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by blfr 44 days ago
But the accounting difference is real. It is virtually impossible to earn a billion dollars. What is possible but still difficult is to create something worth a billion dollars which you can then sell if you choose so.

And to the people criticizing, this is cheating. To them, a billion dollars enterprise is not possible without the exploitation of employees, customers, or at least the environment.

Also, the most important thing to understand about a society is how people gain status, not just money/wealth. If you focus on money, you won't have an explanation for political movements or artistic endeavors.

5 comments

It's pretty hard for someone to make something worth a billion dollars then sell it, because someone else could make the same thing and undercut you. We even have a word for the way around this: 'moat.' In the 2000s 'network effects' were the most common moat, and they seemed a little crappy but not outrightly evil. Now the most common scheme seems to be breaking law until your big enough for the rules to not apply. That's why people see it as cheating.
Is it hard? It seems like if you have capital you just buy your moat, isn't that what basically every modern billionaire has done to get there? SpaceX used it's capital sued the U.S. government to get it's contracts and now 20 years later the regulatory capture and Elon's influence in government as a whole is beyond most people's wildest nightmares.
> And to the people criticizing, this is cheating. To them, a billion dollars enterprise is not possible without the exploitation of employees, customers, or at least the environment.

Well that’s wrong. Exploitive businesses do exist. Rent seeking and arbitrage does exist. But the ire today isn’t directed to Wall Street or private equity. It’s being directed to people who built real companies. It’s not inherently exploitive to sell a customer a valuable product or employ someone to build that product.

In the 1990s, it took weeks to order something by mail. Amazon can now deliver me stuff the same day of the next morning. That’s amazing, considering that it’s all done with trucks, warehouses, and other things that already existed in the 1990s. Whoever made that happen when USPS couldn’t do it deserves to be a billionaire.

Okay, now try applying your thinking to abusive healthcare insurance companies and see how well this fares...
Okay, but people aren’t complaining about health insurance companies. None of those are owned by billionaires.
Yes we are, yes they are. You can google dozens of examples of billionaire owners or CEOs of health insurance companies, for example Warren Buffet is deeply invested/has ownership stake.

Why state something so obviously disprovable and false?

Amazon itself used the extremely advantageous rates of USPS for book delivery in the 90s/early 2000s to be able to grow. Combined with the lack of sales tax it could undercut basically any bookstore in sale-tax free states. Part of the reason why USPS couldn't improve itself was because of a law in 2006 which forced them to prefund retiree health benefits for decades into the future making them unable to spend those billions a year into modernisation right when it needed it the most (and private companies didn't face this pressure). Both the sale tax benefit and the USPS disadvantages are reversed now but the momentum amazon got and the slowdown USPS had can't be reversed.

The company also pushed for all sort of regulatory changes to punish competitors (e.g. minimum wage to harm Walmart) while it had labour violations which barely got fined. This isn't to say that I think Amazon didn't provide value at any point in time, with its recommendation algorithm and review system it actually abuses the added value the platform delivered in the past to benefit its own basic products, but I believe there would've always been an Amazon who would've used similar regulatory plays to get ahead. That's why it's kind of difficult for me to say how many of Bezos his billions were 'fairly' earned.

Furthermore I don't believe it's impossible for someone to truly earn a billion, the financial sector is one that has some of the best examples (e.g. Jim Simons) it's just difficult to find a 'close to purely fair' billionaire.

But there are many online stores, and Amazon is one of the worst? On line shopping was an innovation but Amazon, in particular, was just a cash grab from all the others.
If you pay attention to how people spend their money, and not what they say (i.e. actions speak louder than words)

People really love billionaire owned businesses.

We can look at Walmart, which eviscerated mom&pop stores all over rural America, and you'd be hard pressed to find much love of Walmart in those places, but alas, people gave their money to Walmart instead of Jone's Town General.

I saw a Harvard-Harris poll a couple of years ago where Amazon had the highest favorability ratings of institutions/organizations polled, basically tied with the U.S. military and ahead of the police and CDC: https://harvardharrispoll.com/key-results-may-2 (page 15).
People don't have to like things they use though.
> Whoever made that happen when USPS couldn’t do it deserves to be a billionaire.

