Wealth Distribution in the United States(righto.com)
righto.com
Wealth Distribution in the United States
https://www.righto.com/2024/10/wealth-distribution-in-united-states.html
125 comments
Author here if anyone has questions. This is a bit different from my usual posts...
Have you tried plotting it in log scale?
Why? So massive differences in wealth look significantly smaller? By graphing this in log scale you are admitting there is an "exponentially growing delta between rich and poor" and log makes it easier to even visualize (which is insane to begin with).
xenocratus(3)
Now, it looks almost like a binomial distribution. Yet, an Uber driver may not feel like being in the same bucket as someone worth $499M.
The diagram makes the point but misses subtlety.
The diagram makes the point but misses subtlety.
Disagree, the point is to visually show there is an exponential difference between LITERALLY EVERYONE (uber driver to Google engineer to VP) and like 100 people who have insane amounts of wealth. I agree Uber driver is not in the same bucket, but the way to fix it isn't going after VP its going after the other hump in the binomial where the wealth is being hoarded for generations.
vorpalhex(5)
I think the diagram on a linear scale makes the stark point that to Elon Musk, there is not really a difference between someone worth $499 and someone worth $499M, even though to me there is a massive difference between those people.
Additional wealth has diminishing marginal returns, obviously.
No, according to economic theory, the law of diminishing marginal utility generally does not apply to money. Please cite a source that says having more AUM somehow decreases potential yield. Sounds retarded. People say stuff that needs evidence then say obviously like its a source.
I think GP doesn't mean "returns" as in investment returns. I think they're talking about like... living. The utility of buying a second (or tenth) house/car/whatever is drastically lower return than the utility of buying your first one.
However, the utility of money starts to drastically increase once you reach a tipping point where it can start allowing you to wield real political power.
The graph of monetary utility may look like a logarithmic graph at first glance, but that's just because it's more like a C1 + (x-C2)^3 graph where you haven't followed x far enough to the right.
The graph of monetary utility may look like a logarithmic graph at first glance, but that's just because it's more like a C1 + (x-C2)^3 graph where you haven't followed x far enough to the right.
Eh, it's not that linear.
Remember when Michael Bloomberg spent 500 million dollars to be on the Democratic debate, and Elizabeth Warren burned that money down with a single zinger?
https://www.youtube.com/watch?v=QD4csGWPo6o
Remember when Michael Bloomberg spent 500 million dollars to be on the Democratic debate, and Elizabeth Warren burned that money down with a single zinger?
https://www.youtube.com/watch?v=QD4csGWPo6o
"The Marginal Utility of Income"
> We have thus confirmed the (cardinalist) assumption of nineteenth century economists that marginal utility of income declines with income.
https://cep.lse.ac.uk/pubs/download/dp0784.pdf
People say stuff that needs evidence then say "according to economic theory" like its a source.
(fwiw I agree that this isn't a good argument for a log scale)
> We have thus confirmed the (cardinalist) assumption of nineteenth century economists that marginal utility of income declines with income.
https://cep.lse.ac.uk/pubs/download/dp0784.pdf
People say stuff that needs evidence then say "according to economic theory" like its a source.
(fwiw I agree that this isn't a good argument for a log scale)
oops, this thread's just been censored off the front page, better luck next time
Yeah, the "controversial" filter kicked in because the post has more comments than upvotes. I reverse-engineered the HN algorithm a few years ago: https://www.righto.com/2013/11/how-hacker-news-ranking-reall...
why?
Why is it dropping, or why 'better luck next time'?
The former is easy to answer. It's a hot, emotional topic and getting comments way faster than it's getting upvoted.
The former is easy to answer. It's a hot, emotional topic and getting comments way faster than it's getting upvoted.
I meant why "censored". I guess I don't know how the algorithm works - I guess being downvoted or flagged.
I don't think it's getting censored intentionally, in the sense someone is taking that action specifically. It's falling quickly off the front page because the algorithm is biased against this kind of discussion. If it was getting killed by flags it would end up saying [flagged] in the headline as it disappeared. And you can't downvote submissions, so it's inferred from lack of upvotes.
Um, anyway for me to put in my money and see where I rank? I'd just love to know how bad things really are.
I thought having a hundred billion dollars was basically unfathomable just a few years ago.
Now I'm pretty sure we will see the first trillionaire in the next decade
Now I'm pretty sure we will see the first trillionaire in the next decade
It’s worth keeping things in constant dollars for those kinds of comparisons.
In 1999 Bill Gates was worth the equivalent of ~187 billion dollars today. 25 years later Elon Musk is worth ~269 Billion and Zuckerberg is worth ~206 Billion.
None of these guys gets close to the robber barons in terms of share of total assets though.
In 1999 Bill Gates was worth the equivalent of ~187 billion dollars today. 25 years later Elon Musk is worth ~269 Billion and Zuckerberg is worth ~206 Billion.
None of these guys gets close to the robber barons in terms of share of total assets though.
Yeah I want to say it was Rockefeller who is the richest guy in history. He'd be closing in on half a trillion dollars in today's money IIRC. Perhaps we should rank wealth as a percentage of GDP for somewhat more accurate comparisons.
Rockefeller had $1.4 billion in 1937, which works out to $31 billion in 2024 dollars after adjusting for inflation. Ranking wealth by percentage of GDP doesn't really make sense. Otherwise, I could move to a small island like Tuvalu and become richer than Bill Gates by fraction of GDP.
