensure that everyone at the bottom has as little leverage and as few alternatives as humanly possible.
Not only that, but I have an incredible amount of competition. Thousands of alternative products, listings, websites, etc. I went to buy a standing desk last week, and there were literally thousands of choices all over the internet: solid wood standing desks, aluminum standing desks, tall ones, short ones, mid-century modern ones, futuristic ones, etc.
I have no idea what planet y'all are living on to say that people now have no leverage, few alternatives, no stores, slow delivery, and get no value.
You can argue that the app store and vetting process itself is worth up to or over 30% (i.e. they are giving value away, not extracting it), but they make a clear distinction.
Uber's profit margins are about 10% value created and 90% exploitation of power imbalance between the rich corporation and itinerant drivers and less well capitalized competitors.
Whether somebody acknowledges this reality or not tells you where their political allegiances lie.
That feels like a number you are just making up based on hating Uber.
They maintain an app and some servers and do some cursory checks on drivers. Those things are pretty easy to do.
In a properly competitive market for ridesharing apps those things would be commoditized to the point that they are pennies per ride.
The vast, vast majority of the value is getting you from A to B whether you are in denial about that or not.
Apple was already a multibillion dollar company almost 30 years before the iPhone was invented...
(though I'm sure you will have no trouble inventing some other reason that that wealth, too, was created through exploitation)
We have evidence he was still doing this decades later when he colluded to depress wages with Eric Schmidt at Google when he felt Apple employees were being offered too much in salary.
I'm happy to assume he was stealing money from people at every point in between because he was, quite famously, an asshole.
Ideally a new business creates more value than it simply takes out of an existing marketplace.
I think one can argue a lot of 2010s app-ification, Uber-of-X, or what I called "re-intermediation" was more than 50% rent seeking.
The business model of being willing to lose billions selling $1 of goods for 80cents (before even talking CapEx) until your competitors fold (and then raise prices) is the kind of thing we used to regulate against.
At some point our regulation shifted towards a more short term "if it makes consumer prices lower right now its OK".
It's impossible to fully prove a counterfactual, but few things "wouldn't exist at all" if "that one person" hadn't done it.
Netflix is a decent example. Many people saw the coming of video streaming. We would still be able to stream videos today even if Hastings had stayed at Rational.
There are also products that seemingly should exist but don't because no would-be inventor has found capital, eg. a decent bluetooth keyboard+trackpads with the same layout as a laptop. I know because I spent an hour trying to find one yesterday, and they basically just don't exist.
Any discussion not grounded in those facts is a dishonest discussion. It is a zero sum game until those externalities change because ultimately our species is built upon extraction resources to produce wealth. It IS a zero sum game until you or someone else invents a means of solving the first order problems.
You don’t need a trillion year scale for the average man to already be dealing in finite resources and ability to create wealth.
It takes 30 seconds of research to see the cost of an acre of land has far exceeded inflation over the last 50 years. That’s finite resources at work.
Anyone downvoting me because they think renewable energy overcomes the finite resources on planet earth are absolutely delusional.
We literally have evidence of the scarcity of resources when China started threatening to limit access to rare earths. CaN other countries build capacity at some point? Sure. What happens when you’re in a country that has none naturally and the countries that do have access don’t feel like selling you any?
What’s that? It’s a finite resource that results in a zero sum game?
The original claim, as I understand it, is basically this: you can’t be an honest actor in a dishonest system.
And it’s not even necessary to claim that billionaires did something uniquely wrong to become billionaires. It’s just that their share of the exploitation is so, so, so much bigger.
> There are three ways to make a living:
> 1) Lie to people who want to be lied to, and you’ll get rich.
> 2) Tell the truth to those who want the truth, and you’ll make a living.
> 3) Tell the truth to those who want to be lied to, and you’ll go broke.
> What [AOC] meant was that it's impossible to get that rich without doing something bad — without cheating in some way... The reason [my founder's] startup was growing so fast was simply that users loved what she'd built. So she could feel from her own experience how wrong [AOC] was. She wasn't exploiting anyone. Exactly the opposite in fact. The reason her startup was growing so fast was that she and her cofounder had been working their asses off to make their users happy, and as a result the users had been telling their friends. And that gets you exponential growth.
To any honest reader, it's clear he's saying the system isn't necessarily dishonest, and that it's possible (if not common) to rapidly earn money in the system by simply creating things of value and selling them to willing customers.
That is the system.
The marxist nonsense about exploitation is getting really tired and needs to die already. Yes, we get it, marxists don't value anything that grows total output, don't think it should be compensated and are totally fine living in the stagnation that view creates. If they could all just skip a few steps and go to the end game of their philosophy that would be great because I'm tired of hearing from them.
Last election cycle, the world's richest man made the nation's largest political donation to the most expensive campaign in US history. In return he was given unprecedented (and arguably illegal) access to take a figurative chainsaw (his imagery) to our institutions.
We're all under the same laws, but we are not all operating under the same rules. To quote the President, "when you're a star, they let you do it. You can do anything."
First, this the same logic as "the law is equal because the rich and poor are both equally barred from sleeping under bridges." Moreover, no, you cannot hire the same lawyers and that's the point, because what Musk got wasn't through the law, but throwing $300 million dollars at an autocrat. This isn't about $50 vs $2000.
Can you do that and buy your own government agency and a pseudo-cabinet position that circumvents senate confirmation? No? Neither can I. We're not under the same rules they are.
Your point same sex marriage doesn't make sense to me you'll have to explain it better.
The second point was the ambiguity in outcome is what allows societal change and I don't want to lose that because there is still a lot of stupid enshrined in our legal code and institutions. We need enforcement to be lax enough to allow people to break stupid laws and the legal code to be ambiguous enough that, when enough people's opinions have changed by the law breakers breaking the law and nothing bad happening/ the law breakers being closer friends and family of enough people that you can get a big change to the law through, either via the courts deeming the law unconstitutional or the congress critters changing the law. It's a fine line on multiple fronts there between effective changing to suite current needs and too much corruption and I don't see a way to change the system that decreases corruption without also decreasing flexibility for change so I am very cautious on that front.
The problem is that wealth can buy a level of political access that ordinary citizens cannot realistically obtain at all. Once someone can spend hundreds of millions helping elect a president or pay people a million dollars to vote their way, and then get a quasi-governmental role with influence over federal agencies, then the system is no longer a system but instead a service.
Saying the system allows the ultra-rich to do this because of builtin ambiguities does not mean therefore no billionare is blameworthy for using it. If a loophole lets billionaires buy political influence, them exploiting that loophole is still part of the problem.
Your defense of him seems to reduce to: the system is corrupt, and if you were rich enough you could exploit it too. I agree that this describes how power works, but I just do not see how it defends it.
Right, but, taken to its logical conclusion, you cannot earn any amount of money honestly at all, because you'll always create negative externalities to some extent, or supporting people who do/companies who exploit their workers, even as a rank-and-file employee.
1. Extracting from the market or the economy. It seems like (correct me if I'm wrong) this is what you're reading it as? Here you're generally exploiting what private equity calls "pricing power" or what economists call "enclosures" (or "rent-seeking") so inelastic demand (eg housing) or market protection (eg making municipal broadband illegal); and
2. Extracting from labor. This is the basis of the labor theory of value [1].
The point of comments like AOC's is mostly the second one, which is to say that you only become a billionaire by extracting it from your workers. And yes, this is a fundamental disagreement with many people. Some will say that the startup founder who makes a billion dollars deserves it by taking the risk or being the leader or however you want to frame it.
The counterargument is that that value simply wouldn't exist if it wasn't for those workers and their work. Even Instagram, which famously had only 13 employees when acquired for $1 billion, still needed those workers. It would've been nothing without them.
Take Google as another example. The profit per employee has famously been (at times) over $1 million per year.
The term for this is "surplus labor value".
> Take Google as another example. The profit per employee has famously been (at times) over $1 million per year.
So, are you saying that the employees were exploited in some way? I could give you examples of how value is created without any work at all.
"Mainstream economics" is doing a lot of heavy lifting. It didn't "replace" LTV. Marginal utility is simply an an ideological rejection of it with the confusion of price vs value that ignores class exploitation. The proponents of this were the gensis of the so-called "Austrian school" [1] and thus the fathers of neoliberalism [2].
> So, are you saying that the employees were exploited in some way?
Yes, objectively, as measured by profit. The counterargument is that many were well-paid compared to their non-tech colleagues. While true, they still created way more value than what they were paid.
> I could give you examples of how value is created without any work at all.
I'm all ears.
[1]: https://en.wikipedia.org/wiki/Austrian_school_of_economics
As is "mainstream medicine" or "mainstream climate science". If you don't trust mainstream science, you must be either extremely smart or just delusional.
> I'm all ears.
Ageing whisky.
> product is constantly evaporating and you're getting a lower yield on the same initial input
This so-called 'angel's share' accounts for ~2% per year, not 10%.
Capital costs are not real in LTV?
A carpenter takes wood, nails and hammer and creates value making tables.
Hammers are a capital cost and are made the same way - workers are a factory xreate value by assembling steel and other components making a hammer.
Steel workers un a steel mill create value by turning iron into steel.
Iron miners create wealth by mining iron.
And so on.
Capital costs are accounted for. Not turtles all the way down, but labor - newly created value comes from labor. The value in a hammer comes from the labor to make it a year ago when you bought it.
Google ads "extracted" value from traditional advertising in newspapers and magazines, so the "exploitation" (or efficiency gains, if you're charitable) came at the expense of employees at other organizations worldwide.
Reasonable people can disagree as to the nature/extent -- or even the existence of -- exploitation, but this guy absolutely has impermissibly strong blinders on, rendering most of this article a waste.
Like, does PG really not understand that nobody is arguing that a company can build a billion dollars worth of value? Has he not read Adam Smith? Is his definition or understanding of rent seeking so limited that he can't see the grey areas between "extraction" and "earning" money?
Anybody who earns significant income from investment, including VC money, should recognize that they are at some level extractive, not the hard won dollars that the folks at the ground level are generally putting in.
For guys like PG, Musk, Bezos, Zuck, Ellison, Thiel their very identity is tied to winning this as a game, and thus, any actions they take must defended at all costs, and the score must be seen as righteous and deserved and free from interference.
Not to mention that, especially in a fiat environment where currency is printed out of thin air, it is literally a zero-sum game by definition. When the printer winds up, the bankers win big at everyone elses expense; setting the tone for the entire market. Anecdotal success stories of hard working, honest billionaires is a nice distraction, but that's all it is.
The substantive reality of the status quo is one of unprecedented levels of extraction, and as we continue down this AI power consildation story, that will be harder and harder to deny as we go forward. If you happen to win big as an outlier, more power to you, but the article even admits to the rarity of this story implicity. 20 years. thousands of companies. 30 billionaires.
Even if every single one of those people are honest to goodness saints, that's only slightly better odds, perhaps, than winning the lottery.
The fact is the billionaire managed to extract value from the market. The ethical question is: who deserves to get the value that was created by the market? The answer could be "the founder" but it could also be the funder, the worker, the customer, the political structure that enables the market economy, the mother of the funder who raised them to be hard working, the nurse that treated the founders minor illness in an early stage and prevented it from causing a physical disability, etc.
That's why we're here debating, because one can create value, and one can extract value. Both statements are true and easy to argue for. The synthesis is that creating value also grants licence to extract since it's impossible (possibly even theoretically impossible) to define exactly where the line between the two is.
Uber was not a YCombinator company. For some unexplained reason, many mistakenly think it was a YC startup but it's not correct.
(The gp's comment is an example of how chatbots hallucinate because they train on the text of people unintentionally hallucinating.)
()
We're now applying LLM anthromorphism back on people...sigh
I'm of the opinion that this skill atrophies substantially for billionaires.
His post here in particular violates the fundamental principles of HN in that he does not engage with the argument at all.
The argument isn't that it's impossible to become a billionaire legally, the argument is that it's impossible to become a billionaire in a moral way, though that's more of a problem of the system than it is necessarily one at the individual level. A just and moral system would assign the value being created in such a way that becoming a billionaire would be essentially impossible.
Yet pg never even acknowledged the possibility that that might have been the argument.
There are many assumptions around this you could argue about, but he’s directly addressing the original statement (which was also simple, and did not explicitly include the assumptions either).
I agree they are talking past each other - a lot of this is more related to marginal cost differences than anything else imho (basically how leveraged the value of my labor could practically be).
2. If you don't have an unfair anticompetitive moat, you'll have competitors, driving your profit towards zero as usual.
2. This is one of the (many) side assumptions that are worth discussing.
I'm not defending that interpretation, mind you, just saying it's a possible read of the phrase.
When you hit a hundred billion in net worth, you get a nice solid gold plaque that says "I won capitalism", you get an attaboy from the UN, and we start taxing the shit out of wealth over that cap.
Adjust periodically for inflation. (Do that for minimum wage while we're at it.)
I find these special founder-class shares that completely insulate folks like Musk and Zuck from their actual investors to be deeply problematic.
It's because while for some people there may be jealousy involved, many more have realized or are now realizing how much power the ultra rich have, and how bad that is for our societies.
Once a company becomes large enough, it becomes so influential in society that control of it must be made more democratic.
I don't think anywhere has figured out quite the right way to go about it yet, but it's clearly the right goal. Some countries require employee representation on the boards of large companies.
Musk was AWOL running the US government for months without any apparent impact. Even after he got back to work, he's running enough companies he's clearly part-time on at least some of them.
Jobs died. Bezos and Gates stepped down. Things continued!
> Commies will literally never learn.
Yeah, they're goofy, for the same reasons the extreme libertarian anti-tax folks are goofy. Each pretends the complexity of humanity can just be waved away.
So the reason you can’t think of any is because no economic activity exists with out them.
But externalities can both be positive or negative.
In my circles we actually never use this word because it is basically just a fancy way to say exploitation that makes capitalists feel good about them selves.
Exploitation is orthogonal. You can have internal or external value exchange that is exploitative. You can even have positive sum transactions that are exploitative.
It must be exhausting having conversations in your circles if you change the definition of all the words…
As opposed to something like heliocentric solar system theory, where you don’t need to play word games to prove the counter. You just need to observe and collect data and use the same words to come to the correct conclusion.
Say, for example, my job is allocating capital across the S&P 500. My work is picking the stocks, the fruits of my labour are excess returns.
Are those excess returns not work? What are they?
Wealth extracted from a market, which is what the parent commenter said in the first place
Please provide an example of how logging in to fidelity.com to see that today my net worth increased by a multiple of my annual salary constitutes "work". Define your terms so it's clear to readers.
Are you sure you tried to come up with a counter example?
If the only kind of “work” is “selling your labor” then sure, but I think a farmer tilling his own soil is “working”.
I described it as “sitting there” to contrast my viewpoint that in fact it’s not being “extracted” from anything as far as I can tell.
It’s totally incoherent and unreliable as an explanation for an economy, but it explains the comments in this thread.
You could say the same about musicians and authors. Are they immoral as well?
But note that I have been very careful not to call the fund managers individually immoral.
Making great art is wonderful, but it's certainly not "work" the same way that digging a ditch or answering tech support calls is.
I was talking specifically about the moral implications of books that can be read without any additional work from the author. This statement is about books, not authors.
> but it's certainly not "work" the same way that digging a ditch
I don't think so. Value comes from utility, not from toil.
I agree, writing great novels is a wonderful thing and a moral positive.
The moral problems begin when writing that book gives you extraordinary power beyond what is healthy for society (which is extremely rare for authors, of course; the discussion isn't really about authors, you just invoked them in an attempt to conjure a moral shield for the people who are the real problem).
And again, even that in itself is still not a moral failing of the individual. It's primarily a failure of the system in which the individual operates.
It does become a moral failing of the individual if the individual uses that power to perpetuate the system.
Say, for example, my job is allocating capital across the roulette wheel. My work is picking the numbers, the fruits of my labour are excess returns.
Are those returns not work? What are they?
Normally you'd get a low percentage fee instead of getting all of the returns unless you got that capital for free (inheritance?), so yes, you are a worker compared to the person controlling the capital.
Missing from both sides of this argument, IMHO, is BATNA.[0]
[0] https://en.wikipedia.org/wiki/Best_alternative_to_a_negotiat...
Whereas: If they hire a single employee to help with, idk, responding to support tickets that would get them into "well maybe you did not earn it"-territory?
Because if that is the depiction we are going with: I have my doubts.
Just like you're mentioning Obama's lambasted "you didn't build that" comments -- his point was completely valid, in that the individual profiteers didn't build the roads their products ship on, the energy infrastructure their cloud providers consume to host their digital footprint and logistics, etc. etc. But people pay for a large part of what they DO consume -- the cases where they don't are what we squirrelly and bookish economists call "externalities" (costs of production gotten too cheap/free). Trying to correct for every externality is a maddening and endogenous exercise in navel gazing -- but huge and easily seen externalities are not crazy to want to address (e.g., Erin Brokovich, pollution, etc.).
In your example of someone getting hired to field support tickets -- if that person weren't hired, the founders would spend all their time chasing down those tickets. So did the founder earn the cash, or did both people earn the cash despite one of the jobs being less favorable? If an egalitarian share is unwarranted, what is a reasonably fair trade? Why is an egalitarian share unwarranted? Etc.
The core question embedded in all these arguments are - what is a fair tax on the economy? If a government's policy encourages large economic growth for everyone, then perhaps it is good to fund it via tax with all the associated tradeoffs like crowding out, marginal decisions impacted, and so on. Getting it right looks like Scandinavia. Getting it wrong looks like Cuba / final days of the USSR. Ignoring it (on both sides of the aisle) looks like Venezuela and Argentina.
But there is no doubt that without the people who produce there would be no taxes, and a 100% tax would push everyone away from doing anything. This is why the way-too-simplistic Laffer curve argument seemed compelling in the 80s -- "unshackle the economy by lowering taxes."
I haven't kept up with pg (fairly or unfairly) since some of the techbrokings adopted Yarvinism as a goal, so I have no idea what he has said recently.
That's the fun part: they cannot make a billion dollars through their own work. It doesn't exist. Billions of dollars do not exist without either collaboration (extremely rare), or exploitation of others (see: every single YC company)
>Whereas: If they hire a single employee to help with, idk, responding to support tickets that would get them into "well maybe you did not earn it"-territory?
Would you have made that billion without the employee ? If not, you did not earn it. Would your company have gone under if you didn't have someone handling those support tickets, what percentage of the survival of the company is linked to it, and why didn't you pay them nearly that percentage ? Congratulations on exploiting your employee.
Her point was being made about actual reality and not some hypothetical fantasy
With recent advances in AI, it may be possible for someone to build a billion dollar single founder company.
Reality is reality. Her statement was based on reality.
Inventing some nonexistent fantasy where her statement is wrong isn’t a useful exercise.
Yes, it’s possible that in the future there may be some person that manages do be worth billions by themselves, but that doesn’t exist today so isn’t relevant to her statement
Working through a world where some condition proves true is useful to inform logical policy. It admittedly doesn't make for a sexy soundbite and is a lot harder to work through, but it has substantial use (1) to both justify the morality of a policy/action in the real world and (2) to anticipate a potential real world scenario where a single person makes a billion dollars in a SaaS.
Just because pg is `not even wrong` doesn't mean we have to be as well.
Thank you, you made me laugh in earnest. This is one of the funniest things I've read today.
The actual opposing argument is that it's impossible to create a billion dollar enterprise without a group effort, and for one person to end up with a billion dollars necessarily means that they made decisions within that enterprise that resulted in a lopsided allocation of resources at the end.
Period. That's it, and it's inarguable.
Every single aspect of the system is arbitrary and is a policy decision made by society. The basic building block, the limited liability joint stock company as a legal concept with some form of independent rights and entity status is arbitrary. Every lever, every part of the system, is created by people making decisions about how society is organized.
The people he is arguing with are basically saying "we want the system structured differently because this one is producing too much concentrated wealth." That's a political choice and an eminently reasonable one.
So if it's that simple, why would he feel a need to straw man instead of just addressing the actual argument? Well because he'd lose. The reality is is most people agree with this assessment of society and want it to change.
And by the way the question of how resources get split between labor and capital is the oldest and most central political problem in human history. To adopt a condescending tone while pretending to be ignorant of stuff you learn in the first couple weeks of any real study of politics or history, betrays the deception inherent in his essay.
George Lucas made a movie with a (small) group effort. But what made a billion dollars is his Star Wars universe which is almost entirely his creation.
It literally creates wealth for other people. If my toy sells $10,000 without Star Wars and $100,000 with it, did I participate in making George’s billion, or am I benefiting from it?
> means that they made decisions within that enterprise that resulted in a lopsided allocation of resources at the end.
What do you mean? Every good and service involves many people, but the degree to which they participate in its creation and risk vary. For example, a Farmer may create a more efficient way to grow food. Is the grocery store now entitled to a piece of the reward? They didn’t change anything, all of the improvement is the farmer side.
Once again, lopsided allocation - George benefited from and is directly responsible for keeping the cost of labor low: https://www.hollywoodreporter.com/business/business-news/100...
Would he have been a billionaire without that? Who knows? But it definitely helped him get there.
If you say the original crew did not do all the labor required to make the franchise grow in the future (obviously true), you are now arguing different people have had incremental impact on creating the wealth, which is kind of the point.
Are you saying that he/the small group are solely responsible for Disney wanting to pay 4 billion for it?
The Star Wars franchise earned a tremendous amount of money before the one-time Disney payout.
Jk Rowling and LeBron James are additional examples.
The reason is that the conflict here is between labor and capital. And those two, at least in their primary roles, are labor, as a writer and an athlete. One of them is even a union member operating under a collective bargaining agreement.
They're just the absolute pinnacle top of anything that could possibly be put in that category.
But if I'm arguing that this is really about the division of of the spoils between labor and capital, and you have to resort to picking members of the labor class to make your argument then you have essentially conceded my point, which is that returns to labor are different than returns to capital, and returns to capital are much harder to defend. You didn't pick Bill Ackman for a reason.
If that were actually true, how come we can't predict what the next Star Wars universe will be?
Same for pop songs etc. If it were actually about objective qualities of the creation, and not just luck, the next winners of the lottery would be apparent even before they hit the theaters.
There is null inherent quality in the Star Wars universe causing the billion dollar revenue. If George Lucas wouldn't have been there at the right spot at the right time, the dominant IP would simply have been something different.
If you have kids, you can directly observer what actually happens: The IP owners dump huge amounts of money into merch and product placements everywhere, resulting in them getting in contact with the franchise before they are out of their diapers. My kids came home from daycare roleplaying lightsaber fights without any previous contact with the franchise at our home. The trick is implanting the meme (in the original meaning of the word) into kids' brains before another meme can nest in there.
That’s absurd. Obviously they are creating incremental wealth and their particular toy didn’t make or break billions.
The post I replied to allocated all of the monetary value of the Star Wars branding of a toy to George Lucas personally, which I think is obviously wrong.
in the same way that Lebron didn't go where with his own feet, he benefited from coaches, support, doctors, nutrionists & cooks, all dedicated to putting everything into this one man. Do you think merely being a freak of nature nets you a billion ?
Can you quickly break down which players on the team are fairly compensated and which are oppressed by LeBron?
> The actual opposing argument is that it's impossible to create a billion dollar enterprise without a group effort, and for one person to end up with a billion dollars necessarily means that they made decisions within that enterprise that resulted in a lopsided allocation of resources at the end.
--
> And I would guess the NBA made a lot more money than LeBron.
And yes, in this case I believe the NBA is extracting asymmetrically, from Lebron and others.
It's also important to note that Harry Potter making billions of dollars also prevented any other similar books or ideas from making any large profits. The entertainment industry is very much a winner takes all industry. HP didn't hugely grow the children's entertainment market, it just outcompeted other works. This is extremely important to understand, because it directly implies that a huge part of the value is simply that media execs decided to bet big on HP instead of trying out many other possible properties. The money would have happened either way, more or less the same - they just would have been distributed to one or many other authors instead, if JK Rowling hadn't hit it out of the park. People would have bought a roughly similar amount of books for their children to read, a roughly similar amount of toys, would have taken them to a roughly similar amount of movies.
Well yes. That is in fact exactly what I mean.
My argument is this: the core disagreement here is about the allocation of resources between labor and capital.
I’m right. It is.
That doesn’t mean I have settled the argument about what those allocations should be which nobody has, it’s a core organizational element of politics.
But I think his argument is bullshit. It’s a purposeful misdirection because it refuses to recognize the terms of the discussion at all.
In fact, my argument would be that the more regulated, industrial-policy-driven economies of the recent past were better at generating wealth and improving society.
For the most part, the real conflict that we're having around these topics is about the reorganization of the economy that happened starting in the mid-1970s.
This change shifted the focus of the US economy to financial extraction and away from industrial policies, a role that we sold out to China for the benefit of our elite classes and the severe detriment of our working class.
> “There’s a certain level of wealth and accumulation that is unearned,” she said. “You can’t earn a billion dollars. You just can’t earn that. You can get market power, you can break rules, you can abuse labor laws, you can pay people less than what they’re worth, but you can’t earn that.”
You can produce a motte-and-bailey-type argument where the "get market power" and "pay people less than their worth" are doing all the heavy lifting in that statement. But I think we can agree that she is very much tying the accrual of wealth to various kinds of villainy. That is what pg is taking on. And that matters because the common person would agree with the statement that you should be rewarded for what you create - if wealth accrual is all theft, that perception would make a much stronger argument for the reallocation of resources.
Now I'm not saying that the employer is necessarily morally culpable here — I'm sure most employers would like nothing more than to not have to worry about their employees' healthcare, and certainly I doubt many people enjoy having the ability to take it away. But it doesn't change the fact that it's impossible to have a real negotiation when inelastic demands are (potentially) unmet. Someone under threat of losing health insurance or housing is negotiating under duress, contrary to the comment I replied to.
It's especially insufficient to generalize the working of the entire system from an example of a market in which employees currently have enough power to not really have to worry about the prospect of physical harm because it would be disadvantageous to the employers to cause it. Even if we take the current state of the SaaS startup market as reliable (which it isn't) the original argument was not limited to SaaS startup employees, and in other industries (including ones that are a bit down the pyramid from the SaaS companies) things are a lot less rosy for employees.
This is a ‘no true Scotsman’ so I don't think I can really respond to it directly. But I'll point out that my claim is not that some contracts bargaining for safety of life and limb are a form of duress but that all inherently are (to some extent). Especially when the other party's BATNA is ‘no guarantee of safety’.
This would also imply that the best thing ethically is not to give people goods in exchange for labor because the simple act of interaction with them puts their housing and food needs under your responsibility.
I don't really think that companies (or other parties in trades) bear moral responsibility for this inherently — a company that accepted every job applicant to try to meet their inelastic demands wouldn't last long, so the company itself is also under some duress even if it might like to. Trying to assign blame for complex distributed problems isn't really that simple. Your example in particular is a trolley problem, and I (personally) don't believe that pulling the lever makes you more culpable than deliberately choosing not to pull the lever.
But regardless of your chosen ethics, my point is pragmatic — while it's not correct to say that people take jobs only because they are under duress, it's also not correct to base arguments on them acting on their own free will based on their personal preferences. UBI experiments show significant changes in employee behaviour when inelastic demands are guaranteed to be met and negotiations pertain only to elastic quantities.
They don't hold me down and force me to hand money to a landlord, mind, they just lock me in a cell if I don't, so maybe it doesn't meet your standard of proof.
No it's not, it's actually extremely easy to prove wrong: J.K. Rowling.
Which is, as I pointed out, inarguable. No one is spawned alone in the woods to start their adventure independently of the society they are in.
He takes that as a given but this is, in fact, the argument and you can't wave it away.
By doing so he's being disingenuous. The argument here is about who gets what. And the startup founder and its employees are not the only participants in the economy.
The revenue flowing in to his hypothetical startup is exogenous to the startup so you have to talk about where it's coming from, who's affected, and how that fits in with policy goals.
For an extreme but accurate thought experiment, imagine concluding your analysis of FTX by noting that their employees were "fairly and properly" paid and then moving on.
The other thing that we're often ignoring is that it's impossible to create a billion dollar enterprise without luck. You have to be at the right place at the right time.
For the most part only capital gets to roll the dice, but even before that it's a sign of the times that we take it seriously at all when people talk about "earning" a billion dollars. We could all do with a bit more humility.
You should read that as a self-preservation technique. The eager use of a strawman tells us PG heard AOC's words as an attack against him personally, his business, and his friends.
So the essay is not a reasoned retort but more an emotional self-defense to soothe a bruised ego. It's to assure himself that no -- in fact he did earn his wealth fair and square, and to imply otherwise shows a lack of understanding of how this all works. But I do love this essay because it does show just how emotional and irrational billionaires can be when their wealth and egos are threatened.
Sure, some folks are going to be fantastically wealthy, that's OK to a large extent.
