3058

Of course it is, newcomers are good because they’re disruptive by having little to lose, we just forget all that were left behind. That capital to burn quickly turned (as usual) into capital that made incompatible or ate everyone who threatened the vertical integration, from music sellers to even cable sellers.
I was reading tech stuff, I remember there wasn’t much new, Nokia just didn’t want to start from scratch to adapt to the much more powerful hardware that was showing up, and as devs were fed up of how annoying it was.
I also remember Jobs had to be scared into actually supporting apps, and then over and over again to let them do more stuff he didn’t want in order to compete with other capital buying their way in, not that he decided to support a new market of app developers in any way.

Why wouldn’t they, at least regarding success of it? IBM was surprised by PCs, Microsoft was surprised by both mice and the web, AT&T was surprised by cable, Blockbuster was surprised by Netflix, on and on it goes. What’s known is comfortable and doesn’t get anyone fired, a few quarters later it’s someone else’s problem. What’s doubtful is if it still matters or only a Disney can buy their way in now, because, as you say, available capital is important.
But that’s besides the point. They were neither great unparalleled geniuses, nor idiots lucking into success, and shouldn’t be treated as either, as it’s both unhelpful and unhealthy. Even if they were, geniuses aren’t always right, and do really stupid shit when their ego is stroked, just like anyone else, especially when so detached from real life, and maybe shouldn’t be let to have the power to direct society their capital allows them to. Or looked up as the only successful and smart people in the world - they were just the lucky ones (that believed and worked hard, sure).

3059

That’s an overly reductive view of the overall discussion, and not what I’m saying at all. As I already responded when you asserted the same thing earlier:

Is there anything you need me to clarify about that or expand on? Or are you trying to combat the “constancy” of stating my opinions by just repeating the same misinterpretation?

3060

I’m not talking about “good” in the moral sense; I’m talking about value, where someone produces something and other people voluntarily pay for it. Of course there are loads of exceptions and special cases, but very generally speaking, money is what we use to measure value. If you have some other objective way of measuring value put into the world, I’m happy to hear it.

I would say that you contribute to the job market by providing an opportunity for someone else to work and get paid. It’s a contribution to society, not something that makes you “better than regular people” or anything like that.

Well you said before, “Here’s what I want: to have their contribution to society (read: government social safety net) have as much an effect on them as it does on me. That’s ‘their fair share’. I would be much better off if I still had the tax money I pay in my pocket, but I’m happy to contribute. I want them to feel the same thing.” First of all, I don’t know how someone “feels the same thing” unless they’re in the exact same financial situation you are.

But beyond that, how is that measurable or actionable in any way? Right now, “fairness” in taxes is based around having a series of laws that everyone has to follow. Or you could say “a person who makes X% of the income pays X% of the taxes”, which is defined and measurable. But how can you quantify “I want them to pay as much as it takes to actually notice”? I don’t see how you can define what’s “fair” taxation based on those terms.

3061

The reason to tax wealth it’s not emotional. If wealth it’s not taxed it accumulates, moving society towards wealth inequality levels that will profoundly change it (for the worse, for those that support such a wealth tax).

Once wealths accumulates enough, concepts like meritocracy disappear into oblivion and you go back to an aristocratic society of sorts.

There’s some value to the concept that the individual power of voting could offset some of this, but that ignores the reality that people can be manipulated once enough capital is spent in that manipulation, and that inequality makes that manipulation easier (since people struggling have less time to be informed actors).

Finally, stuff like our own self image of what an ideal western society is is formed through a recent past (post WWII) that was much more equalitarian that the current situation, which resembles the gilded age in terms of inequality. Thus striving for more equality becomes an ideological point, like freedom of expression and other “western” values.

So a wealth tax is not about making the rich people contribute or not, nor feel anything, nor about redistribution of wealth (although some of this helps towards more equality). A wealth tax is about preserving a model of society that we call “democratic”. If wealth accumulation is not stopped we’ll move from the gilded age into uncharted territory.

This is a good primer, and quite an easy read.

The problem is not Jeff Bezos and similar people (although there’s an argument wealth should not even accumulate at that level), the problem is that once Bezos is gone his wealth goes to people that have done nothing to generate it (and this only if you believe CEOs and investors are Ubermen really responsible for the capital their companies generate -I don’t personally subscribe to that idea and find it ludicrous, but it’s part of the contemporary mindset-).

