Just Be Rich

Inequality by itself is not a bad thing. Let&#x27;s start from there. If 90% of the population had a (sustainable) lifestyle of current dollar millionaires, and the remaining 10% had a (sustainable) lifestyle of dollar billionaires, there would be lots of inequality, but it wouldn&#x27;t be problematic.<p>Inequality is only bad if you&#x27;re in a zero-sum game. The rich do have the power to extract rents and &quot;rig the system&quot; to cement their wealth and power. Those are things Graham is clearly against. But an entrepreneur who gets rich by reducing waste and improving productivity by harnessing technology deserves our praise. They&#x27;re not causing the &quot;poor to get poorer&quot;.<p>And comparing the wealth distribution of today to that of 1980 is pretty silly. We&#x27;re in a global economy now, so if you want to be fair, you need to look at it from a global perspective. Almost all Americans are going to fall in the top 10% of earners globally. And global poverty has collapsed since 1980. Yes, you no longer get a comfy middle class life just by virtue of being born in the US (regardless of skills) anymore. I personally don&#x27;t believe that an unskilled worker in the US deserves to be paid 10X what an equivalent worker in Bangladesh makes just because they were lucky enough to be born here.

A lot of people who are just as smart and motived as Elon Musk or Steve Jobs will never be able to start their own companies and get rich.<p>Because they have family obligations that take priority.<p>Because they live outside high-income countries.<p>Because they have no access to support network, so when they fail, they fall all the way to bottom.<p>Because they may have made a crippling mistake in their pasts that now prevents them from reaching their full potential.<p>And so on and on. While I would still recommend everyone to pursue the dreams over never trying to do so - <i>being poor</i> is the single most powerful force that prevents people from doing that.

Great article, I wasn&#x27;t aware the share of the middle class had dropped so significantly.<p>I think there is also another factor that plays a role in the de-democratization of wealth. In the olden days you could be the biggest fish in your pond, but as that pond grows it&#x27;s becoming more and more a winner takes all ocean.<p>&gt; As more occupations become scalable, jobs that were previously stable are becoming risky. Telehealth enables superstar doctors to serve customers in markets that were previously inaccessible to them. Connected fitness devices like Peloton allow superstar instructors to serve thousands of customers at a time, making the average instructor in your local gym redundant. The same dynamic applies to many other service and knowledge jobs.<p>- <a href="https:&#x2F;&#x2F;www.drorpoleg.com&#x2F;the-ponzi-career&#x2F;" rel="nofollow">https:&#x2F;&#x2F;www.drorpoleg.com&#x2F;the-ponzi-career&#x2F;</a>

There&#x27;s a little company called MyTeksi. My is a for-profit social startup with a mission to revolutionise the taxi industry.<p>They started GrabCar, which killed off the taxi industry with higher wages, higher quality services, lower prices. To win the war against Uber, they&#x27;d lie about how long it took for a car to arrive, and they&#x27;d deceive drivers as well. A driver might be promised a $100 bonus for driving into an inaccessible area. And for the bonuses they could claim they&#x27;d be paid 70% because their fee was deducted from the bonus. Sometimes they&#x27;d ban a driver for small reasons like a customer complaining about leaving a water bottle. Not only would they fire you despite your 4.7 star rating, they&#x27;d take all your earnings.<p>Eventually, they outlasted Uber, acquired them. They didn&#x27;t raise prices but they no longer offered discounts. Now they&#x27;re simply called Grab.<p>They still hold on to the idea that they are the good guys who are improving the lives of others, but whose lives? It&#x27;s billionaires getting rich off the hard labor of others. Don&#x27;t get me wrong - the billionaires worked hard and took risks, but is it as hard as the drivers that they kick off the platform?

Income inequality is growing, yes. But are the wealthy somehow responsible for it? Is their &quot;getting richer&quot; directly responsible for it? There seems to be a growing consensus on the left that they are. I have yet to see a convincing argument to show this though.<p>Someone who builds a company worth 100m didn&#x27;t have to steal money from me (or anyone else) to do it. If they did steal, then that&#x27;s what needs fixed. Prevent the stealing.<p>The individual who has 100k to invest can watch that 100k grow if they invest wisely over time. They can pile the earnings on top of their savings from their salary, and get richer faster than someone without the 100k invested. The rest of us who don&#x27;t have 100k to invest don&#x27;t see that same benefit--but merely because the 1% chooses to invest and to watch their money grow isn&#x27;t a bad thing. Now if they&#x27;re doing corrupt things with that money, then yea--fix that.<p>This concept of a wealth tax &quot;fixing&quot; income inequality is folly. It won&#x27;t fix anything. It&#x27;s at best a band-aid attempting to treat a symptom caused from underlying issues. We need to treat those underlying issues--not the symptom. Wealth tax happens to garner a lot of support though because many of the 99% love the idea of receiving something for free that&#x27;s taken from the 1%. But it&#x27;s not the governments job to legalize theft and pick the winners and losers, it&#x27;s the governments job to fix the underlying issues.

This is pretty accurate. When I went through that essay (by PG), I got the similar idea.<p>The essay read to me like, &quot;Oh, you are white guy, your parents are well off, you must have been studying in some tier 1 school, why not risk 1&#x2F;2 yrs of your life to start a company, while you are in college. Chances are you may get some money from us too! You should try a lot. Infact the more you try, the better we earn.&quot;<p>edit: What PG misses is worldwide perspective. Everything in his essay is limited to Silicon Valley and the social circle around it. Some people from east may have connections with the valley, and that can benefit them.<p>He even goes to mention, startup succeed because of social factor. There is a very small chance that people in US would trust a revolutionary product built outside. So unless the product is able to bootstrap itself in the home country, the chances are slim. And not every part of the world is as fortunate as SV folks and have startup culture.<p>You may say, why not move to one with good culture. My answer, &quot;Goodluck getting out of third world country.&quot;

The really shocking quote from the article is the part of the caption below one of the charts:<p>&quot;Data for families in the first quintile (bottom 20%) are not shown. Their median wealth was as follows: 1989 — $0; 1998 — $0; 2007 - $36 and 2016 — negative $1,099.&quot;<p>BOTTOM 20%. Has has zero or negative wealth. And that has only changed for the worse during the last 30 years.<p>If one FIFTH of your country has $0 or negative wealth, and your country is the richest country in the world, I would say there is a significant problem.

As economist Russ Roberts often points out in these inequality discussions, the quintiles that are used to show growth only in the upper class does not refer to the same people over time. When you follow people over time, they generally move up into higher quintiles thus &quot;getting richer.&quot;<p><a href="https:&#x2F;&#x2F;russroberts.medium.com&#x2F;do-the-rich-capture-all-the-gains-from-economic-growth-c96d93101f9c" rel="nofollow">https:&#x2F;&#x2F;russroberts.medium.com&#x2F;do-the-rich-capture-all-the-g...</a><p>He also talks about &quot;what happened in 1972&quot; is more about demographic shifts due to divorce, single parent homes, and children leaving home sooner:<p><a href="https:&#x2F;&#x2F;cafehayek.com&#x2F;2013&#x2F;11&#x2F;inequality-in-two-graphs.html" rel="nofollow">https:&#x2F;&#x2F;cafehayek.com&#x2F;2013&#x2F;11&#x2F;inequality-in-two-graphs.html</a>

It was the best of times, it was the worst of times.<p>It was the age of wisdom, it was the age of foolishness.<p>It was the epoch of self-made tech billionaires, it was the epoch of stagnant median wages.<p>It was the season of free knowledge, it was the season of credentialism.<p>It was the spring of Hope, it was the winter of Nope.

