No mention of Piketty or r>g?

Look, I know this is a tech forum and we don't claim to be good at the social sciences, but this is a central debate and r>g, the idea that the rate of return to capital tends to exceed economic growth over the course of history, is a major result from Piketty's Capital In The 21st Century that people interested in "grow the pie" vs "trickle down" really ought to be familiar with. Even if you disagree, you ought to be able to articulate why, and "the average includes winners and losers" ain't it.

"But life has improved, r>g couldn't have been true forever" -- last time the inequality bubble popped because of a great depression and two world wars. The capital was incinerated, metaphorically and literally. It's a cautionary tale and we should aspire to do better.

> Growth comes from innovation...

I suppose it depends on how broadly you define "innovation".

Lots of companies grow because of, among other things: regulatory capture, regulatory arbitrage, questionable use of other people's IP, offshoring, misclassification of employees/contractors, profit shifting and transfer pricing, subsidized predatory below-cost pricing, dark patterns, aggressive collection and monetization of user data, acqui-hires to stifle competition, implementing high-switching costs to create vendor lock-in, round-tripping, channel-stuffing, business models that intentionally externalize costs, outright fraud.

If so many entities are declining, why shouldn't I expect that my entities will also decline? Why should I expect them to be the ones that go up?

I would say it slightly differently: The average rate of growth comes from the average of the successful and unsuccessful innovators and non-innovators.

Bill Gates' wealth grew much more after he left Microsoft than while he was CEO. Was that wealth earned through innovation? No. He simply owned something that became more valuable as other people labored to innovate.

Growth does not ONLY come from innovation. It can come from bad actor or even simply non-innovaive strategies such as acquistition (which can lead to monopoly, as capital tends to amass in large centers / the hands of the few, per Marx). Other bad faith / anti-competitive / non-innovative strategies include regulatory capture, lobbying, doing illegal things (and hoping to not get caught / paying a slap-on-the-wrist fine that would be impossible for smaller companies), etc.

I think he's doing 15% every month, not every year. It's not an implausible growth rate for a unicorn startup; it is implausible to expect it.

He talks about 15% _per month_

15% monthly

> These numbers are ludicrous.

They are also speculative, not real. They are based on the notion that the company would be worth that much based on projected cash flows, expenses, etc. If you actually tried to cash it all out at any point in time you could not get anything close to that because the very act of selling will lower the value by destroying confidence in the speculative valuations.

None of these SV billionares have billions in cash or cash equivalents. Maybe a few of the largest companies do.

Are you doing something to create that value? If yes, then I think you are earning it. If you are simply an investor, then no, but we need investors to make the whole system work.

How do you grow better than average?

> For one thing, founders and employees don't share equally in the high growth rate of the company even though at most a founder is working let's say 2x longer hours than a salaried employee. You can do nothing wrong but you're still taking more of your fair share by the basic structure of how the business is setup.

What is fair? Obviously hours worked is one metric to determine what is fair. But another way to arrive at what is fair is through negotiation. Neither the founders nor potential hires are obligated to work with one another. The only way it happens is if an early employee believes the compensation they are offered by the founders is fair. If it was unfair, they would presumably reject the offer outright.

I agree with most of what you're saying -- but just wanted to add some notes here: 1) founders should start companies where equity is distributed to the early employees much more evenly: this actually gives additional super-powers to the company since employee incentives are much more closely aligned with the vision of the founders (building something great that people love to use). 2) stop rewarding growth: there is nothing wrong with NOT growing 90% a month. The goal of most companies shouldn't be to grow or return maximum value to investors (or shareholders): it should be to provide a greater human good the markets will be willing to pay for 3) revenue growth also is not something to aim for: sustainable income growth is. 4) unless the billionaires start re-distributing their wealth -- history is not on their side. A revolution will happen: usually this is associated with the younger male population being unemployed (~15% is the magic number) and causing an uprising. The goal of most founders at this point should not be 'how do I get to 1 billion.' The massive unemployment caused by the AI revolution will cause a massive uprising. There is great danger I think if they do not figure out a way to re-distribute their wealth. Currently, the poor and middle class are taxed way more than the rich (as a percentage of their income): and from what I see are increasingly becoming more disgruntled with the situation they are in. Why in the world would anyone want to even be a billionaire in this situation is the question I want to ask?

>So yeah, Jeff Bezos made $260 billion dollars, but an alternative that could have happened was "Jeff Bezos makes $50 million and every Amazon employee gets a much more fair share of the happy customers' money."

Jeff Bezos famously took an $80,000/yr salary. Bezos didn't make $260 billion, or anything within 1/1000th of that. He built a company, that through some inane estimations his share of which might be $260 billion.

For him to not have that imaginary $260 billion would be for the company to not be built at all. So, if that's what you want, you're at least consistent... but no one else would think that a particularly good idea. Quite a few people like being able to order things online and receive them quickly. They don't want to have to go back to stomping through Walmart, hoping that the store has what they need.

I think part of the problem is that if you can slap a label on someone of "Eleventy billion dollars", everyone's brain malfunctions and treats it as a literal fact, regardless of the truth of the label. When you don't want billionaires to have billions, what you're saying is that you don't want them in control of those billion dollar companies. But do you not want the companies to exist, or do you just want someone else in control of those companies? And who?

[dead]

Grombobulous says "Paul Graham is out here giving speeches to rich kids at Oxford Union, but he could be spending his morning in the local soup kitchen or building homes with Habitat for Humanity. He could be mentoring people who are struggling to escape housing insecurity, or he could be working with advocacy groups to expand healthcare access and end childhood hunger."

Which of those would provide the most benefit to the world?

Grombobulous says "But he is one of the people who has dedicated his life to capitalism, even after successfully taking care of his family for many lifetimes, and that says a lot about him."

You're simply anti-capitalist. Please post about that instead of mounting personal attacks on people who make more money than you. And please cease telling other people what to do and not do! Try to put yourself into their shoes and think harder about their situation.

> What exactly is inconsistent about this?

Assuming invariance of scale between how growth works between a family's height and how a company worth a billion(s?) operates relative to the environment. It's the same error Paul makes when he has the politicians calculate the log base and form that connection about exponents in their minds.

This is the level of detail I am asking for. “Subpopulation height increases because of the physical and understood processes of maturation and growth”. You could easily go into the biology involved, model the genetic, environmental, and random variance.

You will note that PG does not provide such a mechanism for how a $100m company grows into a $10b company (thus producing $b wealth for founders).

Just to be clear. I am not saying at the object level that such growth is impossible. I am saying that at the meta/causal level, PG did not adequately characterize it it.

Your analogy does not apply. Billionaires are growing faster than anybody else in the global economy. The impoverished are growing slowest. If you want to apply this to your family then the adults would be growing by 15% every year, while your kids growing the least (and your teenagers would be shrinking).

If we take this analogy further, your kids would be the ones working the hardest to bring the food on the table required for this growth, and the adults would consume like 90% of it.

"Just do whatever, don't mind other people. You don't need to focus on consumers, you can always sell drones to the military."