[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.

[lotsofpulp]

Those are not socialized losses.

The aforementioned suggestions are a great way to kill any incentive to take risks and start a new business with one’s savings, further tilting the playing field to SP500 dominance.

[jacquesm]

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