[ppereira]

The distincion between creating value and hacking the economic system is interesting.

“Think of Alan Turing, whose genius provided the mathematics underlying the modern computer. Or of Einstein. Or of the discoverers of the laser (in which Charles Townes played a central role) or John Bardeen, Walter Brattain, and William Shockley, the inventors of transistors. Or of Watson and Crick, who unraveled the mysteries of DNA, upon which rests so much of modern medicine. None of them, who made such large contributions to our well-being, are among those most rewarded by our economic system.”

[lajhsdfkl]

I think it should be obvious that you won't get rich unless you sell something... None of those people sold things or seemed to be interested in the process of selling things (except Shockley and that point is moot since the coinventors/creators reaped the rewards).

Is it really that surprising to people that you wont become rich unless you convince thousands upon thousands of people to hand you money?

What our system rewards are practical products that provide value that the average working class person would want to spend money on.

[coldtea]

>I think it should be obvious that you won't get rich unless you sell something... None of those people sold things or seemed to be interested in the process of selling things

Obvious under the current system maybe.

Obvious that it should be so, and that it's better that it's so, or that it can only ever be so? Not so much.

I, for one, think that society would be so much better if production of value like what Einstein did or what Tesla did etc, was rewarded with richness, rather than selling something.

For one, we'd have gotten rid of fucking SPAM email and social media leeching on private data to sell ads...

[dwaltrip]

> I, for one, think that society would be so much better if production of value like what Einstein did or what Tesla did etc, was rewarded with richness, rather than selling something.

Unfortunately, there's no mechanism for doing this in a decentralized, dynamic fashion.

The great strength of markets is their decentralized and dynamic nature. They are the original hivemind and crowd-sourced wisdom. Of course, they have many weaknesses (especially with the corruptibility of governments). But for now, it seems these weaknesses are best handled by continually attempting to apply layers of patches and one-off fixes, instead of altering it fundamentally. Perhaps advanced AI will enable a new paradigm... although I would certainly not want to rush into such an enormous change.

I do agree that we can do a better job of rewarding and incentivizing fundamental research and innovation. But it's not going to be easy. Part of the problem is that it often take significant hindsight to know which breakthroughs are the most important.

[coldtea]

>The great strength of markets is their decentralized and dynamic nature. They are the original hivemind and crowd-sourced wisdom.

The problem is that markets optimize for one thing, to the detriment of all others: profit.

Anything else (e.g. more inventions, etc) is a byproduct. If avoiding it will bring more profit, that's totally fine for the actors involved.

And it's not even long term profit (which, because of costs to reputation and such, will require more good behavior) -- quick term profit is equally good a motive under such a market system, human costs and externalities be damned.

Under such a system, if people could sell baby milk mixed with chlorine to make a profit, they would (and they have -- among countless of other examples of putting profit first).

We should create and foster decentralized and dynamic systems that optimize for a better world in aspects that we want -- instead of piggybacking on a naturally occurring decentralized system based on greed like monkeys.

[pjc50]

> Is it really that surprising to people that you wont become rich unless you convince thousands upon thousands of people to hand you money?

> What our system rewards are practical products that provide value that the average working class person would want to spend money on.

Hmm. The first statement either tautologous or ignores the importance of inheritance and marriage; the second one ignores the importance of property.

http://uk.businessinsider.com/sunday-times-rich-list-2017-ri...

In addition to fairly standard retail I can see: gambling, property, inheritance, diamonds, inheritance (Earl Cadogan, Duke of Westminster, Heineken), property, actual inventions (Dyson, Rausing), corruption/oil oligarchy (Abramovich, Usmanov, Blavatnik), and war profiteering (Fredriksen).

[lajhsdfkl]

Thank you for posting an argument against a point I've never made. Hmmm, it's almost as if I didn't state that selling things was the only way to make money.

[pjc50]

You said "you won't get rich unless you sell something" upthread?

[api]

Your last paragraph is no longer really correct. The largest rewards have for some time been going to equity plays and financial schemes. You don't build a company for customers but for the next round of investors, and your product is its stock. In the extreme these can be highly clever and polished versions of the "big store" scam where nearly all actual value is flimsy or illusory.

This is because all the money is now at the top. Your customers are the ones who can pay.

A related phenomenon is Internet companies where the user is the product. Advertisers and others who want user data or access to attention have far more money to spend than users. Computing has transformed into a surveillance platform to monetize users because users are not the ones paying for anything.

[lajhsdfkl]

> The largest rewards have for some time been going to equity plays and financial schemes

The largest rewards are going to people using their money to finance the creation of businesses that create products people want to buy? Yeah that makes sense to me.

[amarkov]

You're mixing up levels of indirection. Financing the creation of businesses that create products people want to buy isn't itself an example of "practical products that provide value that the average working class person would want to spend money on".

You can say that what our system rewards is always derived from practical products the average person wants, but that doesn't seem like a useful way to think about things.

