[aleqs]

The problem is, in the minds of these people 'firing at 100% all the time' generally means doing busywork and/or thinking of ways to cheat/manipulate their customers and the market for maximum gain whole delivering minimum value. I would have loved to be 100% engaged working on solving real problems in honest ways at some of my past jobs, but alas MBA/marketing leadership, which has taken over much of tech has very little interest in actually building good things and solving real problems in honest ways.

[joquarky]

This is what happens when companies become so nepotistic that they only believe in their own bullshit.

"Can they really breathe fire or did we make that up?"

[WalterBright]

Profit maximization is a continuous process that has generated our high standard of living.

P.S. I welcome all attempts to prove me wrong!

[spiorf]

No, the process has impeded even higher standard of living, because it misallocates resources from value generation to value appropriation. It's the extreme short term profit maximization that makes the economy a zero sum game. Otherwise it is not.

[WalterBright]

Do you really think the economy is zero sum?

For example, who was Elon Musk's wealth transferred from?

What do you think about all that money being invested into AI? Is that "extreme short term profit maximization"?

[cowmix]

I don’t know who his wealth was transferred from, exactly. But I do know what he’s using it for now: as a gravitational force to unilaterally screw with public institutions and systems the rest of us depend on.

Even if you agree with some of DOGE projects’s goals, the way it operated was wildly thoughtless about consequences beyond Musk’s personal wishes, and almost completely unaccountable.

I’m honestly sick that my personal Model Y purchase helped add to that power.

And I say that as someone who was a huge Musk fan for years, despite the warning signs — the Thai “pedo” comments, and his very public turn during COVID.

[WalterBright]

Musk's money came from creating a business that was worth a lot of money. I.e. he created his wealth.

It was not transferred to him.

The same goes for Bezos, Jobs, Gates, etc.

[jfengel]

He ended up with all of the profits, but he didn't put in all of the work. A lot of people worked very hard for that wealth, either for salary or a minuscule fraction of the profits.

He gets to keep the lion's share of the profits because he was the one who took the risk with his capital. And bully for him; well done that man. But we treat him as if he had all of the ideas and wrote all of the code, and that's simply not true. It's a myth that the wealth owners tell us.

All of these products would exist with the CEOs who get the credit. If it weren't them it would have been someone else. Their expertise as CEOs is not to get the product done, but to get it done a week earlier than the other guy. And even that much is more luck than skill.

There's no way to say "Musk took this money from someone else". But that's different from "He has a million times as much wealth because he is a million times more valuable."

[kmijyiyxfbklao]

You can always trick investors. For example all the overpromising Musk has done over the years. Also when you are that famous you can sell lower quality goods for a higher price that people will buy because they are associated to you.

[breezybottom]

Buying an ownership stake in an established business and forcing them to give you a "co-founder" title isn't "creating a business".

[sghiassy]

I won’t deny he created his own fortune from PayPal.

But if you come from “so much money we couldn't even close our safe” as his father put (quote from Wikipedia

Then you do have a leg up

[cowmix]

The “created vs transferred” thing is more nuanced than that.

At some point, accumulated wealth becomes power, and that power can be used to pull energy, attention, labor, and public resources out of the system for one person’s agenda.

And in Tesla’s case, the stock value creation story is insanely unorthodox, to be charitable. A lot of that valuation was supercharged by years of market-moving hype done personally by Elon: 10+ years of FSD timelines that never happened, the more recent “buy a Tesla, it’s an appreciating asset!” super-lie, the mission gradually being abandoned, GOP craps on EVs and it’s crickets from Elon, etc.

Now we have the ultimate example of wealth gravity distortion: Musk helped put Trump back in power, and the relationship looks openly transactional. But Elon is not just benefiting from Trump’s transactional nature. He is also benefiting from an administration where white collar crime and regulatory accountability seem to have basically stopped being real things.

So with all that, the kind of shady behavior Elon pulled that might normally trigger government scrutiny or enforcement is now being smothered by political influence.

Even today, Tesla appears to be the highest P/E outlier in the S&P 500 among profitable companies. So the market is not just valuing the current business. It is valuing the story, the hype, and increasingly Musk’s ability to buy influence to stay outta trouble.