I would be ok with no wealth tax but a 95% inheritance/donation tax, or income tax going up not by yearly “income” but by lifetime levels.

3062

Yeah, this the sort of “I just had my 8th birthday party” view of the world that Andy subscribes to, where Bezos is like Santa Claus and works his fingers to the bone in order to package and ship each item that Amazon handles.

Meanwhile in the real world:

3063

Yeah, but without Jeff Bezos and his generosity, those drivers would never have had the opportunity to earn the tips that he stole!

3064

Man, I take a few days off from P&R and the thread explodes.

Back in Jan 2000, I was short Amazon, along with AOL and some other dot.com it was trading at $80. My BIL convinced me that I shouldn’t be short tech in retirement. In the short term he cost me a lot of money. In the long term, I’d be down $3.4 million in Amazon, almost certainly broke and still working. Anyway, how the math works 5% of $80 is $4/share, and if the timing of sales was bad he could have lost even more. But let’s assume, his accountants said sell 5% of your stock on whatever day/week the IRS evaluates it for the wealth tax. If a 5% wealth tax was in place since 2000 we can use the simple formula (1-5%)^21= 34% and see that Bezo would have only 1/3 of his shares left.

I think you ask the right question “So what” . It is a fair question. Let me start that you and I have vastly different views on business.
I think in the same way the there are exceptional athletes, actors, and artists, there are exceptional business leaders. Nobody thinks you could replace Tom Hanks with Tom Chick in a movie cause they are both named Tom and they’ve acted, or that any 2nd string NFL quarterback could have lead the Patriots to all those SuperBowl wins the way that Tom Brady did. The world is a poorer place if these exceptional talents don’t have a stage.

I know how amazing Intel’s Andy Grove cause I knew the man. I meet his contemporaries, Steve Jobs and Bill Gates, and more importantly, knew lots of people who worked for and with them. They aren’t like you are me or probably anyone you’ve meet. I doubt tech is the only industry that has exceptional leaders, it’s just the one I’m most familiar You only have to look at not just the financial performance, but innovation, and impact on society, of Apple,Intel and Microsoft before and after there founder were around. Apple is particularly interested because you have early Apple, than the years after Steve Jobs was fired by the board, and the Tim Cook years. As far as I can tell Tim Cook, has introduced pastel colors and the Apple credit card, and bunch of incremental products. I left Intel one year after Andy Grove left as CEO (he stayed on for 1/2 dozen years as Chairman) I sold most of my Intel stock in Jan 2000 for between $55 and $60, it closed yesterday at $55, 20+ year of stagnant stock price. I started Intel at the beginning.of the Andy Grove era, my earliest stock options were 62 cents. So 100x increase when Grove ran the company and nothing since.

Microsoft struggle for more than a decade, and it is not because Gate’s replace Steve Ballmer was a bad executive, he just was not Bill Gates, Satya Nadella is by all accounts quite good. But like Apple, Microsoft is no longer the source of innovation, they essentially just update Windows, Office and dabble in various other sectors. There are a zillion other example of companies either dying or become irrelevant after their founders leave, Hewlett-Packard is an early tech example.

To me, both Bezos and Musk are every bit as impressive as the previous generation, in many ways even more, because of their vision and the fact they are a solo entrepreneurs with no co-founders.

Now I don’t have proof that if Bezos or Elon Musk lost 2/3 of their stock they’d lose control of their companies. But I think there is plenty of evidence that the long-term vision of their owners, generally clashes with Wall Street’s demand to hit the quarterly numbers. Steve Jobs being forced out because he was ignoring Apple IIs, in favor of the Macintosh is a good example. There was a damn good reason I was short Amazon stock in 2000, Bezos was losing money with every book he sold, and even more money with the other things he was selling. I figured eventually he’d run out of other people money and the stock would go to zero. There is also a reason Bezos is the richest man in the world and I’m not.

Generally speaking, when the top companies go public the founder (or founders) control between 30-50%, which gets diluted over time. In Jeff’s case, he spends a couple of billion/year to fund Blue Origins. When founder(s) own that amount of the stock,it is basically their company to run. Bezo’s was at that level for years, after the divorcee and more space spending he is down to 10.6%. If the wealth tax was in effect he own just over 3%. Generally speaking when a CEO owns the 30% of the company he acts like an owner when it’s 3% he acts like an employee. Every Vanguard, Fidelity and many hedge funds manager would own more Amazon than Jeff, would they go along with his most ambitious plans? I have my doubts.

