| PG, this is a thoughtful essay. Yet I'll point out a flaw in this thinking below. Intellectually Honest merits here:
- you want to incentivize people to create value for society and optimize globally by raising the quality of life of (most) humans.
- Wealth creation itself is not by default at the cost of others. Intellectually Dishonest:
- That startups and wealth creation converge on a quality of life optimization function for humanity. In other words: startups and wealth creation operate within the randomness of free market. And most software technology in the last 30 years has not unlocked some kind of massive step function value in global problems. If we could align more Venture Capital funding and R&D output to solve fundamental problems (in other words: can we solve access to affordable nutritious food, reduction of common disease, reducing cost of housing ahead of 5-minute media formats or SaaS Invoicing Applications?) Housing has continued to become less affordable and poverty still prevalent in the US. - That there is a binary debate: "should there be wealth or not?" Social Programs, funded by government, funded by taxes on higher earners and large capital gains, are one lever to address this. The reason the inequality gap matters is less that its a metric of the _delta in absolute wealth_ but more that opportunity and livability of average Americans has a worse outlook in the last 20 years, not a better one. |
Housing: It seems this is largely a policy issue rather than an economic one. Restrictive zoning and a misaligned incentive structure come to mind. Places like SF are the face of the housing shortage, but it’s a problem of supply and demand. To make affordable housing, you need a lot more housing. First, you have to satisfy the needs of all of the wealthy buyers, and this isn’t even clearly achieved. Even with subsidies, there isn’t a financial interest for developers to sell affordable housing. We need to build a ton of housing to meet demand. Policy is the inhibitor here.
Food: Food deserts exist entirely because of sprawl. The suburbanization of America means lowered density in certain Urban cores. (The Midwest and south especially) Lower density, particularly among lower income residents makes traditional grocery stores unviable. To sell produce you need sufficient traffic or else your stock will go bad. To make things worse, low income residents have less access to transportation. Thus, lower traffic. It’s not profitable to run a grocery store in the middle of urban sprawl, especially given the lack of access to transportation. Transportation is a matter of policy, again.
Healthcare: The problems here are directly correlated with housing and food, but extend to education. There is significant over—utilization of emergency services for non-critical medical services. I believe some universal access to healthcare should exist, but not if we don’t first address the inefficiencies that exist due to a lack of health education. Education is again, largely the fault of policy.
It’s not lost on me that wealth increases access to all of these things, but I don’t think we can blame venture capital and founders. These are deeply societal issues, given poor policy decisions in our history. They aren’t attractive investments because you cannot change them in a matter of a couple of years.
A higher tax on the wealthy would incentivize focusing on these issues, but it would also slow the pace of economic growth. It’s a matter of compromise.