[InterviewFrog]

You saved $500k to buy a beautiful home. You don't know how to build a home.

I do. I take the $500k from you and then pay $450k to a bunch of employees who put in 40 hours a week. I take home $50k. I earn $50k.

Now, you like the home so much you tell all your friends about it.

I hire more employees and I take $50k profit per house but I build 20k houses and make $1B. I earn $1B.

Market forces decide how much you "earn". There are plenty of blue collar workers who work 3 jobs and live paycheck to paycheck. There are SWEs who work 20 hours a week and make the bank.

[beloch]

>I hire more employees and I take $50k profit per house but I build 20k houses and make $1B. I earn $1B.

This is the "rock star" fantasy. You do something that becomes wildly popular and can then walk away while still making epic amounts of cash. You didn't earn that $1B through continuous effort. It was all made by your initial idea. It just takes time for the cash to be delivered in full.

Do you deserve to profit off a good idea? Yes, and few would contest that. Do you deserve to profit so much that you never have to work another day in your life? Should the system let people retire after having one good idea? That's going to seem like a sub-optimal system to many. However, its important to note that ideas take capital to implement, and it's much more typical for rock star rewards to go to those with the capital than those with the ideas. That's a system that many more will find to be flawed.

[bredren]

This sub optimal system is what has (at times) led to massive growth of disruptive technologies and platforms.

People got reasonably mad at Apple’s iron fisted control of the App Store and access to its platforms.

It got to the point that there was political will to force Apple to change. (Sort of, in some circumstances)

But during the golden age of the App Store, when Angry Birds came out—-it wasn’t something people were hemming and hawing about the fairness of distribution platforms it was more like: “wow! iPhone! Check out this game! Everyone is playing this thing, Jack White is playing it. You too can have this game for a few bucks, can you believe this?”

It is only after Apple had ridden the horse a good long while and reaped what came to be outsized profits and using the thing to control competition over an extended period that something really was done about it. (Sort of)

There are many other examples of this kind of thing.

Compensated creative expression has somewhat relied on it in the form of intellectual property, which has built in albeit relatively toothless expiration.

But even IP is under greater threat than ever with gen AI. Just look at what fans are doing with the Star Wars franchise on YouTube right now.

Anyhow, I agree with the system is flawed but I mean to point out that deciding a person or company has reaped enough for their thing is something we do on a case by case basis.

It is not easy to say when to say to someone or something has been compensated “enough.”

[reassess_blind]

How much profit do they deserve exactly? How exactly is it calculated, and who decides how it is calculated? These questions aren't in bad faith, I'm genuinely curious how people with your world view would answer them.

[angrysaki]

I don't have an answer, but I don't think the framing should be about what they deserve or not. It should be around how much money an individual can have/control before it becomes detrimental to society.

[ModernMech]

What’s the going rate on purchasing a law or Supreme Court decision?

[ericd]

It's the execution, not the idea.

[rayiner]

> You didn't earn that $1B through continuous effort

Why does it have to be earned through continuous effort? It seems like you’re defending a sweeping assertion (that you can’t “earn” $1 billion), but retreating to a narrower position based on a very specific definition of “earn.”

Yes, you can’t become a billionaire performing fungible labor compensated on a periodic (hourly or annual) basis. But I don’t see why that’s the dividing line between “earned” and “unearned.” A lawyer charging hourly will never become a billionaire. But there’s been a couple of lawyers (Joe Jamail, Mark Lanier) who became billionaires by securing enormous verdicts for their clients. Are you saying lawyers “earn” their money only if they charge hourly, but not if they get a share of the money they recover for their client?

That seems to be a weird definition of “earned” versus “unearned.” Maybe you can say that money is unearned when it’s inherited. Or that it’s unearned when it’s just accrued interest. Or that it’s unearned if it’s through socially questionable activities like high frequency trading. But most billionaires didn’t get their money in those ways.

[peab]

They are rewarded, yeah. And then they could retire, or they could take that money and put it towards more good ideas, like what Elon has done his entire life.

