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Comment by davidiach | Hacker News Reader

Nassim Nicholas Taleb has also debunked the math in Piketty's book. Here is the paper: https://docs.google.com/file/d/0B8nhAlfIk3QIbzRrRkhhc1RNY0U/...

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One of the best and most accessible pieces I've ever read on inequality is PG's essay on the subject: http://paulgraham.com/gap.html

My all-time favorite quote on inequality: "You need rich people in your society not so much because in spending their money they create jobs, but because of what they have to do to get rich. I'm not talking about the trickle-down effect here. I'm not saying that if you let Henry Ford get rich, he'll hire you as a waiter at his next party. I'm saying that he'll make you a tractor to replace your horse." -PG

Also see: http://paulgraham.com/inequality.html

So the thesis is that technological progress relies on us incentivizing people with the hope of extreme wealth?

Seems unlikely - for one counter-example, a large part of progress in society rests on investment in basic research, and most of the scientists engaged in that work have no real expectation that they will get rich.

I don't think any of that is necessarily true. The Henry Ford that we know of is a myth, an aggregation of ... "process engineers" and engineers-in-general that worked for him, not to mention the army of line workers. He's a "macro".

The real Henry Ford was modestly ... nuts. But in a good way... well, mostly a good way... the Rouge Plant is the Neuschwanstein Castle of American industry...

But who gets identified with a machine that is as iconic as a horse? Perhaps you have to have know someone who used a 40-horse Ford in anger for decades - there were a handful of my paternal grandfather's brothers, who I knew, who did ( guys who were fully adults at the onset of the Depression) . As a suburban brat raised by somebody who was not going back to the farm, they were like priests of the Old Religion.

In order for a narrative to make any sense, we have to have a two-legged archetype. The truth is closer to "we (collectively) stumbled into using tractors and Haber-Bosch* process related fertilizers to make Malthusian scarcity/crises go away as a potential force of history."

*yes, that's James Burke's "Connections" voice you hear there.

Of course, the equal but opposite counter to that is these things also made way for machine guns and tanks. Might some extra CO2 outta it; we're not 100% sure...

Even modest wealth has a lot of fantasy tied up in it.

The whole point of markets is to enslave Vast quantities of inscrutable information. When we make up stories about this information, we should expect to fail.

I don't think it's been said better than by Talking Heads - "You may find yourself behind the wheel of a large automobile You may find yourself in a beautiful house with a beautiful wife You may ask yourself, well, how did I get here? "

If anything, what hubris it is to think we can shape that to order.

Piketty's worry is not about earned wealth; his worry has to do with inherited wealth.

Disclaimer: I don't mindlessly believe everything pg says just because he is a co-founder of YC.

"Replacing a horse with a tractor with a horse" is 'g'. Any action that reduces the incentives of the next Henry Ford to create will reduce both 'r' and 'g', and have very little effect on the relationship between r & g. Piketty realizes this. It's the heirs of Henry Ford, who did nothing but get lucky in the genetic lottery, who have the most to worry from broad adoption of Piketty's book. It may be the actions of Bill Gates and everybody else who signs and propagates the giving pledge who do the most to prevent the doom that Piketty prophesies.

Piketty's book is about rentiers and rentier capitalism; the comment you quote is an intellectually weak justification of why riches do exits. In the real word is not like that.

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