That&#x27;s actually what I do the whole day. I give people good advice. I call myself a generous problem fixer. Yesterday a poor man was complaining that the steel company he worked for closed a few years ago and since then he did not get any job. I saved his life by telling him the following: &quot;The solution to your problem is easy. Stop being poor and start being rich. You made a mistake by choosing to be poor so my second advice is to stop making mistakes.&quot;<p>He thanked me and I am quite of proud that I saved his life. Going to write a book now.

Nothing truly insightful about the troubles of poverty has ever been said by someone who never lived it. Divorced of the appropriate context, advice and opinions are like the proverb says; everyone&#x27;s got one and they all stink.

Recently I made the oldest startup mistake in the book:<p>Exercising too many ISOs and incurring the AMT to the tune of $350,000.<p>I have talked to probably a dozen various professionals - accountants, lawyers, wealth managers, liquidity providers, etc - and they all give the exact same advice:<p>1. Borrow from family or friends.<p>2. Leverage existing assets (mortgage, stocks) to pay it.<p>Every one of them has mentioned those 2 ways are how &quot;most people&quot; in my situation deal with it. Neither are an option for me.<p>To put it another way: already be rich. Whether personally or by proxy.<p>Paul Graham also neglected the necessity of the wealthy in creating new wealth because he is one of those gatekeepers. Whether they&#x27;re the VCs benevolently funding your startup, or the &quot;rich uncle&quot; floating you a 1% loan for a year to pay AMT: it&#x27;s much easier to become wealthy if you&#x27;re already wealthy or have access to wealth. You need the wealth to fund your startup. You need the wealth to exercise your ISOs. You need the wealth to cover your AMT obligations. All of this is after you&#x27;ve managed to get the capital for a good education and everything else that goes into joining startups.<p>Oh and the wealthy get a cut every step of the way. The AMT may be flawed, but the wealthy also tax the rest of us. Not only that, but if we do get rich, since they&#x27;ve done you so many favors, now they have a new wealthy friend in their network to fall back on or raise capital from or obtain liquidity from. So many people who get rich from startups give their money right back to VCs to join funds. It&#x27;s almost seen as an obligation to help out others. It&#x27;s not. There&#x27;s plenty of capital out there. Let the VCs risk their own, not yours. Build affordable housing or bootstrap your next thing; don&#x27;t effectively give VCs their money back.<p>And let me be clear: if I do become wealthy from these lottery tickets I&#x27;m jumping through hoops to attain: it will be luck. I&#x27;m just one of hundreds of people who have built this startup, and if we do exit: the value will be as much more a factor of external market dynamics than intrinsic value created by the company and its labor. It&#x27;s luck. It&#x27;s lottery tickets. Don&#x27;t let anyone fool you otherwise. A good product is one tiny piece of it.

What PG also conveniently failed to mention was how the money shuffle results in a few people getting very wealthy (less specifically because they had a good idea and executed it well).<p>Money Flow:<p>Public Investors, Mutual Funds<p>V<p>Investor Round X<p>V<p>Investor Round ...<p>V<p>Investor Round A<p>V<p>Founders&#x2F;Seed Investors<p>Each level of this Ponzi pays for the previous level, plus a healthy spillover. So when the IPO happens, everyone prior in the chain wins big.<p>Before the IPO, each funding round pays the previous investors up the chain to the founders&#x2F;seeders (unless you made a foolish arrangement with one of the VC rounds).<p>The magic here is that all of this can be done without the company ever making a profit. That&#x27;s where things have really changed. In the past, you had no hope of an IPO unless your company had a track record of reasonable profitability. Uber is the best example of how the general investing public got fleeced in order to pay each level of investors which basically fleeced the next. It was all a money shuffle.<p>It&#x27;s a great system to take money from questionable regimes and pour them into this shuffle (Softbank).

<p><pre><code> the survival of the fittest is a means by which creatures may evolve from one species to a superior species. The challenge before us now is not how we could evolve further but: to live together in a society and achieve the greatest amount of happiness for the greatest proportion of the worlds population this could never be achieved by imitating the survival of the fittest it happens in nature, it&#x27;s just the way of the world your child failed the SAT, so natural selection has taken place and we&#x27;re feeding her to a pack of hyenas we are human beings, with consciousness and a unique ability to see things from another person&#x27;s point of view the survival of the fittest created species but what makes a decent society is the responsibility of the fittest</code></pre>

It&#x27;s also worth noting that many startups are used to launder trust funds and family money. Daddy (or the family office) invests in my friends startup, I (I wish) get a job as &quot;chief growth officer&quot; or &quot;chief of staff&quot; or &quot;COO&quot; or similar - or even as an early stage dev. Daddy gets preference shares - ofc - I get early stage employee shares, Daddy gets a tax break and Daddy&#x27;s investment ushers in Venture funding. With Venture funding &amp; Daddy the company goes well (pretty often) and goes to a early exit which sees the investors make a minimal profit and the early employees (me, I wish) get a nice bonus too - and onward.

A very well thought out and articulated essay. Essential to get the billionaires of the pedestal that they have perched on.<p>Put your money where your mouth is and fund the wealth tax.<p>Personally, I vehemently disagree with the 10x programmer narrative in IT. It fuels &quot; management provides more value than replaceable workers&quot;. If there were no workers, then management is just sitting there coming up with random ideas. Everything else is management lingo which is fine and good but we all have 24 hours in a day. One thing doesn&#x27;t make you more valuable than the rest.

I&#x27;m not sure why people think Paul Graham&#x27;s perspective on wealth inequality is in response to a recent shift in public opinion; he&#x27;s taken this position since at least 2004: <a href="http:&#x2F;&#x2F;www.paulgraham.com&#x2F;gap.html" rel="nofollow">http:&#x2F;&#x2F;www.paulgraham.com&#x2F;gap.html</a> (the basic premise of that essay was that in the tradeoff between freedom and wealth inequality, the latter didn&#x27;t matter because everyone&#x27;s living standards are converging). From that essay: <i>Materially and socially, technology seems to be decreasing the gap between the rich and the poor, not increasing it</i><p>Paul is a smart guy; to paraphrase Richard Feynman, that makes it easier for him to fool himself. There is a genuine debate to be had about how to balance wealth equality with freedom, but the amount of motivated reasoning on display is enormous.

Thank you. This needed to be said.<p>I was thinking the same when I read PG’s essay. Unfortunately, I sensed arrogance and entitlement rather than humility and reasoned thinking behind his words.<p>It’s a shame, really. This world needs not only more successful people, it also needs more compassionate people, too.

Am I the only person that thought &quot;Paul Graham&#x27;s&#x2F;ycombinator&#x27;s product is startups&quot; when reading his essay?<p>I don&#x27;t think it&#x27;s nefarious, but I suspect he&#x27;s been incubating startups and nouveau riche, so his essays might map the territory he sees.