Fraction of GDP within the same country makes more sense when talking about how much land someone can purchase or their ability to influence politics. Standard oil was broken up in 1911 which significantly reduced his power but not his nominal wealth. Each of those entities was still generating significant returns.
Fraction of GDP doesn’t translate that well when talking about different countries for obvious reasons but for billionaires global GDP isn’t a bad metric.
Fraction of GDP doesn’t translate that well when talking about different countries for obvious reasons but for billionaires global GDP isn’t a bad metric.
I think this speaks to the difficulty in adjusting for inflation over such a long period of time.
I have no dog in the race, personally, but historians routinely put Rockefeller up as the top or among the top richest Americans in history. I do disagree with your assertion that GDP is invalid. You could indeed move to Tuvalu, and you'd be the richest person in Tuvalu by fraction of Tuvalu's GDP. Unless Bill Gates also moves there.
I have no dog in the race, personally, but historians routinely put Rockefeller up as the top or among the top richest Americans in history. I do disagree with your assertion that GDP is invalid. You could indeed move to Tuvalu, and you'd be the richest person in Tuvalu by fraction of Tuvalu's GDP. Unless Bill Gates also moves there.
> Now I'm pretty sure we will see the first trillionaire in the next decade
Not if we do the right thing and switch to labeling our large numbers using the "long" system. Then they'll merely be back to being "billionaires" (instead of milliardaires) despite having the net worth you were discussing.
Not if we do the right thing and switch to labeling our large numbers using the "long" system. Then they'll merely be back to being "billionaires" (instead of milliardaires) despite having the net worth you were discussing.
I look at that graph and think that on the one hand Musk must feel pretty good being on top. On the other hand, though, most of his wealth is tied up in an single incredibly overvalued stock and when the market corrects that interpretation he won't be anywhere even approaching the top. I'd feel much more comfortable being someone like Gates or the Waltons.
Even with those fluctuations, you can live (more than) comfortably with those $100 billion (probably). Unless you're being sarcastic
Not sarcastic, just looking from a particular perspective. My suspicion is that people with such wild amounts of wealth are way past caring about the material pleasures associated with it and focused on the game. He with the biggest number wins.
In that sense, comfort is about the odds of staying the winner for any length of time, or being unthroned by someone else because you have all your game pieces in one basket.
From the perspective of actual comfort, I assume most of us could be quite comfy with a net worth of a few million. Especially the bottom 90% or so.
In that sense, comfort is about the odds of staying the winner for any length of time, or being unthroned by someone else because you have all your game pieces in one basket.
From the perspective of actual comfort, I assume most of us could be quite comfy with a net worth of a few million. Especially the bottom 90% or so.
Mayan economy: Sacrifice your K wealthiest individuals yearly to ensure prosperity of your economy on the years to come. Those sacrificed must give away 90% of their money.
For the individuals shown in the graph, this buys about $6k per American (and after the first year you can't do it again).
That doesn’t sound too bad since currently it’s only a $0 payout
It occurs to me that if you charted a distribution of political power (pick your metric for that…) it’d look about the same.
A few thousand state and federal officials, rich businessmen with influence, lobbyists, union leaders, …
At the far right you’d have governors of large states, Supreme Court justices, Congressional committee chairs, the President.
Nobody seems to get too worked up over this, it’s the system we’ve chosen. But as a group the folks on the far right of that distribution exercise and have exercised way more critical leverage over the state of my life—during Covid, say—than Larry Ellison and the Walmart heirs.
A few thousand state and federal officials, rich businessmen with influence, lobbyists, union leaders, …
At the far right you’d have governors of large states, Supreme Court justices, Congressional committee chairs, the President.
Nobody seems to get too worked up over this, it’s the system we’ve chosen. But as a group the folks on the far right of that distribution exercise and have exercised way more critical leverage over the state of my life—during Covid, say—than Larry Ellison and the Walmart heirs.
I’d argue that more so than anyone alive having “chosen” this structure, it’s what the structure itself wants to perpetuate. Eg people who go to elite colleges tend to see elite colleges as a reflection of “the system working” or whatever and view other concerns other than perpetuating this as secondary concerns. Same with government jobs, industry, etc etc.
Singling out COVID is misleading because of the short timeframe. Overall I’ve been more impacted by Jeff Bezos or Bill Gates choices than any single president in my lifetime.
A President has limited power for 4 or 8 years, and that’s it. We don’t put 22 year olds on the Supreme Court or let them act unilaterally. Sure laws stick around but that’s the result of what hundreds of people and other groups of people not changing the rules in a few years.
A President has limited power for 4 or 8 years, and that’s it. We don’t put 22 year olds on the Supreme Court or let them act unilaterally. Sure laws stick around but that’s the result of what hundreds of people and other groups of people not changing the rules in a few years.
“…than any single president in my lifetime.”
So far! (I would add)
i think the next presidency may be very very different and I give that about 50/50 odds
So far! (I would add)
i think the next presidency may be very very different and I give that about 50/50 odds
Covid, at least the first few months, is an irregularity. Most of the world was freaked out at that time regardless of the country and its hierarchical society. On the other hand, these business interests lobbied to either open/close to benefit their own bottom lines.
If it were somehow possible to arrange things so that political power was equally distributed (e.g., with nationwide direct democracy deciding all important policy decisions), then life in our country would probably get much much worse.
How do you figure?
Yup, same as economic power/wealth.
Nice, so when do we get to elect the billionaires?
You don’t elect a lot of the people with power, either.
