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> Another way to reduce envy is to realize that, ultimately, it's luck all the way down. There are plenty of talented, hard-working people who will never see even moderate success

Realizing that it's luck all the way down only reinforces my opinion that the wealthy pay a pittance in taxes relative to the value they get from our society. Those talented, hard-working people who will never see success deserve affordable healthcare, a functioning safety net that allows them to overcome difficulty and take chances, equal education opportunities for their kids, and a hope for a retirement that doesn't require giving up everything or overburdening their families.

Unhappiness that we (in the US at least) are not on that path is more than envy.

This is always my argument for why wealthy people should pay quite a bit of taxes.

No matter what system we have, SOME people are going to be advantaged by it. We can't always know with certainty beforehand who are the people who are going to be advantaged, but we have a pretty good idea that the people who make a shit ton of money were advantaged in some way. So lets have them pay more than what would seem to be their share, since things were clearly set up with advantages for them.

> Those talented, hard-working people

I can assure you that most people in the world have neither of those attributes.

Considering these attributes are relative by definition, it's a fact that half of the population is harder working than average, and half of the population is more talented than average. But when you add in the context that there are numerous ways to be hard working or talented (e.g. someone may suck at reading, but be an extremely disciplined bodybuilder), it becomes pretty much a guarantee that the majority of people are talented or hard-working at something.

Hey, check out Mr. Talent Measurer over here.

> Rather, it's a result of the depth of the value we provide

The market's notion of value is weighted by wealth and therefore so far from the everyday or philosophical notions of value that it hardly deserves the term. Example: finding a reason to deny someone's health insurance claim is "valuable", feeding a starving poor person is not.

> feeding a starving poor person is not.

Monsanto has made plenty of money feeding the world, including poor people. The key is to do it at scale. Even though some of their tactics and products are controversial, they have probably made the most headway in eliminating hunger as any other organization in history.

The fact that the market places near-zero value on feeding poor people rather than exactly zero is not a ringing endorsement of its priorities.

Also, I'm not at all sure the value proposition they see in being charitable in the tail of their price grading (i.e. no terminator genes) is market-driven. It could quite plausibly be driven by fear of government intervention -- or even, possibly, compassion.

   the everyday or philosophical notions of value that it hardly deserves the term

https://en.wikipedia.org/wiki/Subjective_theory_of_value

> instead value is determined by the importance an acting individual places on a good for the achievement of his desired ends

https://en.oxforddictionaries.com/definition/value

> The regard that something is held to deserve; the importance, worth, or usefulness of something

Seems to fit

I’m not sure I understand your comment. Do you mean to say that you think the market’s notion of value DOES align with the importance acting individuals place on a good / importance worth or usefulness of something?

How could this possibly be true when the majority of wealth is held by a minority of individuals?

It’s contradictory. A majority of people are incapable of expressing their values through wealth dispersion. If you assume that wealth dispersion is an expression of value, then by definition wealthy individuals are disproportionately able to express value.

  How could this possibly be true when the majority of wealth is held by a minority of individuals?

You went from value to wealth too fast. And this catchy sentence is only true because some statistical institution said so. Read De Soto about dead capital : http://www.thepowerofthepoor.com/concepts/c6.php

> The developed world has devised a formal property system of titles, title registries, and inclusive property law that includes real estate used for homes or businesses. We in the West take that system for granted, probably because it is invisible to us. De Soto shows that this is in a large part why some nations are rich while others remain in poverty.

   then by definition wealthy individuals are disproportionately able to express value

How do you think "everyone able to fairly able to express it's own value" would work ?

> How do you think "everyone able to fairly able to express it's own value" would work ?

I don't believe this is possible; it seemed like that might be what you were suggesting. I wasn't sure what point you were trying to make with your links and "seems to fit" comment in response to the "markets notion of value" correlating to wealth, but I also wasn't sure that I was correctly interpreting your comment.

Rather, it's a result of the depth of the value we provide and the number of people we provide that value to. Outcome > input

Not really. It’s mostly family connections.

