[mcntsh]

> Then the next question is why does wealth, in practically all industrious countries seem to distribute disproportionally and not uniformly?

It's simply because money is compoundable. The more money you have the more you can make, and the more you make means less other people have.

[_DeadFred_]

"U.S workers just took home their smallest share of capital since 1947"

https://fortune.com/2026/01/13/us-workers-smallest-labor-sha...

[cbolton]

I think you have the right idea, if poorly worded. The economy is not a zero sum game, but the idea works when you apply it not on wealth but on wealth increase. That's more or less the famous r > g formula of Piketty: when the rate of return of capital is larger than the growth rate of the economy, wealth gets more concentrated. Its application has been disputed but the basic principle certainly applies in many situations.

[kjshsh123]

There's a finite amount of money. There's not a finite amount of wealth.

Having lots of wealth does not mean other people have less. If that were the case, there'd be as much wealth today as there was 1000 years ago. Making a company and having it valued at whatever value, does not remove that amount of wealth from other people.

[Supermancho]

Not trying to argue, per se. I'm saying that you gave me a lot to think about.

> There's not a finite amount of wealth.

I think there is a finite amount of wealth, at any given time, same as "money". Money is a transactable medium to measure value, rather than as a type of good on its own. The medium can change region to region and over time.

Wealth is an aggregate of all valuables you possess, including expected gains. Wealth is also subjective, because of these properties. People agree on some approximations for the purposes of transactions with money.

> Making a company and having it valued at whatever value, does not remove that amount of wealth from other people.

Depends on perspective, I would say. When the value rises in a public company, even when it's just the expectation, you have people dumping their wealth (as money) into the company. So yes, it does for large public companies. While it does grant some rights, in a practical sense it's a hole you dump money into with the expectation that you can reach in and take out some amount in the future. I can understand this is what is envisioned, when people talk about wealth as zero sum. I don't agree, but I get what they are going at.

> If that were the case, there'd be as much wealth today as there was 1000 years ago.

Wealth is partially based on expectation. The growth in population fuels increases in wealth, because that's the part of the equation that is speculative.

[kjshsh123]

>Depends on perspective, I would say. When the value rises in a public company, even when it's just the expectation, you have people dumping their wealth (as money) into the company.

That's not how it works at all.

[ryandrake]

But relative wealth is all that matters, when it comes to lifestyle. If I have $100K net worth, and I'm living in a city where the first standard deviation net worth range is $80K to $120K, then I'm living a pretty average lifestyle, can afford my groceries and entertainment, and feel middle class.

If I have a $200K net worth, and I'm living in a city where the range is $1M to $500M, then I'm pretty much living in poverty, even though I have "more wealth" than in scenario 1.

This is also why, although my absolute wealth today is hundreds or thousands of times more than a king in the middle ages, I'm not actually living like a king today.

It's also how gentrification works. You're living somewhere and all of a sudden a bunch of very wealthy people move in, raising the prices of everything. You're no more or less wealthy than before, but everything has become slightly worse.

[AnimalMuppet]

Can everyone be rich enough to not be food insecure or medically insecure? I'd like to think so.

Can everyone be rich enough to not be in the bottom 20%? No, no matter how rich we become.

Can everyone be rich enough to have servants? No, unless you count machines as servants. But if you do, then I'm rich enough to have several.

[kjshsh123]

That is exactly wrong. Real wealth is goods and services available.

You live way better than a king. Your expected lifespan is higher than kings because of access to better food, nutrition, and medical care. You have access to luxuries like chocolate, and coffee that kings might have tasted once in their life, or at best every few weeks.

Not understanding what wealth is, is precisely what leads to this mistaken thinking.

As for gentrification, it is often just confusing correlation and causation. People blame rich people moving in, when really a place just actually became better due to improvements in goods or services like public transit exapansion.

[temp84858696945]

There is not a finite about of wealth, but the wealthy are currently using their position to reduce the amount of wealth the average person has, by driving up prices of everyday requirements so that they can make more money.

It's not an issue that they are wealthy, it's that they are abusing that position to gain even more wealth at the expense of the rest of the population.

[jibal]

That there is more wealth now than in the past does not even remotely imply that there is infinite wealth.

> Making a company and having it valued at whatever value, does not remove that amount of wealth from other people.

This is a strawman. The ability of people to accumulate wealth is affected by every aspect of the economic system, including the means by which those companies are acquiring wealth.

