[ckip]

Misleading. Likely intentionally so. Top 1% mostly comes from artificially scarce markets and pyramid schemes: lawyers (with intentional bottlenecks on supply at the associate level and a pyramid scheme to make partner), doctors (with intentional barriers in both requiring unrelated undergrad study and the hazing style apprentice model), elite university professors (pyramid scheme with grad students and post docs; salaries are now typically above $200k, reaching a million), executives (pyramid scheme based on connections and kickbacks), finance, etc.

The only domain requiring unique productive skills is doctors... The rest is all market manipulation.

[gbacon]

Where did you find your stats on distribution (“mostly”)?

The article mentions other professions without the supply limiting that physicians and attorneys enjoy.

“Typical firms owned by the top 1-0.1 percent are single-establishment firms in professional services (e.g., consultants, lawyers, specialty tradespeople) or health services (e.g., physicians, dentists),” Smith et al. write. “A typical firm owned by the top 0.1 percent might be a regional business with $30M in sales and 150 employees, such as an auto dealer, beverage distributor, or a large law firm.”

Engineering-services firms also fit this description. Specialty tradespeople include plumbers, electricians, and lawn care and to belong to this cohort, they are running more substantial operations than solo self-employed: at least $3-10M top line and twenty or more employees.

[ckip]

I find my stats in studies with much more robust methodology.

Here is a reference chain:

https://www.nytimes.com/2017/11/17/upshot/income-inequality-...

Tldr: "Almost all of the growth in top American earners has come from just three economic sectors: professional services, finance and insurance, and health care, groups that tend to benefit from regulatory barriers that shelter them from competition.

The groups that have contributed the most people to the 1 percent since 1980 are: physicians; executives, managers, sales supervisors, and analysts working in the financial sectors; and professional and legal service industry executives, managers, lawyers, consultants and sales representatives."

[sharemywin]

Don't forget the franchise systems.

[gbacon]

Excellent point. Some franchise terms require significant net worth and have six-figure fees, but that is not the case across the board. I have heard that Chick-fil-A’s franchise fee is only $5,000 but also that they are very selective. Subway’s initial fee is in the $10-15k range[0] with the cost to open between $100-300k, and the company will provide and help with financing.

[0]: http://www.subway.com/en-us/ownafranchise/franchisingfaqs

[restuijs]

The tasks of physicians don't require unique skills, in the sense that there is no other route to obtaining those skills. What they do requires skill, but often they are skills that could be and are acquired by different means, but are prevented from use by the arbitrary educational structure required by regulation. Physicians too benefit from the artificial benefits of rent seeking.

[JoeAltmaier]

Permitting physicians to practice without certification has historically been a mess. That's why the rules are there. To filter quacks and con men.

[GFischer]

Agreed, but it definitely could be argued that the pendulum has swung way to the other side, and that many diagnoses and procedures that could be performed by someone with 1 or 2 years of education are performed at a substantially higher cost and inconvenience by doctors.

Maybe an equivalent to the lawyer's "bar exam" without the degree requirement?

http://www.slate.com/blogs/business_insider/2014/08/02/state...

[0xcde4c3db]

I'm having trouble finding a source for this (I'm pretty sure I initially read it ~12 years ago, which puts it pretty close to the current linkrot horizon), but it's been claimed that many bar exams are somehow rigged to control the supply of lawyers as well. The evidence was something like the derivative of the pass rate being inversely correlated to the derivative of the number of practicing lawyers in the jurisdiction.

[TheOtherHobbes]

It could be argued, but that argument would be incorrect, because leaving diagnosis to untrained individuals unrealistically favours "obvious" - but wrong - shallow diagnoses over less obvious deeper diagnoses.

You could argue that doctors aren't great at deep diagnoses either, and unfortunately that seems to be true. But they're still likely to better than someone who lacks the experience or knowledge to understand why a shallow diagnosis may be misleading or limited.

Law is a different problem. Lawyers are paid to be persuasive, using some knowledge of law as a foundation for rhetoric. Specialist lawyers are likely to have access to useful domain-specific professional networks. But a lot of law is relatively menial (but expensive) form-filling. The very specific and self-contained skills used to handle routine property transfers, wills and probate, and so on, can easily be handled by paralegals.

Medicine doesn't have those nice clean silos. If someone has abdominal pain, the range of possible causes is huge, and often very dependent on an extended medical history.

[GFischer]

I'm not saying to exclude doctors :) , I'm saying that primary care and triage could be done by individuals with less extensive studies.