But, we're on the precipice of trillionaire's existing in a country where literally half of the population is functionally illiterate (yes, that's the USA), where the middle class is dissolving, and where we are approaching a feudal level wealth inequality-- and all this stuff is accelerating.
I mean, I guess it's not that bad. We still have a democracy. It's not like we have billionaires re-arranging political power and public resources for their pleasure and benefit. Oh wait, we do!
I wasn't there at the time, so I could be wrong. But I feel like their robber baron counterparts 100 years ago knew that they were hated and had some idea of why. And that's why they spent so much money on parks and buildings and colleges and everything else. They could see option B was the masses coming across their lawn with sharp implements.
No. It was to persuade future politicians not to redistribute his and his friends wealth.
I don't think anyone reading PG's blog is clueless about the power of compounding or the difference between salary and wealth through asset growth.
Her point is essentially whether the entire capital system is "fair." And to be fair to PG I don't think AOC articulated a particularly strong point either.
> What [AOC] meant was that it's impossible to get that rich without doing something bad — without cheating in some way... The reason [my founder's] startup was growing so fast was simply that users loved what she'd built. So she could feel from her own experience how wrong [AOC] was. She wasn't exploiting anyone. Exactly the opposite in fact. The reason her startup was growing so fast was that she and her cofounder had been working their asses off to make their users happy, and as a result the users had been telling their friends. And that gets you exponential growth.
In other words, he's saying that rapid wealth creation can (and often does) come from creating and selling things of value to willing buyers, at scale, and that that's not unethical to do.
I do agree with you that AOC's point is not particularly strong, though :)
You've ascribed to them an ideology they don't hold. They don't hold that view "simply because they are billionaires".
A million is hardly buying mansions, yachts, and champagne-filled swimming pools in the current economy
Which is something that is not an option for most people.
Look at where y combinator founders come from. It’s 99% people from elite institutions
That is a core part of AOC’s point
Getting a startup funded is just not something that is possible for most people. They just aren’t in the right circles. Does not matter how good of an idea you have
However, if you’re in the right circle, you’ll get shitloads of chances even after repeatedly failing. Just look at how many of these founders that “made it” drove multiple companies into the ground before making it. It’s a lot easier to find “good fortune” when you have a lot of chances than when you have 0 chances
How else should it work?
Should investors give funding to people who haven't built anything, whose startups don't have any users, who had bad test scores and did poorly in school, and who have no references? If you think so, why? And how is that fair?
If you believe that, should professional sports teams draft mediocre players? Players who didn't play in college or even in high school? Players who didn't make the JV team? If so, why? If not, why not, and how exactly is that so different?
We all know there is no such thing as a perfect meritocracy. There never will be. Things will never be perfectly fair. That's life. But we can try to come as close as we can. And that obviously requires offering more opportunities to people who perform the best. Otherwise, what incentive is there to even strive and try to do well? The alternative isn't fairness, it's randomness.
Look, if you think people who go to elite schools have all the good ideas, just say that. You don't have to wrap it up in high-minded pragmatism.
Your comment and the one I'm replying to are so far removed from reality that I'm worried you know nothing about Y Combinator, elite institutions, or startups in general.
You do not just waltz into elite institutions. Let's take my alma mater, MIT, for example. The average SAT score there is probably around 1500-1550. The average GPA is near perfect. College admission are insanely competitive. Pretending like getting into these institutions is zero signal is bad faith.
Followed by the claim that it "having a good idea is the only qualification for an incubator." What? No it's not! Out of the thousands of admission advice poss that are publicly available online, written by YC's founders, partners, and successful applicants over the past 20 years, I challenge you to find a single one that even kinda sorta comes close to echoing that sentiment. What matters WAY more is demonstrating technical, sales, and marketing prowess by building something and attracting users at a high growth rate.
This is very obviously not what the person you responded to was saying. It's so far off that it's hard to believe you are even arguing in good faith anymore...
And if you do have a good idea but are not in the right circles, someone from the "right circle" has the "right" to use your idea as their own.
Furthermore, the company motivated by profit that does not have to pay for polluting the environment will also pollute the environment. Regulation is also necessary to pay for long term externalities and other boom and bust cycles. There is nothing new in PG take except COPE and blame shifting about the increasing inequality and other societal and environmental issues.
Without regulations (just a fancy word for "laws"), few people would bother to do any of these things. As it would be much more profitable to simply sabotage competitors, form cabals or monopolies, oppress and steal from the populace, conquer and loot your neighbors, lie and deceive and trick your partners, etc. And even if it weren't, anyone who did want to truly innovate or produce something useful would be discouraged by the fact that, due to others engaging in the above activities, they wouldn't see any profit.
So, to answer your question…
> How often does this actually happen?
All the time! Hundreds of thousands of times per year! Because we don't live in an unregulated free market, because there's no such thing and the concept is absurd on its face.
There are plenty of gaps and inefficiencies where new businesses can provide value to customers at scale who will happily part with their money in return.
Not to mention the fact that the constant march of technology (as well as changes in policy, culture, environment, knowledge, etc.) are constantly tearing open new holes in the market.
The actual comparison would be to look at all the startups with billionaire founders (so likely $10B companies) and then analyze the market dynamics that enable them to keep growing so fast.
She has made vague, handwavy, and (depressingly) oft-repeated statements that "there are no ethical billionaires" and that "it's impossible to earn a billion dollars," but she has rarely supported with these statements with any facts or evidence whatsoever.
The fact that her detractors have spilt gallons of ink arguing against her point without providing such a counterexample speaks volumes.
But here's a quick list from the top of my head: Judy Faulkner of Epic Systems, Hamdi Ulukaya from Cobani, the founders of Canva, the founders of Stripe, Tobi Lutke from Shopify, Paul Graham himself, Taylor Swift, Beyonce, George Lucas, Roger Federer, J.K. Rowling. Probably dozens/hundreds of others.
If you do something that somebody likes and they give you $1000, that's ethical. But if you do something a million people like, and they give you $1000, then you're a billionaire, somehow you must be unethical?
Umm - a healthcare company selling patient health records. I'm willing to bet a lot of those records were not obtained through ethical disclosure and most patients would refuse to have private details of their health sold to anyone who wanted it.
Ok, let's take a look at the next: Hamdi Ulukaya from Chobani
https://www.kirkland.com/news/in-the-news/2014/04/chobani-ce...
Right. I'd better stop now.
1. One started a healthcare company, and bad things happen in healthcare, and you aren't going to look into any more than that.
2. One is a rich man being sued by an ex-wife who wants his money/stake in his business.
By these standards, not only are there no ethical billionaires, but there are also no ethical millionaires, or thousandaires, or taxpayers, or politicians. Because they're almost all going to be a degree or two of separation from someone or something doing something unethical or making a claim. "Ethical" is such a high bar that no one meets it, and it becomes a meaningless standard. AOC herself isn't ethical[0][1].
[0] https://www.cnn.com/2025/07/25/politics/house-ethics-aoc-met...
I did some more oldfashioned lmgtfy:
This is not just "bad things happening in healthcare". It's how you become a billionaire:
https://prospect.org/health/2024-10-01-epic-dystopia/
> Epic became the dominant vendor of databases because it was better than anyone else at combining regulatory compliance with maximizing hospital income. Epic enables the hospital to maximize the use of codes that determine the payment. “Before Epic, nobody was able to systematize upcoding,” says an executive of one hospital system.
> Epic’s software can enable doctors and hospitals to overcharge patients, insurers, and Medicare and Medicaid.
Edit: so really, "billionaire healthcare company owner" is all you need to know about the ethics of that person.
As I already pointed out above, your bar is going to be incredibly unrealistically low for what counts as evil, and I was right.
You're also just ignoring most of the people on my list anyway, picking on one person (quite poorly), and then trying to generalize that to all billionaires.
> I guess most software developers are evil.
Not most. Anyone who willingly works for Facebook/Instagram/Tiktok/Advertising/Palantir and other exploitative companies is.
>Anyone who makes silverware is evil. Etc.
Umm, silverware?
>picking on one person (quite poorly), and then trying to generalize that to all billionaires.
Yeah that was my bad - to clarify: anyone who became a billionaire through their own work/talent and without exploiting anyone is an ethical one in my book. Anyone who became one by stealing (yes, "upcoding" medical charges is stealing, unpaid labor is stealing) is not.
What's your definition of "through their own work/talent"?
What's your evidence that somehow up-coding medical charges was some crucial part of what led to Epic's initial success?
He said nonsense! If you start as a two millionaire and grow 95% every month you can be there in 9 months!
I say if I start with one cent and grow 10000000000000% every millisecond I can be there in a millisecond.
Edit: I’d like AOC to publicly say Taylor Swift is unethical and immoral too. Heh the swifties would have her head over that.
But his example doesn’t demonstrate anyone earning $1b. It just demonstrates a very high growth rate at $1-2m.
She captured the truth, that our current system vastly favors capital over labor (etc etc etc), and did that in around six or seven words.
You can't really do better than that when communicating ideas at scale. What she said is true, it's for essays, economic papers, and laws to provide the nuance.
Does this mean you haven't been following his twitter the past several years?
And a lot of these structures either involves a percentage cut or a security of some kind. And it's not new, it's copied.
Which one is the better allegory of modern capitalism?
It's about how a utopian society could and/or should respond to changes in resource distribution, and how entirely consensual behavior and exchanges between people can still lead to situations that are problematic.
Making everyone have the same income means there is already a big infrastructure to manage how resources are allocated in this society - it already can't have been a free-trade system with currency that can be arbitrarily sent and received.
But yes, I think a lot of people would say there should be a cap on how much more wealth someone has compared to the median, for many reasons, such as the amount of political power it would yield him. The thought experiment uses a harmless activity for earning the wealth, but criticism of wealth inequality is often based on what happens _after_ the wealth is earned too. If in this example you will claim the world remains perfectly (socially) egalitarian and the kid will be benevolent, then maybe we can let him keep his wealth in the thought experiment. But that’s not the world we live in, and possibly never will be.
IIRC, that's precisely what Nozick is nominally interested in exploring (although he really doesn't).
There at least 2 distinctions going on:
1. whether wealth is acquired with or without exploitation; Nozick uses consent as a proxy for exploitation, which is dubious but predictable given that he's a libertarian
2. whether there are ill-effects to (excessive) wealth regardless of how it was acquired
They aren't paid millions based on tickets to see them play, it's the advertising.
And now comparing PG's writing today and what he wrote 10~15 years ago, I finally get what Joel means.
By comparison, many people out there are trying to get rich playing the lottery, gambling on stocks, etc., which often have far less likely odds. Is it not better for them to hear about what PG is preaching?
There are less than ~5K billionaries in the entire world. Not quite like winning the lottery sure, but still unrealistic for the majority of people.
How many is "many"? If you meant 100 million people, then that's still just 1.2%.
And in my opinion to claim that 100 million people have the opportunity to become a billionaire is laughable. Even if you're a super genius and you do everything right, there are just WAAAY too many happy accidents (opportunities) or just lack of unfortunate events stopping you.
Like you could be born to the best parents, who can afford the best school, growing up with the best opportunity business partners, and you work your ass off and are very smart… and then there's STILL a 20% chance you're in a car accident before the age of 30[1], potentially derailing your whole trajectory.
So car accidents ALONE could take away the chance for 20% of people. Not saying a car injury is terrible, but it could be sufficient to derail the billionaire plan.
That said, you work with what you got. And become a millionaire? Sure, doable. Billionaire? You need to win several lotteries AND have skill & contentiousness, I'm sorry let's not pretend otherwise.
[1] 2.44 million people injured in traffic in the US every year (2023 data, and US traffic injury and death is skyrocketing UPWARDS thanks to the car lobby's light truck loophole, while everywhere else in the world traffic deaths are going WAY down).
But PG is literally addressing the billionaire question. He's literally replying to a statement about billionaires specifically.
We're not reading too much into it.
Like I said, millionaire sure. (You could see it as another word for "successful"). Billionaire? Absolutely not, and it just sounds like you and PG are trying to change the subject, because the actual topic can't be refuted.
Or PG is so disconnected from reality that he's intentionally directly saying "I earned billions".
Yeah that's not better.
I'm not an AOC fan, but wow that makes PG an ugly political hack, not a clever writer.
There's no way to spin this that makes PG look good.
Looking through wages and trying to find a ceiling(by time/effort) on the value creation by a human is one dimensional at best.
> The work is done by the seed/sun/soil/water.
and the farmer collects. It's not that the farmer does nothing or deserves nothing. But it is precisely the same as the capitalist model: the capitalist sets the stage for labor to do the work, and then collects.
As others have noted, the central question is who gets to benefit from what is created and why.
It’s only the same if you consider natural resources and human labor to be equivalent. To me, that sounds quite reductive.
Obviously when viewed from other perspectives, they differ significantly.
This is what aoc is referring to essentially. It's practically impossible to become a billionaire through "regular" work alone that pays you a salary.
I'd argue that for all super wealthy people, their salary isn't the major factor in how they gained their net worth. Lets take Googles CEO, he makes 2 mict llion per year (the exanumber isn't that relevant here). With this salary it'd take him 500 years to earn his net worth. Again, completely different proportions to "normal" people earning their net worth through their job. And I'd argue you can do this for everybody with more than 100 mil. dollars.
Is "building structures" not work?
But the meat of the point is: if the economy is growing at 2.5%, how do you sustain 15% over 5 years?
Look, I’m a startup guy, I buy into the premise that it’s an intensely value-creating activity. But I think it’s self-defeating to pretend like the monopoly and regulatory arbitrage problems don’t exist.
I get that PG and his customers need to be able to cash out, but also, the monopoly rentiers make it more difficult for startups to compete by buying up competitors early and offering crazy salaries that make startups uncompetitive.
All that said, the subtext here is that PG is providing politicians with stories they can tell, nobody in this conversation is trying to describe reality in the most precise or honest way.
"You're young, and usually young founders should make something that they themselves want. You don't have enough experience yet to know what other people need. But at the same time your own needs are uniquely valuable, because your needs predict future demand. You're the age when people start using new things. Whatever you and your friends start using now, everyone is going to be using in ten years. Since your intuitions about other people's needs are usually a crap signal, and your own needs are an especially valuable one, you should usually listen to the second signal; you should make something you and your friends want.
Making something you and your friends want doesn't mean you have to build a consumer product. Maybe you and your friends are molecular biologists, and there's something cool that could be done now to DNA that everyone else has overlooked. Maybe you and your friends are into drones. The idea doesn't have to have a wide appeal. It literally just has to appeal to you and your friends."
By growing better than the average?
The most poignant example is tobacco. Tobacco is a net-negative product for the world. But many people find it very valuable, because it helps them with the stresses of their life and they have a biological dependency on nicotine. And so, it’s a multi billion dollar industry. But, for the world as a whole, it generates negative billions of dollars. Because of the health cost and the cost of lost work. If you did 10, 20 years early then that’s a lot of human productivity burned.
Of course, most products are not tobacco. But every product is tobacco a little bit, I think, in the sense that they merely move some money from externalities into the product. In that sense, it’s not all value creation, it’s value siphoning or moving.
Im not going to disagree that externalities are everywhere though. The question is to what extent and if, after correcting for them, there are still products which create so much value they make their founders billionaires. I think the most obvious case for this are artists. JK Rowling sold her writing for over a billion dollars. The work was, as far I know, created pretty much solely by her. You can point to the book publishing system as a whole, but she has nothing to do with that. All she did was write some books and sell them to an already existing system.
You’re moving value later to value now, in the form of enjoying smoking.
Consider: if the conditions of our work were different, many people would not smoke. If nicotine didn’t happen to have a biological effect on the human brain, then nobody would smoke. The value created is only in the context of those constraints, and many more (including regulatory ones, which is why we see less smoking today).
I view it as a type of loan. Is loaning money a productive activity? Of course not, because no value is created, it’s merely moved. If the entire economy was just loaning money, then GDP would maybe go up but no value would be created. Smoking is a loan from the tobacco company. You get immediate relief, in the cost of more value paid back to society at a later date.
Consider: if the tobacco industry has sold 5 billion in tobacco products, but tobacco as a whole results in 20 billion dollars in lost productivity and healthcare, then the value generated is -15 billion dollars. In actuality the estimates are much worse, because typically models only consider healthcare cost, not suffering or lost productivity due to death. Suffering, too, has a cost. How well do people work when a loved one dies?
Growth comes from innovation, and innovators get rewarded with faster growth as non-innovators decline.
I suppose it depends on how broadly you define "innovation".
Lots of companies grow because of, among other things: regulatory capture, regulatory arbitrage, questionable use of other people's IP, offshoring, misclassification of employees/contractors, profit shifting and transfer pricing, subsidized predatory below-cost pricing, dark patterns, aggressive collection and monetization of user data, acqui-hires to stifle competition, implementing high-switching costs to create vendor lock-in, round-tripping, channel-stuffing, business models that intentionally externalize costs, outright fraud.
If we believed that the only people who should be morally allowed to benefit from asset appreciation are the people who actively work for that company, the entire economy would collapse.
For example, every pension fund, endowment, retirement fund, etc. are all invested in financial assets that they had NO role in. All they do is own something that become more valuable as other people labor and innovate! Shall we cast them as evil capitalists?
AOC’s criticism is that “own stock, share in gains” is not the same as earning money.
My position is that this is not a good thing.
Also, a large share of the value I add to society is attributable to the person who set up the institution I'm working in. I work hard and am friendly but without someone setting up an organization that employs programmers usefully, the most I can do for you is fix your Wifi. I would vote to keep paying the builders after they leave.
Look, I know this is a tech forum and we don't claim to be good at the social sciences, but this is a central debate and r>g, the idea that the rate of return to capital tends to exceed economic growth over the course of history, is a major result from Piketty's Capital In The 21st Century that people interested in "grow the pie" vs "trickle down" really ought to be familiar with. Even if you disagree, you ought to be able to articulate why, and "the average includes winners and losers" ain't it.
"But life has improved, r>g couldn't have been true forever" -- last time the inequality bubble popped because of a great depression and two world wars. The capital was incinerated, metaphorically and literally. It's a cautionary tale and we should aspire to do better.
Why is it a cautionary tale? Sounds like we should have a bunch of incinerations of capital, ideally let the capital mobilizers that are actually competent survive.
I haven't read the source but for one, there wasn't really even a US dollar until 1935. When banks failed, and they did unlike now when they artificially don't, you lost everything. There was no FDIC. All of those mechanisms are artificial and serve to make the banking industry large and profitable.
Not to mention currency debasement, another aspect of the modern world that makes finance uniquely profitable and, really, white collar work existent in any major form at all. It's ingenious. Since capitalism is naturally deflationary, as competition removes all profit over the long term, let's interfere and make it so workers make less money every working day. Hence, in order to make even the same amount of money each year, one has to either rise in the hierarchy, or argue for raises, which is inherently risky.
Basically, before 1935, it was hard to accumulate that much wealth. It wasn't generally backed by any nation state guarantee. Real estate has always been a great store of wealth, but it has physical limitations. The world since 1935 is now a world of nation state wealth guarantees. The only reason this amount of wealth is allowed to occur, is because of it. We took a strange path since 2008, when the banks were not allowed to fail. Everything eventually comes to pass.
I'm surprised someone who picked the name "engineeringwoke" has no love for FDR. He's the GOAT!
The largest bank in the US is #14 on the S&P by market cap. If the Federal Reserve is a conspiracy to make banks profitable, it is doing a poor job. More to the point: I challenge anyone who doesn't like the Fed and the compromise it represents (money printer exists, but is guarded from the politicians by a council of 12) to name their alternative. Hard money? Politicians can print? You picked "hard money." Let's go!
Everyone who learns about the Cantillon Pump thinks they would love to run it in reverse. This is because they don't understand that it does not run in reverse. It is not symmetrical. They underestimate the pain of a deflationary shock, where everyone (namely your employer) gets an incentive to not participate in the economy and then stops participating in the economy (namely by employing you). Rent and debt is still due, of course. This is the pain that inspired the USA to split from Britain (scrip/specie). This is the pain of the Great Depression -- you threw out that 1935 date like it was the culmination of a Bond bad guy plot, not the capitulation of a country tired of deflation. We even have the counterfactual: Germany, having just escaped the Weimar inflation, decided in 1929 to take the deflationary response to the Great Depression. It led them to a very dark place.
Returning to the USA: they weren't called "robber barons" because they failed to accumulate wealth. Capitalism does not guarantee competition (quite the opposite, strong property rights are the nexus of anticompetitive opportunity) which does not remove all profit over the long term, it squeezes it onto assets, which is where that unearned income we were talking about originates from. If you have ever heard or given a business pitch, attended a class in business school, or listened to a VC for 30 seconds you have heard some heinously anticompetitive scheme and their plan to leverage it for personal gain by turning it into an asset they own. Network effects, platform effects, two sided markets, returns to scale, etc etc etc. Usually they don't work, but when they do and you get a stock or a deed or a title to a money fountain (exploitation fountain, seen from the other side) you get to stack trillions while the competition spends decades trying to cross your capitalism-created and capitalism-guaranteed moat.
Yes, in recent times the money printer has been used to exacerbate inequality. But it isn't the cause of inequality -- certainly not if you look at what happened in the 1935: https://ceprdc.tumblr.com/post/87307310830/piketty-in-one-gr...
Turns out you can have an inflationary adjustment and unwind inequality and boost the economy at the same time, so long as you remember to tax the rich. FDR sends his regards!
You'd like Capital in the 21st Century.
I made this point many times a number of years back and gave up. It's incredible how an entire message board of HN that supposedly is extremely pro market competition, seems to entirely be unaware (or just collectively puts it's head in the sand) that the #1 strategy that most VC backed firms seem to target is "figure out out as quickly as possible how we can get out of having to compete with others". And they do so under the name of "a moat".
Building a moat is one of the most anti-market actions that can be taken. You hear commenters post non-stop about the ills of communism as it avoids market competition, but somehow every seems to just gloss over or ignore the fact that moats are designed to do the same thing and cause the same issue. Terrible allocation of capital.
If you think of inflation as money supply growth, or growth relative to gold, the economy has barely grown since 1971 when Bretton Woods was ended. However, the economy did grow in gold terms in the period beforehand. Why would that be? Is your theory from a textbook truly applicable or just a way of enforcing the current economic norms that heavily benefit nation states? If you force all assets to go up, you bleed your asset holders via tax as well. They don't want people to believe in ideas that could break their hegemony.
> Capitalism does not guarantee competition (quite the opposite, strong property rights are the nexus of anticompetitive opportunity) which does not remove all profit over the long term
This is a different conversation, regulatory versus monetary. It also weakens your r > g business book pseudoscience argument. I studied economics and finance enough, I don't need some cheap armchair economist slag.
> tax the rich
Nice, if I didn't need any more proof that this is just another diatribe based on another faddish idea about how to fix the economy. Wait, did I say that earlier? Something about how ideas can be used to control the bounds of policy, the Overton window.
You still haven't explained why we should expect hard money to fix America when hard money broke America in 1750 and America and Germany in 1929.
PG just completely misunderstands and hand-waves over this basic concept and makes the excuse that "hey we worked really hard and made an amazing product that people loved, we aren't harming anyone."
For one thing, founders and employees don't share equally in the high growth rate of the company even though at most a founder is working let's say 2x longer hours than a salaried employee. You can do nothing wrong but you're still taking more of your fair share by the basic structure of how the business is setup.
I think anyone who is running a successful company and doesn't have a path to converting to an employee-owned enterprise is immoral, especially if you have managed to capture $1 billion just for yourself while your median employee is just making market rate salaries, or maybe they happened to gamble on your stock options and have a modest nest egg about 1/100th-1/50th the size of your wealth as a founder.
So yeah, Jeff Bezos made $260 billion dollars, but an alternative that could have happened was "Jeff Bezos makes $50 million and every Amazon employee gets a much more fair share of the happy customers' money."
More importantly, if you have $1 billion in net worth, that means that you can choose to do anything with your life on a daily basis.
When I'm over here working my job in my cushy upper middle class life, it's still an objective truth that I need to be selfish in order to secure the future of my family. Nothing is guaranteed and we need to fend for ourselves. I can't stop working or the home finances collapse within months or a short number of years if I'm very lucky and have something significant saved up or my house paid off. I legitimately don't have the time or money to help many other people outside of my nuclear and extended family.
But when you have a billion dollars (and some people have hundreds of those and one person even has a thousand of those), that means you have no limit to what you spend your time on. You can do anything, and deciding not to work on capitalist endeavors anymore has zero chance of turning you destitute.
In other words, when you are a billionaire, what you choose to spend your time on says a lot about the content of your character compared to someone who is not that wealthy.
Paul Graham is out here giving speeches to rich kids at Oxford Union, but he could be spending his morning in the local soup kitchen or building homes with Habitat for Humanity. He could be mentoring people who are struggling to escape housing insecurity, or he could be working with advocacy groups to expand healthcare access and end childhood hunger.
He doesn't have to go to work every day like I do. But he is one of the people who has dedicated his life to capitalism, even after successfully taking care of his family for many lifetimes, and that says a lot about him.
What is fair? Obviously hours worked is one metric to determine what is fair. But another way to arrive at what is fair is through negotiation. Neither the founders nor potential hires are obligated to work with one another. The only way it happens is if an early employee believes the compensation they are offered by the founders is fair. If it was unfair, they would presumably reject the offer outright.
My first startup was one where I was hired because I was young and cheap. I could be paid in free lunches rather than 401k matching and decent healthcare plans.
Big companies often pay better salaries.
Your last sentence you’re saying it’s fair to make this assumption that most other jobs are worse.
So that means if a non-startup offered you a better pay package your assumption and bias might steer you away and take worse compensation to do the same job.
I ask you this question because I made a similar mistake in my youth. I took a pay and benefits cut for a startup because it sounded a lot more fun. 6 months later and the company was going under and I was out of a job.
There are also plenty of employees who just didn’t get a job offer elsewhere. When I took my first startup job I didn’t have a competing offer.
Meta is paying a Security Engineer (not a lead) $271,000/year to $347,000/year + bonus + equity + benefits across the following locations: Bellevue, WA, Menlo Park, CA, Washington, DC, New York, NY
I find it hard to reconcile that salary difference, and I think the only way to explain it is that startups offer dreams of upside like a smoky Vegas casino.
Working for Meta [1] is "boring" and corporate, but it's also objectively a better financial decision unless Glimpse becomes the next Uber. My point is that I am hypothesizing that tech culture encourages people (especially young people) to prefer objectively worse financial outcomes to do the exact same work at a more "exciting" startup company.
At the time you joined those startups, you considered those other opportunities to be worse, but I wonder if that was true or if that was perception? Of course, I don't intend to tell you that you were wrong, in fact I think it's highly likely you were right. I only mean to say that it's worth introspecting on the concept.
[1] Or insert any other large and slightly more ethical company, if we want to disqualify working for Meta due to its "evil empire problem."
But there are also genuine advantages that others simply might not see. For example, many would rather apply to work at a startup because it's an easier job to get than one at Meta, Alphabet, Amazon, etc., and not having to study as hard for interviews is a genuine advantage to some that's worth the money left on the table. Or for others, maybe they want a more casual work environment. Or others might just want startup experience because they hope to start a startup someday. Etc.
Your definition of "fair" is questionable.
If you're negotiating from a position where you've taken on debts and rent that you can't afford to pay, and time has run out to the point where you're desperate for a paycheck as soon as possible, that's unfortunate. But that's not the fault of the person you're negotiating for a job with. Exceptional cases aside, 95% of the time that's likely due to your own risk-taking, neglect, poor decision-making, or financial mismanagement. And you had a "fair" chance to not get into that situation to begin with.
But regardless of blame, it's certainly not the fault of the counterparty in your employment negotiations in that you're in that spot. Nor is it their responsibility. Nor should we want it to be! What kind of system would that be, exactly? A brutal one where many more people fall through the gaps than would otherwise. A much better system is the one we have, where people pay taxes, and do so at higher rates the more fortunate they are, and that tax money goes into programs like unemployment, which helps people in exceptional situations.
What's so unfair about this, exactly?
> What's so unfair about this, exactly?
We don't roll the same dices at birth.
Especially because in America at least, over 200 million people are born middle class or above. An even lower class in America is doing much better than many other countries in the world.
At what point in your mind does personal accountability come into play? How prosperous does a nation have to be for people to have some responsibility for the consequences of their own actions? Or are people never responsible?
When we're discussing policy for our society however it's too easy to blame people for the choices they made so we don't have to think harder. The world's complexity is beyond what the humans brain can hold at any single time. Some people are dealt bad hands, born in a difficult family, born in a body that slow them down or drag them down. Some people make one bad choice (even something mild like a financially unprofitable carrer choice) at 18 because millions of parameters that played since their birth compulsed their brain to make that choice at that moment in their life. Not even mentioning meeting the wrong people. You can do everything well and cross the path of someone who breaks you.
