Just Be Rich (2021)

I live in a country with wealth tax (Norway), and I'm a bit conflicted on it.

On one side, it is effectively the only real tax a many in the "ownership class" are paying - relative to their wealth.

On the other side, it is a really problematic tax for entrepreneurs. It is downright horrible for startups and scaleups - critical funds that should be used to grow your company, has to be given out in dividends to founders, so that they can afford to pay the wealth tax.

And it is unfair - as it is a tax that foreign owners don't have to pay, but domestic owners have to pay. One natural consequence of this has been that the wealthy people are simply...leaving the country. (our total / combined max wealth tax is 1.1%)

> You would think, after having been on the side of labor in its fight with capital for almost two centuries, that the far left would be happy that labor has finally prevailed. But none of them seem to be. You can almost hear them saying "No, no, not that way."

This one really threw me for a loop. Do startup founders making or seeking a big exit really think of themselves as "labor"?

Not using a throwaway, and agreeing in principle: Paul Graham appears here oddly non-scientific.

From my perspective, this is entirely a case of Simpson's Paradox.

* Worldwide, wealth gaps are closing.

* Within most countries, wealth gaps are widening.

Here's how globalization works:

1. As capital, I target 8 billion instead of 350 million. That's more wealth per invention.

2. As US labor, I compete with Indian labor. Income goes down.

3. As high-end developing-world labor, I can compete with Americans for jobs. Income goes up.

4. As low-end developing-world labor, I have some trickle-down benefits, but gap to high-end labor increases.

Footnote: It also makes a lot of sense, looking globally, to look at log(wealth). See:

https://www.gapminder.org/fw/income-levels/

There has been a huge move from Category 1 (horrible life) to 2 (manageable life). That's huge. However, income going up 4x is not very visible on many figures when that income goes from $2/day to $8/day, and is being compared to someone with $100B.

In addition to wealth taxes, inheritance taxes are also important to get right. The US, historically, had fairly high inheritance taxes because it was thought to prevent dynastic families from taking over. Over the last few decades, inheritance taxes have been reduced, and it seems to correspond with a large concentration of wealth in the upper classes.

Noahopinion has a very recent interesting article on wealth and taxation. It makes me mad because it contradicts a lot of cherished ideas I have about the rich and taxation, but probably makes sense in this conversation:

https://www.noahpinion.blog/p/theres-not-that-much-wealth-in...

I find discussions of economic desert rarely get anywhere since everyone has a different idea of what is deserved.

I like to talk about incentives. We have a massive under supply of housing across the developed world, in part because so much labor is training for desk jobs rather than construction jobs.

If you want to solve the housing problem, you need to change the incentives for young people to shun construction jobs. That means more money and eventually status for manual laborers and less money and eventually status for desk jockeys.

That's just one example.

1000+ comment chonkthread at the time https://news.ycombinator.com/item?id=26787654

I think there's another point to be made here that isn't often discussed. Even in a system where people that work hardest/smartest directly translates to the most successful - doesn't mean you have a good system.

Consider an environment where a million engineers are all working on their own startups. 99% of them fail and reward the work put into them with nothing. Some subset of the remainder makes barely enough to survive; a smaller subset makes enough to have a successful business; a smaller subset makes millions, and a smaller subset makes the vast majority of the money available. If the effort put into the thing follows a mostly linear line, but the reward is exponential, is this really a good system? Do the people at the top of this structure deserve the wealth they gain, even if they genuinely the best at what they do?

More and more systems today are winner-take-all. Entertainment is notorious for a tiny number of multi-millionaire artists/actors/comedians/etc., while the vast majority of people that try to make it end up with a succession of part-time jobs that never ends. Even if there's no nepotism or corruption, is a system where the people at the top get everything and the bottom gets nothing a good one?

There's something disturbing about PG's take to me - as if only the most successful are deserving, or worthy - that this warped reward structure isn't inherently unjust. It feels like the kind of justifications nobility and royalty relied on, but for modern times - "I worked hard, I found the market, I did everything right, so naturally I deserve more wealth than a human can use in a thousand lifetimes."

So to be honest, I find almost every single one of PG's points worthless. I don't care how easy it is to start a startup if the chance of real money from it is one in a million. I don't care about how much faster growth is when its billions of dollars for a few dozen people. I don't care if the new wealth is genuinely new instead of inherited, if all we get from it is yet another tiny group of obscenely wealthy people - meet the new boss, same as the old boss. And I especially dislike the idea that the "far left" should be happy that "labor has won". Having a system that picks a few hundred of the "most worthy" each year and adds them to the capital class is by no means what I could consider labor winning.

Not only are the poor poorer but now they feel like crap from the tech social media dystopia they inhabit.

while globally we are in a better* state than our past selves, but being better off than the others have always been a zero-sum game imho.

so this sort of messaging reminds me of the cutthroat competitiveness that folks from working-class backgrounds, especially in developing countries, get drilled down on from a young age.

too bad it is not something everyone can achieve at the same time.

"Paul paints a rosy picture but doesn't mention that incomes for lower and middle-class families have fallen since the 80s."

Doesn't look like it: median income in 2019 was $44K, in 2001 it was $31K. That's adjusted for inflation. Source: https://en.wikipedia.org/wiki/Income_in_the_United_States

I don't like it when the facts look wrong after two minutes' googling.

The part everyone always glosses over is:

If the rich are taxed more, will the government equitably distribute that money to the middle class?

Defense contractors make hundreds of millions of dollars from government funds.