As usual, this entire argument, both the PG essay and the response, in focusing basically only on Silicon Valley and the US. The real difference that nobody seem to notice is that 1982 rich people from Pg’s data were locally rich. Tech has enable a class of globally reach people, whose riches, even tho they live and prosper in Silicon Valley, is the product of global unregulated resources extraction. Unlike oil and real estate, which were already quite regulated and fundamentally local (not limited to the country of the rich man, in case of multinationals, but definitely localized), tech prospers on the borderless nature of the Internet, and the borderless nature of media.

OP mentions PG’s article arguing against a wealth tax. That article is short, simple and to the point - Modelling a Wealth Tax (<a href="http:&#x2F;&#x2F;www.paulgraham.com&#x2F;wtax.html" rel="nofollow">http:&#x2F;&#x2F;www.paulgraham.com&#x2F;wtax.html</a>). It is so compelling, but also misleading and wrong. Its not easy to spot the sleights of hand he uses. I wrote more about it here - Modelling a Wealth Tax Correctly (<a href="https:&#x2F;&#x2F;blog.nindalf.com&#x2F;posts&#x2F;wealth-tax&#x2F;" rel="nofollow">https:&#x2F;&#x2F;blog.nindalf.com&#x2F;posts&#x2F;wealth-tax&#x2F;</a>).<p>And yet, I think the simplicity of PG’s arguments is going to convince a lot of people. Simplicity sells, even if it deliberately obscures the truth.

&gt; It&#x27;s less a tutorial or analysis and more a thinly veiled attempt to ease concerns about wealth inequality.<p>Given in Graham&#x27;s essay he comes out and discusses the Gini coefficient, it doesn&#x27;t seem like a &quot;thinly veiled&quot; anything. The point of the essay is to discuss how much inequality itself matters (as opposed to, say poverty, lack of access to health care, or other things other people are raising as legitimate concerns).<p>&gt; What he fails to mention is that concerns about wealth inequality aren&#x27;t concerned with how wealth was generated but rather the growing wealth gap that has accelerated in recent decades.<p>My take away from Graham&#x27;s article is that, all else being equal, we should care about how wealth was generated, and the gap itself is less important.<p>&gt; Tech has made startups both cheaper and easier but only for a small percentage of people.<p>This is probably true, but again I think it misses the point that Graham is making: Creating a new company is overall simpler today than it was in the 1970&#x27;s and 1980&#x27;s, and so the &quot;small percentage of people&quot; who can start companies now is larger than it was 40 years ago.<p>&gt; Paul paints a rosy picture but doesn&#x27;t mention that incomes for lower and middle-class families have fallen since the 80s.<p>For a more thorough and balanced analysis of what this author refers to, see Russ Roberts&#x27;s series on these questions: <a href="https:&#x2F;&#x2F;www.youtube.com&#x2F;playlist?list=PLRZf05zFBLXIKLD3blbnnFIv85OesJaKc" rel="nofollow">https:&#x2F;&#x2F;www.youtube.com&#x2F;playlist?list=PLRZf05zFBLXIKLD3blbnn...</a> . There are several factors that make these long-term trend analyses hard: changing family compositions, changing quality of goods, and challenges with price indexes.

&gt; But it&#x27;s also obvious to anyone outside the SV bubble that it&#x27;s still only accessible to a small minority of people. Most people don&#x27;t have the safety net or mental bandwidth to even consider entrepreneurship.<p>That is barely touching the surface of the problem. Having the bandwidth to become an entrepreneur is the least of anyone&#x27;s problems.<p>I know many people who have gone to extraordinary lengths (like working non-stop 24&#x2F;7 nights and weekends in addition to their day job) starting a startup, building a great product but it just doesn&#x27;t grow.<p>There are a lot of monopolistic forces which prevent a startup from growing when you&#x27;re not in the &#x27;Silicon Valley Club&#x27;. Receiving VC funding is not even about money, the most important part about raising funding is the social aspect; that it makes you part of the club. The product you&#x27;re working on doesn&#x27;t matter at all. It&#x27;s all about being in the club...<p>To join the club is all about your appearance and personality and not about skills.

The author posts some charts about wealth, then writes:<p>&gt; Paul paints a rosy picture but doesn&#x27;t mention that incomes for lower and middle-class families have fallen since the 80s.<p>If you don’t know the difference between wealth and income, maybe you shouldn’t be blogging about these topics.<p>This is not meant to be some low-brow dismissal. How can you have any serious discussion when two completely different things are used interchangeably?<p>P.S. a chart that shows shares each class’s percentage shares of total wealth is pointless. It doesn’t actually tell you if the middle class is getting poorer. The middle class and lower class can have a constant inflation adjusted wealth (or even wealth outpacing inflation) and this chart will still look bad if we have more people moving into the upper class.

Absolute wealth has increased as the wealth gap increased. Standards of living for everyone have gotten better, but there is still an issue. Wealth is not just about your buying power it&#x27;s also about your social status and power. A lot more status and power is concentrated with the few. This is a big problem if you care about individual freedoms. They tend to erode very quickly with a concentration of power.

&quot;tons of people are struggling to meet their basic needs&quot;<p>That&#x27;s just not true. There are billions less people struggling to meet their basic needs now, than there was in 1982.<p>World is much more equal now than it was in 1982.

The author says that middle-class incomes have dropped since the 1980s, but the associated graph:<p>(1) is pertaining to wealth, not income.<p>(2) shows that middle-class wealth has <i>increased</i> since the 1980s, not &quot;decreased&quot;

This article draw&#x27;s the clear gap of concentration of wealth between the top , middle and lower. I think more than hard-work, intelligence and money itself there are two more factors which i would say if does not work or are in your favor i bet you cannot succeed and that is LUCK and DESTINY (Note - I am not saying that these are the ONLY FACTOR, but for sure are the important factors). There are lot of people who literally put their effort, time , money and all hard-work to make things happen but fails coz either their luck does not work&#x2F; favor them or the success they were chasing was not written in their DESTINY. We have fail stories as well in our society but only success stories gets printed (despite of some failures they must have faced to achieve that success). You see brothers started their journey but where are they today. <a href="https:&#x2F;&#x2F;www.diffen.com&#x2F;difference&#x2F;Anil_Ambani_vs_Mukesh_Ambani" rel="nofollow">https:&#x2F;&#x2F;www.diffen.com&#x2F;difference&#x2F;Anil_Ambani_vs_Mukesh_Amba...</a> keep working, keep struggling , be motivated let the nature decide. Hoping for the better world with less suffering and more happiness

The creation and adoption of new technology has created a lot of new wealth. This has increased inequality just as it has done in the past. This creates power disparity and envy.<p>The creation and adoption of new technology has decreased the wealth of people obsoleted by new technology. Additionally, our system has grown many oligopolies including healthcare, education, utilities, etc... that increasingly leech off the system.<p>Poverty not only makes it harder to become wealthy but can also be debilitating. Some poverty has been alleviated by the social system but poverty&#x27;s effect is lives long.<p>It is possible to retrain people who have been obsoleted by technology but in many cases people will end up with a lower pay than before.<p>I don&#x27;t trust either side (this writer or Paul Graham) to come up with good solutions because both are partisan. The wealth redistributors focus on redistribution but actually cause wealth to be destroyed since they disincentize the creation of wealth for all. The other side does not spend enough energy on eliminating misery and dysfunction.