This bit might be a bit unfair. USPS and Amazon Delivery are different services, fulfilling different needs. Neither will deliver a pizza in 30 min or less, for example.

> Neither will deliver a pizza in 30 min or less, for example.

Looks like Amazon will deliver me a (frozen) pizza in 23 minutes, actually!

> Amazon can now deliver me stuff the same day of the next morning. That’s amazing, considering that it’s all done with trucks, warehouses, and other things that already existed in the 1990s. Whoever made that happen when USPS couldn’t do it deserves to be a billionaire.

It's also impossible without Amazon exploiting all the workers in the chain - from warehouse workers forced to undergo dehumanizing _unpaid_ searches that take hours when leaving the warehouse, to being forced to pee in bottles.

It is impossible to become a billionaire without exploting people.

Someone working a job they freely chose is not being exploited. This word is losing all meaning. Amazon pays more with better benefits than most other warehouse jobs.
> Someone working a job they freely chose is not being exploited.

This article from 2022 has something to say about that:

https://www.theguardian.com/technology/2022/jun/22/amazon-wo... Amazon is right to be worried – its staff turnover rate is astronomical. Before the pandemic, Amazon was losing about 3% of its workforce weekly, or 150% annually. By contrast the annual average turnover in transportation, warehousing and utilities was 49% in 2021 and in retail it was 64.6%, less than half of Amazon’s turnover.

So you mean workers who find it disagreeable freely leave to do something else? Hmm, doesn't sound like exploitation to me.
"People are exploited by this organization so they leave"

"Can't you tell how unexploited all these people are, just look at them leave!"

If someone could pick and choose jobs they wouldn't be a warehouse worker, come on now.
Sure if people could just pick whatever they want we'd all be sitting on the beach having drinks with supermodels, but then who's going to make the drinks?

People can pick among various jobs. If they picked warehouse worker that was the best option available to them. Taking it away means they have to choose something worse.

And a job is not a lifetime commitment. Warehouse worker may be a stop on the way to something else. I worked in a warehouse for a while, now I don't. People are not static blobs.

Maybe it's Amazon's predatory pricing and regulatory capture that drove most other nicer job opportunities out of business.

I used to work retail selling software and games as a teen. It was a nice starter job talking about the things I liked most. There were 7 places I could do that back in the day. Now the kids have only 3 such options in my area. Many areas now have none.

Under capitalism, man exploits man.

Under communism, it's the other way around!

> It is impossible to become a billionaire without exploting people.

Explain this to me using math not feelings.

At 5% APR compounded daily and zero inflation, a person would need to invest $300,000 weekly to attain 1 billion dollars after 80 years. Fiddle with the numbers as you like.

Do enlighten us as to what actual labor creates $300,000 in real value every week, week after week.

Tim Cook’s labor optimizing Apple’s supply chain easily crates billions in value.
Excellent way to put this, by moving and accelerating Apple's outsourcing of manufacturing and production to countries with more exploitable labor and cheaper corruption to advantage himself with, Tim Cook not only exploited people in multiple countries around the world but helped hollow out American manufacturing and suppress wages!

Through this exploitation he created billions in value for himself and other capital holders.

Here's a useful, easy-to-understand number: "Exactly zero"

That is the answer to the question: "How many of the top 50 billionaires in the world have NOT been in legal trouble for anti-worker, anti-consumer or anti-competitive practices."

Try it yourself! If you ask it to, Google AI Overview will even detail the infractions of each billionaire on the list.

The fact that lawsuits exists doesn’t prove that unfair practices account for any particular share of the wealth. You can’t just wave your hands like Glenn Beck and say “connect the dots.”
Saying "lawsuits exist" obscures the fact that they have almost all resulted in convictions and penalties per billionaire. The fact remains that every single of the top billionaires has been convicted for patterns of exploitation. Are we to reasonably expect that all of these were random, uncorrelated one-off occurrences rather than a pattern of behavior?