And to be clear, I’m not trying to pretend nothing real was built. SpaceX is impressive. Tesla really did help kickstart the EV market. But that does not make up for the harm, distortion, and unaccountable power being exercised now.

So yes, maybe the wealth was “created” in an accounting sense. But the concern is what happens when that created value becomes an unaccountable force acting on everything else.

[pigeons]

That business is currently worth a lot of money, but why? Its not making a lot of money.

[c22]

Wealth is not created, it's stripped from the natural commons and it is, despite being massive, obviously finite. What you're referring to is "value creation"--the transformation of this natural wealth into a form that some other humans find valuable at a point in time. This value creation is rewarded via capitalism by the accumulation of monetary instruments which very much represent an appropriation of this wealth. If this system wasn't zero sum then we wouldn't have inflation?

[Unmotivator2677]

I don't know but I will speak:

Cantillon Effect

How much does your bread cost and how much did it cost in the 90s? Where do you think all that value gone? Has bread some what become much better quality or something? Are they lacing it with gold?

They are stealing from your pocket, in many ways than one.

Another point to consider is that musk wealth is on paper only, real value if he wanted to cash out would turn much smaller, it's all hypothetical.

[WalterBright]

American bread was worse in previous decades. Now I have many more options, and I buy organic bread.

> They are stealing from your pocket, in many ways than one.

You need a more compelling argument than that. Agriculture is not a particularly lucrative industry.

> Another point to consider is that musk wealth is on paper only, real value if he wanted to cash out would turn much smaller, it's all hypothetical.

Back to "what is value?" There is no such thing as intrinsic value. Value is what people are willing to pay for something. That's it. If people are willing to pay more, then the value is higher. If the are only willing to pay less, then the value is lower. And certainly the value of x is different for different people, and varies moment by moment.

The value of a TSLA share of stock is no different from the value of that piece of paper you have that says "One Dollar" on it.

[rkuodys]

What is the point on Musk you are making? The monetary success does not neccesserily correlate to the common good they have created. In case of Musk there is a lot of governement subsidies, lots of market manipulation and false claim s. So not all activieties that bring profit to the richest are good to the rest. And stats on inequality just highlights that trend

[WalterBright]

> subsidies.

The government gave Musk a trillion dollars?

> So not all activieties that bring profit to the richest are good to the rest

I didn't say they were all good. I said he created his wealth, it was not transferred to him.

> And stats on inequality just highlights that trend

All those stats highlight is some people create more wealth than others.

[AngryData]

On the short term every economy is effectively zero sum. Even if you invented something magical that is worth trillions, the economy can't pull trillions of dollars out of nowhere in any short period of time without devaluing everything else.

[WalterBright]

Sigh. A brief explanation of how money is created. If I create something of value, you can go to a bank and borrow money based on that value. Where did that borrowed money come from? The bank created it out of thin air! Yes, that's right. Created value can be transformed into money. The books balance. And this is unlimited.

What happens when you pay back the money? Yes, it is symmetric, the money is destroyed! (wild, isn't it!)

So why does the bank do this? They make money on the interest from the loan.

This is how "free banking" works, and it applies to your scenario. Creating value does not devalue the rest of the economy. The supply of money is not fixed, it rises and falls relative to the value in the economy.

I know this is a difficult thing to describe briefly, there are college degrees on this topic.

[YZF]

These two positions are not mutually exclusive:

- Over-optimizing for short term profit can hurt innovation and value creation.

- The economy is not a zero sum game and new value is created out of thin air.

[afpx]

Partly this is because total global debt is 3x global GDP.

[Yizahi]

It transferred from the S&P-493, obviously :) .

[ryandrake]

When it comes to what actually matters, people's standards of living, what matters most is percentages, which are zero sum. In a simplified economy where 10 people have $100 each, everyone is worth 10% of the economy, have about equal buying power, equal standards of living, equal political power, and so on.

If one of those people suddenly "creates wealth" and now has $100,000, then the average value of the dollar goes down and the cost of everything goes up. Person X can trivially afford the increase, but the other nine now have lower buying power, lower standards of living, and the $100,000 now can exert coercive control over those with less.

We are all slightly worse off every time there is a new billionaire.

