[ywei3410]

> Wealth creation isn't zero-sum, just because someone builds a business and creates wealth doesn't mean they're taking it from others.

It absolutely is zero sum - but not from the point of money, but from the point of view of another finite resource; human labour and talent.

The fact that someone has more wealth than someone else means that the market will value their time/spend more than someone who is poor.

Think about it this way, if you see money as a way for society to allocate resources - is the fact that you own more wealth than someone else mean that you can should be able to direct more of where the resource spend of human labour is?

How many talented engineers work at Rolls Royce to create £250,000 cars which would be better put to use elsewhere? How many software engineers work at startups funded as a moonshot for the wealth of the founders work on CRUD apps where they could be working on something like scientific or educational tech? How much chemical engineering talent do we sink into cosmetics?

Your cited examples prove the point above - the only reason why those examples exist is at the whim of those who have wealth. What about less savoury examples of the use of wealth such as Academi or Palantir?

[drewcoo]

The only reason wealth creation is not zero sum is because of the way it's defined. I can redefine anything zero sum to be not. Slicing a pie into pieces and sharing it is non-zero because there was no joy of sharing before! Etc.

[tim333]

>It absolutely is zero sum

So the humanity's wealth is the same as a million years ago? There seems to be more stuff now.

[ywei3410]

I see you didn't bother to read past the first few words; but I'll be charitable and explain why this is _reducto ad absurdum_.

First, we're talking about capitalism as a economic system which has only been in place for ~200 years. I think you'd be hard pressed to find any capitalist which would give credit to capitalism before the birth of capitalism. If your critique is based on the fact that capitalism is a successful economic system and better than what came before it, I fail to see where I suggest the opposite view. To suggest it's the _best_ possible system is rather more difficult.

Second, wealth has no definition without some form of economic system. Is wealth the free time that someone has, the trinkets or baubles that someone owns or their lifespan? By all accounts capitalism has done wonders for the second and third measures of wealth (arguments that technology and scientific progress which capitalism doesn't tend to fund notwithstanding). The first I'm unsure about; census data only shows since the 1970's and of course we have the massive bump due to a doubling of the demographic who are working.

[gonehome]

> It absolutely is zero sum - but not from the point of money, but from the point of view of another finite resource; human labour and talent.

I think your point is less about wealth creation, and more about access to capital and how that influences who can fund what work. It's a subtle distinction, but I think an important one - and yes you're right access to capital and how capital is allocated is zero sum and this influences what work is done.

I don't think this is entirely a bad thing though because in a society with an effective market what makes money should be related to what people want. The incentive alignment that comes from this (and capitalism generally) has allowed the largest creation of wealth in human history (of which everyone benefits when you look at things like infant mortality, public health generally, standard of living, etc.).

This doesn't mean there aren't places to improve in terms of equality of opportunity for access to capital or that there shouldn't be rules to prevent incentives that can lead to outcomes worse for individuals and the group (see the fish farming story in this: https://slatestarcodex.com/2014/07/30/meditations-on-moloch/), but it also doesn't mean that the wealth tax or dis-incentivizing wealth creation is a good idea. Venture Capital is important here because it gives access to money to people and ideas that would have a hard time getting it otherwise (on bets that only occasionally pay off huge).

We want people to be incentivized to take risks and start companies that can create massive amounts of wealth and entire new industries. If you have a wealth tax, someone making a couple million a year as an investment banker will be less likely to leave and risk that money to create something since they'll probably get to the cap without doing that anyway.

Starting a company is already a pretty hard/risky decision to make, we don't want to make it harder.

> How many talented engineers work at Rolls Royce to create £250,000 cars which would be better put to use elsewhere? How many software engineers work at startups funded as a moonshot for the wealth of the founders work on CRUD apps where they could be working on something like scientific or educational tech? How much chemical engineering talent do we sink into cosmetics?

The way to fix this is with incentives that encourage people to go into areas society thinks are more worthwhile, but I think you're too dismissive of things like CRUD apps. Those things provide enormous value for the companies that need them (I think even cosmetics research has led to new medical knowledge).

That said, I agree with the spirit of your questions - I wish humanity was better at coordinating. There's so much we could do if we were better at coordinating. I think capitalism and incentivizing for wealth creation (with controls for human rights/environment) is the best we've got to make the most progress the fastest. It aligns human nature and rewards people that make things that people value.