I also believe in the market. I think there is a reason that Apple, Amazon and Google are trillion companies. It is because they deliver terrific products and services, and except for Apple, at great prices. I think computers and phones are better products, because of Steve Jobs, Ecommerce is better because of Jeff Bezos. Getting access to information is better because of the Google boys. I think it is indisputable that both rockets and electric cars are better because of Elon Musk. If these guys die early or were merely ousted for adult supervision like John Scully at Apple, the world would be a worse place.

TL:DR. The wealth tax threatens the golden goose of America’s great entrepreneurs. I’d much rather wait to take the gold after the goose has died, (aka inheritance tax) than risk killing it while they are laying golden eggs.

Now let me ask you a question.
This thread is about income equality, but you (and many others) seemed to be obsessed with wealth inequality. I understand the concern about income equality. but wealth and income are only moderately correlated. If we had a very generous UBI say $50K/person, would it still bother you if Bezos was worth $100 billion, but millions had no liquid wealth? why?

3065

I think so, too. I just don’t think there are irreplaceable supermen, not in a country of more than 300 million people. There are movies that score big but don’t star Tom Hanks. There are teams that win football games and championships that Tom Brady doesn’t work for.

I’m just as obsessed with reducing income inequality. The income inequality in our country is so great that it contributes to the accumulation of massive fortunes, concentrating great wealth into the hands of a few people or families. That’s why wealth inequality and wealth taxes come up here. What does it matter if we talk about both in this thread?

It’s quite easy to imagine a world in which the vast majority of humanity are well-fed and clothed and sheltered and think they’re happy because they simply don’t know how much is being denied to them by the few wealthy, powerful people who keep it for themselves. E.g. health care that extends lives and therapies that extend it even further for one’s offspring; other therapies that make one’s children healthier, stronger, more intelligent, etc.

It’s also easy to imagine worlds like that where — for reasons of their own — the few super-rich actually want more, and can only have it by worsening conditions for everyone else.

It’s so easy to imagine these things that people actually write books about it. They call them ‘dystopias’.

Beyond that, whatever you think of the super-rich, it’s pretty obvious that they’d rape the world if they had to to grow their fortune. We know that because we see them do it. We see how they got their fortune in the first place. The smart phone empire rests on the bodies of exploited labor and poisons or exhausts the world; just as the petro empire does, just as the battery industry does. Hell, just as the global fishing industry does!

You can’t amass a great fortune without having done a ton of damage to people and to the environment, and once you have one, you’re in a position to do far more damage, because your wealth makes you basically ungovernable. What’s to worry about?

3066

Then wouldn’t this have already happened back when men like Carnegie and Rockerfeller had far more wealth than anyone alive today?

3067

Eh… Yes?

The argument is that society changed for the better post WWII (and with the wealth and income equality post WW2 US and Europe brought).

Certainly going back to the 1920s is not my idea of an ideal society, nor one that I think espouses the values we hold dear today. Society in the Gilded Age was distorted, unjust, and fundamentally different than what we consider a reasonable balance nowadays.

If you think going back to those class/economic dynamics is ok and is not a profound change for worse from what we had post WW2 till the 80-90s, then there’s no way we can agree.

Of course there are other ways to stop the accumulation of wealth, like it was stopped in the 30s-40s, like, you know, a Great Depression and a World War. A wealth tax seems to be less impactful, though…

3068

Yeah, you can’t make a billion dollars through hard work and savings. If you made 2600 dollars an hour, 24 hours a day, for a 40-year working career and spent none of it, you wouldn’t even have one billion by the time you retired. You make a billion dollars by exploiting something - people, the earth, laborers - to an intense degree. Which is why I find this argument:

so overly reductive. Like, obviously, if you see money as a measure of how good someone is for society, then you’re going to think the massively wealthy are the best for society.

I mean, Musk started his first company with a gift from his wealthy family who made their fortune during Apartheid, and Bezos got his parents to invest hundreds of thousands of dollars in him. They’re only impressive because they started further ahead than the vast majority of us could. Most of us are too busy just surviving, and many of us don’t have wealthy family to start us out.

3069

It did actually happen back in the days of Carnegie and Rockefeller. Then an economic collapse occurred, then a global war, and that created the political will for much more progressive policies, and that will has been being eroded by conservatism and the wealthy for decades.

3070

Really, if you’re opining about the wrongness of wealth taxes and you haven’t read Piketty, you’re probably woefully under-informed on the subject.