The whole article by PG seemed like a defense of himself, a justification for wealth inequality.<p>Perhaps most billionaires did not come from other billionaires. But can we really act like tech billionaires didn&#x27;t have enormous advantages?<p>Gates: Parents were quite well off and influential.<p>Bezos: Same, parents gave him hundreds of thousands to start.<p>Musk: Father owned an emerald mine.<p>I could go on, but I won&#x27;t, because you get the idea. How many people in the wealthiest 1000 came from families in the bottom 50% of wealth&#x2F;tax brackets? How many from broken homes?<p>And for the most important point, this doesn&#x27;t even matter: the issue is that it is our financial and tax system, <i>not talent or social contributions</i> that allows billionaires to exist while others struggle. This system could just as easily say that nobody can control that much wealth and ensure a more just distribution, and many think it should. The whole article is a deflection and distraction from the point that a few people are unfairly awarded a disproportionate amount of resources.

&gt; Of course the Gini coefficient is increasing. With more people starting more valuable companies, how could it not be?<p>By taxing people properly?

It’s unfortunate that getting rich is limited to entrepreneurs or otherwise business owners. I’ve known a few successful entrepreneurs who more or less hated their lives because their work wasn’t “personally rewarding” but ultimately they made the sacrifice because the financial independence would allow them to be able to do whatever they wanted later in life. It’s something I learned too late in life but I’m trying to catch up now and I’ve given up coding to focus on moving money around efficiently for my customers (for a modest cut). Ultimately my family will benefit and I’ll code when I’m 60.

Wage theft should be eradicated.<p>But what is disingenuous in the article is fact that it compares &quot;wealth&quot; I don&#x27;t care about how wealthy someone is. If I can afford house and food having a better car is just a bonus.<p>Graphs going down for middle income does not mean that &quot;rich people&quot; are taking homes of middle income people and throwing them to the streets to die.<p>What Paul Graham is writing about, is that Economic Mobility has improved with internet and computers. Rich got a lot more rich but loads of people are out of poverty.<p>We all should focus on educating people and getting them out of poverty not about taking down ultra-rich.

“You would think, after having been on the side of labor in its fight with capital for almost two centuries, that the far left would be happy that labor has finally prevailed.”<p>This is listed as a quote from the PG essay. It seems to represent a fundamental misunderstanding of what “labor” means here. When the left fights for “labor” it is for all laborers to get a fair shake. PG seems to be talking about the fact that a tiny fraction of laborers get wealthy for their work. But that is not at all what the left fights for.<p>It’s amazing that rich people convince themselves they are so right about the world and they don’t even understand the critique of their position. For PG to say that the left should be happy with a tiny few getting super rich is to demonstrate a complete lack of understanding of what “the left” even means.<p>I’ve long wondered if even a single billionaire on Earth actually understands even the basics of Marxism from a Marxist perspective and I bet the percentage is very small.

There are different mechanisms involved. Wealth inequality in general is caused by cheap credit which drives up asset prices.<p>Facebook and Google are not tech companies. The own all the best advertising real-estate.<p>Amazon owns all the best store-front real-estate.<p>And so on. There is no limit to how much of the relevant real-estate these can companies can own. Therefore exponential distribution of valuations.<p>&quot;Tech&quot; is not a big part of it. For example, there is no way of competing with these companies based on tech.<p>Hm. What about taxation of domain names based on revenue?

The profound irony of the PG piece and the growing wealth gap is that it just happens that 1982 was the point where the wealth gap was at its narrowest point (or very close to it). It has only widened since then, underlining the point in the posted article:<p><a href="https:&#x2F;&#x2F;daraalbrightmedia.com&#x2F;wp-content&#x2F;uploads&#x2F;2016&#x2F;08&#x2F;History-of-US-Wealth-Disparity-final.jpg" rel="nofollow">https:&#x2F;&#x2F;daraalbrightmedia.com&#x2F;wp-content&#x2F;uploads&#x2F;2016&#x2F;08&#x2F;His...</a>

Personally, I think anyone who amasses oh, say, 100 lifetimes of wealth <i>and can&#x27;t stop trying to get more</i> has a mental illness. And I don&#x27;t mean that for laughs. They have a sickness and are not well.<p>If you&#x27;ve got a $300 million fortune, why can&#x27;t you just go enjoy life already? It&#x27;s not like enjoying your life by spending your money isn&#x27;t going to <i>also</i> create jobs for other people. You don&#x27;t need to be &quot;a job creator&quot; and build some huge business empire. In fact, it might create better jobs, as you want to buy better things--better furniture, a better home, art--that are not factory-produced crap made by slave labor in other lands. We&#x27;d have a better society if rich people could chill out, IMHO.

This is terrible and wrong. The middle class haven&#x27;t gotten &quot;poorer&quot; for forty years, they&#x27;ve just grown less quickly than the richest - based on the phenomenon Paul pointed out.<p>What&#x27;s happened is the uber-rich are becoming hyper-rich due to tech, and in RELATIVE terms everyone else is growing less quickly.<p>But that&#x27;s literally exactly what you&#x27;d expect and it doesn&#x27;t harm them one iota - the cheaper and more plentiful tech, however, helps them.

One big issue i have with this article is that it states:<p>&quot;Paul paints a rosy picture but doesn&#x27;t mention that incomes for lower and middle-class families have fallen since the 80s.&quot;<p>And then goes on to present wealth charts.<p>However, wealth =! income.<p>The pew research source of data which is here: <a href="https:&#x2F;&#x2F;www.pewresearch.org&#x2F;social-trends&#x2F;2013&#x2F;02&#x2F;21&#x2F;appendix-b-data-sources-2&#x2F;" rel="nofollow">https:&#x2F;&#x2F;www.pewresearch.org&#x2F;social-trends&#x2F;2013&#x2F;02&#x2F;21&#x2F;appendi...</a><p>Points to this article from the fed: <a href="https:&#x2F;&#x2F;www.federalreserve.gov&#x2F;econres&#x2F;notes&#x2F;feds-notes&#x2F;wealth-and-income-concentration-in-the-scf-20200928.htm" rel="nofollow">https:&#x2F;&#x2F;www.federalreserve.gov&#x2F;econres&#x2F;notes&#x2F;feds-notes&#x2F;weal...</a><p>which defines wealth = &quot;difference between the market value of assets owned by a family and the amount owed in debts...&quot;<p>OR restated succinctly, household assets - liabilities.<p>The definition from the fed says nothing on income.<p>Now that we can state the problem the author has cited is regarding wealth inequality, let&#x27;s talk about it.<p>One would expect wealth inequality to keep growing, perhaps infinitely, since the people earning income to buy more wealth (w2s , 1099s) have to contend with a continuously depreciating currency, which is not a problem for longtime wealth holders.<p>Inflation alone does not hurt stocks, real estate owners, etc. It hurts pensioners and labor directly, though.

A missing piece of this discussion is how American wealth got there in the first place: 19th century industrialization.<p>In that era you&#x27;re either a farmer or an entrepreneur. America had a literal explosion of engineering, innovation, and entrepreneurship such that by Lincoln&#x27;s death America was already the top global economy GDP (including per capita) and spearheading the industrial revolution.<p>This was much due to generally high edu levels especially technical education, specific regions of innovation (e.g. CT river valley creating interchangeable parts), and a lot of openness and mobility in the culture (and probably the general cultural obsession with commerce).<p>America doesn&#x27;t exist like this anymore however it&#x27;s a blueprint how inequality could be lowered... bring back a radical culture of entrepreneurship and innovation (not &quot;go have a career at someone&#x27;s company&quot;), bring back widespread technical education, and bring back a whole lot more of our former industrial-manufacturing economy (which was like 80% of our economy in 1950 to like 10% today; &quot;knowledge economy&quot; is not going to get us there).