Truly and without getting too philosophical,looking back and learning about people's stories I've come to realize that we have little agency and by the time we understand how the world works and what we should have done instead it's often too late to change the outcome drastically.
To tie it all back to the topic of this thread, the 19 year old who's been pushed by his parents all his life to get good grades, study well, get involved in the right extracurriculars, ends up at Stanford, starts a startup because that's what people do around him, is told to apply to YC, is accepted, is taken care of by YC, tell me how much is he responsible for his success?
To me, this inspires empathy and care, and it's why I believe that society should have a very high floor. But discussions like these, and the current "eat the rich" zeitgeist seem to focus so much more on lowering the ceiling. Which to me is the wrong focus.
Luckily, we've never actually capped the ceiling, and it's unlikely we ever will.
There should be a ceiling or we reach the current state where accountability is nothing a million dollars can't buy.
More than one million people die of TB annually. We have a cure for it. Elon Musk could pay for testing and treatment distribution for the entire world without noticing a change in his wealth.
A million people a year.
Millions dead every year from TB. A curable disease.
I live in a country where “oopsy doopsy your insurance denied this so now you owe us 20,000” isn’t terribly uncommon and your employer can fire you without any warning or severance. “I need money for the rent this month” is not consistently some moral failing.
We might as well just say “I exploited my structural power over my employees and got a better deal for myself.”
Of course the employees agreed to the deal presented to them, what other option did they have? They aren’t like all these founders that have the luxury of being unemployed because their dad will pay the rent.
That’s another point I forgot to bring up entirely: PG also hand-waved over the quantity of billionaires from his accelerator that came from families of very decent means where they have the luxury of risking failure. The quantity of true rags to riches billionaires is extremely slim.
What? The employees had infinity other options! They could have negotiated harder. They could have declined the job. They could have taken a job somewhere else. They could have taken the risk to start their own startup, and been in the founder position, instead of choosing to be in the employee position and getting the security and reduced stress that comes along with it.
> That’s another point I forgot to bring up entirely: PG also hand-waved over the quantity of billionaires from his accelerator that came from families of very decent means where they have the luxury of risking failure. The quantity of true rags to riches billionaires is extremely slim.
Over 200M Americans come from middle class backgrounds are above. YC also provides founders with the funds to pay themselves while they start their company. I did YC when I had almost $0 to my name and no well-off family to rely on.
But you said earlier that YC pays founders for living expenses. What risk are YC founders taking?
In contrast, every startup I’ve worked at has offered equity in the form of options where I had to stake my personal finances just to own company equity. None of them granted shares to me as a reward for my labor. I was taking more of a financial risk than the founder of the company just to own a stake!
VC-backed Startups are much different than small businesses where founders take personal financial risks. The VC itself is also not taking any kind of outsized risk as it has mitigated that risk by betting on dozens of companies. They expect most of their companies to fail and leave their employees high and dry, but that’s not their problem and is baked into the formula.
Essentially VCs have plenty of capital and no ideas, so they pay outsized equity compensation to founders for ideas. But the early employees are just interchangeable implementers and get basically nothing by comparison.
If I started a cupcake truck with my friends, they wouldn’t be my friends anymore if I decided I get 50x their equity stake just because it was my idea.
In my opinion, our business systems have been allowed to get away with much more inequality than should be legal. Each caste is orders of magnitude away from each other rather than being linear steps above each other.
Importantly, people are free to walk away from a bad deal. If you don't like a store's wares, you can go to another store. If you don't like a job offer, you can apply to a different job. Freedom of choice creates competition, which puts pressure on buyers and sellers alike to actually come to terms.
Your post comes across as someone who is consistently in the seller position (selling your labor for compensation), and who's simply advocating for his own personal interests in wanting higher wages. But for some reason, you think your own personal opinion about exactly how much you should be paid is what the bar is for "fair", rather than the prices set by the market, that is, the repeated agreements by tens of thousands of people day after day for years.
And that perplexes me. Why are you so special? Why is your opinion or anybody else's opinion supposed to be the basis of what's fair? I've never met someone who's not just going to argue for their own interests here, exactly as you're doing.
If you don't think it's a good deal to work at a startup and get the equity that you're offered, then you can negotiate or you can just walk away from the deal and work somewhere else. There are many tens of thousands of jobs that I personally don't think are a good deal, or I wouldn't work there. But for other people, they are a good deal. I don't really understand where this belief comes from that, because you personally don't find it to be a good deal, that it's objectively unfair for everyone else, even as they're accepting it willingly.
> But you said earlier that YC pays founders for living expenses. What risk are YC founders taking?
I could have easily gone and gotten a job at Google and made a lot more money very easily. Instead, I spent a ton of time and effort trying to create something new in the world and take it from zero to one. That was a lot of personal sacrifice, giving up my nights and weekends and living off Ramen noodles and almost no money. Just that I could get something successful and useful enough to be in a position to realistically even apply to YC and hopefully get accepted. And I was still rejected twice before finally getting in.
If you think being a founder is so risk-free, so easy, and such a good deal because of how much equity you get to keep, then presumably what should happen is many more people should find the prospect attractive and become founders, relative to becoming early-stage employees, and that should drive up the prices that early-stage employees are able to charge.
Selling labor on the labor market, well, you can just go find whatever offer is on the labor market (e.g., your first five paragraphs)
You had to beat out a bunch of other people and get rejected twice in order to go the startup route. However, I think you are mistaking hard work and low pay for risk in this transaction.
There's no risk because, like you said, "I could have easily gone and gotten a job at Google and made a lot more money very easily." You can always go back to selling your labor on the market.
You aren't risking any personal property or savings. A college student is also living on ramen and giving up nights and weekends, but they are actually taking a bigger risk than a VC founder by paying tuition to the school.
What is happening here is that VCs/incubators are using scarcity as a quality filter since they're trying to buy good ideas/stake in early stage companies and dangle the founders' lottery ticket/casino jackpot to buy those ideas.
I think that startup founders are in weird sandwich between being exploited by VCs in the worst case and being unfairly over-compensated by them in the best case. I'm sure many of your early employees also worked nights and weekends just like you did, but they have less of an ownership stake than founders do.
Maybe the founder's scenario is similar to an NFL player, where average players have short careers and are left with broken bodies and dreams, while the star quarterbacks leave as billionaires. This is why the NFL has a players union.
The risk is the opportunity cost. Going and getting a job at Google pays a lot of money. Repeatedly starting and failing at startups, or getting rejected by YC, doesn't pay you anything. I was a student and then a recent grad with lots of debt, so I had all the normal risk of a college student living on ramen and giving up nights and weekends.
> I think that startup founders are in weird sandwich between being exploited by VCs
What makes an agreement between two parties exploitation, exactly?
> the star quarterbacks leave as billionaires.
I think it sucks that the NFL destroys people's brains and bodies. But why is it so bad that the star quarterbacks command such high pay?
There are many other definitions of fairness as well.
This comes back to the thread we’re discussing. What a fair wage means is a philosophical and moral question. Not just a math problem.
If someone inherits a business and earns higher wages than their workers is that fair? What did they do to earn that?
Hey, that 8 year old was willing to work in the asbestos factory, that’s just fair market value!
My word do people actually believe this. What theoretical econ 101 textbook are you living in?
Which of those would provide the most benefit to the world?
Grombobulous says "But he is one of the people who has dedicated his life to capitalism, even after successfully taking care of his family for many lifetimes, and that says a lot about him."
You're simply anti-capitalist. Please post about that instead of mounting personal attacks on people who make more money than you. And please cease telling other people what to do and not do! Try to put yourself into their shoes and think harder about their situation.
This is the most ironic comment I've seen in a while.
Nonsense. You are a simple study and you are envious. There are good reasons why envy is listed as one of the "Seven Deadly Sins". See Wikipedia:
https://en.wikipedia.org/wiki/Envy
Reading "St. Augustine on Envy" might help:
https://fountainofelias.blogspot.com/2019/08/st-augustine-on...
Thomas Aquinas on Envy:
https://www.newadvent.org/summa/3036.htm
Stanford Encyclopedia of Philosophy on Envy:
People like you are so sociopathic and unaware that it's simply comedy.
> people who make more money than you.
One of the things I realized, as I made more money... was how much _easier_ every aspect of earning gets, as you are already earning more, and as you need it less.
We live in a system that almost _automatically_ overallocates wealth to people who do little for society. It's pathetic.
Jeff Bezos famously took an $80,000/yr salary. Bezos didn't make $260 billion, or anything within 1/1000th of that. He built a company, that through some inane estimations his share of which might be $260 billion.
For him to not have that imaginary $260 billion would be for the company to not be built at all. So, if that's what you want, you're at least consistent... but no one else would think that a particularly good idea. Quite a few people like being able to order things online and receive them quickly. They don't want to have to go back to stomping through Walmart, hoping that the store has what they need.
I think part of the problem is that if you can slap a label on someone of "Eleventy billion dollars", everyone's brain malfunctions and treats it as a literal fact, regardless of the truth of the label. When you don't want billionaires to have billions, what you're saying is that you don't want them in control of those billion dollar companies. But do you not want the companies to exist, or do you just want someone else in control of those companies? And who?
This seems to come up on every thread like this. Owning 9% of a company that generates ~$80B in profits and employees 1.5m+ people is literally a massive amount of wealth and putting a dollar figure on that is both straightforward and accurate.
Anyone who owns a house can understand that liquidity and net worth are two different things. But shares of Amazon are far more liquid than a typical home.
In case you need a real example, Bezos personally funds Blue Origin by selling around $1B worth of Amazon stock each year. That's 11000 people earning their salaries + a huge amount of capital investment that are all funded from this so-call "imaginary" money. I can assure you that each time those people get a paycheck, it's just as real as yours.
Sure, but we also attach imaginary dollars to things that wouldn't and can't sell for those imaginary dollars, or even large fractions. And I expect older children to at least catch on to that fact, but a great many adults never seem to.
> and employees 1.5m+ people is l
So is that what the leftists hate? That he employs 1.5 million people? You want that to stop. That's the the part of the him being a billionaire that hurts the most?
>and putting a dollar figure on that is both straightforward and accurate.
If that were true, he could sell it for that valuation tomorrow. But as soon as he tried, the amount would drop, and the company might even be in peril. So it's neither accurate nor straightforward. It's convoluted and overestimated.
>In case you need a real example, Bezos personally funds Blue Origin
So that's the part of his wealth that you despise... that he employs people making spaceships? Those 11,000 people are the problem?
My point is has nothing to do with despising blue origin - it's just a direct contradiction to your absurd belief that this wealth is imaginary. You can't fund that big a company on imagination!
Are they earning (collectively) $260 billion? Are they earning anything like a significant fraction of $260 billion? Is the amount they collectively earn, whatever the total, coming out of Jeff Bezos' wealth, subtracted from it, or are they paid out of several different funding streams such as the government contracts and commercial revenue?
And you think this is somehow some sort of gotcha question. "Look, I've proved that Jeff Bezos has $260 billion!" (or whatever the amount was supposed to be). You're unable to think clearly or correctly on the matter. It's scary how confused you are.
And again, he only owns 9% of Amazon. Of course if he dumped all of that stock at once the price would go down, but Bill Gates sold almost all of his Microsoft stock for cash and Microsoft stock has continued to go up. Jeff Bezos could certainly do the same and come out the other end with around $260B in cash - but he has zero reason to go do that..
Here's another way to look at this: do you have a retirement account? Is the money in there imaginary? If not, why not?
worth mentioning that our current system is setup by and for the people who own the stuff so its no surprise that we need them to make new stuff.
To get a billion from a million you need to do 15% for fifty years, and that ignores inflation. Or 25% for thirty-one years.
These numbers are ludicrous.
They are also speculative, not real. They are based on the notion that the company would be worth that much based on projected cash flows, expenses, etc. If you actually tried to cash it all out at any point in time you could not get anything close to that because the very act of selling will lower the value by destroying confidence in the speculative valuations.
None of these SV billionares have billions in cash or cash equivalents. Maybe a few of the largest companies do.
US GDP is $31.82 trillion dollars per year. Taking the 2.5% growth rate, that's nearly $800 billion dollars per year in new GDP.
The economy very obviously does not progress as a bunch of soldiers marching in a straight line. Some firms will shrink 100%, some will growth 10,000%. This much is obvious by just looking around. But even if no businesses shrank, no wages were docked, nothing bad happened... even still there would be $800B in more GDP.
So if the economy is growing at $800B per year, it's extremely obvious how a company could even grow from $1M to $1B in revenue per year without doing anything shady... Just capture some of the new economic activity that cropped up this year!
And it's even easier when we're talking about an entrepreneur's net worth. Their net worth is going to be mostly holdings in company stock. The value of company stock is some multiple of the company's theoretical future financial earnings.
So if a company is making $1M revenue today, and growths to $5M revenue by the end of the year (15% MoM growth), at let's say a 30% EBITDA margin, they have made $1.5M EBITDA. And let's say that fast growth is rewarded at an extremely rich 50x EBITDA multiple. That company is now worth $75M. If this founder is lucky and owns 50% of their business, they now are "worth" $37.5M.
If they were only at $1M * .30 * 50 * 0.50 = $7.5M net worth at the beginning of the year, and then were at $37.5M at the end, their net worth increased by 500% in one year! And all they had to do was capture $4M / $8000M = 0.05% of the increase in GDP.
Like, none of this is either shady or complicated.
I agree you’ve demonstrated that there is enough economic growth to not contradict PG’s hypothetical numbers. But I think we should strive for a deeper understanding than “all they had to do was capture… 0.05% of the increase in GDP”.
Just as a counter-example, a Robber Baron could monopolize all the profits in the rail sector and run a drug mafia on the side, and it would show up the same in your numbers; “all they did was capture 5% of the increase in GDP”. In other words, like PG you don’t actually prove the point you’re arguing; you just provided a story that doesn’t contradict it. (Capturing the annual wealth creation of ~350m*0.05% ~= 175,000 people doesn’t seem on its face to be obviously fair or routine, rather it seems like a tail outlier worthy of further investigation.)
The way I would frame it is, what we actually need to do is look at the firm level metrics and figure out what is going on. (A founder becoming a billionaire typically means their company grew to the order of $10b - let’s look at the business practices of $10b companies or founders with confirmed liquidity valuations in our range.)
If you look at founders like Jobs, I think it’s pretty clear he made his first $b (via Pixar) just by making things people loved. Companies like Uber obviously relied to some extent on regulatory arbitrage, and you can debate the timing of e.g. Google founders’ shift to monopoly rent extraction, I would likely argue they got their $b “fairly”.
The second order question of course - would markets price your company at $10b if they didn’t think you had a future monopoly opportunity? Expectation vs current reality makes this all more complex.
But I think for PG’s purposes you can ignore the second order and just talk about successful, billionaires who built things that people loved.
The problem of course is that nobody likes billionaires these days (except politicians of course) and so it’s a much less marketable narrative. And there is the crux of the problem; this post is not an honest attempt to increase our understanding of the world, it’s a political slogan.
That said, I think there are a great many people who believe that all forms of wealth acquisition (above a certain scale) are fundamentally immoral. And that belief is held because they believe, "The only way you get a billion dollars is taking advantage of working people, not earning it."
So, my read is that PG's point is not to defend all billionaires. But instead, to debunk the incorrect folk-belief that all billionaires necessarily are exploitative.
I didn't even exploit my workers and make a margin on their labor. Please can someone who believes billionaires are evil explain this to me.
Focusing on completely optional and often imagined "externalities" just reveals a certain mindset (one could find some for cases like Amazon, but bezos became a billionaire in 1998 so whatever Amazon does after that doesn't directly apply, unless the goalposts are moved).
An example I love is hollowing out of this or that. The fact that people wanted to shop at Amazon (especially in 1998) and not a local bookstore, like the fact that people want to go to a Taylor Swift concert and not your indie band's is not an externality, it's a skill issue.
The problem with AOC’s argument is she’s recycling a 2008 talking point into a context where it doesn’t make sense. Financial entities making trillions moving money around raises questions about whether value is really being created. When I get three Amazon packages delivered to my house every day, there’s no question about value creation.
Her point isn’t that Amazon is bad because it’s a trillion dollar company
Her point is that Bezos is bad because he and Amazon could have paid that driver 10x what they make and still had more money than they could spend in 100 lifetimes
The distribution of the gains is absurdly weighted towards the top
How is that relevant to anything? There are intelligent criticisms of Amazon. But this is just a non-sequitur.
The point is that his wealth is from exploiting labor out of greed.
He could take a smaller share and still be plenty rich and many more people would be much better off than they are today.
But he doesn’t. The disparity is so vast that it is arguably immoral or unethical. That’s AOCs point
The entire point is that the riches borne of the success of amazon could have been shared more equally while not actually making a different in Bezos' or his families life.
The only difference would have been that his score on the billionaire leader board would have been slightly lower.
That fact is not only relevant, it's a central pillar of the point.
Why does that matter? What is the universal principle that’s at play here? Does this principle apply to everyone? Does it apply to you? People in my dad’s village in Bangladesh survive on $5/day. Under your principle, why do you get to spend 1,000x that on a vacation?
Can you also explain your math? You said above that Amazon could pay its workers 10x as much as they do now. Bezos’s share of Amazon’s net profit last year was about $6.9 billion. Amazon has 1.1 million delivery drivers and warehouse workers. So if Bezos’s share was nothing, those workers could earn about $6,300 more. That’s like 10-15% more, not 10 times more as you incorrectly said.
We're not talking about Bezos's profit share for one year. We're talking about giving the workers a bigger share of the profit. Ideally, there would have been a workers union that owned a significant number of amazon shares or some other similar structure. Then all workers benefit from the compounding growth pg is talking about in the article. However that didn't happen, because Bezos didn't want it to happen.
Those are the same thing, because you can only take Bezos's 9% of Amazon once. If you took all of Bezos's Amazon stock and put it in a trust for the workers, the profits from that would have amounted to $6,300 per worker last year. That's a nice bonus, but it's not 10x like you said.
It very obviously goes to the people working at Amazon. Political party has nothing to do with anything
Everyday, people grind their own flour.
Then I build a mill, and allow them to use it in exchange for a part of their flour.
Is my wealth not earned?
In the US that would make me a billionaire.
You couldn't do it by yourself. A team of people could, and if they shared the billion, none of them would have a billion, but if you were the company owner and got to keep 50%, but your team of a hundred made two billion, you'd be a billionaire but not because you earned it.
> She wasn't saying, of course, that it's impossible to become a billionaire. Obviously that's possible. Nor was she talking about the distinction between income and capital gains. She wasn't making a point about accounting. What she meant was that it's impossible to get that rich without doing something bad — without cheating in some way.
IMO, that's a pretty fair interpretation, given Warren's rhetorical history.
> ...one doesn't earn a billion dollars through work alone > set up a structure that extracts a billion dollars from a market
If we accept that interpretation (which I don't), in what way is the latter not "work"?
Guy wrote an essay criticizing “woke” on the eve of Trump’s inauguration and is now running interference for billionaires causing an affordability crisis.
If someone is out of tune enough they are probably just playing a different song.
What you said she said: "The only way to get there is to set up a structure that extracts a billion dollars from a market"
Extracting does, in fact, imply "something bad". To extract is to take something for yourself without adding value. That is bad. Your language implies that the people who make that sort of money do not add, which is what pg is trying to refute.
Taking your interpretation at face value I would add that yes we call it “capitalism” not “laborism”.
like other "entrepreneurs" its most likely self-affirming bullshit, cranked up to religious levels (cue any modern ayn rand equivalent)
She meant it was unethical to do so. It wasn't about working alone or not.
I know we like AOC but the way people bend over backward for her is off-putting.
"Company" is doing some very heavy lifting in how you are using it. The "company" in that sense does not include any worker who isn't a meaningful equity participant. In Amazon's case, or Telsa/SpaceX's case, the "company" is a single founder and his cronnies.
But as for `the work of the workers does not on its own create the value`... I just don't see how that isn't completely incorrect. It is literally the only part that is at the core of the value creation.
How much value would be created by Amazon tomorrow if every fulfillment worker and driver didn't show up? Basically none. But Jeff Bezos could die of a heart attack tomorrow and it wouldn't stop a single dollar of value creation.
We really don't appreciate the contributions of workers enough in this country. Whether it is the medical assistant at the doctor's office, the person who makes your burrito, delivers the Amazon diaper's order, or even check you out at the store. If people stop showing up to work, this all falls apart. It won't matter how much capital you have if you have no workers.
You can worry about whether the split of return is correct, but arguing that the pile of paperwork is valueless or somehow nonexistent is silly. Value flowing to investors is a consequence of how that pile of paperwork is set up and what is on the papers, nothing more or less.
China probably has the most successful communist government ever (in large part by selectively adopting capitalism) but it isn't like the conditions for their workers are better than in the U.S. or Europe.
All this talk of "late-stage capitalism" seems to miss the mark. It is the rise of many forms of authoritarianism that is the leading cause of disregard for the needs of every day working peoples.
As he got a little older, he cut back on that pro-discrimination advice... that typical thing where he was able to recognize the problems with his bigotry only after he would have been on the other side of it.
As he has become ludicrously wealthy he has, unfortunately, lost all track of reality. He no longer engages with the practical or the real... instead he deliberately misreads a quote so that he can wrote a pathetic and defensive response to it that engages in bad faith. And because he is ludicrously wealthy, he is surrounded by a mix of yes-men, and other hyper-wealthy sociopaths. So none of them give him critical feedback.
Paul Graham has become useless to society. He is, fundamentally, just a mindless pile of cash.
And an overly simplistic view of the math problem too. (Surely going from 1000 to 2000 customers is as easy as going from 10 to 20, right?)
And to the people criticizing, this is cheating. To them, a billion dollars enterprise is not possible without the exploitation of employees, customers, or at least the environment.
Also, the most important thing to understand about a society is how people gain status, not just money/wealth. If you focus on money, you won't have an explanation for political movements or artistic endeavors.
There's a cost to perfection. In our computing world, every extra nine of reliability is more expensive than the last, often with diminishing returns.
See also: Florida drug testing welfare recipients cost more than it saved. https://www.aclu.org/news/smart-justice/just-we-suspected-fl...
If I’ve already found with a poor justification or better yet, someone is proposing a new one. Shouldn’t we remove it?
For example:
https://x.com/NEWSMAX/status/1937470443168182386
> A government agency spending $300 million in taxpayer dollars to produce sterilized flies sounds like a dream scenario for a DOGE team looking to cut waste, fraud, and abuse.
A year later:
https://www.cnn.com/2026/06/09/business/what-consumers-shoul...
> Grocery shoppers could get hit with higher prices if the screwworm cases turn into a full-blown outbreak. That could cost $3 billion across the Southwest, according to a report by the Federal Reserve Bank of Dallas.
Good tax, or bad tax?
Returning to your question, though: Yes, I assert the cost of troubleshooting a "bad tax" may exceed the benefits of having addressed it.
We don’t have to treat taxes as a pool we can look at the pros and cons of each one. Taxes are not benevolent and good by nature.
You seem to be suggesting here it’s impossible or too costly to weigh pros or cons. So I would not consider you for an administrative position
"Look at the pros and cons of each one" is an enormous handwave; I've provided very clear evidence of our inability to do that successfully in a very topical and concrete case.
Sounds like you agree.
We are tweaking a multi-trillion dollar system impacting hundreds of millions of people directly and billions indirectly. The impacts of those tweaks take years or decades to (imperfectly!) assess. Many of the tweaks and their impacts are a matter of deep partisan and academic contention.
What about new tax proposals? Shouldn’t we then reject them all to avoid butterfly effects in this carefully tuned ideal?
I'm noting that our political system seems to generate lots of folks going "this is wasteful spending!" when it's… not.
That results in challenges in determining what's a "bad tax" and what's a "good tax", and the consequences of cutting programs may take time to show up.
This illustrates very well how difficult it will be to agree on good/bad tax.
> There definitely are ways to look at each tax and determine its worth, in a non-partisan way.
If you've found one, can I come to the Nobel ceremony?
We have those, and they disagree almost as much as the general public does. Economists get plenty partisan; they're human!
> By that logic, any tax I suggest should be accepted by you, because there is no way to tell if it's good or bad right?
No. But I'm deeply skeptical of "bad tax!" assessments from someone who's calling random people Marxists on this thread!
And yes, economists are human of course (unless they're now AI). Not sure how that changes what I said. Just because they disagree doesn't mean what they do isn't better than throwing your hands up and saying it can't be done.
> There definitely are ways to look at each tax and determine its worth, in a non-partisan way.
You then asserted those are:
> Academic panels, economists writing papers on impacts of various policies like rent control, monetary policy, and yes, taxes.
But Marx himself is an example of that process - an economist, writing papers on all this. You clearly don't agree with his conclusions, so now we're... right back where we started?
So your functional way to effectively assess good/bad tax is ... not so functional.
Anyway, you're seeming to misunderstand me when I asked you questions as well, such as why you took Marxist for an insult for example when it accurately describes what I was talking about. I'm not the only one that will answer your questions, seems like there is some sort of sealioning you're doing in this thread.
Do you vote?
Turns out paying more money to an already corrupt government doesn't turn it less corrupt. Go figure, hm?
I live in the US and pay less raw tax than that, for sure.
But I reported $49k in medical expenses (premiums, deductible, copays, stuff they won't cover) last year on my taxes, and I've got two kids going to college in a year, which may cost $10-40k/year for each.
I'd rather your trade-off.
I see you're unfamiliar with American student loans.
> And Germany still makes you get private insurance for medical.
We spend about double what you do for healthcare, inclusive of both private and public spending. https://commons.wikimedia.org/wiki/File:OECD_health_expendit...
> What were you doing with your money in those other years?
An enormous amount of it has been going to healthcare for about twenty years now. This wasn't our first year of such costs.
I never said I was - I'll certainly try to help where I can. I don't have that kind of money; see aforementioned healthcare costs! They're gonna need loans, it's probably gonna be quite a bit more than $40k, and I'm pretty dubious in the current job market that they're gonna have $40k in discretional annual income on the other end.
> I don't want to pay 15% of my income forever just because you can't budget.
And I don't want to go bankrupt from ever-rising medical costs, but here we are.
https://commons.wikimedia.org/wiki/File:Average_annual_healt...
We seem to be making most of the changes in favor of the already very well-off, instead of, say, expanding the EITC.
https://commons.wikimedia.org/wiki/File:1960-_Tax_rates_of_r...
While at Amazon Jeff Bezos considers his worth to be 80k a year hence he was paid that much, and paid taxes in that salary.
If someone becomes a billionaire by being paid 50m a year for 40 years and paying taxes on that income then congrats.
Has he earned his wealth over 40 years at an income of 7b a year he’d have paid 115b in tax, not 3b.
Well that’s wrong. Exploitive businesses do exist. Rent seeking and arbitrage does exist. But the ire today isn’t directed to Wall Street or private equity. It’s being directed to people who built real companies. It’s not inherently exploitive to sell a customer a valuable product or employ someone to build that product.
In the 1990s, it took weeks to order something by mail. Amazon can now deliver me stuff the same day of the next morning. That’s amazing, considering that it’s all done with trucks, warehouses, and other things that already existed in the 1990s. Whoever made that happen when USPS couldn’t do it deserves to be a billionaire.
This bit might be a bit unfair. USPS and Amazon Delivery are different services, fulfilling different needs. Neither will deliver a pizza in 30 min or less, for example.
Looks like Amazon will deliver me a (frozen) pizza in 23 minutes, actually!
It's also impossible without Amazon exploiting all the workers in the chain - from warehouse workers forced to undergo dehumanizing _unpaid_ searches that take hours when leaving the warehouse, to being forced to pee in bottles.
It is impossible to become a billionaire without exploting people.
Explain this to me using math not feelings.
Do enlighten us as to what actual labor creates $300,000 in real value every week, week after week.
Through this exploitation he created billions in value for himself and other capital holders.
That is the answer to the question: "How many of the top 50 billionaires in the world have NOT been in legal trouble for anti-worker, anti-consumer or anti-competitive practices."
Try it yourself! If you ask it to, Google AI Overview will even detail the infractions of each billionaire on the list.
And that still underplays their overall scope of culpability. As a lawyer, you are probably best positioned to appreciate how asymmetrically difficult it is for anyone but the most well-funded to realistically take these giant companies to court.
You need to quantify it for these lawsuits to support your point. The fact that these companies sometimes color outside the lines doesn’t negate the enormous value they create otherwise.
You know who else has lost tons of lawsuits and paid a huge amount in penalties? The federal government. 40,000 lawsuits are filed agains the federal government annually. The government pays out billions of dollars a year for various wrongdoing: https://settlementinsight.com/research/federal-government-pa.... By your logic, we can assume that the existence of these lawsuits and payments means that the entire value of the government can be attributed to exploitation.