If we don't have a system for that, then how would you incentivize people to take on bigger risks, bigger projects, etc?

Also, should the lottery not be a thing? What exactly are you advocating by this line of reasoning?

[beloch]

Consider what happens in academia.

Imagine that making a ground-breaking discovery in physics came with a prize of a billion dollars. One good idea, and you can retire. Would that not harm science? Many scientists would keep working after their first prize because it's what they love to do. Some would accuse them with being greedy after they've made a few more discoveries. "Hey, leave some money for the rest of us!"

What I'm trying to get at is that the rewards for certain things are badly out of whack with what is necessary to keep people both rewarded and motivated. At least, in terms of what is healthy for society and progress. In general, the closer people are to the money the more unreasonable the rewards are. Perhaps people who are further from the money but who contribute just as much (or more) to society are right to be concerned.

P.S. Musk bought companies with people who had a lot of good ideas and convinced governments (mainly the U.S. government) to pay for it. He's always been a capital guy, not an idea guy. He desperately wants to be in idea guy, but his ideas are things like re-branding Twitter to X and the Cybertruck.

[roenxi]

> P.S. Musk bought companies with people who had a lot of good ideas and convinced governments (mainly the U.S. government) to pay for it. He's always been a capital guy, not an idea guy. He desperately wants to be in idea guy, but his ideas are things like re-branding Twitter to X and the Cybertruck.

Personally speaking, I am sympathetic to the idea that billionaires (especially Musk) are often created more by government policy than market forces. Although for some reason the push to stop governments minting billionaires by fiat seems rather weak, which makes me think a lot of people are being disingenuous on the topic. Or maybe just haven't thought about it much. There is a bizarre zeitgeist where first the government has to give a man billions of dollars because something needs to happen ASAP, then they have to take the billions away because nobody thought the thing needed to happen all that urgently.

There is an overlap in the vibe between the people who are unhappy that the government rewarded Musk and the people who, at the time, were clamouring that the rewards for things Musk was doing were too low. 10, 20 years ago it was all "there isn't enough funding for electric vehicles", "world is literally ending from climate change" and "who is going to put money into batteries".

[beloch]

I'm not saying capital guys have no place. Should they be rewarded to the tune of a trillion dollars though, especially if most of it ultimately came from government coffers? That seems extreme to me.

The people closest to the money are the people who have the most control over how and who its allotted to. We really ought to watch them more carefully.

[peab]

So how much should they be rewarded? You suggest a cap? What prevents someone that's more poor than you deciding that you nobody needs to make more money than them, so now you should make less money?

[rayiner]

Your narrative is self contradictory. In your own theory of what happened, Musk was the idea guy, not the capital guy! You said the government provided the capital. Why did the government provide the capital to Musk rather than GM or Boeing or Rockwell? Because he was the one who could actually develop what the government wanted to support.

It’s rewriting history to call Musk a “capital guy.” Tesla and SpaceX entered markets with huge, established competitors. Those companies had access to virtually unlimited capital. But EVs and commercial space travel were pipe dreams before Musk got involved. I graduated with a degree in aerospace engineering pre-SpaceX and the field was moribund. Your options were going to Boeing to make airliners 1% more efficient every decade or going to Lockheed or Rockwell to design better missiles for blowing up brown people. The idea that SpaceX was just about a “capital guy” coming in is 100% hindsight bullshit.

You’re also just completely factually wrong about “most of” anything “coming out of government coffers.” The government gave Tesla a $485 million loan that was fully repaid. SpaceX received about $500 million in grants. In both cases, that was a small fraction of the money invested into the companies. Tesla’s cumulative net loss was $6 billion before profitability. SpaceX’s cumulative net loss is $42 billion.

At most you have a fair argument that the government should take equity in companies instead of providing grants with no strings attached. But that would just mean that maybe the government should have a 10% share of SpaceX or whatever.

[tsimionescu]

This is a great example of why you can't earn a billion dollars without doing something immoral.