Having more medical services does drive the cost down and I live in a country with firsthand experience.

Here in Uruguay, we have several tiers of care, the first one being an equivalent to a walk-in clinic plus doctor-to-home services. If your child has a fever, or you're feeling unwell for some reason, or you have a rash, you go to those and get immediate service. Here they're manned by actual doctors because we have a lot of them (4 per 1000 inhabitants, highest in the world).

These doctors usually only did the standard training (which is 6 years) and not the specializations (which are 4 more years).

These services are not free but they're available with a ridiculously cheap subscription (about 35 dollars/month) which includes free ambulance services in case of heart attack or similar.

These are the ones I'd man with nurses or equivalents in the U.S. They know better than to treat complicated cases - if they triage and understand your diagnosis might be more serious (let's say they suspect the abdominal pain is an appendicitis), they immediately transfer you to your primary care center.

As mentioned, if your injury or symptoms are more serious, then you can go to your primary health provider. These are under a "mutualism system", which is basically equivalent to being a state-provided healthcare system. Those are paid from your paycheck (4.5% to 6% of gross salary) and free for those under some sort of state subsidy or pension or equivalent.

Here you have access to all specialists, if you're on a standard service, you'll have to be referred by a general practitioner or have a wait time of a few months. There are also private insurance companies that provide a service on top of this, which for an extra monthly premium (200 dollars in my case) you can get same-day appointments to any specialist.

Many doctors here are among the 1%, but a lot of them (those in the primary care centers I mentioned) don't make much above a standard wage.

[stanleydrew]

> The only domain requiring unique productive skills is doctors

Most doctors I know are simply information routers. Unless you're talking about surgeons I don't see what makes medicine more uniquely productive than, say, legal work.

[ckip]

Medicine contributes to economic output. Most legal work takes away from it.

[jacques_chester]

> The only domain requiring unique productive skills is doctors... The rest is all market manipulation.

The difference between you and I is that I trust experts to be experts.

I'm also aware, because I studied law, that "oh it's a supply-side cartel" is basically a myth. Anyone who can rub two braincells together to singe their fingers can find a lawschool that will take them in (after all, that's what I did). There are more grads than openings, year after year.

Lawyers are expensive because the stakes for fucking up are potentially very high and the good ones are in high demand. Same with medicine.

[te_chris]

Yep, the thing big clients are buying from big law firms is their liability insurance, not their super-unique law expertise.

[jacques_chester]

I think it's a lot of things. Any lawyer is insured to the level that makes sense for their work, so at some level that's really not a differentiating factor.

A lot of it comes down to things as varied as depth of bench, using their famous letterhead as a club, familiarity and traditional relationship, old boy's network and so on and so forth.

But it's still silly to give a one-conspiracy-fits-all account of the legal world.

[te_chris]

I should've been more explicit, I meant against bringing it in-house. My partner is an experienced commercial real estate lawyer so, really, I'm just reflecting her view - she's worked on both sides, in-house and private practice. The only reason, in her experience, that companies don't bring that sort of work in-house is insurance and the hassle of liability being worn by the law firm rather than the company. Also, it allows the client (i.e. manager at the client) to have someone to blame when it all goes tits up.

[barry-cotter]

This is really excessively cynical. Any law firm can buy liability insurance, not all law firms have the kind of legal expertise of Cravath, Swaine and Moore or Slaughter and May. They don’t have unique expertise but they have extremely rare, expensive and reliable expertise available in quantity and on demand. When the stakes if a contract goes to court are in the billions you do not skimp on mere millions in legal fees.

[ckip]

Lawyers out of law schools are not qualified to practice the law. That takes an apprenticeship as an associate which is where the bottleneck is. It is a cartel, but not at the law school level.

There is a huge demand for cheap lawyers -- basically people who know rules of procedure and basic law. They don't exist, in part because law schools don't teach enough practical skills to be able to practice without malpractice.

[alexasmyths]

Doctors and Executives are not 'pyramid schemes' in any sense of the word, and profs at elite universities represent a very small economy.

'Management' is a skill, not a 'market manipulation' and a very difficult skill at that.

Most of these 1% work huge numbers of hours, typically had to work pretty hard through school, and are smart and talented people - even if there is shifty stuff here and there, and a lot of 'born in the right family luck'.

I don't know any successful people who are fools who just lucked out through life. They're all pretty amazing.

[ckip]

Management is a skill. Moving up the totem pole to executive at increasingly senior levels is political games. It's a skill, but not one that contributes to economic output.

Founders excluded, of course.