In the US? most def. I don't even know where to start with all the exploitative practices of the government - Regan's strike busting is a good place to. And don't forget the institutional practices:
Yes, they create enormous value, but they get convicted of rule-breaking with such regularity and such large penalties that "coloring outside lines" is not a "sometimes" thing but rather a standard mode of operation. At that point it becomes impossible to separate the genuine value created versus the revenues generated from exploitation.
As an example, look into Project Bernanke, which is part of Google's convictions in the latest Ad Tech antitrust it lost, wherein they rigged all their ad auctions to benefit themselves: https://www.adtechexplained.com/p/google-project-bernanke-ex... -- now try to explain how we could separate that from the profits they made during all those years, which would also require one to consider how they profited from the lock-in they reinforced through that time.
> By your logic, we can assume that the existence of these lawsuits and payments means that the entire value of the government can be attributed to exploitation.
I never said "the entire value" (see point above about attribution) but yes, it applies to governments too. From the site you linked the top reason for lawsuits seem to be Breach of Contract, which does sound somewhat "exploit-y" to me.
People can pick among various jobs. If they picked warehouse worker that was the best option available to them. Taking it away means they have to choose something worse.
And a job is not a lifetime commitment. Warehouse worker may be a stop on the way to something else. I worked in a warehouse for a while, now I don't. People are not static blobs.
I used to work retail selling software and games as a teen. It was a nice starter job talking about the things I liked most. There were 7 places I could do that back in the day. Now the kids have only 3 such options in my area. Many areas now have none.
All 7 places I could have worked (doing what I enjoyed) as a teen paid above minimum wage.
> Now the kids can learn to code online
Starter coding jobs are increasingly rare in light of AI.
> or do a hundred other things we couldn’t do
Can you name a few that pay at least minimum wage?
Under communism, it's the other way around!
This article from 2022 has something to say about that:
https://www.theguardian.com/technology/2022/jun/22/amazon-wo... Amazon is right to be worried – its staff turnover rate is astronomical. Before the pandemic, Amazon was losing about 3% of its workforce weekly, or 150% annually. By contrast the annual average turnover in transportation, warehousing and utilities was 49% in 2021 and in retail it was 64.6%, less than half of Amazon’s turnover.
"Can't you tell how unexploited all these people are, just look at them leave!"
"help, help, I'm being exploited!"
People really love billionaire owned businesses.
We can look at Walmart, which eviscerated mom&pop stores all over rural America, and you'd be hard pressed to find much love of Walmart in those places, but alas, people gave their money to Walmart instead of Jone's Town General.
Why state something so obviously disprovable and false?
The company also pushed for all sort of regulatory changes to punish competitors (e.g. minimum wage to harm Walmart) while it had labour violations which barely got fined. This isn't to say that I think Amazon didn't provide value at any point in time, with its recommendation algorithm and review system it actually abuses the added value the platform delivered in the past to benefit its own basic products, but I believe there would've always been an Amazon who would've used similar regulatory plays to get ahead. That's why it's kind of difficult for me to say how many of Bezos his billions were 'fairly' earned.
Furthermore I don't believe it's impossible for someone to truly earn a billion, the financial sector is one that has some of the best examples (e.g. Jim Simons) it's just difficult to find a 'close to purely fair' billionaire.
I don't think that the current system rewards those deserving the largest cuts of the pie.
If you want to argue how to get a billion dollars, sure. But to me that is different than earning it.
The distribution of the wealth created by the massive increase in productivity has been trending towards the organisational top for many decades now.
I don't think that the management has gotten exponentially more efficient and better at their job to justify their increasingly bigger share of the profits.
If you only look at nominal dollars, you could say the wealth has trended toward the top. But the average person is materially richer today than at pretty much any point in the past, in terms of real income + real consumption + net worth + access to goods and services adjusted by quality + safety. There's a lot to be happy about, and I know few if any people who'd rather go back in time and live a worse life just so they're part of a time period where inequality is less.
Also, inequality has always been high throughout human history. The brief period of time in the mid 20th century where things seemed a bit closer, was the exception, not the rule, as far as I understand.
And again, if you only look at nominal dollars, maybe inequality seems extreme. But thanks to technology, the actual lived experience and quality difference between middle and upper classes is lower than it's ever been. What exactly is Bill Gates doing in his day-to-day life that's so much higher quality than what the average American is doing? He's eating the same burgers, wearing the same clothes, driving on the same roads, consuming the same entertainment, and getting more-or-less the same healthcare. His improvements on these things are incremental at best.
Compare to the gap between the rich and poor at any other time in history, and it's miniscule today. Housing and education and healthcare, imo, are the real areas to focus on the most. And I'm a big believer in raising the floor. But lowering the ceiling just so you can say things are more equal in nominal dollars isn't going to help anyone.
You yourself are using an expensive phone or computer to type Hacker News comments, presumably not at gunpoint because you choose to do so. Which means you think it's better than the alternative that you're apparently glorifying.
And no, I don't think that most people are "happy shoppers" but seem deeply disaffected about their lives, and shopping might be a compulsive behavior that helps them soothe underlying fears of dread.
When people hear "the world sucks" enough times, they start think, "the world does suck", and easily enough that leads to "my life sucks". Hearing that the world is great can help have the opposite effect. But it's often derided as foolish or even insensitive not to dwell on the negative.
Almost every single person I know would rather do this, including myself, and can't. The woods are all private property, and unless we managed to hide somewhere, we would be removed by force.
Historically, (at least in my country, Scotland), people have been forced via economic and military coercion to migrate to the cities and adopt a lifestyle of employment and consumption, there's very little free choice going on.
I do not believe I could move to another nation without employment or family relations legally.
We cannot pull together because even pooling all our resources, we could not afford to purchase the land nor the means of survival for ourselves and our families.
I do think Taylor Swift and JK Rowling "earned" a billion dollars.
I don't think Elon Musk or Donald Trump "earned" their wealth.
Elon, for example, did earn a lot of it. People gave him money for Teslas.
But he disproportionally makes profit off regulatory credits, selling his own companies to each other, and burdening his companies with debt. He's forced people to work through pandemics, undermined the SEC, stolen data from the government, bought elections, and (if you want to believe recent stories) may have even helped cheat in the most recent presidential election. He directly caused hundreds of thousands of deaths due to DOGE budget cuts, all while getting billions of dollars worth of contracts via SpaceX and xAI.
Or Bezos. Amazon uses our roads and infrastructure. A majority of Amazon warehouse workers rely on public assistance. I believe Bezos is a phenomenal founder, but his returns have subsidized by us.
There's a reason Taylor Swift doesn't get brought up when people talk about the rich. You _can_ earn a billion dollars, but more often than not you have to screw over a lot of people to get there.
That and Taylor does get brought up the whole time for being rich and wasteful, I can't count how many times I've heard about her incredibly short private jet trips in the past few years.
Your criticism of Bezos are also a bit ridiculous. Nearly every company that isn't B2B SaaS junk uses roads in some degree. I fail to see how the warehouse workers being on public assistance have anything to do with Bezos—if you wanted them to be self sufficient a politician could increase the minimum wage.
Your criticisms of Musk dishonest, but I would also argue that he didn't "earn" a lot of the money for Tesla, as he's just a jackass with a bachelors in econ that did none of the work on it.
AOC/Bernie types have never been directionally correct, as allowing the government to rob you in America will usually not correlate with any increase in QoL for the general populace. Someone on here described taxes in America and Western countries as "tithes" like you would pay to the mafia as "protection" money, where every dollar you give them makes them more capable of extorting the next one out of you.
There's a greater wealth inequality in the US now than there was at any other point in time.
What's the difference? Either way, she's trying to change it so people can't have so much money.
And why? To what end? How does trying to tear down people who have money help anyone else? Why doesn't she instead spend that time trying to create more worth and opportunity for people who don't?
It is rather strange to have a system where the problem is lots of people don't have access to material goods and power, and you see a few people with huge amounts of those things, and not think that maybe those few people should have less so the majority can have more. You may disagree based on economic analysis, but surely that follows intuitively?
First of all, the average person has more power today than at almost any point in the past. If you're obsessively focused on making people hate others with money, then, of course, you're going to spread the message that money is the only thing that contributes to power, but that's far from the case. Any scholar of personal power would tell you that that's incredibly oversimplified to the point of being almost laughable.
Compared to, say, 70 years ago, the average person has a greatly increased ability to: publish and distribute ideas, organize large amounts of people quickly, start a business, influence culture without being gate-kept by institutions, gain and maintain attention without being gate-kept by institutions, etc. Education is better and more broadly available, capital is more accessible, legal and bureaucratic tools are easier to use, geographic constraints matter much less, more paths to elite influence exist. And of course, far more people are included in what "the average person" is, more can vote, more can be part of society. And this is over the exact same time period that income inequality has increasing. Income equality is only part of the picture when it comes to personal power, not everything, as AOC would have you believe. Also, there are more people in the upper and middle classes today than there ever have been in the United States!
Also, she's hugely oversimplifying the economic landscape. There aren't just two parties, rich and poor. There's a huge third party known as the government. And that party's express mandate is to take care of the people. And the people pay into that party's coffers in order to help it do so. And they pay at progressively higher rates based on how rich they are. The top 1% alone pay about 40% of federal income taxes.
So yeah, if you just completely oversimplify things and pretend that this entity doesn't exist, and you came into a situation where the rich had all they money and power, you might propose a system exactly like this. And I would agree. We should tax people, and that tax should be progressive, and that tax should go to a central government, and that central government should have stewards who we elect to help redistribute the money. And that's what we do.
But these stewards are also so busy telling everyone to hate each other -- hate the trans, hate the atheists, hate the rich, hate the men, hate the conservatives, hate the business owners, hate the elites, hate the immigrants, hate the blacks, etc. The average person is extremely susceptible to demagoguery. It's much easier to hate and blame your neighbor than it is to actually look into government budgetary figures.
And it's much nicer as a steward of the government budget to get everybody hating their neighbors than to have everybody scrutinizing what you're doing with their money.
Your government budget comment is just fluff. If you actually engaged with her in good faith, you'd realize she is not someone who thinks government spending should go unchecked, and the only issue is how much it's getting. She just disagrees with the right on where it should go. For instance, it shouldn't go towards bombing a country for 3 months just to wind up paying them billions for the same deal we already had. I think we can agree having a world leader that is so easily baited into pointless conflicts is bad for our budget. But I guess we balance it out by slashing social programs.
A lot of people's interest in government budgets coincides with the introduction of DOGE. That is to say, their entire understanding of it ends with what Musk tells them. Most people have no idea how it works, and half the things they suggest are already happening. It shouldn't shock you to know some people think billionaires could pay a little more and we can be smarter about where the money goes.
I don't believe I said that AOC thinks government spending should go unchecked. But the vast majority of comments I've read from AOC seem to blame the plight of the poor on the success of the rich.
The only real question is how someone can delude themselves into buying the Aw Sucks routine of the most powerful people on the planet.
For another, as a sibling comment points out, AOC can have a much greater impact by influencing policies that help the people than through charitable donations, which, let’s face it, are just a bandaid on the structural issues that lead to such wealth inequality. Making something one’s professional goal when in a position of influence is much more impactful than optional activities on the side like charitable donations.
If she was truly moral, she wouldn't need to be feted for her actions. Virtue comes from doing the right thing even when other people are not looking.
Her using her position of power to extract money from Peter and give it to Paul does not bestow on her any morality or virtue points. One could characterize it as "buying votes with other peoples' money".
But the reason it's a "fallacy" is AOC could donate 100% of her current salary for 63,000 years and that would equal 1% of Elon's current net worth.
Even if you did get 1% of Elon's money, it wouldn't be enough. Real change comes from structural change, not pure cash.
And as the original person pointed out, you're clearly smart enough to know that.
I didn't say anything about Elon's money being related to AOC's morals. I said AOC's morals were dependent on her donating her money without bragging about it. The claim of logical fallacy does not follow.
Why? That's the point. It's too much damn money for one person to realistically earn. We all know how long a day is and how fast a human being can think, move, how much suffering they can tolerate, etc. It is an intuitive truth.
There is no conceivable formulation of physical and mental actions a human could perform, regardless of outcome, that could possibly justify that level of wealth relative to the average levels of compensation for other workers in society.
That's not the problem.
The problem is even simpler mathematics. Proportions. How much do we give to first employees? How realistic is that John Smith, first salesman of the company is getting 2% and should consider himself lucky, while I, Peter Boss retain most of the company?
We always talk about the dilation of the founders' shares and its relation to the VC portion.
What is the usual proportion of the shares held by the founders and the first 10 or 100 employees?
Is that proportion usually realistic with regards to the effort put in and the risk assumed?
Is that risk usually really that heroic or most of us in the "can found a startup" caste can usually go back to jobs that already pay well over average?
I am the founder of a company. I want it to succeed. I don't want to become a billionaire, but I want the people that help me build it to have similar successes to mine.
If we succeed, I don't want my car or house to be 10x more expensive than of those people who joined me first.
There's something seriously rotten about telling university students about billions. The issue isn't whether anyone can earn a billion dollars. Nobody actually needs a billion dollars.
The question they should be pondering is given the excess of talent and opportunity they have, how can they help the people around them and give something back to society.
The assumptions are:
1. A uniquely special class of people do all the work that matters. They're astoundingly gifted, talented, and insightful, and have a rare ability to make profits happen by having very special ideas, owning Important Things, and telling everyone else what to do. These prodigies deserve everything. They are not to be criticised or judged by their inferiors. Ridicule only proves their superiority.
2. The work everyone else does is far less important. Most of the people doing it are interchangeable and literally disposable. Sometimes they deserve nice things, in a limited sense, if it's hard to make things happen without them. But mostly no.
3. Negative externalities - pollution, ecosystem collapse, spiralling asset prices, financial and political instability - aren't real. If they are real they don't matter. If they do matter they're someone else's fault.
4. It's absolutely fine to treat other humans with aggressive indifference and outright contempt as long as Number Goes Up. In fact it's expected.
But apparently Elon is more valuable, so goodbye high schools, choo-choo.
5. The people working some jobs (notably in the service sector and farm labor) are expected to be poor and remain poor.
So you can imagine how astonished I was last month when an American politician said that it was impossible to earn a billion dollars [...] that it's impossible to get that rich without doing something bad — without cheating in some way.
LeBron James has, between playing basketball and endorsing things, earned a billion dollars. What bad thing did he do, other than losing the finals a few times?
If she meant "impossible" completely literally, then she is wrong.
"No I didn't mean this [virtuous example]. I meant the vast majority of [unnamed nefarious actors] which I don't need to elaborate about as their existence is obvious."
Once you say it's just hyperbole and you don't mean it literally, then the only way to prove it is a statistical argument.
"The overwhelmingly share of company founders and companies are bad and don't earn their money." is a big claim that requires more than vibes.
What counts as 'doing something bad' and 'cheating' clearly is subjective. I suspect Graham's opinion on the behaviour of a Zuckerberg or a Musk would be a little more flattering than mine.
I see large companies selling things they ought not sell (eg: Meta glasses, Tesla FSD) and making malevolent decisions (eg: Google deprioritising search content, Amazon hijacking product searches). Those things probably bother Graham too, but I reckon I consider them more evil than he, since I have less reverence for the 'invisible hand of the market'
Whether my comments constitute a motte-and-bailey depends on whether a reasonable person would assume the "impossible to earn a billion dollars" statement to be hyperbole.
In another world, LeBron is still a millionaire, getting a nice $1M a year. The rest, a mere $39M, which in Paul Graham terms is just a couple months from turning into a billion, goes to the hopeless kids actually churning out the god damn shoes.
LeBron did nothing wrong. The system is this corrupt.
It was made by someone who cannot afford healthy food.
Meritocracy my hairy ass.
It’s an industry of low-grade exploitation, generating products that people mostly don’t need. It’s bizarre. It fits squarely into the category AOC is trying to define here.
Graham's admiration of scammer Austen Allred is evidence for this.[1]
The hierarchy of wage looks something like:
1. hourly pay (how many hours you can work sets the maximum possible salary)
2. base pay + cash bonus (the cash bonus starts to increase your earning potential. Sometimes the bonus can be huge, for traders, salespeople, etc.)
3. base pay + stock options (the stock options can outsize your base pay by big margins)
4. stock ownership (almost all your wealth is tied up to the stocks)
The vast, vast majority of people are stuck at (1), and will never move to (2). Nearly all billionaires are at (4).
The average worker will work around 100k hours in their lifetime. If you started working today, with a 2% inflation rate, you'd have to start getting paid close to $6000 / hour in order to reach a billion dollars (pre-tax) in total income by the time you retire 50 years from now.
Another factor to consider, is that salaried workers can't use leverage to increase their earnings. A startup founder can find investors and raise money, which works as rocket-fuel for their company. You can practically outspend your competition. That is simply not possible for regular workers, without breaking rules (as in outsourcing your job, taking on several jobs and outsourcing those, while collecting).
The simple truth is that many people don't want to step into that kind of intensity and uncertainty, or lack the skills to succeed in a cutthroat industry.
The idea that founders are somehow "cheating" is hilarious to me. Anyone in the developed world can easily become a founder, why don't you try it?
While many don't necessarily value pay as #1, it is important to people. If a regular worker receives a 20% pay increase, that's huge compared to not getting anything, or something which barely covers inflation. Even though the dollar amount may not be much compared to others.
1. Coming from a relatively affluent background (eg Bill Gates's father was a successful lawyer);
2. Social status. For example, Sundar Pichai came from a relatively modest socioeconomic background but he's also upper caste;
3. Even having access to a top-tier education (eg Stanford) generally shows a lot of privilege, Social connections, financial security, probably access to a quality education prior, tutors and so on;
4. Even just being white in the US means your family had access to create generational wealth that minorities didn't. The post-WW2 GI Bill famously discriminatory in providing cheap mortgages (as well as subsidized college eduation).
One cannot overstate the opportunities available to you if you are "free to fail". If your family can support you or even you can live at home then you have the option of starting a company and being unpaid for a long period.
As for founders "cheating", well that's a different story but also objectively true. Many companies extracted value by essentially breaking the law and getting large enough before enforcement caught up with them, which allowed them to buy those changes. AirBNB and Uber are good examples of this.
The myth of meritocracy has been so successfully propagandized it's no wonder that so many people see themselves as "temporarily embarrrassed millionaires".
My grandfather's business operated out of an 8*8 shack.
After my dad passed away, I was shocked to discover that my first salaried job paid more than his last salaried job.
These days, anyone can get a free K-12 education, and then loans for college. Generational wealth is not required.
Freedom from generational poverty is required. A lot of PoC in the US grow up in dire straights which weighs on their mental health. Their chance at a university education drops rapidly when they have a network that depends upon them working from adolescence onward.
My grandfather worked selling cookies for decades and retired with a pension. My father worked as a professional engineer and midlevel manager at least as long and had less to show for it. I'm trying to work my way into upper management and will likely retire later and with less than either of them.
People feel the walls closing in on them. Telling them to buy more lottery tickets, albeit in the form of founding companies, isn't an answer that scales.
This is simply false. Oprah grew up on welfare and is a multi-billionaire.
> Telling them to buy more lottery tickets
The math on lottery tickets is negative. The math on stocks is positive.
The book "The Millionaire Next Door" is a recipe for ordinary people becoming wealthy. You can't afford not to read it.
What isn't an anecdote is slavery, the politcal and economic disenfranchisement of the Reconstruction Era, segregation, redlining, HOAs (which were started to keep black people out [1]), access to free college education (with the GI Bill), access to cheap mortgages to create generational wealth through property, the resulting decay in infrastructure and education thanks to the resultant "White Flight", over-policing and disproportionate outcomes in the criminal justice system.
There are over 1000 billionaires in the US now, most of them homegrown most likely. There are about 14 black billionaires (27 globally, apparently). This includes Oprah, Michael Jordan, Tiger Woods and LeBron James. 15% of the US population is black.
The "just invest in stocks" pseudo-advice is this generation's "let them eat cake" A large percentage of the US population do not have disposable income. They are often working several jobs just to live. The "Millionaire Next Door" is more often than not just some guy who bought a house in the 1980s and sat on it.
[1]: https://www.homesweetheadache.com/post/the-true-origins-of-h...
Our system is based around competition, where advantage compounds. How do you square this circle? In the case of two identical people, one burdened with student loans and one not, the one without the burden will win in the market due to being able to allocate more capital.
Amortized over a large population, this creates a systemic effect where those privileged with generational wealth will tend to be over-represented in the set of "winners" the system produces. This seems irrefutable to me. Obviously there will be anecdotes of exceptions, as there will be in any amortized system.
Besides, there's no evidence that someone with generational capital will be better at investing than one without. In fact, the arc is:
1. first generation makes the money
2. second generation spends it
3. third generation starts over
Because most of us have families and can barely afford rent and healthcare. Those of us with a bit more success are finding that extended family are falling into poverty and need help (thanks inflation and transition to lower wage jobs!). They cannot work more than 2 jobs and also found a company.
Most newly founded companies fail, so it's an expensive process unless you've a network of FFF or VCs to draw from.
Many founders get nothing out of the process but stress and bankruptcy.
[0] Big "if" obviously but so is a 15% monthly growth rate in revenue.
Of course they can. They can invest, say, 20% of their income into stocks. They can borrow money to invest into stocks, too.
As for CG taxes, they don't apply if you don't sell, and no CG taxes are owed if the gains are less than $49,000.
> And what if they bet wrong?
Everything in life is a risk. The idea with stocks is to diversify, which you can do by buying an ETF.
But the work you produce - not so much, for many common professions. If you're working on a assembly line, your work input/output curve (transfer function) will look linear in the productive zone. If you work 20 hours producing 20 units, 40 hours producing 40 units, then working 60 hours will likely yield 60 units. But once you start moving up after that, it might not be very linear - fatigue will set in. There's some saturation point.
On the other hand, the difference between some entrepreneur working 20 hours and 60 hours will likely make all the difference. Even going up to 80 hours can make or break it (and I'm not saying this as someone who's glamorizing long hours). Throw in external forces like investor money, and your input could generate some factor N output.
You could give some factory worker a million bucks, and it would not increase their work output.
Sorry for the ramble, my point was just that the work people do is different. But you are of course correct that spending your resources on different kind of work will yield more. Investing your money in ownership (stocks, real estate, etc.) can (will) increase your wealth.
If a career path (e.g. startup founder) outperforms at time T1, then this fact will diffuse quickly throughout society, causing the path to become overcrowded, which pushes down the average performance. So at time T2 the path will no longer outperform. This is analogous to a stock becoming overpriced due to hype. I consider the founder path to be enormously overcrowded at this point.
The key to finding a good career is to play a kind of Money Ball - find paths that, for whatever reason, are mispriced and thus undercrowded.
One reason why doctor is more popular is the process for becoming one is high effort but low risk. So if you have any risk tolerance you’re probably better off using that effort elsewhere.
Disagree completely that becoming a doctor is low risk. The amount of residency spots is capped and is smaller than the number of people graduating from medical school. Every year thousands of MDs are prevented from going to residency and thus prevented from practicing medicine, even though they graduated from medical school.
https://dailyorange.com/2026/03/opinion-amid-u-s-doctor-shor...
>In 2025, 9,541 applicants went unmatched, including 2,409 soon-to-be graduates of United States schools awarding Doctor of Medicine and Doctor of Osteopathic Medicine degrees.
You just have to do well in medical school (an artificial program with stated requirements) and you’ll make it.
Are the career outcomes for those with medical degrees bad? Don’t they have a ton to options? What’s the risk?
There are exploitable gaps in the logic where loaning against owned collateral is not considered a realizable taxable event and it’s reasonable to attempt to close these.
But like most things I find that things fall down when actual policy needs to be written. The only example is the SEIU proposition in California which is backdated and requires many people to give up half their ownership in a company.
I can’t be brought around to supporting those outcomes.
How fair is it that she becomes a billionaire while most teachers struggle?
Amazon was first, then Uber went world wide, so did Airbnb, and now OpenClaw, so yes, the AI gold rush opened the gates for new opportunities but only a few will make it. We all can run the race for sure but most of us will only get tired at the end while the lucky few will take all the prizes and our corpses will be their podium, as it's supposed to be.
Still, we have to run because there is a chance, a very slim chance which is more than zero hope.
At becoming billionaires. Many more than that succeeded at making a good chunk of money that was life-changing for them, their families, their early employees, etc.
So I think your reading of the chance of "hope" are overly cynical. Of course it's not easy to make millions, but it's not so bleak and the market isn't so ruthless that it can't be done for those who try intelligently and persistently.
And of course, even below that level of wealth, there are tens of millions of people who work regular jobs and are able to afford pretty high standards of comfort and living by any yard stick that's ever been used to measure.
Amazon is famous for being a terrible company to work for, on the logistics side.
Airbnb has caused all sorts of social problems.
Uber results in people working for peanuts and has circumvented labour laws.
I think there are some startups that have created large scale value without doing something malevolent, but not those ones.
Things like Linear. Good tool for software dev, no one harmed.
I know a minor NVIDIA employee who is worth well over 8 figures. Amazon zillionaires abound around here.
If we extrapolate to trillionaires, we know for a fact that you need to be an all-around dousche that manipulates politics and literally cuts government funding to the poorest and most vulnerable groups to get there.
And since this post has a numbers focus, zuck is worth 195 billion. Would Facebook’s negative influence be noticeably less if they spent 194.9 billion on reducing the harms of Facebook, and zuck remained a millionaire? I believe so.
That’s cool and it’s a cool post, sure, but it sounds ridiculous when you look at how many dumb GPT wrappers there are in YC batches nowadays.
The counterfactual, a society in which the means of production are allocated by those that did not create them and do not stand to lose in their inefficient operation, is already familiar to many, in government services and old oligopolies with low insider ownership.
Yes, us poors should be reminded that our bettors will create the means blah blah blah.
You know who funded Arpanet? How the transistor was developed? On and on, taxpayers funded it. And now we have leeches acting like teenagers who think they invented sex.
But don't worry – it's not important that poverty, hunger, sickness, and many other social ills still exist even though we have far more wealth than required to solve those problems.
Obviously the answer is that ending poverty is just an inefficient solution the Great Minds have concluded, and our money is better spent elsewhere. Sorry Timmy, but you should be proud as you're dying of cancer because a billionaire's next yacht will surely solve more problems (or at least generate more money) than your life is worth.
[1] https://fred.stlouisfed.org/series/LES1252881600Q [2] https://www.macrotrends.net/global-metrics/countries/wld/wor...
[0] https://www.reddit.com/r/dataisbeautiful/comments/1o5u4d1/oc...
"... in effect I've spent the last 21 years training people to become billionaires."
"So far about 30 of them have, but there are many more in the pipeline."
"I felt like a skating coach hearing someone say that it's impossible to do a triple axel."
Imagine a skating coach who has been training skaters to execute triple axels. If he has spent 21 years training 6500 skaters and only 30 of them are able to perform triple axels, would you take him seriously
That's less than 1% (0.0046%)
With that extremely low success rate, how valuable is the "training"
Maybe there is no causal link between the "training" and success
Less than 1% succeed
It's easier to argue that there may be a causal link between the training and failure, or that "training" has no effect at all on the success rate
Over 99% of those who "train" with this "coach" fail
Maybe it's not a bad deal for the coach is he gets paid fees by his real clients, the limited partners, regardless of outcome
But is it a good deal for the skater given a less than 1% success rate
The coach, on behalf of his clients, the limited partners, is providing a loan to the skater. If the skater learns to perform the triple axel, i.e., becomes a billionaire, this will enrich the coach's clients and the coach. The skaters are not paying the coach. If they are one of the more than 99% who fail to perform the axel, then they are only wasting their own time and effort
"Thanks to Trevor Blackwell, Jared Friedman, Jessica Livingston, and Garry Tan for reading drafts of this, and to Arwa Elrayess and the Oxford Union for hosting me.
Funny that none of these the proofreaders caught the misspelling of "billionaire"
Very, very rarely does someone actually build or provide something so significant that it results in them profiting enough to become that wealthy.
Instead, they (possibly unknowingly) play a complex game that essentially defines complex rules that result in outsized rewards while obscuring the real process of gaining those rewards.
Most of this revolves around magic numbers. The best example is "valuation". Valuation in theory is reasonable. But after just a couple of iterations of mixing leverage with hype and gambling (with other people's money, of course), there is now enough artificial wealth to invest in new ventures to get some % ownership. And based on the amount paid and the percent received, the venture now has this official value. There's no legitimacy behind this calculation other than the fact that everyone agrees to play this game.
Now that your startup has a nice big valuation, you go through several successive rounds of funding - where each round serves two purposes: 1. give you more cash to burn so you can move faster than regulatory bodies can keep up (Uber) or enough spare cash that you can slow the regulatory processes by throwing lawyers at it, and 2: pay the previous investors a nice reward.
