capz

He dropped out of college to build a start-up taking on Myspace and Friendster, two well-funded incumbents. Furthermore, Zuckerberg didn't have the wealth or family connections of say, the Winklevii. I don't really like Zuckerberg, but to minimize the risk facing him and his investors is kind of ridiculous.

Marx was wrong. Provably wrong. His ideas were put to the test across various cultures and geographies (Russia, China, Vietnam, Cuba, Angola, etc.). Failed. Failed. Failed. Failed. Failed. And the response to this is that they didn't go far enough. There were still capitalists somewhere. It would've worked if the whole world (echoed here by Piketty's world wide tax) was communist.

Perhaps Marx was right in his assessment, but maybe there is no prescription. That is never brought up. Perhaps you're condemned to have a standard of living better than most royals enjoyed a century ago (CAT scans, Internet, Jet Travel - capital, capital, capital) and the price is ennui and jealousy of someone with 2000x more paper wealth. Maybe there is no alternative, or all the alternatives are just a lot worse.

In the meantime, I will continue to think that any tax on accumulated capital is evil and label it as Marx 2.0.

A priori, no investment is "rational." That is, was the construction of 100,000 tanks to export the Communist revolution a rational investment by the Soviet Union? How about the $2 billion in private equity that went into building Facebook, a system designed to let people "like" their friends? The point of a free market is that many experiments are run in parallel. Some of these are deemed rational via feedback. Some fail, and are deemed irrational. A free market is not more rational than a planned economy; however, unlike a planned economy, a free market isn't dependent on a single plan.

It is hard to "horde" a large amount of capital. I would say there are only 4 ways it can be done:

1.) Invest in a natural monopoly. That's fine, but most of these are highly regulated (e.g., utilities) and limit your returns.

2.) Invest in real estate. This is rent seeking at its finest. Henry George [1] addressed this issue, but his ideas have not been widely implemented (unlike Marx).

3.) Invest in government debt. I'm always surprised that people like Krugman and Piketty never bring this up, but the fastest way to reverse inequality would be to default on the national debt. The debt is just a transfer payment from tax payers to wealthy debt holders. It is almost like Feudalism.

4.) Buy and hold a nonperishable commodity.

Even your example, the housing market crash, is not an example of hording. In fact, it is the opposite. It is the squandering of capital. Piketty might even argue it was a good thing (like WWII) since it reduced inequality. Or at least it did until the government intervened.

[1] http://www.henrygeorge.org/whowashg.htm

I see the vanguard is already down-voting. That's fine, but anyone with any knowledge of start-ups should instantly see how the ideas put forth by Piketty are destructive. If I invest in a start-up, that's property. So next year, if the start-up grows and I'm taxed on that growth, I might be forced to sell my private shares to meet my tax obligations. How am I going to do that? And, the year after that, maybe the start-up tanks to a very low valuation, yet I still owe a tax. How is anything supposed to be created in that environment? Or are start-ups somehow special? Do they get special treatment? What about a family farm? Does the farmer have to sell off some land every year to meet his tax obligation? Or does he just continuously raise the price of food every year to offset the wealth tax? I would love to hear some answers from the Marx 2.0 crowd.

I really don't understand why all this Marx 2.0 stuff is on Hacker News. Marx's ideas have been tried, over and over again, and failed. There are far better essays on capital and technology out there.

The Mouse and the Market "If you are for technological progress, and its wide availability, then you should be an enthusiastic supporter of capital accumulation and its rational investment." http://mises.org/daily/1786/

Taxing income is horrendous enough, but necessary. Taxing accumulated capital is just plain destructive.