That&#x27;s what happens when inflation is incredibly low. Wealth taxes are just a hack to introduce artificial inflation for the worst offenders of society.<p>Wealth beyond a certain point is highly deflationary. At some point you are earning so much you cannot possibly spend it all. Any factor that accelerates the growth rate of your wealth just makes it worse because the spending portion goes down as a percentage of your wealth.<p>Wealth is just savings which represents deferred consumption. Therefore either you invest your money (keeping money in the stock market isn&#x27;t the same as actual economic activity, you still have to do something with the money) or someone else has to give up their savings because your lack of spending also caused a lack of employment on the other side.<p>Yes, savings are zero sum if the savings aren&#x27;t investment. If one person saves and doesn&#x27;t invest, then some other person has to lose out. Inflation exists to force investment and to punish those who refuse to invest.<p>I&#x27;ve seen lots of HN comments about indexing capital gains based on inflation, they just want to flee the obligation to invest their money.

Wealth is not a comparative measure. This is fundamental flaw in wealth-inequality concerns. Me being more wealthy does not make you less wealthy, but that&#x27;s unfortunately how our covetous monkey brains interpret the world around us.<p>Wealth at its core is a proxy for quality of life. Today, as compared to 30 years ago, here&#x27;s what even most low-income households can afford: * airline flights that cost a small percentage of what they used to * immediate access to any information via the internet * vastly improved medical care &amp; surgical procedures, ranging from cancer treatment to lower infant mortality rates * the ability to easily keep in touch with loved ones wherever they are in the world * high definition flat-screen TVs and the ability to watch any any show or movie as soon as desired * online videos to learn how to do almost anything, for those motivated enough to learn * digital cameras in our pocket that allow us to always be ready to capture an amazing moment or scene for our memories<p>Wealth disparity is only a problem if it is due to theft.

The problem with the argument is that it does nothing to address the central problem except to blame Mr Graham for it. Most people are getting poorer. That&#x27;s a real issue and it would be very interesting if the poster tried to find a solution for it. Because it&#x27;s very complicated. It touches everything from regulatory red tape to technology to tax policy, benefits, ownership rights. Basically everything. How do you get the amount of high paying jobs to increase so people can earn more money? How do you make sure regulations don&#x27;t affect people&#x27;s side hustles too much? How do you ensure zoning and land ownership rights are done in a fair way that does not significantly disadvantage newcomers? How do you make sure someones ownership rights do not affect someone else&#x27;s ability to make a living? If you ask me this problem is largely self inflicted and is solvable but requires a different way of thinking.<p>Instead this piece justs blames the fact that rich people also defend their interests. It&#x27;s nothing new.

The wealth gap has gotten so bad it’s almost unimaginable. I fear however that as bad as it is, that it’s going to be peanuts compared to what could theoretically be possible as AI and body modification Tech continues to advance at the pace it’s currently at. At some point the contradictions will be so massive, for all intents and purposes, they just won’t be visible.

<i>&quot;...keep in mind this is the same guy who argued against a wealth tax.&quot;</i><p>Everybody with a semblance of economic literacy should recognize that a wealth tax causes a lot of problems for what little income it creates. It is a distraction.<p>For the past decades, wealth inequality has been driven by asset price inflation, which is caused by the easy money policy required to finance government, corporate and private debt.<p>If interest rates were raised significantly, trillions would disappear off the balance sheets of all the billionaires. Immediately, all of us would be &quot;more equal&quot;. The dollar would appreciate, and purchasing power would be restored to the average wage earner. Buying a house would become feasible again.<p>There&#x27;s just one catch: Raising interest rates makes existing debt unservicable, causing a massive wave of bankruptcies and layoffs. At some point, even the US would have to default on its debt. The only way to avoid that would be to just print the money - and then we&#x27;re back at square one.

Love Paul&#x27;s line in the notes of his post about labor finally defeating capital. Complete and utter detachment from reality.

Every time I see wealth inequality being talked about, I remember this quote:<p>&quot;It&#x27;s not greed that drives the world, but envy.&quot;.

&gt;&gt;Paul paints a rosy picture but doesn&#x27;t mention that incomes for lower and middle-class families have fallen since the 80s.<p>This is misleading.<p><a href="https:&#x2F;&#x2F;www.cato.org&#x2F;cato-journal&#x2F;winter-2019&#x2F;us-median-household-income-has-risen-more-you-think#adjustment-for-household-size" rel="nofollow">https:&#x2F;&#x2F;www.cato.org&#x2F;cato-journal&#x2F;winter-2019&#x2F;us-median-hous...</a><p>&gt;&gt;Average household size declined from 3.28 persons in 1967 to 2.62 by 2000 and 2.54 by 2017 (Census 2017b). Larger households can be expected to have greater income earning potential from the availability of more potential workers. It is thus important to adjust for household size in assessing the long-term growth of household income. Otherwise, the larger households at the beginning of the period would tend to exaggerate the income levels relative to household incomes toward the end of the period.

I couldn&#x27;t find mention of Anand Giridharadas in the comments; He wrote a book called &quot;Winners Take All: The Elite Charade of Changing the World&quot; ; I haven&#x27;t finished the book yet, and I don&#x27;t find myself agreeing with him on many things, and his criticism at times is more simplistic than I would like it to be, but I also found it to be an intellectually challenging read.<p>He argues that the rich do much for the underprivileged, but what they never do is challenge the system which made them so rich in the first place. Philantrophy and the associated virtue signaling has the perverse effect of keeping the very system alive, which is (so he argues) fundamentally broken to begin with, and needs major overhaul. I think it&#x27;s relevant to the discussion. <a href="https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Winners_Take_All:_The_Elite_Charade_of_Changing_the_World" rel="nofollow">https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Winners_Take_All:_The_Elite_Ch...</a><p>I found his conversation with Andrew Yang to be quite interesting <a href="https:&#x2F;&#x2F;youtu.be&#x2F;2Ye-Jkql_jA?t=1742" rel="nofollow">https:&#x2F;&#x2F;youtu.be&#x2F;2Ye-Jkql_jA?t=1742</a> (not pitching it out of ideological &#x2F; political affiliation to either).<p>I personally am torn. From &quot;the left&quot; I think that personal responsibility often gets too little credit. The last thing you want to tell people is &quot;it&#x27;s not you, it&#x27;s your situation, the government will fix it&quot;. The government is bad at fixing things, and you create a race for handouts, and a perverse game of victimhood claminig, to get sympathy and handouts. &quot;I don&#x27;t succeed because of X and someone else has to fix it&quot; is not an empowering message. But many rich and privileged people are really blind to the sociological complexity in what determines success. Abundance of wealth doesn&#x27;t necessarily make one happy, but lack of wealth and financial security makes one unhappy. And stressed. Stress in and of itself diminishes intellectual reasoning, decision making, affects mood, can be associated with psychological disorders, etc. &quot;Well he&#x27;s a truck driver, unhealthy, fears for his job due to automation? Well, he should become an app developer, or something similar. There are free courses everywhere, there are so many things to do. If he applies himself, he will find something, it&#x27;s competition and our market system, which has made us so rich to begin with...&quot;<p>I&#x27;m caricaturing ... but I don&#x27;t know by how much.