There's a risk of a corrupting influence on liberal democracy that needs to be controlled (https://www.ted.com/talks/lawrence_lessig_we_the_people_and_...), but I think this is best structure for society to efficiently allocate resources/capital in a way that encourages the most wealth creation and growth.

Does this mean you end up with things like Las Vegas where human investment would be better off elsewhere? Yes, but I think that's an acceptable trade-off for everything else you get (and people like Las Vegas).

Attempts to remove the capitalist incentive structure and dictate what's important for people to do (or worse control how money is allocated to people) seems to lead to massive corruption and people doing what's necessary to get the money (which is often unrelated to actual success).

As far as Academi - I'm not arguing for unregulated, no-government, capitalism. Companies should provide value within society and society should enact legislation via elected representatives in some form of liberal democracy (and companies should operate within those laws). I may not agree with every action that happens here, but nobody will - and that's why we have liberal democracy to sort it out.

[ywei3410]

> I think your point is less about wealth creation, and more about access to capital and how that influences who can fund what work. It's a subtle distinction, but I think an important one - and yes you're right access to capital and how capital is allocated is zero sum and this influences what work is done.

I agree; I'm talking about the allocation of capital in a capitalist society; I'm effectively arguing that inequality and wealth distorts the markets such that capital is allocated to be invested in products which those who are richer care more about - to put it in a more reductive way the fitness function is a simple maximum rather than, for example, having a scaling factor per person.

A liberal democracy is intended to be the latter, but as we've seen, enough wealth and lobbying implies that you can indeed, influence enough of your fellow populace to vote how you want them to.

> I think this is best structure for society to efficiently allocate resources/capital in a way that encourages the most wealth creation and growth

With all due respect, this is similar to the argument laid out by Leibniz when asked about the existence of God; that is that "We live in the best of all possible worlds" - and in that case the rebuttal is the same, given that the proposition is such a strong one the burden of proof is on the proposer. After all, Mercantilism was thought to be the best system during the Rennaisance and Feudalism in the Middle ages to give two examples of economic systems which were later discarded.

> The way to fix this is with incentives that encourage people to go into areas society thinks are more worthwhile

Capitalism only has a single answer to this question; the areas which have more capital are by definition the areas which society thinks are more worthwhile! Which, is why it is an incredible system - it manages to make people who by and large are self-interested and self-organize and as you say has been the biggest driver for human wealth and prosperity for over a century without the need for some benevolent dictator.

To my mind, there are several really big problems which we have to face in the coming years. You alluded to it here tangentially;

> people like Las Vegas

I think with adtech industry and social media, it's incredibly easy to influence what people desire and want - if you can control what people want; can we still really say that capitalism makes people more prosperous, if the very reason that they were poor because we induced artificial needs and desires in them?

On a more practical level, I agree with you; people should be incentivised to start companies because it's good for society. But where we disagree, possibly, is that money is the only driver which causes people to start companies. The IBD banker in your example, would start the company regardless of whether the payout was lower, but by implementing a wealth tax, maybe the we could give the opportunity to the teacher with the great idea about educational technology to create _their_ business and enrich society.

[gonehome]

I appreciate the thoughtful back and forth - I also think we agree more than we disagree.

> "...given that the proposition is such a strong one the burden of proof is on the proposer"

I should clarify that I'm not arguing so much that capitalism is the best possible system that could exist and it's always worth thinking about ways things than can be better. There is a lot of evidence in favor of capitalism though compared to other systems that have existed, mostly in the amount of created wealth it has enabled via growth and the speed at which that improvement happened. Then looking at all of the societal metrics that have improved in that context (infant deaths, violent crime reduction, poverty, etc.)

It's the best structure I'm aware of and a lot of idealized proposals of alternatives fall flat.

The Stubborn Attachments book makes this argument in a way I found pretty convincing.

> "But where we disagree, possibly, is that money is the only driver which causes people to start companies. The IBD banker in your example, would start the company regardless of whether the payout was lower, but by implementing a wealth tax, maybe the we could give the opportunity to the teacher with the great idea about educational technology to create _their_ business and enrich society."

I think you can give this opportunity without a wealth tax and its associated negative incentives (I think these issues are unrelated). I also don't think money is the only driver, but you don't want to dis-incentivize growth when you don't have to.