My point is we worry a lot about outliers in a wealth distribution but not the outliers in a power distribution (some people, of course, being outliers in both!)
And that seems misguided to me for the reason I mentioned: The unfortunate exercise of political power at least anecdotally seems to be more of a risk to the average person’s health and happiness than the misuse of dollars.
My point is we worry a lot about outliers in a wealth distribution but not the outliers in a power distribution (some people, of course, being outliers in both!)
And that seems misguided to me for the reason I mentioned: The unfortunate exercise of political power at least anecdotally seems to be more of a risk to the average person’s health and happiness than the misuse of dollars.
Assuming you are talking about the USA:
> don’t elect a lot of the people with power, either
A republic only works if the people with public political power are accountable to the public. Any employee or officer of the US government at any level is accountable in this way: most are accountable to the institutions they work for, which are themselves accountable to Congress and the President (or state/local elected officers), with elections as the ultimate accountability to the people. The courts are also supposed to be accountable to the public, but in recent years a profoundly corrupt and self-serving Supreme Court has expanded its own power, run roughshod over norms of civility and propriety, and all but erased its own accountability. This imbalance will be addressed sooner or later by Congress and the President, who will rein in the corrupt Court and hopefully make structural fixes preventing future corruption, but it is jarringly anti-republican in the short term.
There are of course many people with power who are not directly part of the government. Such people are only accountable to the people to the extent the people's representatives make and enforce laws affecting their behavior. As an example, it would make a big improvement to many parts of the economy if anti-trust laws were enforced in their original spirit to prevent large firms from using monopoly power in anti-competitive ways, etc.
> we worry a lot about outliers in a wealth distribution but not the outliers in a power distribution
This is certainly not true of a general "we" meaning residents or citizens. To the contrary, there is consistently significant worry about unbalanced political power, which is a running theme of US politics.
> don’t elect a lot of the people with power, either
A republic only works if the people with public political power are accountable to the public. Any employee or officer of the US government at any level is accountable in this way: most are accountable to the institutions they work for, which are themselves accountable to Congress and the President (or state/local elected officers), with elections as the ultimate accountability to the people. The courts are also supposed to be accountable to the public, but in recent years a profoundly corrupt and self-serving Supreme Court has expanded its own power, run roughshod over norms of civility and propriety, and all but erased its own accountability. This imbalance will be addressed sooner or later by Congress and the President, who will rein in the corrupt Court and hopefully make structural fixes preventing future corruption, but it is jarringly anti-republican in the short term.
There are of course many people with power who are not directly part of the government. Such people are only accountable to the people to the extent the people's representatives make and enforce laws affecting their behavior. As an example, it would make a big improvement to many parts of the economy if anti-trust laws were enforced in their original spirit to prevent large firms from using monopoly power in anti-competitive ways, etc.
> we worry a lot about outliers in a wealth distribution but not the outliers in a power distribution
This is certainly not true of a general "we" meaning residents or citizens. To the contrary, there is consistently significant worry about unbalanced political power, which is a running theme of US politics.
I support term limits for billionaires as well.
Anyone have a proper solution to the issue of wealth re-distribution? This is a fairly novel problem, and I think the government is neither equipped nor competent enough to handle hundreds of billions of dollars in new tax revenue (as some propose) while at the same time, why should we be comfortable with private actors deploying this kind of capital at this scale
The linear scaling is valid to show how strictly L-shaped the curve is but a log scaling would show more detail in the middle and an income histogram would show how much each percentile of the population has in aggregate.
Would also be interesting to compare to other countries maybe Norway one of the most egaliterian and a poor country like Sudan.
Would also be interesting to compare to other countries maybe Norway one of the most egaliterian and a poor country like Sudan.
Could the richest people liquidate holdings for the value Forbes estimates their worth at? I doubt it.
Is it possible that the people figuring up "wealth" for these articles have multiple reasons to exaggerate the totals? Perhaps outweighing their impulses towards scientific and journalistic credibility?
Is it possible that the people figuring up "wealth" for these articles have multiple reasons to exaggerate the totals? Perhaps outweighing their impulses towards scientific and journalistic credibility?
I think you have the correct set of facts but entirely the wrong conclusion.
Would the richest people WANT to liquidate holdings for the value that Forbes estimates their worth at? I doubt it.
The marginal value of millions of dollars to these billionaires' lives is close to zero.
However, those holdings constitute control and power over important institutions at the heart of the power structures of the most powerful country on earth.
I don't care about how much money other people have. But I do care about how much control other people have.
Ergo, I am much more concerned about the power-distribution effect of a few people controlling large stakes in institutions significant to the operation of society, than I am about the estimated dollar value of their stake.
If anything, the hypothetical value of these assets under-estimates the amount of social power for which those dollars are a proxy.
There's a reason billionaires buy money-losing newspapers and social networks.
Would the richest people WANT to liquidate holdings for the value that Forbes estimates their worth at? I doubt it.
The marginal value of millions of dollars to these billionaires' lives is close to zero.
However, those holdings constitute control and power over important institutions at the heart of the power structures of the most powerful country on earth.
I don't care about how much money other people have. But I do care about how much control other people have.
Ergo, I am much more concerned about the power-distribution effect of a few people controlling large stakes in institutions significant to the operation of society, than I am about the estimated dollar value of their stake.
If anything, the hypothetical value of these assets under-estimates the amount of social power for which those dollars are a proxy.