[rayiner]

Is compounding interest why Jeff Bezos is rich? Or is it because you get three Amazon deliveries a day?

[jacquesm]

No, he's rich because (1) he had first mover advantage (credit to him) (2) he has a good sense of how to run a business (3) he exploits a large number of people to his own benefit.

[cbolton]

Isn't there also an effect like the second billion dollar being easier to get than the first? I mean all your points are good but the fact that the system allows you to leverage your wealth to increase it is probably the most important factor to get to $250B.

[jacquesm]

Absolutely, the more money you have the more risk you can take. That's fractions-of-a-martingale level money so you can probably chalk up a win before you lose it all. Musk uses the same playbook. Losing is for small fry.

Proverb from my granny to contemplate: the devil always craps on the larger heap.

[cbolton]

Right, and the risk aspect is only a second order effect. The main effect applies even when you restrict yourself to low-risk investments: it's simply that the more you have, the more you can invest so the more you make on average. But yeah, higher risk tolerance means you can also aim for higher returns.

[dangus]

Don’t forget the giant investment from his parents.

Lots of people with great ideas, skills, and work ethic don’t have $250,000 lying around to invest.

[rayiner]

His parents invested about $500,000 in today's money in their 50s. At that age, 10% of Americans have a financial net worth (excluding home equity) of over $2 million. People in America invest that kind of money in small businesses all the time. That’s on the low end of what it costs to open a Dunkin Donuts, and half of what it costs to open a McDonalds. The kids of the Indian guy who owns the Dunkin’ Donuts down the street aren’t exactly scions of wealth.

And Bezos's biological dad was a unicyclist, his mom got pregnant with him at 16 and later dropped out of college, and his stepdad was a Cuban refugee who got an education and became an engineer for Exxon. Going from zero to billionaire in two generations actually says something remarkable about our system.

Think about it another way. If the government doled out $500k to fund business ideas, do you think that investment would be available to kids of refugees? Of course not. There would be gatekeeping behind credentials and connections, and it would be open to a lot less than 10% of the population.

[1] In terms of birth lottery, having top 10% parents is like being born smart enough to get a 1290 on the SAT or having a 120 IQ. Not exactly rarified aid! https://research.collegeboard.org/reports/sat-suite/understa...

[dns_snek]

> The kids of the Indian guy who owns the Dunkin’ Donuts down the street aren’t exactly scions of wealth.

I don't buy that this is a common scenario. How many of those actually own a franchise and how many of them are drowning in debt trying to pay off the loan?

[dangus]

I’m sorry but the idea that anyone near middle class would make the decision to drop their entire retirement savings on a single high-volatility business in a new product sector like e-commerce is insane.

The average retirement savings at that age is around $500,000 according to Edward Jones. That’s average, not median, which means that a ton of people have a lot less money saved up than that by that age.

The Bezos family had $500k adjusted for inflation in money they could risk and lose 100% on. That money was also in an account the presumably was liquid enough to spend (I.e., I can’t spend my 401k money before retirement age without enduring a massive penalty and tax burden).

I must reiterate that no parent would liquidate their entire 401k for a business investment. Middle class people are not starting McDonald’s franchises. At best they are starting a Subway or a Dunkin with borrowed money, and usually the families that do that are putting the whole extended family in on that investment.

Finally, I will address the way in which you our bootlicking our hyper-capitalist system: you praise the virtues of a system that allows people like Jeff Bezos to make it big while downplaying the wild inequalities in that system caused by under-taxation of people like him.

10% of Americans, over 20 million people, have no health insurance. Why is that okay?

[pfannkuchen]

> they could risk and lose 100% on

How do we know that it wasn’t a financially irresponsible move that in this case happened to pay off?

[pinnochio]

> Going from zero to billionaire in two generations actually says something remarkable about our system.

It does? I mean, sure, it's better than having only the already rich stay rich, but let's not kid ourselves that this is a life outcome that everybody, or even 10% or 1% of the US can shoot for. The vast majority of people stay closer to zero. Who gives a shit that a few people get to win the right-time-right-place lottery?

[SturgeonsLaw]

One guy went from zero to billionaire. Neat! How many thousands went from middle class to homeless over the same timeframe?

[rayiner]

Every society has elites. If you invoke the government to keep people from being financial elites, then those government positions will become highly coveted and those will be the elites. And in countries where there aren’t many financial elites because the whole country is poor (like India until recently) those government jobs are highly coveted and insanely difficult to break onto.