We just assumed that tax money will go to the middle class but it's also likely to go to another rich person.

> Paul paints a rosy picture but doesn't mention that incomes for lower and middle-class families have fallen since the 80s.

These analyses never mention the fact that the consumption of wealth by the government has vastly expanded. Where does one think that wealth came from?

> false claim that wealth inequality is solely due to more startups and not a real problem says a lot.

The article assumes that wealth inequality is bad, but never explains it.

The thing is, people all have different abilities and make different choices in life. These lead inevitably to different results. In order to make everyone equal, peoples' freedoms must be taken away.

This article feels like an attempt to morally wash one's hands of the moral stink of capitalism. Do you really think that because you're in tech and not mining, that the accumulation of wealth is any less driven by exploitation?

By the way, I don't know the answer to this. I myself am a landlord. But if we're getting into morality, let's fully examine this.

11.5% of Americans are below the poverty line. The same economic system that makes is possible to become rich enforces a roughly 5% unemployment rate. This unemployment rate is necessary to prevent a wage price spiral. There are people who are paid a lot of money (Federal Reserve), whose job it is to pull levers and turn dials until the unemployment rate is at that magic 5%. They actively ensure people can't make a living, to allow you the chance to accumulate wealth.

You may not be directly responsible for their poverty– but their poverty makes your accumulation of wealth possible. Without a 5% unemployment rate, the delicate balance of the economy cascades into oblivion in a wage-price spiral.

So here's my moral question– do you then owe them anything? Do you owe society anything?

Maybe there is something wrong with "just being rich" if you don't attempt to use some of your money for the betterment of your community and society that is actively made worse to allow you to get rich.

If you want to get rich, get rich. But don't fool yourself into thinking that it's morally good. It can be, but it's probably not. Because it's probably at the expense of others in some direct or indirect way.

By the way I'm pulling punches here. This is a very gentle response to try and get you to think differently about your ethics.

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If you're the sort of person that always needs to feel morally right, then I would say getting rich probably isn't for you. Any moral argument you can come up to protect your ego would be fragile, and easily undone.

Multiple replies merged into one because of HN's post rate limit.

I pulled myself up by my bootstraps once and now I'm the richest person alive.

Paul Graham is forced to appear non-scientific because there is no science, that justifies our current economic conditions. There's the whole field of economics, sure, but that only studies what does happen in our current economy, not how we should run an economy. The only things available to justify our current economic conditions are pseudoscience and appeal to power.

A world where people get rich by starting tech companies that make a mark on the world that appeals to current rich people isn't much better than a world where people get rich by being the children of current rich people. In both cases you get rich by helping the rich class perpetuate itself, not by actually making the world better.

Noahpinion's article misses a point: it talks about how there isn't that much actual wealth and most "wealth" is fake zero-sum financial instruments and since there isn't much actual wealth there isn't much point taxing it. But it ignores that taxing zero-sum financial instrument wealth still alters the world, in a way that many find desirable: simultaneously deleting a positive-value financial instrument from a rich person and its counterpart negative-value financial instrument from a poor person may not change the total net wealth, but it reduces inequality.

> Wealth inequality is just a radical left fairy tale to villainize the hard-working 1%.

The problem with that mindset is that we know how it's going to end up: it's not only the 0.1% or 1% that are going to suffer the wealth tax. It's the 30%.

At first the "tax on billionaire" was supposed to be that: a tax on billionaires. But then there are already publications explaining how "taxing anyone who has more than a million (a million, not a billion) would bring x in revenue for the various countries".

Also note that it's never about distributing that money to the poor: it's always about the state getting more money. Money which is then spent in state-friendly companies.

For example the EU is hard at work now imposing a mandatory, EU-wide, tax on all its citizens to "finance EU projects". It's not a tax to give money to poor people. It's a tax to give money to companies like Thales and Airbus and a shitload of sycophantic companies that'd be bankrupt if not for the state' intervention.

Just look at how government are managing the insane money they get: do you think they're doing a good job when they're at, say, 130% debt-to-GDP ratio? Why would I want to encourage such irresponsible spenders by giving them even more?

When a country like France, which is badly in debt and has huge deficits, has about 60% of its GDP that is tied to public spending, it's not the fault of "the rich" if the country is not doing well. It's the fault of the people governing that country.

So, no, thanks but no thanks. I don't want any "let's tax the rich" discourse because I know that it's the middle-class, not the rich, that's going to end up getting owned.

Just like fighting the four horsemen of the infocalypse is an excuse used by the states to gain every more power, attacking the rich is an excuse for the state to gain ever more power. It's not about helping the poor.

> You would think, after having been on the side of labor in its fight with capital for almost two centuries, that the far left would be happy that labor has finally prevailed.

PG does make a reasonable point here. Capital is much less of a barrier than in the past for starting a business. A small group of people with no outside investment can do a lot of damage.

It's not that complex - there are workers who work and spend their hours creating wealth, and there are heirs who expropriate surplus labor time from those who do work. It's a parasitism of a class of parasitic heirs on those of us who work and create wealth.

Nothing could make that more clear than the past year and a half. For tech workers we had FAANG layoffs, hiring freezes, lowball offers if any offers at all etc. Contrast this to the tech stock market since the beginning of last year - a FAANG index like IGN doubled, NVDA up 800%. Like Shakespeare said - the leanness that afflicts us, the object of our misery, is an inventory to particularize their abundance; our sufferance is a gain to them.