There's a reason billionaires buy money-losing newspapers and social networks.
very well said
my only conclusion from TFA is "someone has emitted some horseshit with chunks of numbers in it"
your point is far more central to the discussion i feel the people compiling the figures wanted to spark. And while its a worthy argument i hafta say "why didn't they put it in those terms, then?"
my only conclusion from TFA is "someone has emitted some horseshit with chunks of numbers in it"
your point is far more central to the discussion i feel the people compiling the figures wanted to spark. And while its a worthy argument i hafta say "why didn't they put it in those terms, then?"
> very well said...
Thank you; that's very kind.
> your point is far more central to the discussion i feel the people compiling the figures wanted to spark.
I tend to agree.
> And while its a worthy argument i hafta say "why didn't they put it in those terms, then?"
Writing is difficult. Persuasive writing is even more difficult. And persuasive writing to a large and undefined audience, in a way that will make that entire audience happy, is basically impossible.
Thank you; that's very kind.
> your point is far more central to the discussion i feel the people compiling the figures wanted to spark.
I tend to agree.
> And while its a worthy argument i hafta say "why didn't they put it in those terms, then?"
Writing is difficult. Persuasive writing is even more difficult. And persuasive writing to a large and undefined audience, in a way that will make that entire audience happy, is basically impossible.
I'm not sure what divisor you would apply which would reduce the impact of that chart?
This argument doesn't account for would happen to the valuations of those assets once the government decided that it owned a portion of them or started forcing people to sell them. Suddenly they are a hell of a lot more risky, presumably the market would price that in very quickly.
> This argument doesn't account for would happen to the valuations of those assets once the government decided that it owned a portion of them or started forcing people to sell them
I don't think the author was trying to argue what would happen if the assets were to be sold, what they were arguing is the downplaying of billionaires wealth, largely people's belief that the extent of the wealth is exaggerated because it's just "on paper".
I posted this link to respond to this assertion:
> Is it possible that the people figuring up "wealth" for these articles have multiple reasons to exaggerate the totals
I don't think the author was trying to argue what would happen if the assets were to be sold, what they were arguing is the downplaying of billionaires wealth, largely people's belief that the extent of the wealth is exaggerated because it's just "on paper".
I posted this link to respond to this assertion:
> Is it possible that the people figuring up "wealth" for these articles have multiple reasons to exaggerate the totals
The author argues that when people say "billionaires can't sell their holdings" that they mean "instantly" and that's not true because they can sell their holdings slowly, and then the author argues that this won't affect the price of those assets because they represent a small amount of the value in the total market.
This is not a serious argument. You're telling me that if shareholders see a founder divest entirely from their companies, they aren't going to take that as a bad signal, and also choose to divest? Bullshit. The size of the total market is completely irrelevant.
But you know, if this was a serious argument, the author would've been able to have it published SOMEWHERE and it wouldn't just be a gist
Don't know why I wasted my time clicking that link. I knew it would be what it was.
This is not a serious argument. You're telling me that if shareholders see a founder divest entirely from their companies, they aren't going to take that as a bad signal, and also choose to divest? Bullshit. The size of the total market is completely irrelevant.
But you know, if this was a serious argument, the author would've been able to have it published SOMEWHERE and it wouldn't just be a gist
Don't know why I wasted my time clicking that link. I knew it would be what it was.
> This is not a serious argument. You're telling me that if shareholders see a founder divest entirely from their companies, they aren't going to take that as a bad signal, and also choose to divest? Bullshit.
Other investors would choose to divest because ownership of those shares signals control and power over those institutions. Someone with a massive set of shares selling their stakes signals some lack of confidence, perhaps. But more importantly, it injects serious uncertainty and risk into the future of the organization. Who will buy those shares? How will they vote? Will there be power stuggles on the board? How will that filter into the effectiveness of executives, and down from there? Uncertainty and risk come at a premium. Redistributing ownership of a huge institution introduces at least uncertainty and probably risk. Therefore, stock price goes down.
But there's an important corollary to that. This isn't just a graph of how wealth is distributed. It's also -- perhaps primarily, to your point -- a graph of how power over other people is distributed.
I don't particularly care about how money is distributed; call me selfish or lazy or stupid, but I have plenty of money to live my relatively simple life in the countryside as I wish, and that's enough for me.
But I do care deeply about how power over me and others is distributed.
When I look at this graph, I see the consolidation of power in the hands of the few, and in that I see a threat to my freedoms and way of life, regardless of whether I have enough cash to sustain myself indefinitely.
Other investors would choose to divest because ownership of those shares signals control and power over those institutions. Someone with a massive set of shares selling their stakes signals some lack of confidence, perhaps. But more importantly, it injects serious uncertainty and risk into the future of the organization. Who will buy those shares? How will they vote? Will there be power stuggles on the board? How will that filter into the effectiveness of executives, and down from there? Uncertainty and risk come at a premium. Redistributing ownership of a huge institution introduces at least uncertainty and probably risk. Therefore, stock price goes down.
But there's an important corollary to that. This isn't just a graph of how wealth is distributed. It's also -- perhaps primarily, to your point -- a graph of how power over other people is distributed.
I don't particularly care about how money is distributed; call me selfish or lazy or stupid, but I have plenty of money to live my relatively simple life in the countryside as I wish, and that's enough for me.
But I do care deeply about how power over me and others is distributed.
When I look at this graph, I see the consolidation of power in the hands of the few, and in that I see a threat to my freedoms and way of life, regardless of whether I have enough cash to sustain myself indefinitely.
