Hacker News Reader

Comment by an0malous | Hacker News Reader

Productivity gains have mostly gone to the investor class, they’re not only not working but making more for not working than they ever have. Elon could go sniff glue for a day and he’ll make more money than most of us would working 10 jobs for the rest of our lives.

View on HN

You don't need investors for this. Example from a non-profit that does R&D, café and music events (and has no investors per its NPO status): no matter how much faster R&D work can be completed, the work hours will never be reduced as this would be unfair to all the other teams. If work gets completed faster it just means that more projects will come in to fill the free time.

Can you define what you mean by “investor class”? I invest in companies and am relying on it to retire one day.

It means not you.

Clues specially being

1) you hope to RETIRE

Ie be able to not work

2) you HOPE to retire

Ie it’s not certain

Well I have enough to retire now, but either way I was just curious - the definition doesn’t seem to meet the word being used, so I just wasn’t sure if this was some new thing or an overzealous use of the word.

People who make money based on what they own, rather than what they do. When you retire, you could arguably be there but it's not what most people mean.

What do you mean by "own"? Are self-employed people included? What if the business is worth negative money?

Literally things like stocks and real estate and cryptocurrency. Imagine Realpage or Bending Spoons.

Then that depends on the corporate structure. If you have personal liability, that means you net worth would be directly impacted and you are personal liable for the business debt. However, if its structured as limited, you could bankrupt the business and the debt of the business get wipe out. In this case, your loss would be limited to the initial investment.

It depends how you separate your personal wealth and the business's

Unsure if you're being deliberately obtuse, but a consultant working for a sole proprietorship is technically making money off a thing they own but they're also still clocking in every day and doing actual work, typically for a third party.

It's a pretty clear separation between those who spend 30+ hrs per week working and those that spend the majority of their waking time "networking" (attending conferences, playing golf, traveling, whatever) with the occasional board meeting or office hours type meeting as the only part of that which looks like a regular job.

I think it's a bit of a continuum based on the degree to which someone is paid for work they do vs how much they are paid for their position and assets. I think if the business can keep running for a good while without them doing much and they aren't likely to lose their job for it, then they're more of an owner than a worker. I'm sure there are caveats on that.

If you work and are paid by the hour you're not concerned do not worry

https://files.epi.org/charts/img/235212-28502-body.png

That still sounds like every retired person in the US - I’m really not trying to be facetious here, I just don’t know if this is a use of the word I personally don’t see often, or if it’s really that people are somehow against the common ownership of stock.

To be clear, I do not support the disparity of wealth, I’m literally just trying to make sure I understand people…

I do suspect that more people retire and retire for longer now than 1973.

Yes, earlier or more lavish retirements are part of where the productivity is going.

Is your primary income a salary? If yes, Then you are not in the investor class

So many people here are brainwashed that the next big thing will make them a billion.

There was an ask HN thread the other day. In which someone notable had posted a vibe coded project.

Literally two days later, some nobody vibe coded the same thing, but slightly different and was absolutely shocked that their post wasn't getting any traction.

The stupidity is genuinely shocking at this point.

Would be interesting to see links.

I would define it as the class of people who make their money primarily through capital gains

If you care about what number is on your W2, then he's not talking about you.

https://en.wikipedia.org/wiki/Bourgeoisie#Marxist_theory

And who invested in everything that made the productivity gains possible?

And who did the work that made the investment returns possible?

People who got paid for their work/time?

The issue is the relative degree to which the worker and investor get paid, as well as the risk they take. It's not a law of nature, societies can decide this democratically.

Did they get paid for their work? Or did their employer keep part of their pay while engaging in wage suppression?

"But that's illegal!" Yes. It doesn't matter because wage theft is the largest class of theft in the US. If nobody stops you, is it actually illegal?

And why should investors get a perpetual part of the profit after buying in once and labour has to keep providing labour every single day to get paid?

Because labor takes no risks. You work an hour, you get paid a wage. Investor might lose everything they put in. See the dot-com crash or any startup that goes bankrupt.

If investors could not profit they'd just put their money in a vault.

Labor takes no risks? Hahahhahaha! Career risk looks exactly like capital risk, with the big difference being that it is uncompensated.

I think investors deserve a return on their investment but the system is also heavily rigged in their favor. They get bailed out for bad investments, they pay lower tax rates, they have many mechanisms to avoid taxes altogether, and systematic inflation favors investors over laborers.

With the stock market, anybody can be an investor. It really should be a core part of modern life to own stocks.

I agree that it should be normal for every one of us to own parts of every company, but probably not in the way you mean.

everyone would own parts of nothing since no one would take the risk to start a company just so a bunch of freeloaders can own a part of it

I know at least one person who would still start something.

Should be? Like, it's effectively forced on people because you can't effectively fund a middle-class retirement without relying on stock-market-like gains, but there's no intrinsic reason that corporate shares should be a core part of modern life.

Isn’t “external motivation” good enough of a reason to buy stocks? (Or index funds)

All the effects in the parent comment favor the wealthy investors and huge companies over individual investors. Then the finishing blow is 'money makes money' with the compounding of investments and normal workers being naturally forced to spend a far higher proportion of their savings on survival and immediate expenses, which greatly reduces how much they can benefit in the first place. Sure, investing can still give you an edge compared to other people like you, but it does not right the wrongs of the system we're living in.