Repeat this process several times, eventually resulting in an IPO where you dump all this false value on the general public (or nowadays, all the pension funds and government-forced personal investment accounts). In other words, the last buyers pay for all of the false value. Then they wait for a reward that often doesn't come.
Ironically, part of why this system spawned and has worked so well is that once large, publicly traded companies became fixated on quarterly EPS numbers (so the execs can hit their bonus targets), those companies became slow and useless for innovation. But they had magic money with which they could buy up startups who are actually trying new things.
This entire system is astounding in its perversion compared to how business worked 40+ years ago.
The real thing they have is a collective agreement that allows them to have the power to direct a bunch of capital toward production. If they ever just decided to cash in their chips and buy a dragon hoard of gold instead, the paper wealth would vaporize really quickly.
The problem that really exists here is that this small group of individuals has too much power. The feudal system existed for a long time, there's arguably a tendency to return to it, and this is the thing that truly makes people uneasy about the concentration of power outside democratic processes. How do we get rid of the despots? At least with democratic process there's a way to vote them out, their terms expire, etc. With hoarded wealth, and especially (as we see with cases like the Waltons and now the Ellisons) generational mega-wealth, we have zombie feudalism clawing its way out of the grave.
I don't think there's a problem with someone earning the trust of a bunch of investors and being granted a lot of power to direct resources in their lifetime, but the intergenerational transfer of unearned power is a place where a crackdown is certainly warranted.
Airbnb/Bed Boat, Neighbor, Swimply, Uber/Lyft, Bird/Lime, BlackJet, Waymo/Cruise, Splacer/Peerspace, Zenefits, Tilt, Loomis/Stablecoins, Coinbase, Worldcoin, Stripe, AngelList/Sydecar, Polymarket, Uniswap Labs, Doordash/Instacart/Postmates, CloudKitchens, Shef, Done Health, Forward Health, Cerebral, Pacaso, Sonder, 23andMe, Ro/Hims/Hers, Viome, Juul Labs, Oura Ring, Particle Health/Moxe Health, Roblox, YouTube, Popcorn Time, Kickstarter/Indiegogo, Republic/Wefunder, Deel/Remote, Lambda School, Make School, Mission Bit, WeWork, Oyster/Papaya Global, HiQ Labs, FlexPort, Katerra, Zipline, Starship Technologies/Serve Robotics, 3D Robotics, Anduril Industries, DraftKings/FanDuel, Cydia, Eaze, MindMed, Odin, Swarm Technologies, Starlink, Convoy/Uber Freight, Carvana, Tesla, VoltShare.... oh yeah, and OpenAI.
What do all of these companies have in common? They all manipulated markets, bent and broke laws in order to get that "exponential growth". They didn't want to wait around and find out if their businesses would be legally allowed to grow. So they just broke or worked around the law, with the intention of becoming billionaires. But that's okay, because growth rate! We're not doing anything bad, people want these things! Who cares if it might be illegal or the spirit of the law frowns on what we do? Money!!!
This is just one of the reasons why becoming a billionaire requires you to cheat. There's also the tax loopholes, the inducement to harm (both of the customer and by the customer), anti-competition, etc. In order to get these gains, you need to cheat, because if it were easy to do legally, ethically, and quickly, somebody already would have. It's corporate doping.
Surely these things are on a moral and ethical continuum and we need to look at them individually? Pretty much every person has broken some law at least once in their lives. I don’t disagree that moral ambivalence is often necessary to make billions, but I also don’t consider all laws sacrosanct, or that breaking the law is the primary measure of a company’s moral standing.
That's a lot of leaps I just took, because it's honestly way too complex to get into litigating when people/companies should be allowed to break the law. The much simpler answer is to simply not let companies/people break the law, and fix the law when it needs fixing, and not just so one dude can become a billionaire real fast.
Wealthy, sure, but becoming a billionaire effectively destroys your place in any of your social circles. It obliterates any dynamics of trust and interdependence you may have and replaces them with a gnawing unease about if they’re still hanging out with you, or if they’re hanging out with the money.
Not to mention, Graham entirely fails to differentiate between EARNING a billion dollars and HAVING a billion dollars. You can be part of a structure that earns a billions dollars without “cheating”, there are all kinds of companies that do that. But if you let that wealth accumulate in yourself? There’s something wrong there. You are almost guaranteed to be under-valuing the contributions of others, or the externalities of the systems in which you operate or SOMETHING.
And even if you’re not? That’s a dragon’s hoard of money. You’d have a very difficult time spending that much money on yourself and your lifestyle, and I find it hard to justify sitting on the rest, just to have it. It is literally a hoarding problem at that point. You do not need that money, it is actively making your life worse (look up the Billionaire’s Social Calendar: it’s the list of ultra-wealthy-only events that billionaires must attend if they want even a chance of interacting with people as peers instead of dependents), just let it go.
Take Mr. World’s First Trillionaire, Elon Musk. He doesn’t have a dragon’s horde, his money is almost entirely invested in SpaceX and Tesla, building things he wants to build. SpaceX didn’t IPO so he could have bragging rights with his Forbes list peers, it IPO’d because it was the most efficient way to get more capital to grow and achieve its various strategic aims—largely set by Elon and its other preexisting owners.
You can take that away either proactively by making such ownership structures impossible or retroactively through taxation forcing current ownership to sell, but the end result is the same: No incentive for folks like Musk or Bezos to use their skills on big, ambitious, capital-intensive enterprises. Control is what matters, not $.
There are no Scrooge McDuck cash vaults.
> Starting a successful startup is the most common way to become a billionaire, so in effect I've spent the last 21 years training people to become billionaires. So far about 30 of them have, but there are many more in the pipeline.
Seems to me that right off the bat he completely undermines his own point - less than .5% of the founders being funded at basically the best connected best financed incubator become billionaires. Easy, right?
I won't even go into the embarrassing math that follows... pyramid scheme salesman levels...
He specifically says it isn't.
Paul if you are so rich why aren't you smart? Or is this the age old problem of getting a man to understand something when his paycheck depends on him not understanding it?
Graham: So you can imagine how astonished I was last month when an American politician said that it was impossible to earn a billion dollars. I felt like a skating coach hearing someone say that it's impossible to do a triple axel. Of course it's possible. It's hard, but it's possible.
Per his link in the article:
AOC: there is a certain level of wealth and accumulation that is unearned. You can’t earn a billion dollars. You just can’t earn that. You can get market power, you can break rules, you can abuse labor laws, you can pay people less than what they’re worth, but you can’t earn
Of course when you put it like that it sounds completely ridiculous :)
When you create a valuable thing, you can use it as collateral for a loan. The bank literally creates the money to loan out out of nothing. When the loan is repaid, the money is destroyed.
Think of a dollar bill as an "IOU $1" (which it pedantically is), and it'll make sense.
Fine, show me the average person who can come up with 2 million dollars. I sure as hell can not. I even went to banks and founders with my ideas, cash flow sheets and customer list looking for a loan.
No, I am convinced, the rich already have 2 million dollars, and make themselves a billionaire. The system is rigged against "normal" people.
If someone has an idea that 'only' makes them 20 million, I would call that a great success; even if it takes dozens of years to get there.
But this kind of person isn't rare either, even in Italy or Poland where I live I know many multi millionaires.
Some are farmers, some have restaurants/hotels, some work remotely for US tech companies, some were early engineers in startups.
Why are you presupposing the world is just when EVERY skill and opportunity is distributed non-linearly?
Is that skill?
Most people with millions do not become billionaires. So yes, there is an exclusive pool of players who can play the game. But within that pool there is incredibly different outcomes.
A better analogy is being born as a child of D1 basketball athletes and then making 100 million in the NBA. Being born into a family with no interest in athletics makes it almost impossible to be a professional athlete. Life isn’t fair. It’s still impressive to become one.
Are you missing something like "getting rid of", as in getting rid of that is a way to make things more equal? Because you are aware there are more than one way to make things more equal, right? For knowledge, a well-funded public education system (i.e., not the US apparently) goes a long way, and most people consider that a public good.
Most people concerned about inequality, I would wager, would be more focused on things like nepotism and access, for example I don't have a mum that could get me a meeting with the CEO of IBM to pitch ideas to.
A robust social safety net would probably be helpful if enabling non-already-rich people to take entrepreneurial risk is considered desirable, among other benefits.
The knowledge we are talking about is particular. You can’t learn how to navigate a professional basketball career AND how to do tech startups. There isn’t enough time even if that information was publicly accessible and teachable.
> I don't have a mum that could get me a meeting with the CEO of IBM to pitch ideas to.
Once again. How can you possibly correct for this? This is basically saying some parents work in tech and some don’t.
> enabling non-already-rich people to take entrepreneurial risk
I think what it does is let people play video games and watch porn. I don’t think the majority of the population is untapped entrepreneurial potential.
Inequality and difference is a natural part of life. The distribution of ability in almost every activity is massive. So why would or should outcomes be the same?
I don't think rich people are inherently more entrepreneurial so I don't see why they are the only people who should be allowed to have the opportunity to play video games, watch porn, and maybe occasionally start a company with any degree of security.
> You can’t learn how to navigate a professional basketball career AND how to do tech startups. There isn’t enough time even if that information was publicly accessible and teachable.
I never suggested that a public education system means no specialisation. In fact, most public tertiary education systems do separate people into specialised streams based on interest and skill.
> Inequality and difference is a natural part of life.
Again with the naturalistic fallacy.
> So why would or should outcomes be the same?
Why should the opportunities available be different?
> Once again. How can you possibly correct for this? This is basically saying some parents work in tech and some don’t.
Right, there is no possible way of ensuring things like hiring and contract negotiations are conducted at arm's length and in a fair and transparent manner, so we may as well not even try. I give up.
Once a company starts operating, but before revenue (and hopefully eventual profitability), the valuation is trickier. The share price _should_ be the number of shares divided by the sum of all future profit (minus current debt.) Which is hilarious of course, because no one actually knows the denominator.
That original $2M equity stake can grow to billions if the company ends up making something that a lot of people want or need, so the sum of all future profit is large. Or, much more likely, it will be worth nothing, or a modest amount.
Graham's essay kind of avoids the point of whether ownership of a vastly appreciating asset is "fair", if a bunch of other people help that asset to appreciate.
Another far more sensible model I've found is slicing pie. Each founder's input % of the pie pre-'bake' is their % of the rewards. And what makes up for one's slice of the pie? The dollar-value you would've earned if you worked somewhere else, times the period of baking. These can be tweaked accordingly to the type of investment put in. IMO, it seems far more grounded compared to say a flat 10%.
In biology there's the notion of a growth curve. It starts out with the familiar "compound interest" exponential growth, but unlike Econ-101 textbooks, that curve then proceeds to resource depletion (overshoot), followed by "die-off", followed by extinction, where (N -> 0, where N is usually something like yeast-cell count, but if you're applying this model to something else, it could be stuff like well-being or money).
Sure, if you start off with $2 million and double it 9 times, you end up with $1 billion. Exponential growth is a powerful thing, so it comes as no surprise that maintaining a large growth rate over time very quickly grows a starting sum into a much larger pool of money.
However, his only response for how you should achieve exponential growth is this hand-wavy "make something you yourself want". His only acknowledgement of the concern that maintaining exponential growth may require cheating is a casual dismissal, and his only acknowledgement of the concern that the growth rate will drop off over time is "you'll still get there eventually".
So, while the original concern was that you cannot earn a billion dollars without some wrongdoing, PG's response can be boiled down to "nuh uh".
Reminds me of this post I’ve seen making the rounds recently about a welder at SpaceX who was making $28/hr becoming a millionaire.
They keep emphasizing he’s a welder, the system works, and at the verrrry end mention he was issued 10k in stock a decade ago at SpaceX and held until it IPO’d the other day. The only “lesson” here is “if you own stock and stock go up you get lots of dollar bucks.”
They keep emphasizing “he’s a hardworking welder.” My response is “great! Let businesses take a lesson here: give all your employees a chunk of the company. Let’s all share in the success!”
But that’s obviously not their point.
Don't >95% of tech companies offer stock options or equity, from startups to FAANG?
Looooots of caveats here.
The thumbnails often just tell the welder story, for instance. It’s very clever (misleading).
- Ordinary income has sky-high taxes compared to capital gains, and you don't even have to pay the taxes on capital gains if you don't realize them!
- Inelastic labor supply mismanaged into increasingly soggy demand, mathematically tanking wages
- Attributing credit for job creation to capital without attributing blame for job destruction to capital
there are more, but these are all Political Economy decisions that didn't have to be this way. They are this way because people with money and power wanted them to be this way and were willing to morally compromise to get them this way.
We've been pushing all the money into the capital economy and all the taxes into the labor economy and this can't go on forever.
Worse, it's just a long post trying to show that doing math with a calculator somehow disproves real-life ethics.
What did George Lucas do?
LeBron has to be worth a few hundred million. What did he do?
You might not believe you've done anything "bad" to become a billionaire, but the mere fact that you accumumated so much wealth necessarily means others, somewhere, had to work for it. The mere existence of billionaires is the mark of an unhealthy economy, that doesn't distribute wealth in an efficient or fair manner.
To pick just one example, infinite scrolling can be seen as a modern equivalent of cigarettes— a product that made people billionaires, and that consumers obviously want but are not free to stop using because of hyper-sophisticated dark patterns.
Is Elon a trillionaire because he created a trillion dollars of value from thin air, or is it because he created an information asymmetry flywheel that lets him allocate capital more efficiently than other actors?
It’s genuinely unclear to me whether the universe in which we incentivize this kind of scale is better than the universe in which we do not (because the counterfactual universe has massive externalities too). But this is obviously not just a matter of compounding value creation and becoming a billionaire fair and square in ten years.
Facebook once existed as "How is a company going to make money from undergrads stalking one another online?" but that company didn't make it big. It was only when it turned into an addictive harmful website that thrives by massively raising the suicide rate of kids, that's when they made it big!
AirBnb once existed as "Who's going to pay to sleep on an airbed on someone's floor?" but they didn't make a billion dollars doing that. It wasn't until it turned into a DYI hotel that displaces local resident, concentrates wealth, and makes housing unaffordable. That's when it made serious money.
So yes, nominally, each of these startups sounds good. But many of them turn into rent seeking, closed ecosystems, that prey on users.
> You must look at the world around you and see how it's actually done.
Correct. I wish PG would do that. Instead of telling this idealized fantasy.
Most absolutely glaze over at the idea of calculating the "log base" of anything. If they ever got that far in math class, they certainly have not used the concept since then and cannot remember what it means or how it works. They might remember exponents, but the compounding of them is absolutely lost on the overwhelming majority of people.
(Edit: At the top of https://news.ycombinator.com/classic, at present.)
It tends to filter out trite topics and lower-quality submissions, though I have the feeling that it has become less effective for that in recent times.
Regardless, can we talk about the danger to society of having these resulting billionaires and how we ought to address that? I think that is in fact what "the politician" mentioned in the article was trying to address.
(The new American Dream appears to be: be one of the 30 people every 21 years that finds themselves the head of a startup that succeeds.)
"The purpose of capitalism is to pay rich people for being rich in proportion to how rich they are, thereby establishing, reinforcing, and perpetuating a class hierarchy where the people on the bottom must constantly pay to exist while the people on top constantly get paid to exist."
Dear reader, if you bristled at how casually this statement ignored that compounding returns are a feature of the real world that we want our economy to model and encourage, now you understand how a normal person feels when a megacorp or megacorp cheerleader casually fails to account for everyone they displaced and stepped on in order to capture the value that they did. "Negligent accounting" is a strategy that points both ways.
Now, if that isn't inspiring, I don't know what is! Some of my rich buddies got to be super rich following my advice!
I really don't know why the average person hates the rich. Those poors are so out of touch!
The plot twist is that the 'rightie' and the 'leftie' are both entirely correct. Which is why most developed economies try to remove sources of wasteful, unearned rent and also include significant amounts of redistribution/social insurance rather than relying on pure market outcomes. This doesn't erase the compounding dynamics altogether, but it hopefully ensures that folks at the lowest end of the distribution can keep a tolerable standard of living that doesn't have them 'paying' too much.
gains = investment * rate_of_return
Right term: capital allocation decisions are made with skin in the game. Every chunk of the economy has a responsible owner who is rewarded/punished and promoted/demoted for good/bad decisions. Capitalism is a Q-learning algorithm.
The non-explosive way to do this is simply to set the heel above the megacorps today and let inflation push them into it. They will be able to avoid the heel by splitting at their leisure, slowly remediating the consolidation we have seen and restoring competition.
I can literally think of a million ways.
1) lie to your customers about what your product actually does; this seems inevitable, once (if not before) private equity gets involved.
Using AirBnB as example: all the excess fees which have slowly crept into the final purchase price, while still requiring guests to clean &c
She certainly frames it in a way that you have to personally cheat, or personally create the myth that you've earned it, or at least it can be interpreted that way. But I think it is the system itself that causes unearned[1] money to accumulate. Money begets power begets money, with or without any intention of the actors to exploit this is any bad way.
I don't think we know a better system, but I do think we can point to the level of wealth accumulation and say this is a bad property of this overall very good system, and we should try to do something about it.
[1] Or rather: Money to accumulate disproportionate to the earning. We can say that many billionaires have earned something very significant and ALSO say the accumulation is disproportionate to that, and that there is an opportunity here for improvement.
Given that, how can some people be worth as much? There has to be some capture of wealth somewhere such that even though nobody can actually earn as much, they can be worth as much.
There is a "hack" to wealth, and PG has explained it here. You need a large addressable market with little competition where you can capture a small amount of value from a huge number of people at scale.
Individually, that value is often not worth much. A surgeon can save your life, and you'd give up most of your fortune for it. A starving person would do almost anything for food. Most startups don't create that kind of value for any one customer. They create a little bit of value for a lot of customers, and at scale that turns into enormous wealth.
That's what people are arguing when they say scale is a form of cheating. Maybe you got into the position to own it through harder work, smarter decisions, more risk taking, more grit, or more luck. But not a billion times more. Once you own it, you've locked yourself into a growth curve that scales with little additional work. In many cases, it gets easier as it grows.
Past a certain point, wealth is no longer tied to your work. It's tied to your ownership.
That's also why CEOs want equity. They don't want to be paid solely for their labor. They want ownership in large scale production so they can benefit from the growth of the system itself and eventually sell that ownership for far more than they could ever earn through wages alone.
This is why, as a software engineer, I favor equity compensation and have benefited from it myself. But I don't think I've worked harder than countless people in jobs that don't have this characteristic.
I wasn't paid more because I worked more. I was paid more because I owned something that scaled.
That's the "cheat."
That’s weird. I grew up around farming and farmers. A group also very proud of the work they do, in a profession where the wage is also indirect — sometimes negative, sometimes a fortune, always based directly on the work they’ve done. Year after year, the work.
That’s different.
I’ve always identified two sets in the realm of entrepreneurs: those that want to “be rich”, and; those that want to “become rich”. The latter group is perhaps more admirable as they acknowledge the process and the value creation whereas the former seek only the status. But neither are often interested in the work of it.
the ratio of the average individual's wealth to 'illionaire's wealth feels "wrongly asymmetric" for a lot of people (CEOs making ~300x that of average worker)
the question is basically about how that startup scaling at 94% translates to scaling up the individual's life (who faces alleged "stagnant wages")
or in other words, how can entrepreneurs create an approach for society that facilitates individuals scaling up their wealth?
There is for example a perception that a person working all waking hours on a low amount of pay - like minimum wage, and without investments - could never become a 'illionaire through their "honest hard work"; ergo becoming a 'illionaire requires something beyond this "honest hard work" (implying illegal and or unethical means)
4. Do a "successful exit" and let some other fool figure out how to make the company profitable.
As if the chef didn’t contribute. People have to eat!
We have weird ideas about who deserves the rewards. This idea that starting a company that gets big counts as “earning” a billion dollars makes some strong assumptions about who deserves what.
Andrew Wilkinson has a whole part in his book about what it's like to be on the billionaire side of this speaking to former employees who feel that you took more of the value than you deserved it was an interesting read.
That said the market is a terrible judge of fairness since it's a feedback loop so luck early on can definitely allow you to extract an unfair amount of value later(this is what Wilkinsons employee was saying basically, Andrew pointed out that they offered them share packages instead of salaries and the employee replied that his employees couldn't afford to live without a salary like he could so it was never a real option so they didn't actually have a chance to capture a fair amount of the value from their work).
(It's been a while since I read the book I could be getting some of the details slightly wrong)
Everyone who makes a billion dollars must attribute that success to themselves, but also the people who built the roads their product is delivered with, the teachers that taught them in school, the doctors that keep them healthy, etc.
What fraction of the wealth earned by a billionaire society is entitled to for its contribution will always be a fair policy debate.
Aristotle describes four causes, and pg has given two; not because he doesn’t know the rest, but because this post is not intended to guide people, but to tamp down the demonizing of success, lest it usher in a Cold War on Capitalism.
There’s much to criticize, but today politicians are desperately herding outrage to make up for their ineffectual performance, so instead of criticism resulting in field-leveling regulation, we’re just seeing haircuts that send the rats scurrying off the boat and fuel for the fires consuming it.
There are 86,400 seconds in a day (24 hours * 60 minutes * 60 seconds = 86400). Now let’s say you spend an average of 1$ every second. That’s every second, including when you’re sleeping or on the toilet. That’s 86,400$ per day, which I hope we can all agree is a lot of money.
If you had one million dollars, to spend it all it’d take you over 11 days (1,000,000 dollars / 86,400 seconds = 11.57).
If you had one billion dollars, to spend it all it’d take you over 31 years (1,000,000,000 dollars / 86,400 seconds / 365 days = 31.71). That is an obscene amount of money.
The pg view seems to assume that if there is a causal relationship between your actions and a billion dollars appearing in your bank account, then it counts as having earned that money.
The countering viewpoint seems to consider the words "earn" and "build" as having a similar relationships to money and buildings respectively. If I tell you I built the shed in my garden, then you'll probably take my word for it. If I tell you I built a skyscraper, you'll either call me a liar or understand me to mean that a large number of individuals built it at my request.
I think the second version is more useful and more accurate.
Politicians spend their lives in one of the purest zero-sum systems in existence. Of course they don't have a gut level understanding of the creation of wealth.
But consumer surplus matters most of all. Imagine the net benefit to consumers of Robotaxi and Optimus (ok, ok, assuming they work, for the doubters in the room). Entrepreneurs capture
Their money goes to heirs who did not earn billions and do not know how to allocate it, or to questionable non-profits. So it ends up being a huge drag for the society.
I don't think there's anything insidious or controversial or misleading here. It's a simple talk to a bunch of clever students using contrived examples that emphasise this point.
Linus Torvalds created Linux which allowed companies to use commodity hardware. Before Linux, every company had to pay massive taxes to Sun (Solaris) or IBM (AIX) to run a server. With Linux, commoditty hardware ecosystem blossomed, and the first companies like Google built massive datacenter. This wouldn't have been possible if they had to buy Solaris servers to run their datacenters.
The value created by Linus is probably tens of trillions of dollars. I don't think he is a billionaire. There is a guy who is a trillionaire today. It is hard to make an argument that Musk created more value than Linus. Tesla is a trillion dollar company with negative YoY growth.
Linus Torvalds is not a visionary: https://www.youtube.com/watch?v=I-YL0BeWZyU
The people who become billionaires are experts at becoming billionaires, creating value probably has nothing to do with it. They have either inherited wealth or in the right networks. The example PG gives of starting with 2 million USD is someone who is already incredibly wealthy and in the top 1% (1% globally, not just US). As always, there may be some rare exceptions where the founders actually created value and became billionaires.
Give me a break. Elon has created a huge amount of value. Every third car I see on the road is a Telsa and the US was relying on Russia to reach the ISS before SpaceX.
However, it's still sure as hell a lot easier to earn it as an exploitative startup than as a good one.
a) thinking that others don't understand exponential. Any reasonably college educated grad understands it well.
b) thinking that growing 93 percent every month means the founder has put in 93% more effort than the prior month.
Their argument relies upon the ideology that just because you thought and executed an idea profitably means you should continue to "earn" from it.
In the LLM age, more and more people are questioning this, and rather want to goto: effort == earnings.
Call me cynical but ...
> The reason her startup was growing so fast was simply that users loved what she'd built.
> In the real world, growth rates tend to slow down a bit. A very successful startup will probably be growing faster than 15% a month in year 1 and slower than 15% a month in year 4.
It turns out that the people who will invest in your startup when 93% MoM gains are possible want you to do pretty much anything to keep growth as high as possible--also your career, net worth, and employment are tied to this so you're similarly motivated--including squeezing and manipulating those users who loved you so much. But hey, as long as you personally get rich it's fine I guess.
Any sane, rational person would offer different advice to people they see as "future prime ministers and billionaires" or at the very least people influential in future policy decisions, than they would to society in general.
It’s as if the money comes right up out of thin air, isn’t it?
He inadvertently gets close when he talks about Facebook being about people doing stalking. PG, is stalking a good thing or a bad thing, hmmm?
(Market cap is estimated based on transactions that are a small percentage of market cap.)
The transactions are just as real for Bitcoin or a meme stock.
Nobody is mad about the billionaires having a lot of money - they are mad that people are pissing in water bottles to make their route, or having the city’s public infrastructure privatized, or the many other fantastic real world changes that are on the other side of these fantastical market caps.
It’s also true that these companies raise and spend money and that results in physical changes in the world, but angry people on the Internet aren’t necessarily well-informed about what those changes are. There are lots of myths.
The first one is dispensed quite easily: if a person becomes a billionaire by lying about what will happen in the future, then the "wealth" is fake and obviously not earned.
That second one is very straightforward and can be addressed. You have to ignore a lot of obvious evidence to believe that coinbase, opensea, flock safety, one of the many gig startups... (to use a few of PGs billionaires) are a net positive force on society.
Thanks for educating me on the meaning of a valuation, but it's not really needed. Those "future cash flows" are eventually realized, and the first category converts into the second (in most cases).
You have to understand that when people are upset, they are upset about real changes that they see in their lives. They see the world that bezos, musk, peter thiel, etc are building, and they hate it. And yes, this group of people includes PG.
AOC also doesn't say anything about "moral", etc. You can behave perfectly morally in US society and "earn" a billion dollars. It is just that, no matter what exactly you did, you didn't actually "earn" it.
Of course pg is smart enough to understand that there are two different meanings of "earn" at play here. It is just that he chooses to ignore the second one, because the second one is hard to define exactly, and it puts him out of his comfort zone. He likes being right more than finding the truth (like most of us), and so ignoring the second meaning is the easy way out.
The trouble is, just because something is difficult to define, doesn't mean it isn't essential, or important.
Those whose bets paid off didn’t “earn” the money, they “won” it. Calling it “earned” confuses “being morally deserving” with “receiving”.
The positive functional effect of “take a risk and get more money if it pays off” is that folks who allocate capital well end up with more capital to allocate.
Of course, this is imperfect ; there are those who allocate capital poorly (by some definition) yet win returns anyways, and some who allocate it well while being unable to capture the value they create.
She says you can't earn it and then gives several examples in a row of immoral and/or rentier economic practices. At no point does she give any example that is what most people would call moral behaviour. She does not give the example pg gives, of simply working hard for it. The implication is that it is impossible to earn that level of wealth morally.
Earn is already defined in the dictionary in both ways perfectly well, and she is using the sense of deserved. pg clearly knows she's using it that way, and his argument is:
1. You can make a billion dollars
2. You can do it by making something people want
That deals with both senses of earn because none of AOC's examples apply and he adds that:
> The reason her startup was growing so fast was that she and her cofounder had been working their asses off to make their users happy
How is that immoral? How is that unearned? If you think it's unearned then you've failed to understand the maths he elucidates in the article, or you've taken a position that earning large amounts of money by any means is immoral (or, like AOC, wish to present the straw man that it's only possible through immoral means).
https://en.wikipedia.org/wiki/Effects_of_economic_inequality
> Effects of income inequality, researchers have found, include higher rates of health and social problems, and lower rates of social goods,[1] a lower population-wide satisfaction and happiness[2][3] and even a lower level of economic growth when human capital is neglected for high-end consumption.[4] For the top 21 industrialised countries, counting each person equally, life expectancy is lower in more unequal countries (r = -.907).[5] A similar relationship exists among US states (r = -.620).[6]
> 2013 Economics Nobel prize winner Robert J. Shiller said that rising inequality in the United States and elsewhere is the most important problem.
"Earning a billion", to the skating coach, is like pulling off a dodeca-axel.
It's not gonna happen through mere pluck, and it's probably gonna involve a lot of other folks' work if it ever happens, who probably aren't gonna get that much of the glory.
I'm suggesting - and I think the politician was also clearly suggesting - that a certain point of scale it ceases to really be "earning" anymore.
