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Comment by emmelaich | Hacker News Reader

"Economic inequality may be caused by good things, but it is still bad"

I think you're still making the same error as those primitive responses, because you're making that statement without qualification.

I suspect you don't realise how extreme your statement is percieved with the lack of qualification.

If one farmer works harder than the guy next door and becomes richer as a result, how is that bad?

If someone earning more than the median gets a payrise, they're contributing to poverty as defined in some countries.

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If one farmer works harder than the guy next door and becomes richer as a result, how is that bad?

It isn't. But if one farmer works harder than another, wealthier farmer, and the wealthier farmer makes 1000 times more than the harder working farmer, that is bad. And that is how the system currently works: we systematically reward people for being wealthy, regardless of any personal qualities or talents. And whereas there is a natural upper bound on how hard you can work, or how clever you can be (we're all human beings, after all), there is no upper bound on how wealthy you can be, and therefore no upper bound on the advantage you can be born with. It's tough to work 1000 times harder than someone else, but trivial to earn 1000 times more from investments if you have 1000 times more to begin with.

Two questions:

-) Sergey Brin is worth $35,000,000,000. Has he worked 35,000 times harder or smarter than the 40-year-old Doctor who earns well and has scrimped and saved to $1m in net worth?

-) Let's say you'd told Sergey - just as he was starting Google - in 20 years' time you'll have $10m in the bank from this. Do you think that would have encouraged or discouraged him?

Brin has arguably created significantly more value than the 40-year-old Doctor. A doctor who likely uses Google to research medical information on a daily basis (as well as uses it for looking up personal information), possibly using a Google device, who gets from place to place using Google Maps, and searches for information for his next published paper on Google Scholar. (and so on, even putting aside the recent expansion of Google into Medical technology).

There's a huge difference between 'significantly more value' and literally thousands of times more value. Had Brin been content to continue in academia after publishing his original research, and left the implementation and the riches to someone else, would we say that he had contributed virtually nothing? It's a myth that our economic system rewards people in direct proportion to the value they create.

Sure he has. Do you still think he'd have created it if he'd known final pay-out was a fraction of what it was? I suspect so...

I see your point, but it wouldn't have been possibly for him to build Google had it not been for people with MUCH more than $10M in their bank account to bankroll his growth.

Sure it would, many smaller investors would have had to be found - it would have spread the wealth.

As someone who's tried funding a company that way, I can tell you it doesn't work.

Companies like Google, Facebook, Dropbox and Airbnb all looked like crazy ideas to begin with. Ordinary people with limited funds shouldn't be investing in companies like these, as they fail far more often than not.

It's only due to the existence of high-net-worth individuals, who can afford to lose money on most of their investments and who have a "pay it forward" mentality, that these companies can get their start.

If the returns for people Page and Gates and Zuckerburg were capped at $10M, there's a good chance they wouldn't bother.

For people like this, the goal is not personal enrichment but rather the ability to better the world, not just via their products, but also through philanthropy.

Take away the blue sky returns, and you take the motive that is most beneficial to the rest of the world.

> Take away the blue sky returns, and you take the motive that is most beneficial to the rest of the world.

I feel this to be the primary reason we have the technology and infrastructure we do today. Take the Robber Barons, for example, their pursuit of endless returns gave us the railroads, electricity for the masses, and cars. I guess the point is there is good with bad in everything. Sometimes the good outweighs the bad. That's how I am interpreting PG's original wealth inequality essay.

And what of their loses? VCs don't make just returns - they make loses as well.

"Person X doesn't deserve their amount" does not equal "taking away person X's return would help reduce poverty".

Why even use the word, "deserve"? It seems like this is a pathway to entitlement. Wealth is created, not distributed.

Wealth is both created and distributed. No one in modern life creates value in a vacuum, it is always in concert with many other people, past and present. And aside from governments, no one makes their own money---they get it from other people, in proportion to the value that those people perceive they're getting in return. And this value exchange all rests on top of a system of laws and culture, none of which is in the direct control of the individual. On a day-to-day basis in modern society, wealth distribution is a much bigger force in an average person's life than is wealth creation.

Would investors have invested if the possible return had been a fraction of what it was? That's a far more dubious prospect.

It's dubious only if the potential return is much less than the alternatives. Assuming that the same inequality-reducing mechanism is operating across all the potential investments, their behavior would be unchanged. Investors are looking for the best available return on their investment, not some arbitrary fixed value.

"I invented nothing new. I simply assembled the discoveries of other men behind whom were centuries of work. Had I worked fifty or ten or even five years before, I would have failed. So it is with every new thing. Progress happens when all the factors that make for it are ready and then it is inevitable. To teach that a comparatively few men are responsible for the greatest forward steps of mankind is the worst sort of nonsense." - Henry Ford

Yes, Sergey Brin has worked 35,000 times smarter than the Doctor. I know this because the market has valued his share of his creation at 35B.

I assume you also 'know' that the founders of Etsy are 75% less smart now that the market valuation of Etsy is 25% of its high. Market valuation measures nothing but what someone will pay for something today. It doesn't measure how smart or hard you worked.

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