[pringle]

PG,

The cases you cite -- tech entrepreneurs whose startups generate vast wealth -- aren't really that relevant to Rich's argument.

While I guess they do make up a portion of this class of superrich (without any research, my hunch is a small portion), the larger problem Rich describes is that society just isn't rewarding people the way it used to, and that there's been a deliberate rigging of the system for the past 30 years that is allocating capital in the hands of a very select few. Pretending like those few are all Zucks and Sergeys is a deliberate misreading and has nothing to do with this problem.

I think your reaction to this, judging from your writing, comes from the fact that you are very much surrounded in a culture of startups and tech innovation, where money is made by creating new things and expanding the pie, not reallocating its slices. That's great, but isn't a reason to deny some obvious -- and depressing -- realities about what's happening to America's social and economic fabric.

The tech startup scene may be a bright light in this pretty dark trend, but is not a reason to deny the trend exists.

Lastly, this is bad for startups. The allocation of capital based on merit is the linchpin of an innovative and growing economy, and the lifeblood of what you do day in, day out. You really should be on the other side of this argument.

[pg]

(without any research, my hunch is a small portion)

It wouldn't have taken long to test that hunch.

http://www.forbes.com/wealth/forbes-400/list

The superrich basically consist of company founders, their kids, and hedge fund managers. So unless your dark conspiracy = hedge funds (in which case why not just say so?), there's no evidence of it.

[pringle]

Come on. I think you very well know that the superrich class being discussed is more than just the Forbes 400. It's about the top 1% or 5%. There's a whole lot of room beneath these 400 people that take up space in this class of superrich that has grown in the past 30 years at the expense of everyone else. The Forbes list just validates that the way to make the absolute most money is to start a company. And that's great. But again, irrelevant.

Here's some quick research you could've done to test YOUR hunch:

"These numbers actually understate the wealth of America’s top 1 percenters. Each Fed Survey of Consumer Finances, as Kennickell notes, specifically excludes from the survey sample any of the people wealthy enough to make the most recent Forbes 400 list of America’s richest. In 2007, the Forbes 400 held a collective net worth of $1.5 trillion.

But in 2007, even without the fortunes of the Forbes 400, the top 1 percent still held a whopping 33.8 percent of America's total family wealth. Families in the bottom 90, all together, only held 28.5 percent."

http://www.alternet.org/story/137540/solving_the_mystery_of_...

As for any dark conspiracy, I'll say it again -- just because it isn't a part of your reality doesn't mean it isn't real.

[lotharbot]

I want to call your attention to a recent survey about wealth distribution [0] in which the average Bush voter stated that the ideal would be for the poorest quintile to have 7% of the wealth and the richest to have 35% of the wealth (Kerry voters said 12/30). Now, a thought experiment: imagine every family had the exact same income and the exact same rate of wealth accumulation. This is definitely more favorable to the poor and less favorable to the rich than you'd expect from the average Bush voter, or even the average Kerry voter. The only way to be wealthier than someone else is to have been working for more years. But if you do the math, you find that under this system, the richest quintile hold 36% of the wealth and the poorest hold 4% of the wealth. In other words, this system that both Bush and Kerry voters would consider extreme in promoting equality actually provides more wealth inequality than either Bush or Kerry voters emotionally believed was appropriate.

Point being, the people surveyed clearly didn't have a principled reason for thinking 30-35% was an "appropriate" amount of wealth for the top quintile; they hadn't done the math. In light of this, I want to ask you: do you have a principled argument as to how much wealth the top 1% or 5% or 20% should have?

[0] http://www.slate.com/id/2268872/

[pg]

The Forbes 400 list isn't just company founders. It's founders, inheritors, and speculators. Do you have any reason for believing the mix of wealth sources changes as you go further down the list? In fact, do you have any specific rich person or type of rich person in mind that would be an example of the conspiracy?

[pringle]

Yes, I do. I think it's pretty logical to assume that you would begin to see many more money managers and executives as you go down the list. But I don't really see what that's getting at.

The point is that the same people doing the same things are getting much more than they used, and it's a direct result of actual policy changes. I'm not sure why identifying these people as individuals and professions is all that relevant. But do I think that tech entrepreneurs are a minority in those few million people? Yes. Call me crazy.

I think the real question is: Do you have reason to believe that the pretty well-documented overhaul of tax, monetary, and regulatory policy that has taken place in this country over the last few decades didn't actually happen?

If so, that's a conspiracy I'd love to hear about.

[lobo_tuerto]

What about El Chapo Guzmán?

[ootachi]

The article defines the super-rich as the top 1%. 300M * 1% = 3,000,000. The Forbes 400 is 400 out of the 3,000,000 super-rich, hardly a representative sample.

Instead I'd prefer to turn to studies of social class, such as Thompson & Hickey 2005 [1]. This study defines the upper-class as "largely constituted by the heirs to multi-generational fortunes".

[1]: http://en.wikipedia.org/wiki/Social_class#Thompson_.26_Hicke...

[dpatru]

The reason more people haven't accumulated wealth in America is not because the rich class has taken it away from the middle class. Rather, it's because the middle class has not saved and has instead chosen to accumulate debt. The government, largely chosen by the middle class, has done the same. I don't see how taxing more will help reverse this. On the contrary, it will make the problem worse.

Government policy since the founding of the Federal Reserve seems designed to discourage the accumulation of wealth. Government taxes income (i.e., the productive use of time), earnings on savings (capital gains), profits, accumulated wealth directly (by the death tax).

In addition, the value of money has been steadily eroded. A century ago, when the federal reserve was founded, an ounce of gold was $20. Now it's about $1400.

Besides penalizing the accumulation of wealth, the government encourages it's opposite: debt. Interest is tax-deductible. Government aid for food, housing, education, and medical care is available, as long as you haven't accumulated any wealth. Big (wealthy) businesses are under more regulation than small (mainly poor) businesses.

With this kind of government policy, it's no wonder that more people don't accumulate wealth.

Accumulated wealth is a good thing. It makes liberty worthwhile and meaningful. It enables innovation. It provides security. Wealth also allows for independence which is why most politicians tend not to like it: a wealthy person's vote cannot be bought so easily with a government handout.

PG is in the business of helping people become wealth accumulators (i.e., rich). He counsels saving money, minimizing expenses, living frugally, avoiding debt, so that a person can devote the maximum energy towards building wealth. I don't see why he would support government policies designed to encourage the opposite.

[TomOfTTB]

Your argument isn't logically consistent. Whatever justification you use the argument is the same: You think the government should be able to decide what people's contributions are worth and act as an intermediary between the person getting paid and the person willing to pay them that money.

So you can't make an exception for people who "create new things". Because the precedent you've set is that Government should be the one judging what someone's individual efforts are worth and in order to even make that judgement Government has to then evaluate everyone's contribution.

Hence there are no exceptions because everyone must be judged.

So in the case of someone like Sergey Brin you'll get people asking if what he did is really worth $15.9 billion dollars? Or those who ask "Isn't $1 billion more than anyone needs? Wouldn't society be better off if we took the other $14 billion and distributed it to poorer people"