It's not about the math of the thing, it's about the arguably necessary exploitation that must occur to hit those kinds of numbers.
And in fact, IMHO, you don't even need to get to "exploitation" to criticize this mentality.
Any normal human would (and if not would, SHOULD) want to stop "earning" well before they hit those ridiculous numbers. Let's say -- at about 50 million, a normal person should realize, yes, that's enough. Time to pivot to something that doesn't cause so much accumulation. This does happen, we just don't hear about it enough.
Trades are almost always positive sum with some externalities.
Trades aren’t exploitative like you claim.
Companies focus of the Rule of 40 and struggle to keep above it. And this struggle is where many in management lose their way.
Enshitification begins. The margins get harder. More corners cut. Employees get treated less well, customers get treated less well.
Instead of telling us "it is just exponential growth bro," do case studies on billionaires and their dealings. In the US, you have billionaire business leaders who have full time employees who require government assistance every month.
The couple of billionaires and near-billionaires I have worked with (and helped build their companies) have not been bad people. But working at their companies pre and post IPO is way different. Less perks, more pressure. If the company culture isn't solid, it becomes bad fast.
"The road to hell is paved with good intentions." I would substitute the word "paved" with "begins." It is the very rare business that inevitably doesn't succumb to enshitification.
It said that the theoretical maximum is 174,000. In a country of 340 million.
That sounds to me like the chance to make it is a lot lower than 0.05%
Maybe we should just stop pretending that everyone can make it and that it's mostly people who already come about with vast amounts of luck (means = luck, opportunity = luck) who have even a chance to make it.
People with cool startup ideas cannot just make it. Working hard is not enough. Growth is not good enough. They will likely just be destroyed in an increasingly unfair and predatory market.
I suspect they may envy the laymens position in life eventually. You loose alot becoming wealthy in the monitary sense. There are many ways to define richness and wealth beyond what society defines it as.
As they say, more money more problems.
That's not what she meant. What she meant was that he was misusing the word "earn".
This is, sadly, a first for him.
AOC (the politician referenced) did not mean that earning a billion is "impossible". She, very clearly, stated within the context of that interview that Billionaires must be an extractive class at the cost of normal market efficiencies due to the rent-seeking behaviors of the monopolies that must exist to attain that level of wealth.
As Upton Sinclair put it, "It is difficult to get a man to understand something, when his salary depends on his not understanding it."
That quote is just the tip of the iceberg of Sinclair's work, though. He wrote about how when a person's livelihood, reputation, or financial well-being relies on a specific status quo, they often find it impossible to see the logic or ethics in changing it. It can be very difficult for them to confront such issues objectively.
He also wrote about the question of cynics vs. true believers in this situation. For the true believers, he pointed out that the only way for them to resolve their cognitive dissonance (while maintaining their lifestyle) is to block out the truth entirely. They stop trying to understand because actually understanding would be too painful.
This article did not sit well with me. I have found myself rereading Beyond Smart, How to Write Usefully, The Need to Read, Life is Short. But this one is harmful; nobody needs a billion dollars.
But you probably need >$10M to not HAVE to work and live a low-risk comfortable life in even modestly expensive parts of the US.
The funny thing about money is, it's really hard to save $1M and $10M, but once you get there, it's pretty easy to grow that substantially.
The fundamental problem in the West, IMO, is that we make it so hard to save even small amounts of money, and so easy to compound huge amounts of money (and no the EU is not much better on this front than the US).
It should be the opposite.
My take: they don't; nobody does. But when you aren't successful and don't have a lot, and when "success" is marketed to you as "big SUV; fancy big ass house; private jet; fancy vacations", you get trained into think you need much more than you actually do to be happy.
The once was a time where everybody reached similar questions, like "why does our monarch deserve to own all this wealth?" and "why does this plantation owner deserve to own these people?" Today it is the myth of meritocracy, they worked harder, or were smarter, and that's why they deserve it. Its all the same moral sickness. The future is socialism or barbarism, everyone get your heads out of your asses and choose.
I don’t know where “the politician” went with that comment, but for me the more pressing conversation is whether we want a society where many are struggling and some make a billion dollars.
You benefited from society, clearly, which is not to say you didn’t work hard. But it seems entirely reasonable to me to ask you at that point to give back. We can knock plenty of people back to mere “hundred millionaire” status, they’ll be fine, and we can do a whole lot with that money.
(Unless there is hyper inflation)
You can only get a billion dollars.
This is such a weird statement to see. The idea that a startup founder whose company is growing at 93% month-over-month has a net worth growing at the same rate is just so logically wrong that it's bizarre to see someone stating this.
Even putting aside the fact that "growth" can be tracked by various metrics (revenue, customers, registered users, etc.), the idea that any given "growth" rate tracks 1:1 to the paper valuation of illiquid equity in an early-stage private company is so naive to be silly.
> And yet she hadn't been doing anything bad. The reason her startup was growing so fast was simply that users loved what she'd built. So she could feel from her own experience how wrong that politician was. She wasn't exploiting anyone. Exactly the opposite in fact. The reason her startup was growing so fast was that she and her cofounder had been working their asses off to make their users happy, and as a result the users had been telling their friends. And that gets you exponential growth.
Delve, anyone? Startups can lie, cheat and steal, and their customers "love" them until they find out they've been duped. And let's not forget that more than a few have been accused of lying about how much "love" they really have (by misrepresenting their traction). Fake it until you raise it.
Also, this reasoning is very narrow. A company's customers might love it because it allows them to benefit from something that has external costs that disadvantage other groups, if not society at large. Cheap outsourced labor, regulatory capture, network/monopoly rents, tax shenanigans, etc.
A lot of companies also try to hack referrals, which sometimes involves using dubious tactics to get users/customers to sign up for something under questionable pretenses. In other words, people recommend products and services to their friends not solely because they love them but because they're given a personal incentive to. These can be really effective even when it's pretty obvious people are doing something that won't benefit their friends.
Exactly, kind-of weird for pg to be conflating these things...and very few comments engage with this part of the "incorrectness" of what pg said.
You start by ignoring what a "billion dollars" means, and most people don't think it's stock. Then you have to ignore what "earn" means, which most people don't think is getting stock on the assumption that the company you own a portion in will turn a profit one day, possibly many years ahead.
Getting investment without having profitability, getting to keep a portion of this investment, even if the banks that are insured with taxpayer money lose that money, is not what the constituency of AOC think is earning money.
There is a huge amount of technological advancement and personal fortune that I enjoy from this system, but I'm not trying to bullshit anyone that the system is fair.
In conclusion, I do think this attitude is cope that allows a high performing individual to focus on this game and be successful, and Paul Graham seems to be successful, so it's natural.
> I've spent the last 21 years training people to become billionaires. So far about 30 of them have
Since it's a post about math, let's do it.
6500 companies with 2 founders each - 13000 founders.
30 of them became billionaires - 0.2% of them.
So being a tech founder at the most famous startup accelerator in the world give you about 0.2% chance of becoming a billionaire.
Or put another way, only 1 out of every 500 YC-combinator founded startup makes one of it's founders a billionaire.
Money is a made up idea that we use to benefit everyone. It's a game that, largely, has positive returns for society. When that is no longer the case, when someone breaks the game and removes themselves from the rules, you have to change the rules.
There could be alternatives. For example, laws that ensure ownership of said companies is more widely held, so that the wealth is more evenly distributed among those who created it, for instance.
> There are other ways to get rich than by starting startups. Some of those do require you to exploit people. But startups are the most common way to become really rich, and if you want to start a successful startup, the key is not exploitation but empathy.
> How people become rich in your society is one of the most important things to understand about it. You can't let your beliefs about this be determined by ideology, or movies, or historical examples that are centuries old. You must look at the world around you and see how it's actually done.
The "it's impossible to do morally" people are looking at how it used to be done, and how it's sometimes still done. They are right to be opposed to that. But oppose the immoral aspects of it, not doing it at all.
And those who hard-core define a billion as immoral are I think signalling something else: They want the government to take that money, from every billionaire. (If we're talking immorality, we could discuss the morality of that.) But they don't understand that there will probably be second-order consequences of doing so...
Not exactly the way I interpreted it (emphasis on earn). Right or wrong, I think the vast majority of us think that "deserved money" is money earned from "work".
A simple example would be the billionaire Walton children: their fortunes inherited. Most people would argue that they did not really earn those billions of dollars.
On an admittedly slippery slope, for many, investing and other means where the money makes money is also not regarded as work (and therefore is not earned money).
To wave around the idea of "the American Dream", I suspect that many American's disapprove of any means of obtaining wealth that the average Joe or Jane are not privy to. This idea that you have to be born into money or have money to make money—we are (perhaps naturally) repugnant to.
When people say that it's not possible to earn a billion dollars, they're talking about the discrepancy between the wealth gained by those employed by the company versus the shareholders of the company. For example, when WhatsApp was sold to Meta for $19 billion, how many of WhatsApp's 55 employees walked away with hundreds of millions of dollars?
The fundamental problem is that it's possible for an employee to generate a hundreds of millions of value for a business, and yet be compensated for a vanishingly small fraction of that. Even if the employees agreed to a particular salary, is it ethical to pay them so little in comparison to the worth they generate, or is it exploitative?
Most, if not all billionaires, reach that status by paying people far less than the value they generate. If you want to become a billionaire, you need to find people who are willing to be paid thousands or tens of thousands of times less than they're worth. You need employees who will generate you $100 million in exchange for being given $100 thousand.
As a career programmer, I worked for several companies. Each time I took a job, I negotiated what I thought was a fair salary for my wages. Some companies also gave me stock options and one gave me founder's stock. When a company had a good year, they often gave generous bonuses.
Only when I took great personal risk, did I expect to share the rewards that come with a successful company. I was always grateful when I got more than I agreed to work for, but I never felt entitled to it.
A janitor working for a 10x company should not feel entitled to 10x of the salary as another janitor working down the street for another company that is struggling.
But hiring people who are compensated fairly does not make someone a billionaire. If you generate $300,000 of value per year and I pay you $200,000, then I'm only making $100,000 profit off your work. I could hire more employees, but value does not scale linearly indefinitely. Doubling my number of employees does not guarantee I double my profits.
No, if I want to become a billionaire within my lifetime, I need an asset that generates far more money than it costs to buy and maintain it. In other words, I need employees who will generate millions for every thousand I pay them.
Now you might well argue that I'm taking a risk. How do I know if an asset or an employee or a team of employees is undervalued? Not every bet is going to pay dividends. However, while this is true, I don't think this makes it ethical. If I'm a venture capitalist looking to make it rich (or richer), the fact that I'm taking a risk doesn't change the fact that ultimately I'm looking for people who I can pay far less than they're worth.
If I charge a client $50k for some software and they made $1 million profit from it, good for them? As long as they pay our mutually agreed upon rate on time and there was no hostile negotiation, why should I feel suddenly entitled to more money if that wasn't in our contract? How do I know how much of the value is from my work and not their marketing or idea?
What you're saying seems as crazy as me saying that someone who bought my software for $99 and used it on a multi-million dollar project is being unethical unless they give me more money. How on Earth does that make sense? Should I be forced to switch to a royalty model? What if I make more selling copies at a flat rate, what if I don't want to have to investigate the finances of thousands of customers and have to deal with that whole trouble?
For me it's the same thing regardless of whether I'm selling my labour or a product. I can choose whether to accept a flat hourly rate, equity, or a mix of both, and usually the better deal is the hourly rate.
If I find a way to hire a software engineer for market rates (say, $200k/year in the US) and get $2M revenue from their work, good? They can ask for a raise or a bonus, we can renegotiate, they can leave if they're unhappy, but I'm not obligated to give them more money than was in our agreement anymore than they're obligated to give me their salary back in the project fails.
Suppose I buy a painting from a flea market for $100, get it evaluated by a specialist, and then discover it's actually worth $100,000. In this example I have no inherent advantage over the seller; neither of us knew the value of the painting at the time it was sold.
Now suppose a famous TV antique dealer stumbled across that painting instead, and immediately realizes its true value. The seller recognizes the dealer, and the antique dealer offers to buy the painting for $25. The seller, trusting the antique dealer's judgement, agrees to the discount.
Would you say in both examples everyone acted ethically? This is a genuine question, as I can certainly see the argument that using the assets you possess to secure yourself the best deal possible is just business, and yet I would personally see the antique dealer in the second example as being exploitative.
When it comes to companies there's a similar disparity in power. An employee requires money to live, while someone founding or investing in a company often has enough of a financial safety net that they won't starve if the venture fails. Equally, any would-be billionaire is explicitly looking for employees who generate vastly more value than their cost. You don't get rich by paying people what they're worth; you get rich by underpaying them and pocketing the difference.
The other problem, and one you've touched on, is how do we assess the value of an individual employee? This is obviously not easy, and businesses also have no incentive to work it out or reveal that information to their employees even if they knew. On the contrary it benefits employers to keep their employees as much in the dark as possible.
Aside from the ethical problems there's a practical one. The very existence of billionaires implies that a significant number of people are undervaluing their work. It's a pricing problem that the market isn't solving, and is only getting worse.
Even within successful companies, it is a challenging task to figure out just how much value each employee produces. Some positions are required, but do not produce revenue. Sometimes whole departments are a sunk cost.
It is up to each employee at review time, to argue that the value they produce is far greater than their salary; in order to negotiate a raise. No one is automatically entitled to anything extra, just because the company had a good year.
Negotiation clearly doesn't work in the general case, otherwise we wouldn't have billionaires. There's too much of a power difference between an employer and employee, and companies have a clear incentive to keep it that way.
--
// 8bn world population / 3,500 billionaires:
0.000000_44
--
// 300mm US population / 1,000 billionaires
0.00000_333
--
// Odds of winning billion dollar powerball
0.00000000_3422298 (play once)
0.0000000_68446 (play twenty times)
0.000000_34223 (play 100 times)
--
// Global net worth vs billionaires
0.03636364
--
// US net worth vs billionaires
0.0942029
> She wasn't saying, of course, that it's impossible to become a billionaire.... What she meant was that it's impossible to get that rich without doing something bad — without cheating in some way.
> But now you at least understand, from having done the math yourselves, that you don't have to cheat to become a billionaire. You've seen for yourselves that there are only two numbers in the calculation, the growth rate and how long it continues. If it's impossible to make a billion dollars without cheating, which of those two numbers is impossible?
AoC quote:
> There’s a certain level of wealth and accumulation that is unearned. You can’t earn a billion dollars. You just can’t earn that. You can get market power, you can break rules, you can abuse labor laws, you can pay people less than what they’re worth, but you can’t earn that.
Come now @pg.
$2 million * 9.45 months * 93% growth rate = earning a billion dollars, ok. Does that really address what AoC was saying? She wasn't saying that the math doesn't math.
> What [AOC] meant was that it's impossible to get that rich without doing something bad — without cheating in some way... The reason [my founder's] startup was growing so fast was simply that users loved what she'd built. So she could feel from her own experience how wrong [AOC] was. She wasn't exploiting anyone. Exactly the opposite in fact. The reason her startup was growing so fast was that she and her cofounder had been working their asses off to make their users happy, and as a result the users had been telling their friends. And that gets you exponential growth.
In other words, this founder being on a trajectory toward billionaire status, through doing little but working to provide something of value to those willing to pay for it, belies the claim that you must be doing something unethical and cannot earn one's way to a billion dollars.
But, in the real world, as the 'exponential earnings' stack up, the incentives to do unsavory things to keep the rate of growth scales right along with the earnings; and the odds of anyone actually 'earning' a billion dollars while sharing the proceeds and absorbing the risks and societal costs of that growth fairly, ethically, legally and honestly has a growing potential to become vanishingly small.
AOC was speaking to this reality, the author was speaking about the math functions of how some steady rate of growth crosses from a small number to a very big number due to the law of compounding growth, and speaking to the actions and motives of a cohort who had not yet done what it took to realize that rate and duration of growth.
They actually are both right.
AOC was not addressing the math at all, nor did she claim that it was mathematically difficult to become a billionaire; just that it was unrealistic to expect that the process of doing so did not select for people with an intrinsic ability to externalize risk and maximize profit in a manner which many other people find distasteful, bordering on criminal if known to the full extent.
And the original post posits that his representative cohort was free from these types of behaviors and thus would remain so.
I find one of those arguments more realistic and actionable than the other even though they both may be true. I'll leave which for another day.
This is no different than any of the Thiel/Musk/Bezos propaganda that's been swirling around as they realize that the natives are getting a bit restless and mentions of guillotines become more common on social media. And they look at the UHC CEO's murder and wonder just how safe they really are.
Of course, we'll ignore the huge issues that Airbnb created for cities, customers, and providers. We'll ignore the way they knowingly helped ignore any regulations on tourism as much as they could. We'll ignore the business model of simply being the biggest middlemen around. We'll ignore the fact that their business is slowly being outlawed in major cities, at least in Europe, because of all of the above.
And, surprisingly, if we ignore all of the things these founders do to ignore the law and cheat the market or their competition, we can say that they earned their billions without cheating!
We'll also ignore the fact that the brilliant magic math that us lay people and politicians just don't understand also predicts that the founder whose business is growing 93% per month will not only be a billionaire in 9 months, but a trillionaire 9 more months after that, and surely the world's first quadrillionaire within 5 years. You might think this is implausible, but that's just because you don't understand how exponential growth works!
Additionally, you keep ignoring the fact that even if new housing supply would be very important, Airbnb is still a drain. If demand was outpacing supply 2.5x before Airbnb, and it's outpacing it 3x now, that is still Airbnb making a bad problem worse.
> But startups are the most common way to become really rich, and if you want to start a successful startup, the key is not exploitation but empathy.
There is no doubt that Graham is right in saying there is a formula to becoming a billionaire and that formula involves creating products that help your users in some way.
However this is very narrow, reductionist interpretation of AOC's comment. You need to put it into perspective of the massively increasing global wealth inequality.
In 2011, billionaires owned 4.5 trillion USD of wealth. Today, fifteen years later, it's 20.1 trillion USD. This amounts to about 20% of the entire planet's GDP. That means 0.000003% of humans capture 20% of the value globally created. The top 12 billionaires own more than 50% of the bottom half of humanity.
How can you sensibly argue that this is not exploitation?
Billionaires obviously get a disproportionate amount of income per year, but it’s far from 20% of all the world’s GDP. To make your math work that would assume they got all the wealth in a single year.
However, getting relatively accurate and meaningful numbers for billionaires income is probably virtually impossible. Hence the comparison to their wealth which is known. I think it's still a valuable and common comparison. See https://stats.areppim.com/stats/stats_rich_26_trend_percentx... or this New York Time article: https://archive.is/KvbQH or this Guardian article: https://www.theguardian.com/inequality/2026/may/15/wealth-br...
For some subset of the population, they are okay with exploitation as long as they are able to exploit someone else that is lower on the capitalist hierarchy.
The Accumulation of Waste, Kadri, https://brill.com/display/book/9789004548022/front-7.xml
Monopoly Capitalism, Baran and Sweezy
https://archive.org/details/monopolycapitale00bara
Labor and Monopoly Capital, Harry Braverman https://ia801604.us.archive.org/12/items/023978561/Braverman...
(Great essay on how to be a billionaire though. Could billionaires give back more? Yes. But creating market value like that is both worth celebrating and evolving.)
Billionaires Build
https://news.ycombinator.com/item?id=25302527
520 points on Dec 4, 2020 916 comments
The idea of becoming rich is as old as society itself but it has not been a static concept. It is an idea shaped entirely by the things mentioned - ideology, culture and history. There is no wealth accumulation without ideology of one sort or another.
It's fair to resist a view of wealth that may seem flawed but it's disingenuous to assume this can be done from a neutral position.
However, there are several addendum to this argument:
1. Most billionaires are hedge fund or private equity managers whose name no one has ever heard of. They provide liquidity or allocate capital or something. It's actually a major PR failure that people think Jeff Bezos or Elon Musk when they think of billionaires; If we can ignore their character for a second, these guys are actually hyper-productive and they've created immense wealth for society and are compensated in a power law sort of way.
2. Rich people make money with money - in the form of dividends, interest, rent, etc. Poor people trading labor for money. Salary only scales linearly; therefore, generating value for society is only half of the equation, you must also have ownership, or slowly invest your earned capital to eventually make money with money (i.e. retirement).
3. There must be a growing economy, otherwise it's a zero-sum game; a fixed-sized pie. In a stagnant economy, the customers you gained are customers another company lost. The wealth just shuffle hands from laid off workers to your employees. I think this is why Jeff Bezos once remarked that a stagnant economy is incompatible with free democratic society.
4. There must be a new frontier, otherwise the chance of success is pretty much zero. Software is this generation's new frontier. There are no bars to entry. You just need a laptop and the skill to arrange symbols on a screen in the right order. It's literally alchemy. On the other hand, non-software startups can't just do things. In many cultures, maybe due to their lack of growth, "entrepreneur" is actually very low status. It's synonymous with ne'er-do-well who can't find proper work. In the case of USSR before its collapse, it's synonymous with literal thieves and black market thugs.
Strap in folks, this is going to be a doozy
> The one insight from the book that I will always remember from the book is this: if you want to be rich, make something people want.
and then there's “Again I tell you, it is easier for a camel to go through the eye of a needle than for a rich person to enter the kingdom of God.” https://biblehub.com/matthew/19-24.htm
> Money is fiat to the value you've generated in growing the economic pie.
This is gibberish, fyi (in case you didn't know) -- I can't even begin to de-garble it
> It is in fact possible gain wealth ethically.
I think this does get to the crux of the matter. I grant you that there is a sizable chunk of the population, most of them lefties, that do believe this. I personally, as a matter of principle, do not believe this. However (you just knew there was a however) I think it is let's say tricky to accumulate a vast amount of wealth obscene wealth ethically. We know from wage stagnation https://aflcio.org/2015/1/15/five-causes-wage-stagnation-uni... that the system is rigged. So fair play to anyone that opts out of playing the game and decides to join the rentier class https://www.encyclopedia.com/social-sciences/applied-and-soc... More power to them, but let's not pretend the system itself isn't lopsided, captured, rigged, and unfair.
> However, there are several addendum to this argument:
addenda is the plural of addendum
> It's actually a major PR failure that people think Jeff Bezos or Elon Musk when they think of billionaires; If we can ignore their character for a second, these guys are actually hyper-productive and they've created immense wealth for society and are compensated in a power law sort of way.
This Jeff Bezos? https://www.btimesonline.com/articles/177080/20260414/amazon... Or this Jeff Bezos? https://metro.co.uk/2025/09/24/inside-never-ending-nightmare... Or this Jeff Bezos? https://www.epi.org/publication/corporate-union-busting/
Oh, he's so hyper-productive
> 1. Most billionaires are hedge fund or private equity managers whose name no one has ever heard of. They provide liquidity or allocate capital or something.
fun fact: “Before founding Amazon in 1994, Jeff Bezos worked at D. E. Shaw & Co., a quantitative hedge fund in New York. He was there from 1990 to 1994, becoming a senior vice president by age 30.”
What I'm not saying. I'm not saying that Mr Bezos isn't a smart guy. I'm not saying that he isn't hard working. I'm not even saying Amazon isn't an amazing company.
> If we can ignore their character for a second
No, I am unwilling to, why should we?
Look, I'm not anti-capitalist. I look up to Elon Musk. I think what he has built and is building are astounding human achievements. Musk and Bezos didn't create this lop-sided system and I am not going to fault them for taking advantage of it. But as I said before -- let's not pretend there's some magic exponential money tree that some among us are just ever-so-gifted at growing for themselves and acknowledge the system is broken for the majority of people. It takes a special sort of myopia to ignore the obvious and plentiful social ills of the day. And do not take this as an attack on the system itself. As I said, unlike many other I am not an anti-capitalist. I do not believe that capitalism is inherently evil or wrong or bad or whatever.
> 2. Rich people make money with money - in the form of dividends, interest, rent, etc. Poor people trading labor for money. Salary only scales linearly; therefore, generating value for society is only half of the equation, you must also have ownership, or slowly invest your earned capital to eventually make money with money (i.e. retirement).
Yes, we know how the world works
> 3. There must be a growing economy, otherwise it's a zero-sum game; a fixed-sized pie. In a stagnant economy, the customers you gained are customers another company lost. The wealth just shuffle hands from laid off workers to your employees. I think this is why Jeff Bezos once remarked that a stagnant economy is incompatible with free democratic society.
??? what's the size of the pie and whether it's growing or not got to do with anything. The problem centers on the how unequal the relative sizes of the slices of the pie everyone is getting over time. Which leads us to wealth redistribution. You lot (you and pg and people like you) can call the rest of us "radical leftwing ideologues" all you like but the longer this inequitable dynamic goes on the likelihood of a violent revolution goes up. If you want to avoid pitchforks and guillotines and "eating the rich" (I'm not advocating any of this btw, I'm just saying that this is where ignoring structural inequalities leads) -- you know way back when they used to have debt jubilees because they our forefathers recognised that inequality (growing inequality between the haves and the have-nots to be precise) is a fundamental truth of the world, an iron law akin to the law of gravity.
> 4. There must be a new frontier, otherwise the chance of success is pretty much zero. Software is this generation's new frontier.
No, what must happen is that when you find yourself writing a string of non-sequitur gibberish … the sane rational self-preserving piece of your brain must stop feeding the gibber-crank oxygenated blood
> There are no bars to entry. You just need a laptop and the skill to arrange symbols on a screen in the right order.
As the kids say "wow, just wow"
> It's literally alchemy.
It's literally and metaphorically not.
> On the other hand, non-software startups can't just do things. In many cultures, maybe due to their lack of growth, "entrepreneur" is actually very low status. It's synonymous with ne'er-do-well who can't find proper work. In the case of USSR before its collapse, it's synonymous with literal thieves and black market thugs.
I would say it's almost a guarantee that going by the rest of what you've written here this short snatch is undoubtedly horseshit
PG's essays function as ideological inoculation for a specific demographic — young, technically skilled, meritocratically inclined. They don't prevent radicalization; they redirect it from class analysis to techno-libertarianism. You think you've avoided leftist ideology, but you've absorbed a different one: the "just-world" fallacy with startup characteristics.
I meant to say => I grant you that there is a sizable chunk of the population, most of them lefties, that do not believe this. I personally, as a matter of principle, do believe this.
Three things can be true: 1. Growing at a rapid rate over long periods of time is hard, doable and rewarding 2. Incentivizing the discovery of these things is good for society. 3. Nonethless there is and should be a limit to wealth acquisition, given moral hazard.
To make a similarly glib counterargument to Paul G:
If it's the founders who earned the same monetary value of the companies they created ("because they're responsible for it"), they should bear the same moral and legal responsibility for the externalities.
So far, only SBF is in jail. Lots more of these companies have broken the law.
Let's throw the founders in jail too - they can keep their money!
Nobody who illegally make the rich richer goes to jail, they get a promotion usually
There's a huge social element. No one wants to throw their buddies in jail.
It looks bad on the golf course (or at Burning Man / Sun Valley if you're in tech)
Rewarding entrepreneurship for example a good thing, but I'm also very much of the opinion that a single person controlling a billion dollars is extremely bad for the society while spreading some of that wealth out would do a lot of good.
The big problem we as a society face right now (in my opinion) is that a lot of political energy (votes and discourse) is spent on things that don't fix the economic imbalance right now. Poor poeple vote for politicians making the poor poorer and rich richer.
and depends on factors outside your control.
This last is a critical caveat, and really the crux of the argument. It's not about cheating, but the limits of predictability in complex dynamic systems.
You can't predict these systems at all!
Me too, honestly. I'm also kind of shocked. I want to expand on your last point.
Uber became a billion dollar business by running an illegal taxi service. Now I like the ability to book a taxi from my phone with seamless payment. I also dealt with the yellow cabs in NYC in years gone by and it sucked. Shift changes, annoying looping ads you couldn't turn off, card skimming, the process of hailing a cab sucked and the cabs themselves tended to be bad. All that is true but it was still illegal.
AirBNB became a billion dollar company by allowing people to run illegal hotels in residential neighborhoods. This was value extraction from all the neighbors who had to live with the externalities created but gained nothing from it. That value was extracted by people who usually didn't live there. Agree with it or not, it was generally illegal, particularly in their large profit centers like NYC.
There is a lot of this that goes on and, honestly, is the entire basis for private equity. Private equity looks for companies that have what they call "pricing power", which is a form of "inelastic demand". Housing, for example, has inelastic demand. But it also includes creating regional monopolies like buying up all the vets or medical practices in an area and then jacking up the price of all of them. You're not going to drive 5 hours for most medical treatment.
This can sometimes go wrong. KKR bought Envision Healthcare, an amergency medicine contracting company, and unlocked "pricing power" by intentinoally using out-of-network services wherever possible to charge a lot more. Lots of medical practices do this actually. Anyway, their business was effectively killed when the No Surprises Act [1], which interestingly was signed into law by Donald Trump in his lame duck period after losing the 2020 election to Joe Biden.