> the author would've been able to have it published SOMEWHERE and it wouldn't just be a gist
ad hominem and appeal to authority fallacy
> Don't know why I wasted my time clicking that link. I knew it would be what it was.
If you already had your mind made up, why did you bother clicking and reading the link?
ad hominem and appeal to authority fallacy
> Don't know why I wasted my time clicking that link. I knew it would be what it was.
If you already had your mind made up, why did you bother clicking and reading the link?
> Could the richest people liquidate holdings for the value Forbes estimates their worth at? I doubt it.
Can the other 99%?
Can the other 99%?
Definitely.
Let's say I had all the same holdings as Musk or Bezos, just in much much lower amounts, proportionate to the difference of our net worth.
Use Amazon stock as an example. If Bezos indicates a desire to liquidate his Amazon holdings he has to file paperwork with SEC, and the very act of him selling his stock would impact the price downward. People wondering if he knows something would also start selling their shares, and just the sheer volume would take hours or even days to unload.
If I wanted to divest my proportion of AMZN I would click a few buttons in an online portal. 10 seconds later, my stock would be sold off at the then-current price, and I'd have a cash balance in my account. In the typical hourly trading volume of AMZN my transaction wouldn't even stand out.
Even if my entire net worth, and the net worth of all my closest friends was in AMZN, we could sell it for market price and the transactions would be settled in a few seconds. Nobody would even notice.
Let's say I had all the same holdings as Musk or Bezos, just in much much lower amounts, proportionate to the difference of our net worth.
Use Amazon stock as an example. If Bezos indicates a desire to liquidate his Amazon holdings he has to file paperwork with SEC, and the very act of him selling his stock would impact the price downward. People wondering if he knows something would also start selling their shares, and just the sheer volume would take hours or even days to unload.
If I wanted to divest my proportion of AMZN I would click a few buttons in an online portal. 10 seconds later, my stock would be sold off at the then-current price, and I'd have a cash balance in my account. In the typical hourly trading volume of AMZN my transaction wouldn't even stand out.
Even if my entire net worth, and the net worth of all my closest friends was in AMZN, we could sell it for market price and the transactions would be settled in a few seconds. Nobody would even notice.
Yes, because the size of the average assets of a person relative to the size of the market is negligible.
This amount of assets cannot meaningfully move the market equilibrium, so the person will realistically sell all of it for 100% of what it's worth, with say a 2% margin of error.
The higher up you go in wealth, the less it is the case. But it's not black and white, just a scale.
This amount of assets cannot meaningfully move the market equilibrium, so the person will realistically sell all of it for 100% of what it's worth, with say a 2% margin of error.
The higher up you go in wealth, the less it is the case. But it's not black and white, just a scale.
Yeah, if Forbes estimated all my stuff I could sell it for probably about 10% within what they said.
Makes sense… lets assume the article is off by 100 percent.
Let’s assume that the article is so off base that it literally got everything wrong by doubling the true value in their estimates which is a completely ludicrous assumption.
This does almost nothing to that graph. The wealth gap is still completely out of this world.
Let’s assume that the article is so off base that it literally got everything wrong by doubling the true value in their estimates which is a completely ludicrous assumption.
This does almost nothing to that graph. The wealth gap is still completely out of this world.
> Could the richest people liquidate holdings for the value Forbes estimates their worth at? I doubt it.
Of course, if someone like Elon liquidated his TSLA holdings he'd be worth nowhere near the estimate. I don't think it matters though, because he can use those holdings as leverage for cash that makes him effectively as liquid as his estimated net worth.
Of course, if someone like Elon liquidated his TSLA holdings he'd be worth nowhere near the estimate. I don't think it matters though, because he can use those holdings as leverage for cash that makes him effectively as liquid as his estimated net worth.
Pretty sure there is a similar graph for Britain during the wind down phase of their Empire.
Wonder what it looks like for China today
The amazing thing is that a dollar is only worth what all those millions of people agree it is. A few people having infinitely more wealth than everyone else is a very precarious position.
None of the people summarized in the graph is ever more than one heartbeat from their demise.
All those frog$kins are good as far as they go.
All those frog$kins are good as far as they go.
This is the biggest game of Monopoly ever.
The difference is that in real life, the board expands to provide more places to obtain rent and that the players have some control over their moves.
[deleted]
A great example of an article that appeals to emotions (negative ones) by manipulating facts.
I'm genuinely curious, and I know this can get political quickly, but I mean this in good faith. The wealth that people like Bezos or Musk have—did it only come into existence because they created their companies? In other words, if they had never been born or chosen a different path, their wealth wouldn't simply be redistributed among others, right? The world would just have less overall wealth, roughly equal to their net worth. Is that correct?
There are a lot of ideological assumptions underlying the very concept of wealth creation, but even if you buy into those I don't think that statement is true. Bezos could only be responsible for creating the difference between him and the hypothetical other most wealth creating possibilities, and there is no reason that difference couldn't be negative.
Jonas Salk, inventor of the Polio vaccine, chose not to patent his creation or seek any profit from it. Imagine the alternative where Jonas Salk patents the Polio vaccine, sells each dose for the profit maximizing price, and becomes one of the wealthiest people in the world. Which scenario led to more overall wealth?
Jonas Salk, inventor of the Polio vaccine, chose not to patent his creation or seek any profit from it. Imagine the alternative where Jonas Salk patents the Polio vaccine, sells each dose for the profit maximizing price, and becomes one of the wealthiest people in the world. Which scenario led to more overall wealth?