I think that there is something that is being overlooked here and not mentioned by Paul G. nor Keenen and that is the source of income of the new upper class. I&#x27;m not talking here about select few at the top but the few thousands that follow. This is very much in focus of the new book by Branko Milanovic where he emphasizes that the source of income for the upper class changed from being mostly income from capital to being both income of capital and labor. I will quote him directly.<p>Branko Milanovic:<i>&quot;Homoploutia is a neologism I invented (after some consultation w&#x2F;my Greek friends). It indicates that the same people (homo) are wealthy (ploutia) is the space of capital &amp; labor; your neighborly CEO who is in the top 1% by labor income and also in the top 1% by shares he owns.&quot;</i>

Question: What would it look like if the currency used to measure any of these statistics is being debased at an ever increasing rate of speed? Would not that make timing of obtaining one&#x27;s wealth very, very important?<p>Second question: What would it look like if the person wondering about this lived in a land that expressed very clearly that there are rules for thee, but not for me? Would not that make many of the assumptions of a solid baseline not solid at all? And make the attempt at living within this structure rather flimsy, at best?<p>As I attempt to navigate forward, I find that many of the previous base assumptions no longer hold true...

A lot of people pre-suppose that “wealthy inequality” is a bad thing. But not everyone agrees, and many people think the greater good is served by things that might increase “the wealth gap” as a side effect. PG’s essay was exploring that very thought - maybe we <i>want</i> a higher Gini coefficient, maybe it’s <i>good</i> that vast fortunes are being accumulated by young tech entrepreneurs who provide goods&#x2F;services that almost everyone in the world wants to use, maybe this is what the <i>more</i> dynamic and broadly enriching economy looks like, compared to the stodgier, class-divided alternative.

<a href="https:&#x2F;&#x2F;www.rnz.co.nz&#x2F;news&#x2F;the-wireless&#x2F;373065&#x2F;the-pencilsword-on-a-plate" rel="nofollow">https:&#x2F;&#x2F;www.rnz.co.nz&#x2F;news&#x2F;the-wireless&#x2F;373065&#x2F;the-pencilswo...</a>

<i>&gt; incomes for lower and middle-class families have fallen since the 80s.</i><p>This is core to their argument, but it&#x27;s false. Looking at the mean income of the lowest quintile in the US, historical and adjusting for inflation:<p><pre><code> 1980 $4,310 $13,757 1990 $7,166 $14,420 2000 $10,190 $15,563 2010 $10,994 $13,260 2018 $13,995 $14,658 </code></pre> <a href="https:&#x2F;&#x2F;www.taxpolicycenter.org&#x2F;statistics&#x2F;household-income-quintiles" rel="nofollow">https:&#x2F;&#x2F;www.taxpolicycenter.org&#x2F;statistics&#x2F;household-income-...</a><p>(And, of course, internationally income has improved dramatically)

Can someone explain to me why &quot;Wealth Inequality&quot; is a problem?<p>If my neighbor has more then me, how is that an issue?<p>Now, I do understand that:<p>* Doing something illegal is wrong, but if someone aquired wealth legally, I don&#x27;t see the inequality a problem.<p>* Poverty is a problem but poverty is a problem whether 100% of the population is poor, or is a minority of the population is poor, or the majority of the population is poor; because the problem is poverty, not the inequality<p>* I can also see how a different taxation philosophy would alleviate poverty, but then again that is a solution to poverty, not a solution to wealth inequality.<p>So, why is &quot;wealth inequality&quot; a problem?

The author is talking about a definition of wealth in the top quintile, 20%, or top 80 million of Americans. In some other figures he talked about upper class in pew&#x27;s research, which is double the national median income. Households in that income bracket earns a whopping $187,872 per year, and have $848,000 in wealth. Why are people talking about founders and the extremely wealthy in context of those numbers?<p>Most of those people are regular people with regular incomes with good saving habit, and&#x2F;or got lucky because the house they bought 30 years ago happen to be in a boom area.

When you are poor, they ways to break thru to the next level say 50gs to 100gs in investable savings is almost the same for everyone, keep climbing the job ladder, save, don’t make mistakes, don’t let the bug corp marketing machine reel you in. Immense competition and obstacles.<p>The ways to break thru from 500gs to a million is immense and less competition. And most of these depend on the money from the lower classes.<p>What I meant to say is the system we all need to be in to get rich creates a feedback loop to keep the poor poor, it incentivize moat creation to stifle competition

I find that there is so much that we are missing from the articles posted, ie. - An analysis of how happiness increased or decreased since 1980, are people nowadays happier than they were before? - Do people &quot;feel&quot; like they have more opportunities now than they had before? ie. Do they know they could be doing more and better but just don&#x27;t and continue procrastinating? This is missing from the calculations, the mental, psychological, internal battle of humans.

My opinion about current <i>wealth inequality</i>, which I&#x27;m sure the entire world doesn&#x27;t give a flying fuck about, so I started my own blog based on the comment so I can talk to myself like a loon in a dunce cap sitting alone in my little corner of the internet like the bad child most of the world seems hellbent on viewing me as:<p><a href="https:&#x2F;&#x2F;news.ycombinator.com&#x2F;item?id=22028732" rel="nofollow">https:&#x2F;&#x2F;news.ycombinator.com&#x2F;item?id=22028732</a>

Did you know Bill Gates owns 51% of the USA farmland? He has it safely tucked away into a trust so that his &quot;will&quot; will be law even after death.<p>I reject this.

Author should consider data for wealth and class mobility. Inequality might be rising but also there is more mobility (upwards and downwards) than there ever has been. Meaning it has also never been easier for someone in poverty to become wealthy than it is today (not saying it&#x27;s easy). And not saying things are great now or not, but mobility needs to be factored in when discussing inequality.

Such a timeless debate. The pandemic should rather teach everyone to adopt more left wing politics instead.<p>I&#x27;ve tried countless times to analyze the philosophical belief of those people, and it often is about social darwinism, a refusal to help the weak, individualism, and extending the concept of the survival of the fittest to society.<p>People at the top refuse to admit they are dominating others through opinions that favors them.<p>You would think civilization would let humans get out of their state of nature, but instead you end with people who prefer to imitate nature and dismiss the mutualistic aspect of society.<p>If that trend continues it&#x27;s expected to witness social unrest and a diminishing trust towards capitalism.

I have a feeling that the problem for a lot of middle-class people isn&#x27;t wealth inequality but lifestyle. It became normal that one has $500&#x2F;month car payment for life (which cost you around $3,000,000 over 40 years), or a 2500 sqft house for a family of 2 or 3, or credit card debt of $30,000 on a $60,000&#x2F;year income.

“Tech has made startups both cheaper and easier but only for a small percentage of people”<p>I’d really like to see cold hard data on this. As best I can tell it is false- tech has made starting a business way easier and cheaper for more people from more walks of life than at any time in history. Sure, we should work to push that to more people.