[1]: https://www.brookings.edu/articles/understanding-the-no-surp...
Travis Kalanick did far worse with Uber. He illegally spied on political opponents to Uber's expansion. As far as I know he's still out there free as a bird.
Private equity is a different problem, which hits closer to the real problems at the edge of the market where prices don't signal reliable information.
We've known for over a century monopolies are bad, but the actual finding is more like concentrated pricing power for goods with inelastic demand is pretty bad. PE exploits these corners with devastating efficiency and often bad results.
How do we determine that limit ?
Most Americans ( middle class and above ) are richer than most people in the world.
Way richer than most people in Africa or poorer parts of Asia can ever aspire to be.
Consider that when competing for resources these poor people are competing with wealthy middle class Americans.
Add to that the USD being world's reserve currency makes life easy for a small part of global population earning in the USA and makes it harder for people in every other country whose currency might not be competitive compared to the USD.
How about a cap relative to GDP?
Elon Musk's net worth is 3% of USA's annual GDP and 1% of global GDP.
I'm not a fan of limiting wealth among the upper class. But I am a fan of stopping a small number of individuals from controlling a significant percent of the world's GDP because if that trend continues, we'll end up with individual people more powerful than the governments that are supposed to keep them in check.
Just like those cases, what other countries are doing would mostly be irrelevant - except, just like now, people may try to find arbitrage opportunities by getting creative about where they live.
1. Too much inequality, and the risk is bloodshed. This is most of human society. 2. Too little, and you get communism, repression, or European stagnation. 3. U.S. is in the goldilocks zone. The goal is to make it so most people in society don't give up (Japan had this happen).
USD is a bit of a red herring. It does make our capital markets the most valuable in the world, and it does generate nearly endless demand for the dollar, but that's actually based on the wide scale belief that the U.S. is far and away the best arbiter of the world economy. The EU had a shot at that crown and absolutely wrecked it via over regulating.
It's a shame. Both AOC and PG are often right in their own way, and then deeply entrenched in others.
The whole discussion about exponential growth is idiotic and not worth responding to. But if you think of what he actually means - having a total addressable market of at least a billion dollars and being able to effectively capture it - it is obviously primarily due to factors outside of your control. The sort of company PG is talking about typically revolves around a good technology that has a network effect somewhere that leads to market concentration. People do not get good ideas by working hard, and markets are not made easily monopolizable by hard work. Execution of an idea requires hard work, but companies that are only good at execution do not win.
Obviously you can engage in hard work to improve your odds. But the returns are out of scale with the hard work. This is all people mean when they talk about "earning" money - if it's in proportion with your work, you earned it; if it isn't, you didn't.
It's a very sf-bubble type article.
Even if the leader wants to hear honest criticism – to receive capital `t` Truth, IMHO: rare – his echelons will sequester any challenge(s) to their status quo, often by excluding dissent(er)s.
----
Thou art mortal, Caesar.
Billionaires are great when the tide is rising. However the challenge for the young generation now is the tide is going out: Housing is expensive, there fewer good jobs, AI is coming for these jobs if they arent outsourced (or we bring in guest workers), plus the specter of supporting all the seniors. This is a problem is every developed and developing country.
Maybe it's worth reflecting on how billionaires could inspire the next generation and help drive society in a better direction. If you are gonna argue capitalism is good (it is) you need to make a credible argument to individuals who arent doing well. Society (or the country) doing better doesnt make people feel better if they personally cannot find a job or afford housing.
The founder of Huawei is the right billionaire role model- not PG -and he at one point stated when you employ thousands of people, you start being responsible for their welfare!
The easiest way to earn a million dollars is to start a business that makes sense and work your ass off running it well. Maybe that's even the easiest way to reliably earn ten million dollars, a million isn't what it used to be.
But at some scale that's far short of a billion the game becomes about asymmetry.
This asymmetry takes many forms. For Steve Cohen it was trading on inside information, for Jim Simons it was (as far as anyone can tell) novel mathematics.
For most of the technology companies in the 21st century it was about privatizing the commons and/or externalizing costs that a well-refereed market would place on your company.
The United States used robust public/private partnerships and a vibrant, thriving university system to build the greatest pile of latent wealth in the sum history of humanity during the 20th century. Everything from the transistor to the integrated circuit to the laser to Velcro to tang to the internet to the web was a product of this holy Trinity of innovation: defense and related public money, well-refereed private companies (even a notable natural monopoly or two under muscular regulation), and a paved path between the Academy and the other two. The gains accrued enough to individuals to keep everyone motivated but largely in the form of status, which confers a desirable station in life but does not compound directly into political power. Feynman and von Neumann and Einstein all seem to have led very enviable lives and are easily as smart and accomplished as anyone in the front row at the last Inauguration (and if we're honest, a lot more), but none of them had a billion dollars or untoward access to the levers of government. All of them paid far more into the ocean of latent wealth deeded to the body politic than they took out of it.
And at some point (my money is on the kneecapping of Brooksley Born, whose architect is now resigning in disgrace from everything for Epstein affiliation and whose most recent post was on the board of pg's protege) the flow reversed. The access caste started to be d away from the competence caste and the singular fortune deeded to the public started to accumulate as a dozen private fortunes that were substantially just the 20th century stuff with a named owner.
You get a billion dollars by stealing it, this is qualitatively different, a distinction of kind not of degree, from how you get a million or even a few tens of millions.
To get a trillion dollars as we have now seen, well first you steal a billion.
1. In pre-industrial society there is less technological leverage, so that it’s very difficult for an incidental or group to help very many people.
Perhaps the closest analog before then was land discovery or conquest (taking other people’s stuff).
2. Post-enlightenment society is one of the first which doesn’t predefine your social role by birth. So you can claim new roles and status from your own wealth.
America has a much stronger sense of 2 which is why European attitudes towards wealth differ.
Early pg wrote about Lisp and engineers should do their own testing and commodity FreeBSD on commodity Intel was better than Oracle on Sun for starting a company.
He wrote that makers and managers needed different schedules. He wrote that math has asymmetrical upsides. He wrote that you do things that don't scale while you're in the garage.
In his wheelhouse he was best in the genre, maybe not the Balzac he fancies himself as an essayist or the painter he fancies himself at all, but the best guy to listen to if you were doing a garage band startup that involved the Internet. He was surrounded by legitimate legends like Robert Tappan Morris and Trevor Blackwell, and he wrote about things he understood.
Late Soviet Paul Graham exists as the lobbyist for Garry Tan Y-Combinator, which isn't even really prestigious anymore. As far as the signalling value goes? I'd rather have a strategic from NVIDIA before YC. I would think about YC's money if literally no one else was interested. This is "ChatGPT Tha License Dawg", "die motherfuckers die motherfuckers die" tweets tagging elected officials Y-Combinator he's defending, and the vampire companies he cites as his clean wins are suitable filleted in the rest of the thread that mine would be redundant.
And the real mile marker of a guy whose audience has exceeded his depth is that he's lecturing a room full of people about how a single operation on the iPhone calculator app can teach you more about government and economics than is apparently understood by someone who has survived eight years in Congress designed to destroy people like her, who has an Economics degree cum laude from Boston University that she got while working as a bartender to support herself and her family after her father died, a situation with no parallel in pg's life or that of anyone adjacent to him in either it's highs or lows.
I got into this business substantially because pg's writing was so motivating to twenty year old me, and for that I'm still grateful. And just like I hope Kanye gets back on his Lexipro and starts making great music again, I hope that pg goes back to his roots and starts printing great technical and startup essays again instead of spewing solid waste.
But just like I can't follow Kanye down the "death con three to the jews in hollywood" road, I can't follow pg down the "think about the billionaires and don't listen to the honors economist multiple-term congresswoman" road.
One is dramatically more offensive in it's form, one is dramatically more toxic in it's substance, because there are people who take it seriously.
No serious person acting in good faith disputes that new methods of wealth creation have started appearing at a dramatically higher rate in the last two or three hundred years than any precedent before that. Everyone, including AOC (who I agree with in this instance but am not in general a huge fan of, just to be clear, I can respect a person's credentials without blindly endorsing them), would concede that point cleanly unless they were trolling.
The second point is so ill-formed as to verge on oxymoronic when examined against either of mechanism on the ground or Bayesian prior of history. New methods of wealth creation have triggered market failures admitting new methods of wealth centralization a number of times in recent history, the Gilded Age being perhaps the poster child for this failure mode, and the Great Depression being perhaps the poster child of the magnitude of that failure mode.
The sleight of hand here is recursive, the two points are one that is trivially true followed by the shellcode that looks like a test fixture, and the shellcode is a subtle rename, `s/time bash -c 'my-command'/sudo bash -c 'my-commmand/`. It's almost reasonable, except that it grants arbitrary privileges to something that definitely shouldn't have arbitrary privileges.
In both instances, pg is smart enough to know he's arguing in bad faith.
> The second point is so ill-formed as to verge on oxymoronic
Sounds like name calling. I don’t see a rebuttal.
> am not in general a huge fan of, just to be clear, I can respect a person's credentials
Are the credentials here a Bachelors from BU? Is this an LLM?
At "Glad you agree" we've left plausible benefit of the doubt that you're arguing in good faith and so I'll bow out with one procedural grade discharge, which is that the LLM accusation is quite trivially prohibited in the stare decis of dang's rulings over the years, but still sometimes rallies downvotes, so my credentials as a human are that no LLM I'm aware of (and I work in AI) has YouTube channels of code streams.
Chain of custody on that: https://news.ycombinator.com/item?id=48511333 -> https://www.youtube.com/@b7r6-c3t so no, I'm not an LLM. I have Opus read my comments after I post them so I don't persist in trivial errors of reasoning, but I credit LLMs for their output just as I expect mine credited.
The llm comment comes from this bizzare integration of random unrelated PG facts. As if you asked it to integrate that style.
I was actually not knocking BU. I’m asking if the authoritative credentials you were referring to is a bachelors degree from a public university. Because most people have those and many of them don’t share then belief.
If you are playing the credential game doesn’t PG have a Harvard PhD?
Because as far as I can tell they're just creating a massive surveilance state while engaging in naked class warfare. Whether you can "earn" a billion dollars, I'm not convinced those people should have a billion dollars.
I’m thinking of vibe coding a calculator app How Many Babies Died For This where you input your startup idea, life(style) goals and AI token usage and the machine spits out the Net Babies Dead for you to achieve your dreams
Ah i see you edited your comment, i’ll leave mine as is though.
For most of my adult life technology was associated with unquestionable improvement and progress. We got used to a series of “revolutions” where you felt that your quality of life improved, even if a few ruthless and amoral business people amassed all the resulting wealth. We assumed that is just how the system works.
But now technology is just as likely to be associated with scams, rug-pulls and using investor capital to capture a market and destroy competition. We are being trained to assume trickery with every software update, forced terms of service change, or company acquisition. Not to mention the absurd corruption when tech billionaires collude with incompetent politicians. It’s just a trend in sentiment I’m seeing that goes against the “just build anything and the world will give you billions” cheerleading from 2000s.
Clearly nothing is universally the case, but this pattern repeats in enough freqeuncy that it's effectively the case.
If that's what production was about, humanity never would have left caves.
The ancestors of the fix-pie idea were the ones who would have sneered at the first hut built outside of a cave, at the first crops deliberately sown into the ground, at the first villages built up to provide better living conditions for groups of people including as a trade center.
Everything from 100,000 years ago to today is the result of productive human beings who made more of the world. It's an ongoing process.
HN used to be open minded about people creating wealth. The change is shocking to me, actually.
I love how the billionaires hoarding resources to entrench their own power are not the greedy ones in your telling.
The selfish people I know of are politicians and online commenters who think they're entitled to the wealth built by other people.
How ironic. Extremely successful person tries to justify why he's better or smarter than you, and the way he does it proves that he doesn't even understand what the other person has said.
He kind of proved the point he intended to disprove.
It's not quite as bad as a lottery winner saying "anyone can earn the jackpot", but it's in that direction.
AOC wasn't even being easy to (deliberately) misunderstand, here, like Obama was when he said "you didn't build that".
Of course, like the tan suit critique, the "you didn't build that" pearl-clutchers were all arguing in bad faith.
I don't think Paul Graham is arguing in bad faith here. This post is just, for lack of a better word, "stupid".
the "hard" part isn't sustaining 15% growth over years, it's doing that in a way that is as reductive as he tries to make it "just build something people like!" and not having VCs and other bullshit trying to backstab and force you into making questionable decisions.
Not all companies are growing because they are making their customers happy. Some are fully exploiting their customer, users, environment, etc.
This mindset is what makes capitalism very ugly, and im not sure how one backs off the throttle a bit to grow responsibly?
https://github.com/PersianHodHod/wealth-in-pixels/blob/maste...
The billionares hands are clean, the climate is fine, the elections are great, there's nothing wrong, close your eyes, stuff your ears with wax, and keep on trucking :)
1. This is a strawman. Mention a startup but not what it does. Wave your hands at growth as much as you want, but it doesn't prove you didn't hurt anyone to make your billion. I think people would find it quite easy to pick apart the actual named companies like AirBnB, Facebook, Apple, Google. Lots of people got hurt by these companies in the name of growth and profit.
2. The distinction between having and earning a billion is irrelevant. You make a billion? Cool, now stop. Give someone else a slice of the supposedly infinite pie. We. Are. Starving.
This obsession with growth instead of progress or value rubs me the wrong way, given the trend for enshittification of services sooner or later, also remind me of a video I watched yesterday when a founder gives examples of private equity people trying to force growth no matter what: https://www.youtube.com/watch?v=k4vNIsVY-0Y&t=412s
"How many of the top 20 billionaires in the world have companies that have NOT been in legal trouble for anti-worker, anti-consumer or anti-competitive practices."
The answer begins with "Exactly zero" and goes from there. It's the same answer up to the top 50 billionaires, but up to 20 it might even give you a summary of infractions for each billionaire.
Not only were the extrapolation calculations in TFA very https://xkcd.com/605/, what was funnier was when PG tried to counter AOC's point ("You can get market power, you can break rules, you can abuse labor laws, you can pay people less than what they’re worth, but you can’t earn that.") by talking about how he personally knows like 30 founders who have become billionaires. And I was like, no way is he thinking about Chesky and AirBnB, who literally started off with multiple regulation-skirting shenanigans and whose effects on neighborhoods have been heavily criticized...
And then he mentions not only AirBnB, but also Facebook!!
building something people love can make you a billionaire, but most billionaires did not build something people love, and most people who’ve built something people love are not billionaires.
I don't think his advice was simply "build something people love." In fact, he specifically spends a lot of time trying to make it extremely clear that a necessary ingredient is compounding of an extremely high growth rate.
So I'm not sure if your take is intentionally misleading or if perhaps we read different essays
pg is way too smart to believe even half of this nonsense. I guess he thinks future UK politicians (the audience of his speech) are that stupid.
Or maybe that speech was just to vehicle to make himself heard spewing this nonsense. Heard by whom?
Very disappointing indeed.
Step 1: Have millions
Sadly this is the actual advice in the post.
With nearly all the billionaire PG mentions the money is the company valuation rather than cash in the bank.
Another example would be taking over media companies like what Bezos did, the side effect would be being able to waylay/hide any dirty laundry.
Paul, playing dumb doesn't suit you.
The first definition of "earn" on merriam-webster.com is "to receive as return for effort and especially for work done or services rendered".
Your chose a straw man, "doing something bad", to argue against because it's so easy to beat.
Much harder to justify that anyone's doing $1B of effort. Being a billionaire doesn't mean you're bad. In fact, it doesn't even matter if they are all bad -- there are always going to be bad people. It means a system that allows, encourages, and protects billionaires might be a problem that needs to be fixed.
Scary idea, I know. But we all only get to go around this world once. Might as well spend our time trying to make it better rather than rationalizing why it's OK to spend all your time trying to make it worse.
— 1 Timothy 6:10 KJV (The King James Bible) <https://en.wikisource.org/wiki/Bible_(King_James)/1_Timothy#...>
Greed mixed with analytical thinking on industrial scale - graham, thiel, musk, hoffman, bezos, zuck all symptoms of “smart” people who screwed this country ultimately - all for what?
Has the changed world that resulted been for the better?
To have illegal hotels that then help keep a generation out of home ownership?
To have an exchange for cryptographic tokens that are used almost entirely for financial scams and organized crime payment infrastructure?
To have an online forum that made so many long-time contributors who built the content and appeal feel so betrayed, that often the top solution to a posted problem (you find in search) has been deleted in protest?
To have a non-profit spun off, ostensibly for the benefit of humanity, and attract talent and funding that way, then coup and rug pulled?
Other big successes?
To solve this, New York City (basically) banned Airbnb's and home ownership is now famously more accessible in the City? I am not even asking for home ownership + rentals to be solved, I am asking whether it got even slightly better because of this ban?
Meanwhile, I can't visit my sister because the regulation cartel..I mean Hotel Lobby has spiked pricing to the high heavens.
Maaaybe we need to revisit some of these easy assumptions on your list?
The housing crisis has multiple causes, regulatory framework which benefits existing homeowners is one of them, capitalists treating houses like the stock market is another, and Laissez Faire hotel market did only make it worse (like a gasoline on a burning fire). Now that the thing that made a bad thing worse has been banned, that does not mean the damage it caused has been fixed, nor does it mean that the other causes have been resolved either.
"Multiple causes" is just mealy-mouthed pussy-footing, there is one big cause and then a bunch of other distractions as the numbers now prove.
Complex problems seldomly have a single cause not a simple solution.
I think the second more prominent cause maybe costs, labor, material, interest rates etc. But Airbnb's are far..farrr down the list so as to be completely irrelevant, as the natural experiment in New York has proven out.
Taylor Swift is coming to the local stadium to play a concert. There are 1,000,000 fans in the area that would like to see her live. The stadium seats 100,000. How do we reconcile the imbalance between demand and supply of tickets?
Solve this problem, and the housing crisis is also solved.
In this analogy we could use our shared funds to hire Taylor Swift for 10 subsequent concerts, and the only issue would be who gets to see her first.
This is patently untrue. Especially for superstar cities that people actually want to live in precisely because the cost of housing is too large.
"outsized political influence of existing homeowners; "
Otherwise known as NIMBY's not Airbnb's.
But that's fine, lets ditch the stadium, and move to a park. The park measures greater than 1,000,000 sq. ft., so we should be good. But now we severely downgraded the quality of everything so we could accommodate everyone. The stadium, although limited capacity, is purpose build to accommodate that capacity. The park, is just Earth, and in no way was designed for a concert, much less 1,000,000 people. This has happened before (not sure if with 1,000,000 but maybe) and I don't think I need to spell out the negatives. Taylor gets icey on the show because of the non-low chance it goes in the record books as an absolute disaster.
It is well studied that many startups succeed by intentionally operating in gray areas or otherwise flouting rules/norms.
I don't know about home ownership - but not having random strangers in the building at random hours of the day/night is a definite improvement.
>the regulation cartel..I mean Hotel Lobby has spiked pricing
Does supply/demand pricing not apply to hotel rooms?
I mean, this is just garden variety NIMBY-ism. Having a quiet farmhouse in the middle of midtown would also be a definite improvement just for you, but you're choosing to live in the most economically productive center in the world, and there are practical tradeoffs for that.
And parties are banned on the platform, I know because I had enforcement against me for even having my sister's family over when Airbnb's were legal in New York City.
Nobody said that banning Airbnb would by itself make buying housing in New York more accessible. It’s not an assumption that anybody in good faith ever made.
I know it might shock many but a lot of people (I would say most) buy a flat to live in it and making it into a pseudo-hotel lower the quality of life at the benefit of the airbnb owner.
Note your parent's statement includes a critical qualifier “helped”. Your parent does never claim that Airbnb was a single cause.
Your theory about NIMBY voters on the other hand does claim a single reason.
I’m sorry Mr Graham, but that’s not what empathy is.
A casino understands what its “users” want. So does a drug dealer.
Empathy is caring about how your actions affect other people as well, and caring about those effects.
Let’s not encourage the dilution of the word empathy.
Paul Graham writes with precision, and he has written extensively and correctly about empathy. Now, does this mean that he is incapable of hoping that some of his readers conflate empathy with sympathy? Not at all. You have incorrectly made this conflation, but correctly understood that he is not describing behavior borne out of sympathy. Others may incorrectly make the same conflation and incorrectly understand that he is sympathetic.
But Mr. Graham himself wrote extensively on empathy, 23 years ago ( https://www.paulgraham.com/hp.html ):
"Like painting, most software is intended for a human audience. And so hackers, like painters, must have empathy to do really great work. You have to be able to see things from the user's point of view.
When I was a kid I was always being told to look at things from someone else's point of view. What this always meant in practice was to do what someone else wanted, instead of what I wanted. This of course gave empathy a bad name, and I made a point of not cultivating it.
Boy, was I wrong. It turns out that looking at things from other people's point of view is practically the secret of success. It doesn't necessarily mean being self-sacrificing. Far from it. Understanding how someone else sees things doesn't imply that you'll act in his interest; in some situations-- in war, for example-- you want to do exactly the opposite."
Now, if you read that carefully and don't conflate empathy with sympathy, you can understand that, for someone like Mr. Graham, empathy is orthogonal to exploitation -- it's a guide to maximum value extraction over the long term, which may or may not require exploitative techniques, depending on the circumstances.
To be frank, this seems unlikely.
> I’m sort of dumbfounded at this level of misinterpretation.
It is difficult to get a man to understand something when his salary depends upon his not understanding it.
-- Upton Sinclair
If he truly believes those companies didn't cheat, then I think his definition of "cheat" is far removed from what most people might think.
The problem with most analysis about capitalism is that it fails to appreciate that, over time, capitalism will destroy itself as winners capture the market, stifle competition, and the very ecosystem that created their wealth in the first place.
If you love the benefits of capitalism: the price setting function, the innovation, the broad wealth creation, you have to prevent the accumulation of market power that leads to monopolies or you will watch as the market evaporates and monopolies turn into aristocracy and collapse
The middle class is shrinking. Social mobility is decreasing. There's now a man who is worth a trillion dollars. Something is broken. Say something about that please.
He actually thinks he trained people to become billionaires.
I like how he thinks everyone else is an idiot - look, if you make a thing bigger many times - it grow big, reaaaal biiig! Take out your calculator, look, number go biiig!
How does your startup avoid failing? By skirting local laws? Exploiting employees? Destroying the environment? Replacing jobs in a way that makes the standard of living better for the few but worse for the many? Making weapons or systems that coordinate weapons? Submitting to and therefore tacitly supporting oppressive governments?
Sure, there are examples of startups that don’t do these things. But looking at billionaire-class startups (there’s not that many of those to analyze!), there are far more of them in the other category.
2) Sell 0.000001% of it to a friend for $1
3) Congratulations, you are now a billionaire (on paper)
Instead of hating the hacker, we should ask can we have a system that is not vulnerable to"exploitation", which naturally leads to the old Capitalism vs Communism debate.
Capitalism is still the most decentralized system we have, if a worker is feeling exploited they can leave and work elsewhere but most importantly they have the option of starting their own business and utilize their skills. But capitalism's main vulnerability is that of investors that can buy up whole industries and collude and bring centralization.
Communism is inherently centralized, only works on a small scale like a village, on larger scale it requires strong leadership that can resist the temptations that come from centralized power, but strong leadership doesn't last forever.
What comes after?
Both things can be true:
- the incredible benefit brought about by YC companies as they grow into their markets and mint billionaire founders... - monopolizing, price fixing, what can feel like gouging, etc. as the temptations of what may be currently possible war with what may be ultimately wise (and for whom)...
Kind of like: - the temptation to appeal to the increasingly common set of hash-taggable moral & political absolutes... - the more measured, wisdom-dense sharing the best possible, and fortunately (hopefully? maybe?) most common form of billionaire-minting...
Is, or was there previously, a different, more American-value-compatible status quo?
... Historically did we IPO earlier, leaving more of the exponential on the table, leading to greater public wealth, resilience, opportunity, and capability? ... Is the profit-margin gas pedal ever pumped a tad aggressively preceding this, inducing trust wobbles in the public and customers as prices are raised and services degraded the quarter before, with share price corrections the quarter after? ... Do we (should we) maintain relatable humility in the face of success and wealth - surely earned, though perhaps better enjoyed by more enduring trophies (disease eradication; public works enhancements; life extension progress) than a mega-yacht in the Mediterranean?
Very easy to be a keyboard-warrior. Very hard to provide $1B in new capability and value.
Good read as always. Back to work.
Folk LTV interpretation is that people's wages are supposed to be proportional to their hours worked. Obviously this is false -- everyone knows this but people still repeat it because it has populist memetic value.
That LTV is debunked and proved to be useless is very easy to demonstrate -- the single person (who was a Marxist) who took this theory seriously abandoned it. He's not the only one though.
I asked ChatGPT this: "who is the single one contemporary person who took labour theory of value seriously in an academic sense?"
ChatGPT: G.E Cohen.
(G.E Cohen is an Analytical Marxist BTW)
Here's what G.E Cohen has to say specifically on LTV:
1. "labour theory is, moreover, false" [1]
2. "The labour theory of value is not a suitable basis for the charge of exploitation laid against capitalism by Marxists, and the real foundation of that charge is something much simpler which, for reasons to be stated, is widely confused with the labour theory of value." [2]
[1] https://andrewmbailey.com/money/readings/cohen
[2] https://www.versobooks.com/blogs/news/3128-the-labour-theory...
So here you have the one guy who took this flawed concept seriously, * from the side of Marxism * and then has to conclude that it is false.
His founder is not at the level we are talking about. They obviously would not represent the 'bad' that AOC was trying to make a point about. Why don't you pick your actual billionaires?
Airbnb - Ignored and exploited local housing regulations, over time the blowback has been HUGELY negative. Here the 'bad' is the commoditization of housing in peoples' homes, causing housing problems.
Coinbase - For years, they built their business on bitcoin being used on dark nets for illegal purposes. There's the bad. If they were truly good they would have done KYC from day 1. Why would they? Billionaires gotta break rules.
DoorDash/Instacart - Exploitation of cheap labor, they _consistently_ underpay workers, hire undocumented laborers for that purpose, and pit laborers and consumers against each other rather than improving the system.
These, Paul, are the actual billionaires AOC was talking about. Not your young founder making the 200th to-do app.
Really unimpressed and disappointed by the shallowness of his thinking here.
"Earning your fruits of labor morally as opposed to the mere market value of labor and capital is a concept derived from Karl Marx' Theory of Alienation. More than 15 million people have died under socialist rule from starvation alone."
I had asked "what about a fund manager earning the carry"
management fee and performance fee, employees not entirely necessary.
the main result was a brief back and forth to understand that role, because this class of people are completely separated from all the exceptions that break their argument, and then a brief moment of acceptance, before focusing on the prevalence of this kind of billionaire amongst all billionaires. Which I thought was funny because there are not many billionaires to begin with. 20 fund managers on the list would be a large percentage of billionaires.
Yeah, no kidding. A mathematical formula where the magic of speculative markets and a stupendous amount of money floating in the stock market can just float right up your alley. Just take your place on the top of a pyramid of growth and stay there!
How does one write this with a straight face?
Most people work linear jobs, with linear creation. The amount of work that they actually do in a day is what they can accomplish with their hands, their minds, their intellect. Whether it's laying bricks or polishing gemstones or cleaning toilets, or teaching kids for that matter...most people cannot just become a billionaire. They can't just growth it real hard. They have to first escape the very real linearity of making a living wage, providing for a family etc. They don't have the luxury of throwing around capital they don't have. They can't just issue their own cryptocurrency or stock and get the market to start funneling it all to them. Hell, their limited investments in stock will only get them piddly millions if they're lucky.
It shows how absolutely broken the system is that people will just say this in a straight face and expect us to not just guffaw at it.
Paul, I hope you read stuff here because growthism is exactly why the system is so fucked up right now, and enshittification is the proof positive of how little all the oversized monsters out there give a shit about how anything works in reality.
Just 93% growth your way there. Good idea, thanks for the tip, Paul.
Just the co-founders eh? Fuck off Paul.
You mass exploit labor at scale to exfiltrate 1B$.
You commit wage theft to obtain 1B$ (the largest theft category).
You union bust and fire workers who try to fight for better working conditions and wages.
You engage in monopoly practices to obtain 1B$.
You engage in corruption via 'campaign donations' to lay down laws that benefit you and harm others.
Doctors earn. Engineers earn. Scientists earn. LABOR EARNS.
But billionaires never *earn* 1B$. They exfiltrate, steal, and corrupt.
But Labour Theory Of Value has been debunked and is mostly not used anymore.