First of all, you don't know how to build a house, you have some vague idea of it, maybe even some innovative one, and hire people who actually know how to implement that idea to do it for you, but you pocket some of the money because they don't know the exact worth, and because they need to live and no one else is paying them.

Then, what happens next is that some competitor springs up, and they want to poach your people by offering to pay them $475k and only keeping $25k in profits for themselves. You can't have that, so you start paying off government officials to deny or delay their building approvals, paying off mafia thugs to sabotage their construction or threaten workers who try to leave, you sue them for breaching worker non-competes or IP rights on the construction methods, etc.

All of these are part of how the construction industry actually operates, it is well known as one of the most corrupt industries around. Let's also not forget that the value of real estate is location location location - house and business prices are hugely determined by where the plot of land is, much more so than any differences in construction prowess, if we disregard the very top of the most complex projects ever made (of which there are way fewer than 20k).

[imgabe]

None of the other workers know how to build a house. The electrician doesn't know how to build a house. The carpenter doesn't know how to build a house. The guy hanging drywall doesn't know how to build a house.

They know how to do one piece and finding and coordinating all those people (something else they don't know how to do) is work on its own that is valuable.

[joquarky]

> I hire more employees and I take $50k profit per house but I build 20k houses and make $1B. I earn $1B.

This hypothetical isn't possible. There's no way you can directly manage the construction of 20k houses in a human lifetime.

[tjwebbnorfolk]

In this example, someone has come up with a way to build houses $50k more efficient than someone else. Otherwise, they wouldn't be at a competitive price that includes a $50k *profit* per house. (profit = the price of efficiency).

So a person figuring out how to scale their homebuilding methodology by teaching others and providing the *capital* with which they can implement that methodology isn't worth anything to you? I can't imagine a society that could work without these features -- we'd all be re-learning best practices every generation because there'd be no incentive to scale up ideas that work.

[tjwebbnorfolk]

So if someone invents a cure for all cancer that costs $1 to make, and they sell it for $2, in your world the value created by the inventor is only the profit from the vaccines that person *personally* manufactures themself? That's an insane and backward world that I'm glad we don't live in.

[Zambyte]

Hot take but people should be paid for working instead of ripping off people with cancer because they got to call dibs on intellectual "property".

[rayiner]

They have places like that. It’s called my dad’s village in Bangladesh. The only way to make money is through labor, just like you want. But it turns out that, without capital, the only labor there is to do is farming rice.

[tjwebbnorfolk]

"Ripping people off"? I think you'd enjoy living in the Soviet Union which existed in exactly this kind of backwardness.

[duped]

At what level do you think a business stops experiencing market forces and starts dictating them, to the detriment of competition, consumers, and employees?

Because I don't think you can build a billion dollar home construction empire where you profit $50k per home in perpetuity. You will have to lower your margins, cut others in on your profits to stop them from competing with you, or manipulate markets to never make a loss on a project.

[LiquidSky]

>You don't know how to build a home. >I do.

Do you? Sound like the people you hired built the home. Do you know how to do what they did? Did you do it? What did you do to earn that $50k?

[nradov]

Why would that matter? Are you getting confused by thinking that the "labor theory of value" is a real thing?

[michaelteter]

Of all the billionaires in the world, what percent of them did something like this, vs the percent who reached that number from investments (and by investments I mean assets they possessed which ballooned in value)?

I'm betting it is a tiny fraction. Most modern "wealth" is all based on investment games.

[jrflowers]

> You don't know how to build a home. I do.

Sweet, how do you build a house?

> I take the $500k from you and then pay $450k to a bunch of employees

Oh. You don’t know how to build a house. You know people that know how to build a house.

Picking a thing that you literally don’t know how to do as your example of a thing that you know how to do is amazing. You could’ve picked a blanket fort or a spreadsheet that tracks other people’s work or a LinkedIn post but those aren’t really things people pay for

I know doctors but I don’t go around posting that I know how to treat eczema lmao