Famous historical sentence of Marie Antoinette &quot;Let them eat cake&quot; The phrase was supposedly said by Marie Antoinette in 1789, during one of the famines. <a href="https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Let_them_eat_cake" rel="nofollow">https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Let_them_eat_cake</a>

I was reading this article about the Meritocratic class reproducing itself <a href="https:&#x2F;&#x2F;www.lrb.co.uk&#x2F;the-paper&#x2F;v43&#x2F;n07&#x2F;stefan-collini&#x2F;snakes-and-ladders" rel="nofollow">https:&#x2F;&#x2F;www.lrb.co.uk&#x2F;the-paper&#x2F;v43&#x2F;n07&#x2F;stefan-collini&#x2F;snake...</a>

While there are real problems with poverty, there is also a real problem with a generation that doesn&#x27;t believe in hard work at all, exemplified by the &quot;pull yourselves up by your bootstraps LOL&quot; of the author. Hard work get you far and it is time spoiled youth in the west remembered it.

It’s a valid point that a lot of rising inequality is due to the expansion of the wealthy class as it is no longer restricted to hereditary elites but is being infiltrated by meritocratic newcomers. That doesn’t really mean labor has won though - since the average worker is not getting a better deal.

Apropos schwag:<p><i>Stop Being Poor</i> T-shirts using Paris Hilton&#x27;s likeness on various overseas ecomm platforms.

Lots of personal attacks, zero thought towards solutions. A certain class of people seem to believe attacking rich dudes online magically reduces inequality. It’s just low effort social signalling :&#x2F;<p>If you care so much, how about even considering some solutions? Should we raise the minimum wage more? Public healthcare?<p>Increasing taxes gets the government more money but does nothing to actually decide how to spend it. And given the huge amounts the govt spends on military, or covid this past year, the problem seems to be a lack of agreement and political will on <i>how</i> to spend money to effectively reduce inequality, not a lack of tax dollars.<p>It seems to me the right place to start raging is against half the government which doesn’t believe in spending money. Which in turn is supported by the ~50% of the US who votes republican and hates the idea of handouts.. so the root is a society wide disagreement, not scrooge mcduck.

The poor get poorer not because tech startups get richer.<p>If we remove tech startups, the poor wood get poorer just as fast.<p>The difference would be that there would be less tech-rich people to calculate the Gini coefficient.<p>The real question is: &quot;why poor are getting poorer?&quot;<p>It is a very complicated question involving taxes, capitalism and hundreds of broken policies and institutions, like mass incarceration that is guaranteed to make people poor.<p>Complex questions never ever have simple answers.

&gt; The rich are getting richer and the poor are getting poorer.<p>Here he understates his own point. The rich are getting richer and <i>everyone</i> else is getting poorer. The people getting poorer the fastest are the middle class.

I&#x27;m just gonna quote what I think is a very important part from the Graham piece itself<p>&gt;&quot;<i>People who don&#x27;t look any deeper than the Gini coefficient look back on the world of 1982 as the good old days, because those who got rich then didn&#x27;t get as rich. But if you dig into how they got rich, the old days don&#x27;t look so good. In 1982, 84% of the richest 100 people got rich by inheritance, extracting natural resources, or doing real estate deals. Is that really better than a world in which the richest people get rich by starting tech companies?</i>&quot;<p>And my answer to that question would be, arguably yes. Why? Because at least old money understands the concept of <i>noblesse oblige</i>. The real sinister psychological thing going on behind the Graham argument is that it&#x27;s not at all about meritocracy, it&#x27;s that this mentality of earned wealth completely rids the owner of any sort of responsibility.<p>The aristocrats and oligarchs of the olden days might have been corrupt, debauched and half-useless, but at least they knew it. This new, self-made entrepreneur class does not only think they have earned their money themselves, which as a sidenote is also kind of a fiction, but that they&#x27;re intellectually superior, morally superior and virtuous in ways that anyone else just can&#x27;t understand.<p>Old money might have ignored you and thrown a party, but Silicon Valley money wants to remake people in their images, they have a Protestant zealotry associated with their money that makes any oligarch look straight up sympathetic in comparison.<p>C.S Lewis:<p><i>&quot;“Of all tyrannies, a tyranny sincerely exercised for the good of its victims may be the most oppressive. It would be better to live under robber barons than under omnipotent moral busybodies. The robber baron&#x27;s cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end for they do so with the approval of their own conscience. They may be more likely to go to Heaven yet at the same time likelier to make a Hell of earth. This very kindness stings with intolerable insult. To be &quot;cured&quot; against one&#x27;s will and cured of states which we may not regard as disease is to be put on a level of those who have not yet reached the age of reason or those who never will; to be classed with infants, imbeciles, and domestic animals.”</i>

Tech doesn&#x27;t cause the wealth inequality gap. If anything it closes it by making the aggregate cost of goods, like raw commodities, basics,etc, cheaper (e.g. hpc for modeling shale oil drilling strategies).<p>It&#x27;s policy, like lowering interest rates, promoting financialization, driving people to invest their savings in the stock market, squeezing out basic saving strategies and causing people to seek higher and higher risk investments (while socializing the risk of the upper class) that&#x27;s driving a wedge.<p>100% of this is public policy (often in the guise of helping out main street &quot;saving jobs&quot; e.g.). Capitalism is just responding, but as always with unintended but predictable consequences.

Inequality is dangerous. When welfare was introduced in european societies some centurys ago, the main reason was security. For the rich.

It seems that the Graham&#x27;s point (a trap in which the OP&#x27;s critique falls) is that obscene riches are OK if they are not inherited. Following this logic, Hitler is better than the Queen of England because he earned his power instead of inheriting it!<p>In fact, the Industrial Revolution that he claims to be the last &quot;time of entrepreneurship&quot; created the the Dickensian&#x27;s work conditions and such a strong class divide that lead to the worker&#x27;s revolutions of the 19th and early 20th century, to the corresponding fascist counter-revolutions, and to two world wars. It is precisely in the following &quot;boring time&quot; of Keynesianism and the cold-war that the west and &quot;the second world&quot; experienced the highest sustainable growth period ever and that the masses had access, for the firs time, to minimally decent working conditions to create that thing we call &quot;the middle class&quot;.<p>So in fact, Graham is right in that we see now again, like in the Industrial Revolution, a simultaneity of great technological disruption combined with a hegemonic neo-liberal ideology. This is leading lead a new rise of world-wide hyper-concentrated capital, job instability, more and more limited access to basic goods like housing, climate catastrophe, and a new class of capitalists that believe that they are above any sense of morality.<p>There is nothing to celebrate here but more of the opposite: good reason to be really scared of the future to come.

not the same people stay in the same income bracket over time. typical fallacy when dealing with such data...

Those who do not read history are doomed to repeat it.<p>Those who do read history are doomed to misinterpret it.

What&#x27;s the solution then?

I would love to see the wealth gap broken down into liquid and illiquid assets.

Why is this only 8th on HN, when it got &gt; 700 points in 6 hours?

Isn’t it agreed upon that the Gini coefficient is misleading though? According to it, the worst inequality can be found in the Netherlands and the Scandinavian countries, just because borrowing money for a house is cheap and safe.

This thread has reached max ism velocity.