"manipulating facts" implies changing the data. I don't think that phrase applies to simply choosing the way the facts are presented.
It can. You can tell the truth in a way that is designed to mislead. (See almost every political statement that isn't an out-and-out lie. See much of advertising. See many statements by CEOs. See many statements by government spokespeople and diplomats. And on and on.)
The facts can be true. The narrative isn't necessarily true, and isn't necessarily the best interpretation of the facts.
The facts can be true. The narrative isn't necessarily true, and isn't necessarily the best interpretation of the facts.
Market monopolies make it possible.
“Wealth” as a static number is extremely fickle and tells you nothing about reality
The Waltons have a completely different kind of wealth than Musk - In many practical and theoretical ways.
So even within this subset of insane wealth hoarders, there is a difference in kind, type legal structure, ability to liquidate, etc…
We have thousands of examples where someone’s “wealth” disappears overnight because a handful of “analysts” downgrade future expectations of what their percentage of equity is worth in a secondary market. That’s not really going to happen with Buffet, Gates but very possible with Musk and similar.
On the flipside arguably Musk has the most political influence within the right wing (See: recent Trump stuff) compared to for example, the relative influence of the Waltons on the “liberal” wing.
Similarly I could point to a ton of people who aren’t on on this list but fall into the >500M$ category who have a lot more influence on power and economics than some of the people in the top of this list.
The fact that this is not calculated within this framework, means that this ranking is pure vanity and says nothing about economic, power, political power, or anything other than an arbitrary, monetary leaderboard.
The Waltons have a completely different kind of wealth than Musk - In many practical and theoretical ways.
So even within this subset of insane wealth hoarders, there is a difference in kind, type legal structure, ability to liquidate, etc…
We have thousands of examples where someone’s “wealth” disappears overnight because a handful of “analysts” downgrade future expectations of what their percentage of equity is worth in a secondary market. That’s not really going to happen with Buffet, Gates but very possible with Musk and similar.
On the flipside arguably Musk has the most political influence within the right wing (See: recent Trump stuff) compared to for example, the relative influence of the Waltons on the “liberal” wing.
Similarly I could point to a ton of people who aren’t on on this list but fall into the >500M$ category who have a lot more influence on power and economics than some of the people in the top of this list.
The fact that this is not calculated within this framework, means that this ranking is pure vanity and says nothing about economic, power, political power, or anything other than an arbitrary, monetary leaderboard.
I have so much trouble understanding the people that come to these types of posts and defend these sociopathic money hoarders. "Uh, you guys don't understand that they can't just liquidate their wealth..." "If they sold all their stock, the stock would crash", and so on. Just amazing.
The neoliberal program initiated in the 1970s is to blame, and the conditions for that program were set by the gross expenditures of the Vietnam War, whose origins date back to Truman's decision to support French recolonization of Indochina after WWII.
The fundamental goal of neoliberalism is to place all capital in private hands and eliminate any governmental control over capital - and that means eliminating the middle class and creating a two-tiered society of serfs and aristocrats, as existed in 19th century Russia, Britain and Germany.
The methodology is roughly threefold - (1) destroy domestic unions by exporting all well-paid unionized manufacturing jobs in the USA to sweatshop zones in offshore client states, and (2) import as much cheap labor as possible to fill jobs that cannot be exported (construction, services, agribusiness etc), ideally undocumented so that any unionization efforts can be resisted by deporting union leaders and organizers at will. This ensures starvation wages for the serf class. (3) Establish large homeless and prison populations as a constant threat to the serf class - no matter how bad your situation is, it could be worse!
The fundamental goal of neoliberalism is to place all capital in private hands and eliminate any governmental control over capital - and that means eliminating the middle class and creating a two-tiered society of serfs and aristocrats, as existed in 19th century Russia, Britain and Germany.
The methodology is roughly threefold - (1) destroy domestic unions by exporting all well-paid unionized manufacturing jobs in the USA to sweatshop zones in offshore client states, and (2) import as much cheap labor as possible to fill jobs that cannot be exported (construction, services, agribusiness etc), ideally undocumented so that any unionization efforts can be resisted by deporting union leaders and organizers at will. This ensures starvation wages for the serf class. (3) Establish large homeless and prison populations as a constant threat to the serf class - no matter how bad your situation is, it could be worse!
> The fundamental goal of neoliberalism is to place all capital in private hands and eliminate any governmental control over capital
Okay
> and that means eliminating the middle class and creating a two-tiered society of serfs and aristocrats, as existed in 19th century Russia, Britain and Germany.
No, that simply does not follow.
Okay
> and that means eliminating the middle class and creating a two-tiered society of serfs and aristocrats, as existed in 19th century Russia, Britain and Germany.
No, that simply does not follow.
A better reading is that neoliberalism is simply indifferent to the welfare of the middle class, and in any case radically opposed to any proactive ("socialist") efforts to protect it. If serfdom and aristocracy are what follow, then so be it.
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I read that you could take all the money from the billionaires in the USA and it would fund the federal government for 8 months.
It'd be interesting to see if that would hold true if the country hadn't gone 30+ years without having an adult conversation about taxes.
Republicans learned one lesson in 1993 and learned it well: "Read my lips: no new taxes" should mean no new taxes. Since then government responsibilities have grown as private industry has shirked it in the name of profit transfer to shareholders. There's also of course been wars of convenience.
The gap has been funded with money printing and deficit spending. Now we sit here and say "but all of their money would only fund things for eight months!" and forget why there's so much interest on loans to pay in the first place.