[lajhsdfkl]

Can you explain to me in simple words what you are refuting in your comment?

Nowhere did I suggest that the only way to become rich was to sell practical products. I will state that this is the primary way people acquire vast amounts of money and that whether people become rich via second order and abstract systems such as financing makes no difference. Ultimately the products would not exist without the financial system that was in place.

[amarkov]

It's a lot easier to get a $250k position at Morgan Stanley than build a business generating $250k in profit. If more people go the latter route, that's just a matter of a larger denominator, not an indication of what's actually being rewarded.

[api]

The last part about value for customers is optional for as long as there are deeper pocketed investors. Given the concentration of wealth at the top that might be a long long time. I also edited my comment to mention user monetization, which is a related phenomenon.

[lajhsdfkl]

> The last part about value for customers is optional for as long as there are deeper pocketed investors

I don't understand what you mean by this? Is this a comment about the current startup funding phenomenon?

[api]

You don't even need such extreme cases. Companies that are insanely successful are generally not the ones that innovate the most and rarely are they founded by inventors. Not only is Tim Berners-Lee not rich but Netscape failed too. Meanwhile the largest success story of the web is Facebook, a company that uses it to strip mine personal data and manipulate our attention.

Our system rewards value extraction (rent, financial hacks) far more than value creation.

[mailxplorer]

TBL is worth over $50 million.

[InitialLastName]

What's the economic value of the World Wide Web? How tiny a portion of that should we really allocate to the innovators who create the concepts our economy is built on?

[lajhsdfkl]

So do you have an actual proposal for how we should be rewarding these people?

Your rhetorical question provides no value. I want to know how we should decide who should be rewarded, how we can obtain the money to reward them and what benefit does rewarding them in this fashion provide to society.

[salawat]

That's a bit disingenuous.

Not all rewards need be monetary or zero-sum.

Also, one does not reward someone to provide a benefit to oneself. THAT is thinking that creates the greatest inequality in our system if you ask me.

Oh, let me pay this employee... but wait! That money goes right into a retirement account, that invests in an index fund, that supports me and my business partners...

A reward is something given at a COST to another in recognition of their accomplishment. You give it without thought of a return, because what they have done is made your life better.

The fact no one in economics wants to think through the money trail thoroughly doesn't change that the corporation is no longer a provider of services as it's primary goal... It is an enricher of the few who jump on the equity train.

[coldtea]

>So do you have an actual proposal for how we should be rewarding these people?

Sure.

An innovation tax, and a group of cross industry and academic people (e.g. a mix of successful founders, engineers, great researchers, Nobel winners, plus a jury of common folk etc) that decides, every e.g. 5-10 years, who gets to share the money among a shortlist of potential benefactors.

"Hmm, looks like this Turing person did good work in retrospect that hugely helped our society. Let him have $100 million of the $1 billion innovation fund".

[WJW]

That seems like an amazingly gameable system. In particular, it would reward the ones who are best at taking credit, which are not necessarily the same ones that did the actual innovating. Further, it requires the deciding group to be reasonably free of prejudice. As little as a few decades back it would have completely ignored any contributions by women, for example. Finally, I would not be surprised if an outsized amount of the 'prize money' went to friends/family/acquintances of the people in the decider group.

[lajhsdfkl]

And this innovation tax takes priority over all of the other things that need to be funded? What about the millions without healthcare? Also are we really going to trust some bureaucratic institution to dispense billions of dollars in a fair manner?

[api]

Good, and thanks for correcting, but he poor compared to Zuckerberg. All the latter did was riff successfully on the already established social media concept and then sell out his user base more brazenly than competitors.

[Alex3917]

While it's certainly unfair that innovation is more rewarded than invention, the idea that this is a significant driver of economic inequality is pretty dubious. Also given that academia has already gotten in bed with Reaganism and Bayh Dole, asking government to bail them out now is basically just wanting to have their cake and eat it too.

[toasterlovin]

Though they were never rich, they will be remembered for all of eternity. Whereas history quickly forgets about the merely rich and famous.

[eaenki]

What's even more ironic is that Watson and Crick did NOT discover the DNA. Actually, a woman did. Not only she hasn't been rewarded economically but even culturally-wise.

[mieseratte]

> What's even more ironic is that Watson and Crick did NOT discover the DNA

I thought Watson, Crick, and Franklin were working on a team and that she was left uncredited?

[ghaff]

She was not left uncredited but is less well known. She didn’t share the Nobel Prize mostly because she had died and rightly or wrongly it’s not awarded posthumously.

Photograph 51 is a good play about Rosalind Franklin BTW.

[SidiousL]

No, she most certainly did not discover the DNA. The DNA (which was not named like that) had been around since Friedrich Miescher's work in the 19th century.

Your statement is at least[#] as ignorant as saying that J.J. Thompson discovered electricity since he discovered the electron. Of course, the electricity had been discovered long before that.

[#] What I have in mind here is that even the statement that she discovered the molecular structure of the DNA is not strictly speaking accurate.