By creating a product that people find valuable?

Yes, but the bigger picture is that what people find valuable and what is actually valuable diverge. Because what people find valuable is through the lens of their constraints: the regulatory structure of their country, the limitations of the human condition, inertia, the limited nature of time.

The most poignant example is tobacco. Tobacco is a net-negative product for the world. But many people find it very valuable, because it helps them with the stresses of their life and they have a biological dependency on nicotine. And so, it’s a multi billion dollar industry. But, for the world as a whole, it generates negative billions of dollars. Because of the health cost and the cost of lost work. If you did 10, 20 years early then that’s a lot of human productivity burned.

Of course, most products are not tobacco. But every product is tobacco a little bit, I think, in the sense that they merely move some money from externalities into the product. In that sense, it’s not all value creation, it’s value siphoning or moving.

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HDThoreaun 4 hours ago | parent [-]

Obviously externalities exist. I disagree with your tobacco take though. If someone knows about the health risks tobacco causes and still chooses to buy tobacco than the tobacco has created real value. Of course societal value can still be negative because of externalities, but externalities have to be external, a person making a decision you disagree with isnt an externality.

Im not going to disagree that externalities are everywhere though. The question is to what extent and if, after correcting for them, there are still products which create so much value they make their founders billionaires. I think the most obvious case for this are artists. JK Rowling sold her writing for over a billion dollars. The work was, as far I know, created pretty much solely by her. You can point to the book publishing system as a whole, but she has nothing to do with that. All she did was write some books and sell them to an already existing system.

	▲	preg_match 3 hours ago \| parent [-]
		Yes, for that particular person it has created value. But for the world, it has lost value. The value isn’t real value, it’s a type of debt. You’re moving value later to value now, in the form of enjoying smoking. Consider: if the conditions of our work were different, many people would not smoke. If nicotine didn’t happen to have a biological effect on the human brain, then nobody would smoke. The value created is only in the context of those constraints, and many more (including regulatory ones, which is why we see less smoking today). I view it as a type of loan. Is loaning money a productive activity? Of course not, because no value is created, it’s merely moved. If the entire economy was just loaning money, then GDP would maybe go up but no value would be created. Smoking is a loan from the tobacco company. You get immediate relief, in the cost of more value paid back to society at a later date. Consider: if the tobacco industry has sold 5 billion in tobacco products, but tobacco as a whole results in 20 billion dollars in lost productivity and healthcare, then the value generated is -15 billion dollars. In actuality the estimates are much worse, because typically models only consider healthcare cost, not suffering or lost productivity due to death. Suffering, too, has a cost. How well do people work when a loved one dies?