- Upton Sinclair
And, well, you are right that there are 'debunkments' of Labor Theory of Value. Of course, they are put out by hard right-wing laissez faire capitalist enclaves, like Mises. I would never expect them to take a dispassionate view of capitalism, given their extremist position.
https://mises.org/mises-wire/three-arguments-debunking-marxs...
"who is the single one contemporary person who took labour theory of value seriously in an academic sense?"
ChatGPT: G.E Cohen.
(G.E Cohen is an Analytical Marxist BTW)
Here's what G.E Cohen has to say specifically on LTV:
1. "labour theory is, moreover, false" [1]
2. "The labour theory of value is not a suitable basis for the charge of exploitation laid against capitalism by Marxists, and the real foundation of that charge is something much simpler which, for reasons to be stated, is widely confused with the labour theory of value." [2]
[1] https://andrewmbailey.com/money/readings/cohen
[2] https://www.versobooks.com/blogs/news/3128-the-labour-theory...
So here you have the one guy who took this flawed concept seriously, * from the side of Marxism * and then has to conclude that it is false.
You want me to *trust* the output of a hypercapitalistic slop machine whose owner bulk pirated most of the western knowlege for money. And he wants to scan the eyeballs of everyone for his shitcoin (and kicked out of multiple countries for abuses).
And, you expect me to read that slop drivel? Fuck, no.
I had the decency to use my own words. You can too. And, "Don't post generated text or AI-edited text. HN is for conversation between humans." I do not care about your propaganda clanker.
I quit after this: "I asked ChatGPT this:"
Even I had enough respect to respond with my words and my intellect. Even if my thoughts are in possible error. You didnt have enough respect for even that.
Both theories use the SAME formula.
Final Price = Raw Materials + Labor + Overhead + Profit
The difference is that Marx pushed that labor is what makes a thing have value. Wheres Musk pushes that humans have 0 value, and should be removed whereever possible.
Same thing, different conclusion.
And know what happens when we get "perfect idiot index" of 1.0? There are no workers, no money, and wealth is accmulated purely in the hands of the elite. Hell, even Ford saw this in tge early 1900's - who'd buy cars if nobody can afford them?
There are very very simple proofs to invalidate the LTV, for example the fact that two items requiring identical amounts of socially necessary labor can have very different prices. In my experience, I have only met one person who earnestly believed it (an old college classmate) and his basis was self-admittedly purely ideological. In the end, I think the most elegant way to think about it is to reverse the causal arrow. Labor does not create value; perceived value decides which labor was worth doing.
Given how tech has gone from nerdy underdog to Orwellian, Machiavellian, dopamine-peddling overlord, I’m actually a bit surprised people aren’t more angry / upset.
Over the last 40 years there has been two career paths with “disproportionate leverage”: tech and finance.
I believe in capitalism, contracts and the rule of law. A founder starting a company and attracting capital, employees and customers and generating tremendous wealth I see as an opportunity, not a bug.
But if I were in a normal career the wealth generated by tech & finance would certainly look & feel like some form of cheat code.
The last forty years have been a huge transient. Massive. AI will probably push it even further.
I hope we as a society and democracy can survive the strain.
> Sam Altman of Loopt is one of the most successful alumni, so we asked him what question we could put on the Y Combinator application that would help us discover more people like him. He said to ask about a time when they'd hacked something to their advantage—hacked in the sense of beating the system, not breaking into computers. It has become one of the questions we pay most attention to when judging applications.
- Paul Graham, "What We Look For in Founders"
I also want to add my own characterization.
It is my personal experience with YC founders that YC has coached them in business practices and philosophy that could be characterized less than charitably as "how to con people and get away with it."
I understand the PG doesn't believe this himself and every partner has different advice. But there is a consistent pattern of dishonesty and manipulation that is not innate to founders but taught to them directly by YC partners and it is impossible for me to square this essay with how those founders PG has coached over the last 20 years behave.
Maybe it's possible to become a billionaire without cheating. But all I know is YC won't teach you how.
---
Aside, it deeply bothers me how tone deaf pg is politically. There is a meta to AOC's messaging that he's not reading, which is that wealth is unattainable for the masses and there are oligarchs in our society manipulating our systems to empower and enrich themselves. You are making a rhetorical error by attempting to debate a single sound bite instead of addressing the systemic problems that AOC and progressive democrats are voicing.
AOC was right.
Airbnb disregarded their impact on rents in touristic cities, and competed with hotels by running faster than regulations.
Kalshi is gambling.
Doordash leveraged underpaid delivery drivers on unfair contracts.
Instacart cheated con consumer fees.
Reddit was based on (milked and abused) volunteer moderators.
I stop because I don't know all the 30 billionaires that YC created... But this subset of companies should cover 30% of them.
I am happy we have innovation in the world, but claiming these things are not bad for society and ways to cheat to the top is... Lying
I'm talking about the estimated wealth of the like of of Ilhan Omar (the somali woman politician).
Just like jesuit priests do take a vow of chastity, I think politicians should have a vow of poverty.
The only way to have a functional society is not to prevent the billionaires from getting to a billion: it's to prevent politicians from enriching themselves.
You can’t “earn” a billion dollars doing the thing that the vast majority of people do for money, which is selling your labor.
No one can argue with this.
We all understand that if people who own a lot of capital give a lot of it to you, you can grow that capital into more than a billion dollars.
Most people do not have access to the kind of capital required to do this. Most people never will. The avenues open to the vast majority of people on Earth cannot lead to becoming a billionaire.
Paul Graham knows this, and he is being deliberately obtuse.
This is a myth. To access capital, in Silicon Valley and anywhere else, you have to engage in elaborate court protocol and social climbing. You have to have the right kind of idea, in a niche that is interesting among the capital-owning class.
Look at what’s getting funded in Silicon Valley right now. Nobody wants any of this AI shit. There is no issue in America that is more unifying across all of our usual dividing lines than opposition to AI.
It’s getting funded because AI is interesting in the social universe of people with billions of dollars to invest.
In addition, the converse is not true. Just because you’ve found something that grows fast and in large market, doesn’t mean you’ll become a billionaire. With all humility, I’ve been lucky to have done that twice, but in a large company. I’m not complaining, I’m just saying that doesn’t necessarily make you a billionaire.
The most famous ones ended-up in prison (Sam Bankman Fried, Elizabeth Holmes, Jeffrey Epstein, Bernie Madoff) but anyone with a basic grasp of statistics and criminal behavior know that many others will escape the justice system forever.
It does not mean that all billionaires are bad, the criminals are not the majority, but there are enough criminals to justify skepticism and scrutiny.
Maybe the most interesting observation is a buried point near the end that the natural cap on this is market size. There's a much more interesting speech there about expanding the size of your market, both to governments and to businesses leaders. But this isn't that speech
PG got into an argument with AOC about it on Twitter. It sounded like he was personally offended by what she was saying. Which makes sense because, as someone who has helped startup founders become famously wealthy, he probably took her statement as an attack on his identity.
Perhaps PG should follow his own advice, though: https://paulgraham.com/identity.html
When he asks "how fast are you growing", to any business operator, that refers to revenue. That's not at all the same as "how fast is your net worth growing". Net worth for a publicly traded company is what the market thinks your future cash flows are worth, NOT your revenue growth. Obviously, more revenue growth is better, but it doesn't automatically translate into higher net worth. You could imagine a situation where revenue is growing like crazy, but net worth declines...because the stock price is based on the expectation that growth will occur at an even faster rate, or that profitability isn't living up to expectations.
Patriot interceptors cost many millions, so 100-200 are already worth a billion! Is SpaceX internet worth 200 Patriot missiles? Easily.
I think politicians restrict "earning" to "wage income", which is kind of an arbitrary line in the sand, and would also be untrue. SpaceX/Tesla would also have paid Musk billions in cash if stock wasn't allowed.
1) PG honestly believes that his audience is unfamiliar with compound growth - i.e., an insult to the audience's intelligence.
Or
2) PG honestly believes that the founder of a successful startup is directly and wholly responsible for the level of magnificent growth a company achieves.
The 2nd one is some Ayn-Rand-like school of thought. That there are great people who have 1000x the work output of those around them. PG more or less alludes to this when he says stuff like
> The reason her startup was growing so fast was simply that users loved what she'd built.
Notice how the credit for the startup's growth is credited to the founder?
> The reason her startup was growing so fast was that she and her cofounder had been working their asses off to make their users happy, and as a result the users had been telling their friends
Again, crediting founders for the entirety of the company's growth. This is obviously flawed thinking in any company that has employees beyond the founder. Those employees are doing a significant amount of the work. And in any company with more than say, 5 people, they are doing the majority of the work.
PG and people who think like him believe ownership==credit. That's the whole problem.
So 3) he is well aware of his audience and is talking to them directly.
I've talked to a lot of seed stage startups this past year, several of them have achieved PMF and have several large customers. None of them have more than five people. If the companies didn't exist, nobody else was going to build the things (most of them) are building.
Where should you assign credit in this case?
Some of them largely eschew AI programming assistance as well.
Surely for these companies, if the founders get to several million or tens of million in revenue without hiring any more people, those people have successfully become millionaires and we can credit them as such, right? Or do you simply think this is impossible?
It seems disingenuous to imply that this is what I meant.
If you can scale a startup to a billion dollar valuation on your own, that's a unique example - and I'd be surprised if anyone is against that. I actually am not sure there are any real examples of this happening, though.
The point is that there's a ceiling to how much wealth a person can create on their own. Corporate ownership structures are the only thing that allow for a person to reach hundreds of billions of dollars.
I know one of the common follow up questions is "well what is the exact number that someone should be allowed to make?" And plainly: there isn't one. That's not what these discussions are ever about. The discussion is really about attribution of credit - and that the ownership class disproportionately benefits for things that they could not have built on their own.
And the thing you own becomes so valuable it's worth a billion dollars.
You are now a billionaire. But through your telling, you don't deserve it, and that might be right. We didn't discuss how this amazing thing came into existence, and if it just magicked into being then sure, you don't deserve it.
But suppose that without you, this thing never existed. How should credit be distributed?
Now there are lots of problems here and there are lots of ways to criticize startups and many of them are legitimate. Oftentimes companies do exploit their employees, or use exploitative contracts, or are exploiting some resource that we don't like them exploiting. But almost every conversation like this implies that this is the only way, that it's theoretically impossible for a company to do things legitimately. And honestly, that's often fair because corporations often become extremely extractive / exploitative (see the new book by Eric Ries if you need examples and counterexamples)
But I would like it if everybody could correctly realize: the problem isn't making a billion dollars. It's how we do it, and it's the incentives that we place on companies for continued growth. If you're a politician you should work to fix _that_, not the existence of billionaires.
> And so you're able to pay people extremely generously to help maintain the thing.
This is optional, and requires the owner to be generous. It is more common for people to not be paid generously. And that matters because these businesses literally cannot achieve their valuations without the employees. Going back to the 1-person, 1-billion startup valuation - there are 0 examples that I can find. What does that tell you? That the maximum amount of wealth an individual can create, in today's dollars, is somewhere less than 1-billion.
I'll try to rephrase my stance: It's not that being a billionaire is bad - it's that all of the billionaires we have believe that they did it themselves. PG basically confirms this in his post. The ownership class thinks they are deserving because no matter how many employees they have, they view all the wealth as something they created by themselves. That disconnect is in my opinion, extremely bad for society.
It's also typical to see delusions of grandeur that lead a lot of these ultra wealthy people into thinking they are working 1000x as hard as everyone else. Elon Musk regularly claims to work 16 hour days, 7 days a week. But somehow he also has enough time to play diablo and path of exile 20-40 hours a week, spend multiple hours a week with each of his ~20 kids, tweet constantly, etc. These aren't people that view the world for what it really is, because the level of wealth they've obtained leads them to believe they have super powers. As a society we can't have rational conversations with people that think this way.
There is a much simpler way to become a billionaire. No Revenue (Silicon Valley): https://www.youtube.com/watch?v=BzAdXyPYKQo
Because there are more than 2 numbers even in pg's simplistic example. Third number: You make $10K monthly today. How? If your cost is $9.9K this doesn't mean anything right? Everyone can do that. So how you earn that $10K is more important than those other 2 numbers. You want more profit and less cost. That's when you start breaking the rules and doing bad things. You have to compete, and it's easier to win if you cheat. If there are cheaters in the game, they would win the competition, not you. And there are always cheaters in the game.
Silicon Valley's system is different than the rest of the world. They give the founders some sort of an infinite money glitch (for a limited time). They don't care about the third number. They care only about the Growth number. Because what they really care about is the Market Domination. They want to BURN money to BUY that market. In most cases, globally. That's why billions of people in the world are using Facebook's products daily. Not because Zuck had a great idea in his dorm room. Not because Poke feature was that viral. But because US needed to dominate the upcoming social media world. For profit, but more importantly for politics, for gathering information, for tracking people, for controlling (social) media and narrative, for security. So the system funded his startup, along with other similar startups in case any of them becomes the winner. And they didn't give just money, they give all the network, permission and privileges to win.
That's why Hans Zuckerberg from the Berlin startup scene hasn't become a billionaire but Mark did.
This is exactly the same playbook with the AI game today. My 70+ parents at the other side of the World use ChatGPT daily for FREE. They will never be the paying customers of OpenAI. OpenAI gives its expensive services for free, because they want absolute dominance in the global market. They can't lose that. Note that such a game plan is impossible for any company outside of Silicon Valley. Only state-controlled companies can play that game in the rest of the world. But for SV, it's not really clear who's controlling who.
She said that no amount of "work" can "earn" billion dollars. So you earn billions through capitalism by rent, through owning companies, and having other people work for you. And ultimately, it should be obvious that societies have to cap this
here are three potential issues:
1. there is a short term incentive for lying -- tricking people can get you a long way (e.g. delve)
2. there's a genuine long term incentive for selling products that have short term benefit but long term harm (e.g. gambling, cigarettes, etc).
3. there is a durable incentive to sell products that genuinely benefit for your customers but cause net harm to society -- this last one is a hard problem of capitalism, and imo it's the gov'ts job to make sure that such companies are not allowed to win.
The assertion that it should be "impossible" to be a billionaire (or trillionaire, gazillionaire, whatever) is really an assertion that a just and moral society would design all of these things to prevent that outcome.
And I think it's pretty reasonable to say that we ought to set society up such that as someone gets wealthier we take money away from them at faster rates, so that beyond some level of wealth it is very difficult to continue to get richer.
Unfortunately, a lot of people are captured by rather libertarian ideas about government, money, property, etc. that seem to prevent many people (at least in the US, UK, et al.) from behaving in anything but the most selfish, individualistic, and antisocial of ways.
In aristocracies we traditionally assume or imply that a person can deserve a certain wealth or power simply by being born into it. Capitalism, however, sells us the dream of the meritocracy: your (financial) success in life should depend not at all on factors of chance like birth or genetics but simply how much of yourself you choose to sell to the market.
At any point in time you have control of some tangible or intangible capital, including wealth, physical health, social connections, equipment, information, trained skills, et cetera. Some of these assets are gained by luck, e.g. accident of birth; some of them are gained by trading your time; and some of them are gained by spending another asset (whose origin reduces, recursively, to some combination of luck or time). At any point you can, assuming the market is appropriately liquid, spend some of these assets to get cash.
Some of these assets have force-multiplier effects on your future output in certain domains, from which exponentials naturally arise; but the time spent on them remains linear, and so, if we want to ignore inherited factors (the opportunity to spend the time on things without immediate feedback, say, or handed-down insight about which of these investments will produce the most value in the future, or access to the required tutors) the increase in earnings these things _merit_ has to remain linear as well. There is no way to compound your time and therefore, under an assumption of meritocracy, there is also no morally acceptable way to compound earnings, which I would assume is the point the politician is attempting to make. Under this worldview, any exponential compounding that occurs must, mathematically, be a result of systematically undervaluing the time of an exponential number of other people, since each person can only spend a linear amount of time.
In practice, of course, the assumption of meritocracy is simply wrong, and arguably the concept as a whole is internally incoherent (or at least I don't believe we've yet managed to articulate it coherently: we would have to settle the nature vs nurture debate and completely sever the value of a person's spent time from the accidents of their birth, if such a thing is even meaningful). But I think that's where the claim falls down, not in failing to understand the mathematics of exponentials.
"But now you at least understand, from having done the math yourselves, that you don't have to cheat to become a billionaire. You've seen for yourselves that there are only two numbers in the calculation, the growth rate and how long it continues."
What could possibly be false in a two-parameter model of reality?
> The rational fear of those who dislike economic inequality is that the rich will convert their economic power into political power: that they’ll tilt elections, or pay bribes for pardons, or buy up the news media to promote their views.
> I used to be able to claim that tech billionaires didn't actually do this — that they just wanted to refine their gadgets. But unfortunately in the current administration we've seen all three.
Now he's claiming he's trained all these billionaires and they are a blessing to the world, not avaricious sociopaths.
“Externality” is thrown about as a term almost completely disconnected from any economic grounding of the term. If you make externality mean “anything I find aesthetically displeasing”, then yeah, sure, billionaires create and benefit from externalities, if your aesthetic is egalitarian comity.
But if you mean “legitimate societal goals, legislated and agreed on by a representative body” are being violated left and right by billionaires, gimme a break.
Go ahead and tax capital gains way more. Ending the estate step up in basis sounds great. Break up the “borrow” part of buy-borrow-die, while you’re at it, and treat encumbrance on capital as a taxable event, we could probably make that work, too, although the middle class might foam at the mouth if that was applied broadly.
But, man. The cynicism, confiscatory and controlling instincts on display are enough to make me upgrade Ayn Rand from “hypocritical nut” to “maybe she was on to something when the general population gets tall poppy syndrome.”
Markets work. There are externalities, but we can, and should, legislate fixes for social goals that we actually agree on. But stiflingly heavy regulation is really bad for incentivizing creation of new knowledge and wealth. You can still believe in caring about people, and building (incentive aligned) social safety nets without destroying people’s incentive, and thus, because intellectual capital formation depends heavily on network effects, people’s ability, to create many kinds of value in the world.
Actual socialists recognize that capital is incredibly useful, and incredibly valuable. Leveraging capital is incredibly beneficial to the world. Pretending that the people leveraging that capital are somehow guilty of an original sin just by leveraging capital markets, which is really what these screeds against anyone holding controlling interests in companies they were instrumental in creating, seem to be about, leads down a terrible path.
Demonizing people creating things is petty and unbecoming for a political movement.
i think a more rational argument would claim that this isn't about demonizing people who create, it's about societal inequality. i don't think mark zuckerberg, elon musk or larry page and sergey brin got demonized for creating their products in the first 10-15 years after launch, it's what happened after, the accumulation of wealth, the extension of power, that get's any rational person believing in a free market socialist economy nervous.
> Pretending that the people leveraging that capital are somehow guilty of an original sin just by leveraging capital markets, which is really what these screeds against anyone holding controlling interests in companies they were instrumental in creating, seem to be about, leads down a terrible path.
do you think that they should still be forced to leverage their capital within democratic boundaries? because from what i've heard most founders carry significant power due to their wealth and share increasingly anti-libertarian values, to secure their wealth.
if those democratic boundaries prove to be innovation stiffling, fair, that is definitely an issue, but wouldn't it make sense to argue to then try to adjust those boundaries from within the democratic framework?
one could also make the claim that one popular strategy for securing the gains of a succesful innovation is regulatory capture - a strategy that is increasingly employed by large companies to close of markets and secure market monopolies or duopolies.
in a sense, they are stifling innovation themselves by closing a market to competitors, via instrumentalizing what they usually critize: regulation, no?
it's like you said, these can coexist, but from my perception it's as if these billionaires don't want them to coexist.
and im not thinking about regulatory drama involving diesel generators for AI datacenters or anything specific, just the mere power accumulation and general radical tendencies you find with these ultra wealthy interest groups.
In the following weeks we saw Elon do two Nazi salutes in front of the presidential seal, and we saw the Trump admin hire tons of thugs to rip minority children out of their beds, and those same thugs have murdered a number of citizens, with Stephen Miller loudly shouting that they have absolute immunity.
I'm surprised Paul Graham and the signers of the blog post are not to embarrassed to continue posting their thoughts. At worst Paul should stop talking, better, he should apologize and admit he is a fool.
The argument isn’t that earning money is inherently immoral. The argument is that you can’t earn a billion dollars without assigning a higher percentage of revenue to yourself than is fair. I’m not going to argue that one way or another here, because I don’t think it’d be a useful discussion: I’m just pointing out that Graham doesn’t engage with the key premise.
He also might want to check his percentages a bit. Funding 30 startups which have produced billionaires is nice. It represents 1% of the world’s billionaire population. You know who really knows how to make new billionaires? The world’s richest families, that’s who.
If you count individual founders, the rate is even lower. So to insinuate this is some kind of training people to become billionaires, is like a lottery operator saying he teaches wealth creation because a few ticket buyers hit the jackpot.
PG is turning an extreme power law outcome into a moral argument. A tiny fraction of founders capture enormous upside, thousands do not, and PG presents the winners as proof that the system is fair. I could not think of more survivorship bias with a halo.
And thee political sneer is also absurd. Startups do not exist outside politics. They exist( or should exist) inside law, tax, infrastructure, courts, labor rules, housing rules, securities law, immigration policy, and government procurement. Uber S-1 warned that its business would be harmed if drivers were classified as employees rather than independent contractors...and described legal and regulatory obstacles as material business risks. In other words...regulatory arbitrage ( corruption? ) as a business model.
Airbnb is an even cleaner YC example. Its own filings describe short term rental law, host registration, tax collection, fines, city restrictions, and New York 2023 rules as materially affecting the business. Its a business that lives lives inside a fight over housing law and local regulation.
And if the claim is that politicians do not understand value creation, then SpaceX is a hilarious counterexample. SpaceX is a company completely entangled with the state and US tax payer. SpaceX has about $22B in government contracts, mostly NASA, and Reuters separately reported a $5.9B Space Force launch award in 2025.
And the biggest logic failure being used here is the so called exponential growth part. The world is not exponential. Population growth is not exponential forever. Demand is not exponential forever. Restaurants, supermarkets, apartments, drivers, cities, and disposable income are finite. Real markets saturate. Growth curves become S curves. Pretending that 15% monthly growth can simply continue for years is nothing more than spreadsheet intoxication.
So instead of the claim you can earn a billion by making users happy, what is reality is, that in a legal and financial system that massively rewards scalable equity ownership, a tiny number of founders can become billionaires if capital, timing, network effects, labor structure, regulation, and distribution all break their way. I don’t think its legal, and the best PG could do with this is a defense of the casino by pointing at the jackpot winners.
Just reflect on this: Of the 30 billionaires Paul Graham talks about, in an essay where, notably, he never once uses the word “entrepreneur” they come from these 14 companies:
Airbnb, Brex, Coinbase, Cruise, Deel, DoorDash, Dropbox, Flexport, Instacart, Loopt, Meesho, Reddit, Scale AI, Stripe.
Less than half of them are profitable as of 2026. None created a vaccine or cured a disease, discovered a new algorithm or mathematical theorem, developed the economies of poorer countries, created a new engine, or invented a renewable energy source. If all of them...disappeared tomorrow...you would probably just use some other payment system, maybe with higher or lower commissions, and argue on some other message board not called Reddit.
The impact on human lives would be zero... or maybe even slightly positive.
"Oh, if we just operate in a vacuum, do not closely examine the systemic interactions of our accumulation of such vast sums of wealth, assume there's no moral or ethical quandary that would prevent us from utilizing every game theory strategy available to us, and have consistently high, compounding growth over time, then anyone can make a billion dollars if they follow my teachings, which in turn were formulated over thousands of students and with a success rate still in the single percentage points, at best."
Here's the thing none of these people will ever admit: not everyone can actually succeed at a goal, otherwise it wouldn't be a goal, but a baseline. This is the fundamental grievance I have with these sorts of "wealth whisperers" braying on (and on, and on, and on) about how with a good idea and hard work (and YC's guidance), you too can be a Larry Ellison or Elon Musk or Mark Zuckerberg type.
Which, no, you cannot. If you could, PG's success rate for billionaires would be 100%. It is not, so clearly hard work and a good idea (and a mentor) alone isn't enough. Yet enough leaders and populace have bought into this fairy tale that we've reoriented society around it wholesale. The presumption is that anyone lacking in obscene wealth has done so by choice, rather than examine systemic incentives and policy failures that make such an outcome the default, rather than a personal choice (or worse, some sort of personal failure).
I'm just so weary of having the same argument with the same people who refuse to bother learning anything that might remotely conflict with their world view anymore. If the response to "maybe we should improve society somewhat" is some banal wealth-building sales pitch relying on cherry-picked statistics and devoid of any wider context, then I think it's safe to presume you're either willfully arguing in bad faith or so colossally ignorant that you're beyond help.
EDIT: One thing I would add requires quoting PG.
> There are other ways to get rich than by starting startups. Some of those do require you to exploit people. But startups are the most common way to become really rich, and if you want to start a successful startup, the key is not exploitation but empathy. What do users really want? What could you do for them that would make their lives dramatically better? That kind of empathy is what we look for in founders, and what we cultivate in the ones we accept.
I will flatly reject that YC startups of late have any shred of empathy for their customer base, in general. If they had any shred of empathy for their customers, they all wouldn't collectively lean into the "permanent underclass" and "AI job replacement" narratives so often spouted by their predecessors. In fact, I would go so far as to argue the only groups with a shred of empathy for their customers might just be the non-YC startups or the FOSS groups cranking away in spite of all the headwinds.
Nobody - nobody - makes a billion dollars through empathy alone. At some point, one has to make a conscious decision to say "I demand more returns than reasonable relative to my costs, and I expect my customers and/or employees to bear that burden on my behalf." Otherwise we'd see a parade of companies demanding caps on margins to drive prices lower or wages for workers higher, thus creating more spending money among workers that in turn produces more economic activity. We do not see this outcome, therefore we cannot ascribe empathy as a source of wealth.
Step 1 ensure server connection is alive and you see pre-birth screen
Step 2 pick character starter pack of higher surface luck areas (e.g. father runs emerald mine in south africa)
Step 3 identify server grandmasters and rewrite unfavorable rules after birth
Unfortunately I skipped step 1 on this build so I'm looking to improve next time!
There is no ethical way to become a billionaire. It always involves exploitation and cheating, including in the very examples named by Graham.
Airbnb got rich by creating a housing crises all over the world and skirting hotel laws. The factories making Apple products are so bad they installed nets to catch people trying to commit suicide by jumping from windows. Facebook... do we even need to talk about that one?
I'm not sure if it's malicious manipulation or wilful self-deception, not being able to come to terms with the consequences of his actions. Either way, it's a bad look and he'd be well-advised to reflect on his actions and statements some more instead of giving grand speeches trying to impart his supposed wisdom.
If one ever does so, one has definitely done something morally indefensible.
The question is, is it actually stealing, or is that just their overheated rhetoric? From where I sit, it's hot air.
Right, similar to the equivocation around the meaning of earn in this thread. I've started to wonder whether it's possible to push by accepting that framing and then asking for a justification rather than quibbling about what "stealing" is.
Or perhaps you would prefer the example of the extortionist, who provides insurance against the risk of "something" happening to the nice business you have?
But point me at any given billionaire and I can provide more context-specific examples, sure.
The default framework is one of private property. If you make it, it's yours, and (modulo taxation), nobody has the right to take it from you. In that framework, it's not a bug that, if someone makes a billion dollars, they can accumulate a billion dollars.
So, do you reject that framework? If so, on what authority? Given that it's the default framework, "I reject it" doesn't cut it. "I think it's immoral" is slightly better, but you need to demonstrate that someone accumulating that much money is more immoral than taking it from them would be.
Or are you claiming that it's immoral for any one person to receive that much money? In a free economy, if others voluntarily exchange that much money for what the person supplies, why is it immoral? What is your moral authority for claiming that voluntary transactions are morally wrong, just because too many of them go to one person?
Any system that allows more wealth than is necessary to accumulate into one pair of hands while another pair hasn’t enough food is inherently immoral.
Also you’ve never, not once, been operating within a free economy… the only people I’ve met in life who have witnessed such an economy have gone to extreme lengths to escape it. Or they’ve died.
That framework is the default for the legal understanding of what is right and wrong. If you want us to change it, the burden of proof is on you. Bare assertions of "that's immoral" aren't going to be enough. You need to make a much more robust case than that, one that's not just soundbites. (At least here. Most people here can think at deeper level than soundbites.)
Yes, under what you’ve accepted as the default it’s legally acceptable to accumulate all the money and avoid any taxation while doing so. Thank you for summarizing and explaining to yourself and others precisely the perverse systemic bug I described earlier.
The haters do not seem to be actually reading and comprehending PG's article.
I have news for you.
The article is not written for those of you who are comprehension challenged...
Becoming and being a billionaire is solely a mathematical exercise.