So it matters a lot where a society’s elites come from. In most societies, entering the elite requires family pedigree, credentials, and connections. If your society is such that simply becoming upper middle class gives your kids a sufficient platform to become a billionaire, that has a huge effect on who makes up the elites. Having elites whose parents were refugees or restaurant owners is hugely different from most countries.

[cbolton]

> Going from zero to billionaire in two generations actually says something remarkable about our system.

This data point doesn't distinguish between a system that fairly rewards abilities, and one that works like a lottery. My guess is that the US is in between: it unfairly rewards abilities, and chance plays a large role.

Taking Jeff Bezos as example: 1) he certainly has remarkable abilities but maybe not 1,000,000 times more than the median American, yet he has about 1,000,000 times the wealth; 2) it's plausible that the US population of 350M includes several people with abilities similar to Bezos yet no notable wealth due to various circumstances. Both points suggest an unfair system.

[rayiner]

Why are you assuming that “fairness” requires a linear distribution between ability and wealth? A winner-take-all system may be undesirable in many respects, but it’s not necessarily unfair.

[jacquesm]

Yes, that's a good point.

[graemep]

He also had a lot of startup capital.

[kg]

This reply has very strong "the average human does not eat 10 spiders a day; the average was thrown off by Spiders Georg who eats 10000 spiders a day" energy.

Amazon does not have an exceedingly high profit margin, and my understanding is that a lot of it comes from stuff like AWS, not Amazon deliveries - correct me if I'm wrong here. So I'm not sure that "three amazon deliveries a day" - if this is even common - is why that man is personally rich. Even if it were a big source of revenue, that would go into Amazon's coffers, not necessarily his directly.

Another way to look at this: Even if Amazon is wildly successful, does that mean Jeff Bezos specifically should become filthy rich as a result, instead of all its employees and investors? How should the gains from successful entrepreneurship be distributed?

[rayiner]

> why that man is personally rich. Even if it were a big source of revenue, that would go into Amazon's coffers, not necessarily his directly.

Jeff Bezos owns 9% of Amazon. So 9% of the expected value of the money going "into Amazon's coffers" indefinitely into the future is counted as part of his current "wealth." It's not money under his mattress.

Is your argument that people shouldn't be allowed to own 9% of a company that they started?

[lores]

People should not be allowed to accumulate capital beyond $X, yes. What natural law means they should? Society created the conditions for that person to be so successful; in fact, the person only had the minor part in that success. Once you reach $X, you get a certificate saying you won at life and society is really grateful, and society gets the rest of the rewards while they dedicate their life to philanthropy or torturing kittens or whatever it is they do as a hobby.

[rayiner]

> People should not be allowed to accumulate capital beyond $X, yes.

The term "capital" is an abstraction that's not helpful here. The big "wealth" numbers are all about equity ownership in highly valued companies. Bezos owns 9% of Amazon stock. That's why he's "rich." What should happen to that stock? What happens to his voting control over Amazon?

[cbolton]

> The term "capital" is an abstraction that's not helpful here

It was not so abstract when Musk came up with 44 billion to buy Twitter... The details are complicated but in the end it's still wealth.

> Bezos owns 9% of Amazon stock. That's why he's "rich." What should happen to that stock? What happens to his voting control over Amazon?

Presumably he would sell the stock to pay the wealth tax (or whatever mechanism is there to limit wealth)?

As for the voting control: when you're down to 9% this ship has sailed hasn't it? Anyway I don't think society has a moral obligation to allow individuals personal control of a trillion dollar company because they founded it (and if society disagrees with me, super-voting shares can be used as Alphabet does).

[fragmede]

The problem is people that rich don't own anything. It's all shell corporations and LLCs and money borrowed against those shares (so no need to pay any taxes). But they clearly have access to yacht money. We're not going to write an airtight law in the comments section. We can just ignore paper wealth and ownership stakes for the purposes of wealth redistribution.

The question boils down to a feeling that when the revolution comes, that no one person needs more than, say, $100 million for themselves, or not. Trying to distract the conversation into defining "for themselves" will only prolong your time before the firing squad, comrad.

[Manuel_D]

What is the value of $X?

[lotsofpulp]

> Another way to look at this: Even if Amazon is wildly successful, does that mean Jeff Bezos specifically should become filthy rich as a result, instead of all its employees and investors? How should the gains from successful entrepreneurship be distributed?

The answer depends on how should the losses from unsuccessful entrepreneurship be distributed?