Republicans learned one lesson in 1993 and learned it well: "Read my lips: no new taxes" should mean no new taxes. Since then government responsibilities have grown as private industry has shirked it in the name of profit transfer to shareholders. There's also of course been wars of convenience.
The gap has been funded with money printing and deficit spending. Now we sit here and say "but all of their money would only fund things for eight months!" and forget why there's so much interest on loans to pay in the first place.
> forget why there's so much interest on loans to pay in the first place
Not only that, but we consistently manage to forget who that interest is being paid to. The economy is complex, but we keep treating it like a larger version of a household budget.
Not only that, but we consistently manage to forget who that interest is being paid to. The economy is complex, but we keep treating it like a larger version of a household budget.
Primarily people who hold bonds for retirement, no?
They're also the people racking up all of the debt.
They're also the people racking up all of the debt.
Primarily the US Government.
Not just money, that's liquidating all of their assets at current market prices.
Yeah, it looks bad, but only if you pretend that the ideas these visionaries pioneered were worthless. To take a single example, it might seem obscene that Bezos' net worth would take 32 million years of continuous work for the average Amazon warehouse worker to accrue, but without him who would have come up with the idea of using a computer to buy things on the internet?
You.. think bezos invented ecommerce? It long predates amazon. Amazon wasn't even the first online bookstore!
How else would he make two hundred billion dollars? Paying employees coerced into selling their labor a wage which is less than the value their labor creates? Ridiculous
It's not just being able to come up with the idea, it's being able to build a team and execute without the company going under.
I think Bezos has a halfway decent claim at being a visionary, at least compared to people like Musk, but let's be real -- ecommerce existed way before Amazon. He is a skilled businessman and built a wildly successful monopoly, but I don't see many concepts that he pioneered.
Yeah, but "one click checkout"? Before Amazon, all the greatest minds could come up with was 2 and 3 click checkout.
https://en.wikipedia.org/wiki/1-Click#Patent
https://en.wikipedia.org/wiki/1-Click#Patent
The value of the super wealthy’s net worth is paper. It only has value because we all agree it has value. If you started to seize their paper wealth and give it to everyone else, the value of that paper would immediately fall, not just from the threat of seizing it but their lack of ownership and stewardship would make it crumble.
When someone actually uses their money, like to buy a mansion, we do indeed tax the shit out of it. We tax the corporation, we tax the dividends, we tax the gains, we tax the seller of the property and we make the buyer pay various fees. We tax the property yearly, and we increase the assessed value of it upwards to get more tax every year. Tax tax tax.
The only place to get more tax is to just seize the paper straight. And I think that’s a terrible idea.
When someone actually uses their money, like to buy a mansion, we do indeed tax the shit out of it. We tax the corporation, we tax the dividends, we tax the gains, we tax the seller of the property and we make the buyer pay various fees. We tax the property yearly, and we increase the assessed value of it upwards to get more tax every year. Tax tax tax.
The only place to get more tax is to just seize the paper straight. And I think that’s a terrible idea.
>The only place to get more tax is to just seize the paper straight. And I think that’s a terrible idea.
That's not true, right now there's lots of incentive for the ultra wealthy to not sell their stocks, and instead use the buy/borrow/die strategy. This results in less tax revenue, allows them to capture gains, and can then pass down that wealth on a step-up basis that wipes out capital gains for the recipient.
Policies could be changed to incentivize selling assets without actually seizing them.
That's not true, right now there's lots of incentive for the ultra wealthy to not sell their stocks, and instead use the buy/borrow/die strategy. This results in less tax revenue, allows them to capture gains, and can then pass down that wealth on a step-up basis that wipes out capital gains for the recipient.
Policies could be changed to incentivize selling assets without actually seizing them.
Seizing it would also have the secondary effect of a mass exodus of investment capital from the country, like capital flight in China.
A more reasonable way is to seize it is through taxation, either by a wealth tax or tax on unrealized gains, but it would be very difficult to implement.
A more reasonable way is to seize it is through taxation, either by a wealth tax or tax on unrealized gains, but it would be very difficult to implement.
Capital flight to where? The US economy is still the largest in the world, there aren't enough assets in the rest of the world for that capital to buy.
Plus, the US government could just implement capital controls overnight (or better yet, in the night before), then the money would have nowhere to go.
Plus, the US government could just implement capital controls overnight (or better yet, in the night before), then the money would have nowhere to go.
> The value of the super wealthy’s net worth is paper. It only has value because we all agree it has value. If you started to seize their paper wealth and give it to everyone else, the value of that paper would immediately fall, not just from the threat of seizing it but their lack of ownership and stewardship would make it crumble.
I don't think ownership and stewardship is the problem. The fundamental problem is still there: whether they have 1T dollars, or 300M people have their share of 1T dollars, the dollars in the system will increase the second they spend it. Their "stewardship" is a tenuous position - commanding enough capital to cause massive inflation. Politics aside, it's lose/lose for a single person to command that much power over an economy. If every billionaire decided to liquidate their assets all at once the financial system would absolutely fold. The fact these people can accumulate this level of wealth is not only an income equality problem but a symptom of a cancer in our financial system. The Fed's policies and the existence of lobbying have, by and large, created these people. It's less a money problem but rather a political problem.
