[goyozi]

Holy smokes, one could call this condescending but assuming both politicians and an average reader don’t understand how exponents work feels a step above. And that’s before you get to the part where it’s all about a great idea and hard work and definitely zero exploitation while mentioning examples like Apple, Facebook or Airbnb.

[ProllyInfamous]

>PaulGraham: And how could you possibly cheat to increase the market size?

I can literally think of a million ways.

1) lie to your customers about what your product actually does; this seems inevitable, once (if not before) private equity gets involved.

Using AirBnB as example: all the excess fees which have slowly crept into the final purchase price, while still requiring guests to clean &c

[smeej]

Have you ever listened to a congressional hearing? Or spoken to an "average reader"?

Most absolutely glaze over at the idea of calculating the "log base" of anything. If they ever got that far in math class, they certainly have not used the concept since then and cannot remember what it means or how it works. They might remember exponents, but the compounding of them is absolutely lost on the overwhelming majority of people.

[650]

I don't think this essay by PG is sufficient to teach them log bases or compounding, and is manipulative to assume now that someone knows 2 million doubling 9 times is a billion, they should be accepting of how one can earn a billion dollars fairly.

[ahartmetz]

Unfortunately, there was plenty of not understanding exponentials on display during Covid, including from politicians, journalists and other public figures.

[layer8]

It’s appalling that it is at the top of the front page.

(Edit: At the top of https://news.ycombinator.com/classic, at present.)

[fakedang]

What's the difference between HN normal and classic?

[layer8]

Classic is based on votes from older accounts: https://news.ycombinator.com/lists

It tends to filter out trite topics and lower-quality submissions, though I have the feeling that it has become less effective for that in recent times.

[JKCalhoun]

The most offensive part to me is that it tries to excuse obscene wealth as simply (shrug) a pesky, I mean "magic", byproduct of math.

Regardless, can we talk about the danger to society of having these resulting billionaires and how we ought to address that? I think that is in fact what "the politician" mentioned in the article was trying to address.

(The new American Dream appears to be: be one of the 30 people every 21 years that finds themselves the head of a startup that succeeds.)

[smallmancontrov]

Let's put this math in a mirror and do the leftie version of the exponentials:

"The purpose of capitalism is to pay rich people for being rich in proportion to how rich they are, thereby establishing, reinforcing, and perpetuating a class hierarchy where the people on the bottom must constantly pay to exist while the people on top constantly get paid to exist."

Dear reader, if you bristled at how casually this statement ignored that compounding returns are a feature of the real world that we want our economy to model and encourage, now you understand how a normal person feels when a megacorp or megacorp cheerleader casually fails to account for everyone they displaced and stepped on in order to capture the value that they did. "Negligent accounting" is a strategy that points both ways.

[zozbot234]

> Let's put this math in a mirror and do the leftie version of the exponentials

The plot twist is that the 'rightie' and the 'leftie' are both entirely correct. Which is why most developed economies try to remove sources of wasteful, unearned rent and also include significant amounts of redistribution/social insurance rather than relying on pure market outcomes. This doesn't erase the compounding dynamics altogether, but it hopefully ensures that folks at the lowest end of the distribution can keep a tolerable standard of living that doesn't have them 'paying' too much.

[smallmancontrov]

Yep! The equation even has a "left" and "right" term that correspond to political left and right:

    gains = investment * rate_of_return

Left term: rich people get paid for being rich in proportion to how rich they are. This is an exponential and it creates, reinforces, and perpetuates a class hierarchy where poor people must pay to exist and rich people get paid to exist. Capitalism is a Softmax function.

Right term: capital allocation decisions are made with skin in the game. Every chunk of the economy has a responsible owner who is rewarded/punished and promoted/demoted for good/bad decisions. Capitalism is a Q-learning algorithm.

[JKCalhoun]

We also want a compounding (progressive) tax rate to address compounding wealth (and perhaps we need a wealth tax?).

[smallmancontrov]

Yes, although I tend to think this produces better incentives and is easier to administer if we formulate it as progressive corporate taxation. This structurally discourages mega conglomeration and encourages spin-offs to enhance competition. Also, taxing at the source of profits obviates the need to track down the destinations of profit, who are far more numerous and easy to hide.

The non-explosive way to do this is simply to set the heel above the megacorps today and let inflation push them into it. They will be able to avoid the heel by splitting at their leisure, slowly remediating the consolidation we have seen and restoring competition.

[JKCalhoun]

"leftie"… kind of a red flag when I see it in comments.

[vrganj]

If you start with a mere two million and get really lucky, you, too, can be a billionaire!

Now, if that isn't inspiring, I don't know what is! Some of my rich buddies got to be super rich following my advice!

I really don't know why the average person hates the rich. Those poors are so out of touch!

[haaz]

$2m is the standard seed round nowadays which is what he was as referencing. Anybody who has a good idea and can convince investors can raise this, hence how the new AI founders became billionaires without having $2m of their own.

[ericd]

Come on. Exponentials are deeply counterintuitive, but simultaneously pretty much where all the returns come from in startup investing. I think it’s extremely illustrative, especially to a group that’s probably heard a lot of degrowth propaganda.