[jacquesm]

Oh that's an easy one: that's societies' problem. Always has been. The same with pollution and all of the other stuff that can be externalized.

[lotsofpulp]

Can you be more specific? Suppose I put $1M into developing a business.

For whatever reason, construction hits a snag or revenues are not enough to cover expenses, how would it become “society’s” problem? Do I get made whole by the government giving me $1M, and the government takes posession of the property?

If so, I foresee a lot more opportunities for corruption.

[ceejayoz]

> For whatever reason, construction hits a snag or revenues are not enough to cover expenses, how would it become “society’s” problem?

You declare bankruptcy. Your vendors who extended credit get hosed. Your employees go on unemployment benefits. Each of these costs money, and each of these reduces taxable income.

[jacquesm]

https://en.wikipedia.org/wiki/Externality#Negative

[Starman_Jones]

Why are people getting three deliveries a day from a company that was founded as a bookseller? How many books do they need?

[crop_rotation]

This is like asking why are people buying so much stuff from a company that was founded as compiler/language tool seller. How much compiler do they need.

The above would be Microsoft for context. For some reason your comment assumes that what a company was "founded as" should dictate what they do decades later.

[Starman_Jones]

I think you've just explained how compounding wealth made Jeff Bezos rich.

[Manuel_D]

> and the more you make means less other people have

This is a false zero sum view of wealth that is unfortunately all too common.

[N_Lens]

Economy growing at 3-5% in the US. Rich people's wealth growing at a far higher rate. Which means the middle class wealth is getting siphoned to the rich. The middle class is getting poorer and we can all see that.

[Manuel_D]

> Rich people's wealth growing at a far higher rate. Which means the middle class wealth is getting siphoned to the rich.

No, that logic doesn't follow. Say my wealth grew by 3% and my neighbor's grew by 5%. That doesn't imply any sort of "siphoning" at play.

[JackSlateur]

Which is exactly the same as "my wealth was constant and my neighbor's grew"

Which is exactly the same as "my neighbor's the same and my wealth decreased"

Which is exactly the same as "getting siphoned to the rich"

Money have no intrinsic value: its only value is relative the others (and also depends on what can be bought ..)

[Manuel_D]

> Which is exactly the same as "my wealth was constant and my neighbor's grew"

> Which is exactly the same as "my neighbor's the same and my wealth decreased

No, not even remotely true. This is a fixed sum view of wealth that assumes the only way to obtain wealth is to take it from someone else.

Say I have a 3,000 sq ft house on a quarter acre lot, and so does my neighbor. My neighbor's company has a successful IPO and he sells his equity to buy a 6,000 sq ft house on a half acre lot, then how has my wealth decreased?

[JackSlateur]

If you have no raise and your neighbor have a raise, then you are poorer

It may be easier to understand globally: if you have no raise but everybody have a raise, then you are poorer (because everything cost more, but you have no raise)

[N_Lens]

It's not just about logic, it's about data. The middle class is becoming impoverished and increasingly more precarious while the wealthiest are capturing ever larger gains.

Capitalism concentrates capital in fewer hands.

[votepaunchy]

Or the wealthy are pulling up the average and most of the rest are not “growing the economy” with increased productivity.

[N_Lens]

Capitalists earn money through control of capital. They're actually parasites that extract all the labour and value from others below them in the system. Capital is taxed lower than labour in most developed countries, at every turn capital is advantaged at the expense of living beings. There is no positive morality in this system of mass impoverishment.

[dns_snek]

I think we should put this to the test. The working class stops working for a week/month and we'll see how "productive" the rich capitalists really are.

[drorco]

OK that's one thing, but still there are many new billionaires that didn't exist a few decades ago, let alone a few years ago. Why did they become billionaires and the wealth didn't distribute over a much larger group?

[mcntsh]

Wealth doesn't go straight up, it bubbles up.

And thinking about bubbles, imagine what happens when the GenAI one pops. The wealth some new billionaires had will go up in smoke, their assets will go on sale, and they'll be gobbled up by the old billionaires.

[hrimfaxi]

Is the rate of billionaire generation increasing? Maybe that is the distribution in practice.

[drorco]

Maybe, I think it definitely happened with millionaires, there are probably many more millionaires these days compared to a few decades ago. Inflation helped too for sure.

But I think still a lot of people would argue the distribution is too unequal.

[Lionga]

money (or more exact wealth) is not a null sum game.