I agree with you that the idea of charging capital gains on unrealized capital is financial and political suicide. Even if you suppose you only do this for people worth, say, 500M or more history has shown that this never sticks. Eventually, the government will continue to get more hungry and continue to make abhorrent financial decisions. Eventually, it will effect everyone. As you stated, the investment from regular people over the next 30-50 years would trend towards 0 - and then a new way to tax would need to be made. Negative interest rates on bank accounts, perhaps.
That's not to say however it's ok that these people are allowed to possess >= 80% of a countries net wealth. The money isn't the problem is the power it brings - and that's a huge problem. The safest way is probably a progressive inheritance tax but it still has the same problem. How long before Joe Plumber is effected by it? 50 years? There's no simple solution.
I don't think ownership and stewardship is the problem. The fundamental problem is still there: whether they have 1T dollars, or 300M people have their share of 1T dollars, the dollars in the system will increase the second they spend it. Their "stewardship" is a tenuous position - commanding enough capital to cause massive inflation. Politics aside, it's lose/lose for a single person to command that much power over an economy. If every billionaire decided to liquidate their assets all at once the financial system would absolutely fold. The fact these people can accumulate this level of wealth is not only an income equality problem but a symptom of a cancer in our financial system. The Fed's policies and the existence of lobbying have, by and large, created these people. It's less a money problem but rather a political problem.
I agree with you that the idea of charging capital gains on unrealized capital is financial and political suicide. Even if you suppose you only do this for people worth, say, 500M or more history has shown that this never sticks. Eventually, the government will continue to get more hungry and continue to make abhorrent financial decisions. Eventually, it will effect everyone. As you stated, the investment from regular people over the next 30-50 years would trend towards 0 - and then a new way to tax would need to be made. Negative interest rates on bank accounts, perhaps.
That's not to say however it's ok that these people are allowed to possess >= 80% of a countries net wealth. The money isn't the problem is the power it brings - and that's a huge problem. The safest way is probably a progressive inheritance tax but it still has the same problem. How long before Joe Plumber is effected by it? 50 years? There's no simple solution.
The government has a monopoly on violence, and it can (and does) print as much money as it wants. There is no "threat" of a private person having money, they are still bound by the same laws. They became rich by creating a business that provided value for others - the most noble way to acquire wealth that exists. That's not a danger or a cancer of the system, that's a success
> They became rich by creating a business that provided value for others - the most noble way to acquire wealth that exists.
This applies to small business owners way more accurately than it does to billionaires riding the startup rocket to the moon because all the gamblers with money decided they looked like the best way to make a quick buck in the stock market.
This applies to small business owners way more accurately than it does to billionaires riding the startup rocket to the moon because all the gamblers with money decided they looked like the best way to make a quick buck in the stock market.
It appears there is a certain type of person, to your own exacting standards, who "deserves" being wealthy, but everyone else does not. Furthermore, the act of having a lot of wealth is inherently suspicious to you, although certain edge cases (a small business owner perhaps) you would allow it.
Overall I am not persuaded, I think rich people are a good thing for society.
Overall I am not persuaded, I think rich people are a good thing for society.
You inferred an awful lot from my comment. Which, I get it, makes a certain amount of sense given that you're attributing 'noble' to people using wealth as the metric.
I'm not focused on the person, nor how deserving they are individually, I care about how this benefits society.
Let me put this another way. I think that the majority of billionaires essentially won the lottery, and that a typical small business owner brings more real, actual value to society. For every one Musk or Bezos or Gates, how many equally intelligent people tried but were in the wrong place at the wrong time? I think the collective value of a lot of really intelligent people is much higher to society than the guys who got all the right things lined up at the right moment. Does Bezos have skill? Yes! Does he have skill proportionate to his wealth? Not a chance.
Hell, I'll even admit that Musk is clearly skilled in business. Luck can't necessarily explain all of it. But he rode the wealth rocket on the back of TSLA, a company he did not create. It wasn't his idea to build electric cars, but maybe we can credit him for figuring how to make them a sexy and sought over status symbol.
I'm not focused on the person, nor how deserving they are individually, I care about how this benefits society.
Let me put this another way. I think that the majority of billionaires essentially won the lottery, and that a typical small business owner brings more real, actual value to society. For every one Musk or Bezos or Gates, how many equally intelligent people tried but were in the wrong place at the wrong time? I think the collective value of a lot of really intelligent people is much higher to society than the guys who got all the right things lined up at the right moment. Does Bezos have skill? Yes! Does he have skill proportionate to his wealth? Not a chance.
Hell, I'll even admit that Musk is clearly skilled in business. Luck can't necessarily explain all of it. But he rode the wealth rocket on the back of TSLA, a company he did not create. It wasn't his idea to build electric cars, but maybe we can credit him for figuring how to make them a sexy and sought over status symbol.
There is no logical way to objectively judge which billionaire is deserving or not of wealth. Any tactic you take will be gamed. I’d rather not pick winners and losers. I disagree that you “win the lottery” by becoming rich.
> If every billionaire decided to liquidate their assets all at once the financial system would absolutely fold.
Would it? Or would it come roaring back stronger than ever? If there are real assets, then I'd expect good results. If it's just on paper backed by nothing but good feelings, maybe we're better off burning that paper.
Would it? Or would it come roaring back stronger than ever? If there are real assets, then I'd expect good results. If it's just on paper backed by nothing but good feelings, maybe we're better off burning that paper.
We don’t tax the shit out of it relative to income earned though. And in the UK we don’t even tax the property in any meaningful way. Do you in the US?
That said, I don't think people like Elon are actually worth 250 billion or whatever the estimate is, but at that level of wealth, it almost doesn't even matter.