According to https://www.cnbc.com/2014/10/03/two-thirds-of-billionaires-m..., about 2/3 of billionaires have self-made fortunes.

So clearly family connections help. But that doesn't appear to be most of the picture.

> According to https://www.cnbc.com/2014/10/03/two-thirds-of-billionaires-m..., about 2/3 of billionaires have self-made fortunes.

> So clearly family connections help. But that doesn't appear to be most of the picture.

That's a very simple view of the OP's statement - notice that OP did not say inherited wealth, but instead 'family connections'.

For example, if you received personalized advice to invest a lot of money in a business that later became wildly successful, are you a self-made individual? There are even more subtle examples of how relationships can lead to wealth.

Anyway, perhaps a better analysis is asking what happens to children who grow up either in poverty or in wealth: https://www.nytimes.com/interactive/2018/03/19/upshot/race-c...

If someone tells you to buy something and you risk your money you are responsible and can claim you are self-made. There is a lot of free advice if you followed all of it you would probably be broke or dead.

If you have access to someone is giving out good investment advice, you are better off than 99.9999% of people.

It's as hard to know whether the person is giving good investment advice as it is to give good investment advice yourself, though. So generally, it's not very helpful.

...doesn't this just reinforce that having family connections matter more? Are you more likely to follow the advice of your family or some stranger? If your family connections have insight and/or inside knowledge of markets, aren't you more likely to accidentally take good advice than the average joe? You're still not immune to bad advice, but you have a higher percentage chance of having higher quality information to act on.

> are you a self-made individual?

Yes. You took the risk. The rewards are yours - and if you fail, nobody's going to bail you out.

Is Bill Gates self-made? Or was it the fact that his father could cut a $25,000 check on a whim?

Having lots of ready liquid cash gets you the ability to make deals that normal people do not have access to.

You don't even have to be that rich. Take a look at Craigslist at the end of the month before rent is due.

>> Is Bill Gates self-made? Or was it the fact that his father could cut a $25,000 check on a whim?

And his mother had good connections with the IBM board, leading IBM to give the operating system business to Bill .

Everyone has certain advantages, one of the keys to creating value is to leverage those.

The public & press love rags to riches stories, so even someone without any of the traditional 'advantages' can leverage that for publicity, fundraising, etc. And many independently wealthy business-people have.

And yet IBM went to Digital Research first, and DR couldn't close the deal. Of course, Gates was already successful when IBM came by, and there's no reason to believe he wouldn't have been greatly successful with or without IBM.

Lots of people can get 25,000 and anyone can get that amount if there was a billion dollars payoff at the end.

Millions of people started a business with at least 25,000 and there are only a few billionares, most lost it all but some made a living and some got richs.

Millions more were never given the chance, because they couldn't get that kind of funding.

> Is Bill Gates self-made?

Yes.

> Or was it the fact that his father could cut a $25,000 check on a whim?

There are millions of Americans like that, and only one Bill Gates.

There's no evidence, either, that his father bought the success of Microsoft. The early success of Microsoft did not require anything more than rather trivial amounts of cash.

His father was a partner in a top Seattle law firm and his mother is a regent of the University of Washington and a director of Pacific Northwest Bell. You think that didn't give him any business advantages other talented programmers didn't have?

His mother is credited in her obituary with pulling strings to get him the IBM contract: https://www.nytimes.com/1994/06/11/obituaries/mary-gates-64-...

"Her tenure on the national board's executive committee is believed to have helped Microsoft, based in Seattle, at a crucial time. In 1980, she discussed with John R. Opel, a fellow committee member who was the chairman of the International Business Machines Corporation, the business that I.B.M. was doing with Microsoft.

Mr. Opel, by some accounts, mentioned Mrs. Gates to other I.B.M. executives. A few weeks later, I.B.M. took a chance by hiring Microsoft, then a small software firm, to develop an operating system for its first personal computer."

Sure, Microsoft was on a nice trajectory, and there is no doubt that Bill Gates is smart.

However, that $25K check is the difference between Microsoft being a solidly growing company up against someone else that IBM anointed vs Microsoft is the anointed one.