[WalterBright]

> We are all slightly worse off every time there is a new billionaire.

I responded to the zero sum theory in another reply.

I'll just say that every country that decided to get rid of its wealthy people wound up poorer, a lot poorer.

For a specific example, Massachusetts has a luxury yacht industry. The government decided that they wanted to tax the wealthy, and slapped a hefty tax on yachts. The billionaires simply took their yacht buying elsewhere, and the yacht industry collapsed, costing thousands of highly paid jobs. The government rescinded the tax.

[ryandrake]

> I responded to the zero sum theory in another reply.

You have ~40 responses in this thread in defense of billionaires, not sure which one exactly you're talking about.

[SquibblesRedux]

Musk got a huge leg up through the government, whether it be tax credits, incentives, side-stepping regulations, etc.

Bezos ran at a loss for so long it drove out actual and potential competitors.

Most (or all?) of the recent titans seem like each has his own company town. (See https://en.wikipedia.org/wiki/Company_town )

While their activities certainly fall in the realm of capitalism, and are just blips at longer time scales, it certainly feels like capitalism has been a bit under the weather for the past couple decades.

Regarding the money invested in AI, it all gives me "irrational exuberance" vibes.

[WalterBright]

> Musk got a huge leg up through the government, whether it be tax credits, incentives, side-stepping regulations, etc.

Nope. (Any government incentives were available to all the other car companies.)

> Bezos ran at a loss for so long it drove out actual and potential competitors.

Where do you think he got the money to sustain those losses? Investors! Including me. That is not a "transfer" of wealth, as in exchange the investors received an ownership share of the company.

> Regarding the money invested in AI, it all gives me "irrational exuberance" vibes.

It still is the opposite of short term thinking.

[SquibblesRedux]

I was not making an argument that the economy is zero-sum, or that Musk or Bezos did not build wealth. I merely pointed out methods they used to build their empires. For example, Musk did take advantage of government incentives, sidestepped regulations, etc.

Again, I never claimed there was any sort of zero-sum transfer of wealth. I'm simply pointing out there are varied ways to build up wealth; people have various opinions about those ways. It's right to call out misconceptions or outright falsehoods, but it's also good to understand what leads people to form or accept those misconceptions in the first place.

[Yoric]

I would argue that profit maximization has had very many effects.

On the one side, it has succeeded at reducing costs, which has indeed given rich societies unprecedented access to consumer goods.

On the other, it has outsourced from us both jobs and knowledge, which has resulted in higher unemployment and dissatisfaction, with as consequences the political dominoes we see falling internationally. That and the shoddy US health system (which the rest of the world seems to have decided to follow, for some reason).

And there is the small fact that we're in the process of optimizing the planet to death, and that not-so-rich countries (as well as formerly-rich ones) have starved to death for this high standard of living.

So, let's appreciate our standard of living, but not assume that it's necessarily a good thing in the grand scheme of things.

[WalterBright]

Outsourcing happens when it is cheaper to build something somewhere else. Tariffs can compensate for that.

Where are the starving people in capitalist countries?

The US health care system is pretty much run by the government. It is not a result of free markets.

A large part of profit maximization (i.e. optimizing) usually means reducing the amount of material needed. Isn't that a good thing?

The people who "rough it" in the wilderness still seem to be backpacking in hi tech equipment. I read about the kit that Lewis & Clark carried. No thanks. (Even on that "Alone" show, they bring hi tech equipment.)

[Yoric]

> Outsourcing happens when it is cheaper to build something somewhere else. Tariffs can compensate for that.

Is that free market?

> Where are the starving people in capitalist countries?

The first example from the top of my head is Argentina.

> A large part of profit maximization (i.e. optimizing) usually means reducing the amount of material needed. Isn't that a good thing?

This very much depends on the industry. In software, for instance, it's exactly the opposite.

> The people who "rough it" in the wilderness still seem to be backpacking in hi tech equipment. I read about the kit that Lewis & Clark carried. No thanks. (Even on that "Alone" show, they bring hi tech equipment.)

No idea what you're talking about.

[WalterBright]

Is what a free market? outsourcing - yes. Tariffs - no.

Argentina is hardly a free market country - https://borgenproject.org/hunger-in-argentina/

> In software, for instance, it's exactly the opposite.