3071

Does anyone else find it funny that the period of time most GOP folks want to go back to was a time formed by the New Deal and high taxes, but they keep fighting tooth and nail not to do the same things that the New Deal and high taxes did?

3072

It would be funny if it wasn’t so obviously cynical. They whole idolizing of the “good old days” when white men ruled America and women and minorities were deferential is a blatant attempt to get the social conservatives to vote for them while they continue to make things better for the ultra-rich that REALLY control party policy.

3073

Not to jump in, but i don’t think this is exactly correct, or at least, not directly correct, and is the reason why a simple wealth tax works politically but isn’t really the ideal solution.

The contemporary problem is that non-participatory investments in the stock market accelerate wealth accumulation far faster than more traditional forms of wealth, such as land or “means of production”, ie, durable capital. That doesn’t mean those other forms of wealth aren’t still important, but their rate of value appreciation is generally some fraction of direct stock holdings. Old style robber barron capitalism pushed themselves the exploitation of labor. Today while there are certainly companies like Apple benefiting from the exportation of exploitable capital, its part of the massive global supply chains that span whole continents whose complexities most people can’t even begin to fathom. In fact you might argue that old-style economic systems which concern themselves only with national economics are basically obsolete at this point, dinosaur memes stumbling into the 21st Century mindshare by sheer weight of intellectual inertia and a lack of alternatives.

When you could invest 50,000 in something like bitcoin 11 years ago and be a billionaire today, something is wrong with the creation and allocation of finance capital. It’s just outside of the wheelhouses of basically everybody to understand its nature. Something is rotten when you can’t give money away fast enough to prevent its accumulation, when you just sit on stock holdings and your non-participating wealth seems to increase with no end, but teasing apart why that’s wrong from a technical point of view is much, much harder than the intuition that Wall Street plays by a different set of economic rules.

3074

Carnegie and Rockerfeller were well before WWII, starting their rise in the gilded age and finishing it in the progressive era.

Indeed, a large component of the progressive era was philanthropy by people like Carnegie, and his “Gospel of Wealth” that said that the rich owed it to society to give back for the benefits they had received.

In terms of “stopping the accumulation of wealth”, a war didn’t stop Carnegie’s wealth accumulation… he voluntarily gave away over 90% of his wealth.

Just to be clear, the gilded age ended around 1900, at which point you had the progressive era going up until around WWI. And during the end of the gilded age, and throughout the progressive era (and indeed, beyond), you saw pretty steady improvements in the standard of living and life expectancy in America.
image

Dude, come on. Bezos totally revolutionized logistics, and improved the world for literally billions of people. The idea that he became the richest person on the planet because “his parents loaned him a few hundred thousand dollars” is absurd on its face, if for no other reason than that amount of money is chump change compared to what tons of OTHER people inherited.

Bezos is absolutely a self made man, and suggesting that you or I could have been him but for a loan of three hundred thousand dollars, is pure fantasy.

3075

Isn’t this exactly the problem? The existence of these loopholes/shelters/what-have-yous that allow fabulously wealthy people to keep their wealth and accumulate more are what you’d expect if you had a politically powerful wealthy elite exerting their influence. And there’s an enormous amount of leverage exerted in our politics to achieve this result, with all sorts of ancillary effects that are simply awful: Trump’s election being one of them.

Extreme wealth is really bad. No one should have that kind of influence in a democratic society. I’m fully onboard with trying to make our income tax collection apparatus more robust and far more progressive, but I’m also fully onboard with trying to reduce extreme wealth in whatever ways we can.

3076

This notion did not spring out of pure altruism though. The wealthy of that day realized a fundamental truth that the wealthy of today have forgotten.

They realized that one very plausible alternative ended with them swinging from ropes. The 19th century is replete with examples of such uprisings, the 1848 Year of Revolutions come to mind in specific. Changing public policy and curtailing the excesses of their day was essential, otherwise there would be no amount of Pinkertons suppressing the working class that could stop what was coming. And believe me, by 1900 that was coming. Events like the Triangle Shirtwaist Factory incident ensured that it would be so, sooner or later.

3077

Yes, which is exactly where you don’t want us to go back to.

Also, life expectancy and height has little to do with standard of living. You ae going to have to look for a better measure.

Moreover, America was not the main attraction before WWII. Wealth inequality was way, way more extreme in Europe back then. It is now that the US has gone over their historical inequality maximum in the last 150 years and starting to go into Europe pre-WWII territory.