The essay is just a collection of incorrect notions pushed all over the place by the intellectuals and media. The author failed to even try to look <i>himself</i> on the real data and went with templates that were proven wrong again and again.<p>Few points: 1. &quot;The rich are getting richer and the poor are getting poorer.&quot; - author does not understand the difference between <i>statistical</i> categories and real flesh and blood people. If he did, he would have known that <i>real</i> people <i>move</i> between statistical categories over time, which makes absolute sense: you start career with no experience and debt to pay if you have a college degree, then over years you gain skills that allow you to get better pay. There is no &quot;rich&quot; and &quot;poor&quot; when judging statistical categories, because in this sense there always be newly graduated people starting their careers at lower payed jobs. That&#x27;s how the world works, you can&#x27;t get Staff Software Engineer position in Google without proving that you&#x27;re at least have skill for Junior.<p>2. &quot;Most people don&#x27;t have the safety net or mental bandwidth to even consider entrepreneurship.&quot; - Entrepreneurship is tough and definitely not for all. But, not having money at first was never a problem. Reading some history of big companies you may see that they often started on campus or in garage. Therefore main prerequisite is mental toughness, and building of something people want.<p>3. &quot;It&#x27;s less a tutorial or analysis and more a thinly veiled attempt to ease concerns about wealth inequality.&quot; - PG correctly pointed out that individuals become wealthy by creating giant amount of <i>new</i> wealth and then capturing some small part of it. For example Amazon, you use it everyday, it has the best pricing, so get immense value from it. Bezos captures some part of the value that Amazon created for all consumers.<p>4. &quot;basic needs&quot; - It&#x27;s often a tactic of demagogues to hide behind undefined terms to push their vision. Having a fridge or microwave is a basic need? Is having a car or 2 cars also a basic need? Both of these would have been considered luxuries 50 years ago, and still people were living without them. The point is that setting arbitrary standards imposed by third-parties is not <i>basic needs</i>. In this case, you could define anything as basic need and always have 15-20% of people that don&#x27;t meet your <i>arbitrary</i> standard.<p>5. &quot;a small minority of people&quot; - And again, PG provided an approach that will work for every individual. If you create something immensely valuable, and capture some small fraction of it, you get rich. If you do not create, then you don&#x27;t become rich. But, that is not the problem of society that you yourself did not create anything.<p>As is usual with such types of articles, the author positions himself on some moral high ground. He claims that his aim is to help the poor, but since the author did not create big amount of wealth and he could not donate large sums to philantropy (which wealth individuals do a lot), then the only approach is to steal money from people who created it with hard work, and give to people who did not work, did not create wealth and likely will never do.

&gt; Most people don&#x27;t have the safety net or mental bandwidth to even consider entrepreneurship. It is not a panacea for the masses.<p>Even if they did have the resources to go into entrepreneurship, if <i>most</i> people did so, they would run out of employees and markets. Not everyone can be a CEO, at some point you need workers as well, and there&#x27;s room for only so many Ubers and Facebooks before starting a new one is unprofitable.

Why exactly is the wealth gap a problem? Shouldn&#x27;t it be more relevant how well of people are in general?<p>There are so many nice number games to play, like the stagnant wages. Those usually fail to mention that the workforce has increased significantly, so the sum of wages paid has risen significantly. Buying power also tends to be not factored in. People couldn&#x27;t buy iPhones 50 years ago.<p>Also if anybody is unhappy about some tech company, they are free to not do business with them.

&quot;Give me control of a nation&#x27;s currency print&#x2F;supply, and I care not who makes its laws&quot; --Rothschild (b. 1744)

Why is this vomit on HN?

In a hypothetical society which leveled the playing field and started over again from scratch, I’d expect the two most important factors in wealth accumulation to be 1) an aesthetically pleasing facial bone structure and 2) g-factor intelligence. Lacking just one of these is enough to take you out of the game, and lacking both is all but a death sentence for your prospects of becoming a contributing member of society.<p>Both factors are almost entirely determined by a person’s genetics.

&gt; Paul paints a rosy picture but doesn&#x27;t mention that incomes for lower and middle-class families have fallen since the 80s.<p>As per the chart literally included in this piece, middle-income median wealth rose over 10% since 1983 (inflation adjusted).<p>High-income wealth rose much, much more. But the argument PG et. al. seem to make is that the economic order that drives inequality also drives economic growth overall and for the median person. Granted, China might be a more convincing example of this. Median quality of life in the US has declined in some key areas.

&quot;Paul paints a rosy picture but doesn&#x27;t mention that incomes for lower and middle-class families have fallen since the 80s.&quot;<p>Income in the US has increased for all brackets since 1967[0][1] (at least). The argument is really about who is entitled to more of the increase. But it&#x27;s framed by the charts as a zero sum: Rich gaining and poor losing. It&#x27;s not true. All brackets are gaining.<p>The actual risk is that super-wealthy use their wealth to affect political outcomes. They can influence politics, but were not elected by anyone to do so.<p>[0] <a href="https:&#x2F;&#x2F;www.advisorperspectives.com&#x2F;dshort&#x2F;updates&#x2F;2020&#x2F;09&#x2F;17&#x2F;updated-u-s-household-incomes-a-50-year-perspective" rel="nofollow">https:&#x2F;&#x2F;www.advisorperspectives.com&#x2F;dshort&#x2F;updates&#x2F;2020&#x2F;09&#x2F;1...</a><p>[1] <a href="https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Personal_income_in_the_United_States" rel="nofollow">https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Personal_income_in_the_United_...</a>

In the United States, the measures we use for income inequality are outrageously flawed<p>In almost all measures of the Gini coefficient two significant flaws exist:<p>1. Incomes are counted on a pre-tax basis<p>2. Incomes are counted on a pre-government transfers basis<p>The consequence of this is that income inequality appears to be increasing _regardless_ of the level of social subsidies and redistribution.<p>When you correct for these measurement flaws, income inequality in the US has been decreasing over recent decades.<p>If you are in the “Tax the Rich” camp as a result of looking at the Gini coefficient, you may need to strongly update your priors.<p>Sources:<p><a href="https:&#x2F;&#x2F;www.wsj.com&#x2F;articles&#x2F;incredible-shrinking-income-inequality-11616517284" rel="nofollow">https:&#x2F;&#x2F;www.wsj.com&#x2F;articles&#x2F;incredible-shrinking-income-ine...</a><p><a href="https:&#x2F;&#x2F;www.economist.com&#x2F;briefing&#x2F;2019&#x2F;11&#x2F;28&#x2F;economists-are-rethinking-the-numbers-on-inequality" rel="nofollow">https:&#x2F;&#x2F;www.economist.com&#x2F;briefing&#x2F;2019&#x2F;11&#x2F;28&#x2F;economists-are...</a>

There are a lot of people in the comments here pointing to environmental or exogenous factors, things that &quot;aren&#x27;t your fault&quot;: where you&#x27;re born, family obligations, stress levels and their effects on cognition, the behavioral economics of risk and scarcity, shocks for the poor vs. the wealthy, and a host of other things.<p>These things are real. However, I want to point out that there are other very real things going on too. Particularly, there are real, and strong, effects from natural selection. The people who tend to succeed really are smarter, harder working, healthier, stronger, etc. The natural selection at work is obvious to any scientist thinking about it, but it&#x27;s difficult or impossible to talk publicly about it these days. Hating on such an obviously true thing in order to show off to your friends is unfortunately very trendy :-( This is a problem because it means we look for invisible boogeymen rather than having a correct understanding of the situation and going from there.