??

> No idea what you're talking about.

Watch "Alone". I think it's on Netflix. Compare it with the kit of Lewis and Clark.

[Yoric]

> > In software, for instance, it's exactly the opposite.

>

> ??

During the last 30+ years, the trend has always been to increase hardware use to save on development/thinking time. AI is the latest and most extreme version of it.

> Argentina is hardly a free market country - https://borgenproject.org/hunger-in-argentina/

Are you by any chance moving the goalposts?

[danmaz74]

"Profit maximization" on its own would have left most people working 12+ hours a day 6 days a week, like it was very common in the 19th century. Luckily, it's never been the only force shaping our societies.

[WalterBright]

Working long hours was necessary in those days because productivity was much lower.

Productivity has gone up so much people can work a lot less, and vast part of the population doesn't work at all.

[danmaz74]

Sure, productivity increase is hugely important, but if you only pursue profit maximization, then all the productivity increase goes into profits, which means that the general population doesn't increase their well being much if at all.

The 40hr work week didn't come by as a consequence of the profit maximization mentality, but as a consequence of hard fought battles by the workers/employees against that mentality. And when I say "hard fought" I mean in the literal sense, with at least 1,000 workers killed just in the US in those days. https://en.wikipedia.org/wiki/List_of_worker_deaths_in_Unite...

[WalterBright]

The Law of Supply and Demand is in play, and it means a company cannot dictate prices, wages, or working conditions in a free market economy. Rising productivity would have reduced the average work week regardless.

If you still aren't convinced, consider that the benefits package routinely offered to employees is worth around 40% of their pay.

[KittenInABox]

> Rising productivity would have reduced the average work week regardless.

Do you have evidence of this?

> consider that the benefits package routinely offered to employees is worth around 40% of their pay

Please define "routinely" and "employees". Part-time employees do not get benefits packages, much less benefits packages worth 40% of their pay. PTO, Sick time, family leave, and other "benefits" are actually legally mandated and I do not see any evidence that companies would offer this if they were not mandated to do so.

[danmaz74]

Human societies aren't governed by simple, divine Laws. "Free market economy", based on rational actors, is an abstraction, an idealized model which is useful to understand some mechanisms, but it's far - VERY far - from being a complete model of any real society. At some point, trying to explain everything with the simple rules of that abstraction becomes an ideology just like Communism, which tries to do the same with different abstractions/simplifications.

[nobodyandproud]

A free market is bound by the rules of the market, which is trade agreements and government.

Meaning it can be changed and adjusted.

[amanaplanacanal]

Depends what you mean by work.

Most people do a lot of work themselves that the Richie Rich would pay somebody else to do, like cooking, cleaning, childcare, gardening, etc. If it counts as work when you hire somebody to do it, it should equally count as work if you do it yourself.

[WalterBright]

People still did cooking, cleaning, childcare, and gardening in those times of 12 hour work days.

BTW, cooking in those days was an all day affair. The wood stove required continuous feeding and watching. Today one can just put the food in a microwave.

I cook a steak now and then, it's the only cooking I do. It takes about 10 minutes. The dishwasher does the cleaning.

Rich people hire others to do the cooking because the rich peoples' jobs pay off far more per hour of work. For example, if my profession pays me $100/hr, it makes perfect sense to pay someone $30/hr to do the cooking for me, as I am still $70/hr ahead.

[nobodyandproud]

Division of labor. The men worked, the women stayed home.

Things went to hell for single-parent families

[AngryData]

Working long hours was not necessary in those days, it was forced upon people by declining wages as profit was transferred from individuals, families, and small businesses towards the capital class. The entire movement to introduce the 40 hour work week was based on people wanting to reduce their hours towards what their grandparents worked and survived on. The entire luddite movement was based on declining wages and worsening work conditions compared to the generations before them.

[WalterBright]

I don't know where you're getting that information from, but analysis of the bones of American colonists shows they worked themselves to an early death.

Life expectancy and average height improved throughout the 19th century.

[keeda]

I think it's more accurate to say it is a process that has resulted in our high standard of living faster than other processes... so far.

There is no guarantee it will keep working for the majority of us going forward; as is becoming very clear all around the world, it also has downsides especially without checks and balances (which was predicted and observed in the past, which is why other processes were conceptualized in the first place!)