To some/a fairly large degree, wealth fits a log-normal distribution[1]. A log-normal process is the statistical realization of the multiplicative product of many independent random variables[2]. When we take that as returns are a product (in a multiplicative sense) of investment, the result flows naturally. The basic multiplicative nature of investment returns is a direct cause of our wealth distribution - it couldn't have been different. Want a different wealth distribution? Use a different investment process. Good luck. The political machinations required to do that are left as an exercise to the reader.

1. Upper ranges more closely match a pateto distribution. For.the purposes of this argument, I don't think that is too relevant, but willing to change my mind.

2. https://en.wikipedia.org/wiki/Log-normal_distribution

I have like €150 in my bank account bro

But you are no doubt filled with joy that the stock market is booming and gdp is up and other metrics that we are told are what’s important.

I'm pretty sure Germany is in a recession.

When one person is born into life with $1 and another is born into life with $5,000,000, no amount of "you can just buy stocks too" can be fair.

You can even buy national bond to get a share of the sovereign debt, but does that mean anything?

Well, besides from it is deemed as what the bankers call it "risk free rate", but I have already started to challenge this assumption 6 years ago

Gambling should be a core part of life? Sounds unnecessarily stressful and risky. Most gamblers I know don't come out ahead.

That by itself seems fine.

I think the problem, trying to be as objective about it without taking sides, is that you make more money the more money you already have. This leads to runaway wealth inequality, which leads to civil unrest and eventually violence.*

If we at least didn't have all this systemic rigging in favor of the investor class, the wealth inequality would at least be less severe and maybe low enough for a stable equilibrium.

I'm not an economist but I would guess that you need the return on capital to be closer to the return on labor, and when they're about equal you have a stable distribution of wealth.

I am a rentier, an investor. I haven’t worked in any conventional sense for over a decade now, and I keep getting richer.

The system is rigged. I pay less in tax than someone earning a quarter of my income through their labour. It isn’t fair. It wasn’t fair when I worked, and it isn’t fair now - and that’s why I absolutely incinerated my 20s on the pyre of 60 hour weeks, year-round, as I realised that working for a living is a fucking trap, and only by living like a hermit, working like a slave, and getting really damn lucky can you climb out of the crab bucket.

It only gets more unfair the richer you get. I only need to increase my worth by about another 30%, and then I pay no taxes at all.

I do compensate through altruism and charity, but equally, I could choose not to - and again, it is not fair that I have that luxury.

And I don't think that in itself is even bad if you see society on a road where one day no one has to perform labor anymore and some people get there earlier than others but the system is fair. The problem is that the system is not fair and routinely rigged for the investor class.

And what historically happens when a small advantaged class presses their advantage so far that the lower class is unable to sustain a reasonable standard of living?

The lower class starts borrowing from the haves to survive. My only hope is that the idea of debt bondage doesn't start making a comeback in a generation or two.

People in the US are getting cash advances to buy groceries with mobile apps with massive interest rates.

We already have multi generation mortgages. We’re well on the way back to feudalism with wealth concentration

The problem is that the payout is unbounded. Yes, their initial investment was important. But most of the productivity gains after that investment was not directly their work, yet they claim all of that as well.

Bonus points if they invest some of those gains into lobbying for regulatory capture to make it difficult or impossible for some of those workers to strike out on their own and compete.

The US, where unbridled capitalism, at any cost, in all fields of endeavor, is the goal - from healthcare to education to private prisons.

"Investment" is just an abstraction that we've created to manage resource allocation. If people with wealth didn't "invest" in a way that's productive to society, society can choose a different method of resource allocation that doesn't involve those people having the ability to invest.

Actually science and universities which are funded by tax payers made most possible and public money (look at space x).

History shows most innovations would have happened anyway without big dependence on individuals, which is overrated most of the time.

Humanity really doesn’t need billionaires

So you mean giving a little money and resources should grant you a perpetual license on being the vampire to suck the living soul out of the thing you "invested" in

Don’t forget that technology development is a spectrum. A lot of the basic research that laid the groundwork was funded through public investment. Then the VCs and BigCos come in when the technology is mature enough to be worth the risk of investing in tech transfer to take it all the way to a real product

When I think of investor class, I think mostly of those who inherited their wealth.

It's the ability to not work a day in one's life because of inherited investment.

For example, I don't consider Jim Simons to be in the investor class.

Nothing prevents any of us from similarly figuring out how to make a money via investment.

But Simon's descendants are in the investor class.

They are not the ones who invested to make those productivity gains possible.

In fact those descendants may not even understand what "productivity gains" mean.

This glue sniffing you talk about, does one HAVE to be an investor to partake? (Asking for a friend)

Also I am going to be in the alleyway with a bag of glue if you’re keen. But I am not going to make any more money as I called in sick to work.

Where do you think productivity from extending our lifetimes with advances in medicine and biology will go? Oh, you thought by extending our lives, we'll be enjoying it more? No. We'll be just working more.

Altered Carbon already answered that question.

Reply on news.ycombinator.com