And that still underplays their overall scope of culpability. As a lawyer, you are probably best positioned to appreciate how asymmetrically difficult it is for anyone but the most well-funded to realistically take these giant companies to court.

What's missing is that the billion-dollar value is based on the expectation of exploiting the employees/customers/environment to achieve profit in the future.
Missing cause it's not true.
Musk minted 4,000 millionaires last friday.
How many paupers did he create? I haven't seen this reported on, seems biased to ignore it.
Having to pay a fat wedge of tax every year on what you "earn" sucks a lot of the life out of the compounding effect.
When capital gains tax is so much lower than income tax, this holds even more true for people who work at the companies being sold for lots of money and make income in wages than the people who own the companies, and that just reinforces the original point
Those taxes are the necessary condition in silly essays like this one from pg. Or why do you think those billionaires miraculously mostly end up in the US and not in countries like Sudan or Peru? I mean if those billionaires would actually be the wealth creators, not depending on society at large, they could become billionaires everywhere, right?
Some countries have far more repressive governments.
Only up to a certain threshold – after which you can afford "creative" accounting which reduces the tax burden and restores the compounding effect ;-)
We pay those taxes because not having the services and societal stability those taxes pay for also sucks a lot of life out.
To add to that: There are also "compounding effects" from investments made by tax money, just as for any other investments, the difference is that the compounding gains are collectively owned and not controlled by an individual.
I think that’s their justification in the abstract, not the justification for most individual tax items.
I don't have to inspect every grain of rice with a magnifying glass to enjoy the overall dish.
Are you arguing that we should have bad taxes because some taxes are good?
Yes, absolutely.

There's a cost to perfection. In our computing world, every extra nine of reliability is more expensive than the last, often with diminishing returns.

See also: Florida drug testing welfare recipients cost more than it saved. https://www.aclu.org/news/smart-justice/just-we-suspected-fl...

In a healthy society that's the case. In an unhealthy one, who knows.
You can still collect taxes without taxing people who have already been taxed in the form of needing to exchange a large fraction of their life for the wage.
I'm entirely onboard with reducing tax on low/mid income folks currently "exchanging a large fraction of their life for the small wage" in favor of increased taxes on the billionaire class, yes.
We already have the Earned Income Tax Credit (EITC).
We already have all sorts of things that I like.

We seem to be making most of the changes in favor of the already very well-off, instead of, say, expanding the EITC.

https://commons.wikimedia.org/wiki/File:1960-_Tax_rates_of_r...

That covers maybe the bottom 30% of households, and realistically only if they have kids.
There again you might pay a lot of taxes and not get the services and have questionable societal stability. Ask some Brits about that.
But the amount of tax we pay is because of inefficient, corrupt and incompetent government.
We have the current inefficient, corrupt, and incompetent government in the US because the anti-tax wealthy class threw an all-out tantrum over even the idea of paying a tiny bit more tax.
I live in Germany and I pay almost 50% of my income in income tax and social tax. There is always "just that tiny bit more tax" that will magically fix the system (it won't).

Turns out paying more money to an already corrupt government doesn't turn it less corrupt. Go figure, hm?

> I live in Germany and I pay almost 50% of my income in income tax and social tax.

I live in the US and pay less raw tax than that, for sure.

But I reported $49k in medical expenses (premiums, deductible, copays, stuff they won't cover) last year on my taxes, and I've got two kids going to college in a year, which may cost $10-40k/year for each.

I'd rather your trade-off.

We have an inefficient, corrupt and incompetent government in the US because we voted for it. And we keep voting for it. That's our revealed preference. We obviously like inefficient, corrupt, incompetent governments.
And that government was corrupted by…wealthy business owners via regulatory capture!
People who earn money pay taxes

While at Amazon Jeff Bezos considers his worth to be 80k a year hence he was paid that much, and paid taxes in that salary.

If someone becomes a billionaire by being paid 50m a year for 40 years and paying taxes on that income then congrats.

Bezos has paid $billions in capital gains taxes.
About 1% of the wealth he’s accumulated

Has he earned his wealth over 40 years at an income of 7b a year he’d have paid 115b in tax, not 3b.

Luckily, billionaires don't have to worry about that.