As a trivial example, profit maximization is directly responsible for the enshittification we're seeing everywhere, which definitely is negatively impacting our standard of living.

[WalterBright]

> I think it's more accurate to say it is a process that has resulted in our high standard of living faster than other processes... so far.

Nobody has found a better process. Not even close.

> As a trivial example

It's not an example, it's a generalization. If you have a specific example, let's have a look at it!

Have you ever wondered why communist countries never exported products?

Also, if you want better products and believe people will want to buy them, go into business making them and make yourself wealthy!

[keeda]

> Nobody has found a better process. Not even close.

Maybe, but as they say, "Past Performance Is Not Indicative of Future Results." The point was, this process may work up to a point, then it may work more against the interests of the population.

I mean, history is already littered with examples of the downsides of this process, like all the rampant anti-worker things profit maximizers tried to get away with that had to be fought literally with blood. Without that bloodshed it is highly likely the average standards of living of the general population would be much, much lower.

You don't even have to look at history, the process is literally playing out right now in various countries.

> It's not an example, it's a generalization. If you have a specific example, let's have a look at it!

I thought enshittification was a pretty specific example? You can find the many articles written about the various ways things are degrading on the Internet with a Google search (the experience of which is probably an even more specific example in itself ;-))

I chose that example because I think it's a microcosm of this process: in the beginning, the profit motive creates great innovation and products. But at some point, like when the market is saturated or monopolized, the profit incentive creates anti-consumer dynamics because companies turn to extractive methods rather than innovative ones.

[contingencies]

Your line of reasoning misses the clear example that China pulled 1.4 billion people out of poverty creating mass-literacy before embracing capitalism.

[WalterBright]

The Chinese did not come out of poverty until after China switched to capitalism.

[contingencies]

This big beautiful claim does not match my first hand observations.

[applied_heat]

They certainly turned away from socialism and towards capitalism though, I think as part of embracing capitalism. What parts of the economy are not capitalist? State owned companies? In Canada and the US there are many protected or subsidized companies as well. Genuinely curious on the differences on owning a company in China vs canada

Thanks

[pigeons]

Ask Jack Ma.

[striking]

Which country experiencing communism at any point in time didn't export any products?

[WalterBright]

The Soviet Union.

I don't recall ever seeing USSR products in stores, while plenty of manufactured goods from other countries were. (By products I meant manufactured products, not extracted resources like oil.)

[AngryData]

I got some Soviet Union produced wrenches and drill from my great grandfather and East Germany made drill bits from an auction despite nobody in my family living outside the US in 120 years. No it isn't common, but I wouldn't expect the Soviet Union's biggest rival to be importing many of their products to start with, so the fact I possess them at all is decent evidence of their significant production volume.

[Yoric]

I did, so it probably depends of where you live.

[keeda]

I think that may have been a result of the political divide of that era. The USSR did export some machinery and arms, but those were traded largely within other Communist countries and "third world" countries.

[buzzerbetrayed]

> generally means doing busywork and/or thinking of ways to cheat/manipulate their customers and the market for maximum gain whole delivering minimum value

When I read comments like this I can’t help but wonder where people like you work. It’s completely unrepeatable to me. I work with really good people, all the way to the tip, and no try to make money by increasing value for our customers.

Apple, Google, Walmart, Amazon, Home Depot, Anthropic, Toyota, and a hundred other companies all offer me incredible value for so cheap. Why are people so cynical about a world that offers them unimaginable riches everywhere they look.

Sure there are bad companies. And if you work at one of those, go get a new job.

[rapnie]

The parents are talking about things in-the-large, negative societal trends, while you are talking your anecdotal experience and perhaps survival bias striking it so lucky with your employer. The world offers unimaginable riches, but at what cost really? Who benefits most? Where does it lead? Big picture.

[mikewarot]

>Apple, Google, Walmart, Amazon, Home Depot, Anthropic, Toyota, and a hundred other companies all offer me incredible value for so cheap.

Try to find something with Google these days. Try to use an Apple product past it's planned obsolescence. They crowd out innovation with their monopolistic rent seeking.

[vader_n]

Really?