$25K was about 5x the price of a car at the time. That makes it about $150K in modern dollars.

How many people can cut a $150K cash check because their kid says it's a good idea? Even most "millionaires" can't cut a check for cash at that level.

Starting a restaurant easily can cost $25K in those days. Yet people did it all the time.

Don't overlook that Microsoft was IBM's second choice. Their first was Digital Research.

And lastly, I haven't been able to find any evidence that Gates Sr. funded Microsoft with at $25,000 check. Citation needed! Certainly there's no mention in the book "Hard Drive", and my recollection is that he started MS with $5,000.

There's nothing Bill Gates did at the time that a very, very large number of people could have done, if they'd only thought of it and had been willing to risk it. I knew many computer people at the time, and they dismissed PCs as toys and saw no future in them. Including many who had money to invest in such a startup.

That amount of cash is not trivial for the vast majority of Americans.

Millions can do it, rendering the notion that that was what enabled Bill Gates to be a zillionaire absurd.

And then there are all those millions buying houses for over $500,000, and $30,000+ cars, who could invest $25,000 in a business instead. But that's why they aren't Bill Gates - they made different choices.

There are vastly more people with access to $25k in cash than there are people who end up making an impact as large as Gates had. It still takes an enormous amount of work and savvy to pull off what he did.

Gates seemed to be the only one who understood the value of DOS initially. Not you, not I, not Gary Kildall, not IBM, not Tim Paterson.

There were thousands of other people involved in the industry at the time. Many of them understood the future value of personal computer operating systems.

Any idea how he got to that unique understanding? Is that something we can learn from?

If you read http://gunkies.org/wiki/Gordon_Letwin_OS/2_usenet_post closely you'll understand the key business insight about the value of platforms that underlay a lot of Microsoft's success. And further see how Microsoft's continued success required a series of good decisions that capitalized on the famous lucky break.

If I knew how, I'd be a billionaire myself :-)

Sure. But if he didn't have access to that money, would he still have been able to do that?

Yes. An aggressive entrepreneur like Gates would be able to rustle up a few paltry thousand in investment capital. People do it all the time.

That is a necessary but not a sufficient condition.

His personal connections and family wealth were a lot more significant than one loan.

Billionaires are the outliers among wealthy people. Its hard to connect what they did or are doing, to anything that most people will ever know or experience.

https://imgur.com/a/Bu8iLiz

Yeah citation needed

Unless all the scholarly work on “how is value determined” attempting to define this is wrong. Did we just solve it on a web forum by accident?

Short answer is there isn’t an answer that’s reliable except “networking and feelings” making it seem arbitrary

Economics and Wall Street are not free markets for ideas. They’re on rails financial walled gardens. One must recite the theories and have the right keys (money) to gain entry

Nothing about the system is objective

You do realize that 80% of people worth >$1 million had parents that were not millionaires right?

I suppose it being luck all the way down would reduce envy in some people, but I expect it will make it much worse for others.

If it's all luck, then why aren't we equally "lucky" if we just sit around watching TV?

First, there's nothing in the definition of luck that says it gets spread around equally. That would be uniformity, but luck is about randomness, which is (by definition) not uniform.

Second, when you say "sit around watching TV," I presume you're saying that hard work leads to success, and implying that hard work is not luck. I agree with the first part and disagree with the second. What makes someone a hard worker? What makes someone intelligent? Attractive? Likable? Talented? If you keep asking why, and you keep retracing a person's history back to the beginning, then the answer invariable boils down to some lucky combination of genes and environment/experience. Even your ability to improve upon the hand you were dealt in life depends entirely on… the hand you were dealt in life.

All you're doing is making excuses for people sitting around watching TV being just "unlucky". Your life is by and large the sum of your choices.

If you read my post, you'll see that I'm not denying the existence of those choices, but I'm pointing out that those choices are the inevitable result of genetic and environmental factors that nobody ever decided on.

> I believe that understanding this makes us less jealous of people who seem "undeserving," and also helps us make better decisions in our own careers.

oh no, now I'm just jealous they were able to convince people of the value of their vapid bullshit.