Wealth Inequalities Shown to the Scale

Wealth Inequalities Shown to the Scale(mkorostoff.github.io)

101 points by subrat_rout 6 years ago | 48 comments

ksec 6 years ago |

This is often the problem I see with people mixing up Wealth and Income. A person with $100K income could also have millions of wealth or asset from stocks to property. Jeff Bezos has most of this wealth from Stocks. And I am willing to bet $100 given the current market cap and PE or PEG, his resignation from the company and liquidations of his Amazon Asset will trigger a sell off that its value differs quite a lot to his current value.

Someone might as well set up a gaming site called How to Become A Billionaire. Simply paid the cheapest amount of money to set a a company somewhere, issues a billion shares and get someone to buy one share for a dollar.

While I do agree on the world in large has inequality problem. Focusing on the ultra rich doesn't fix it.

titzer 6 years ago | |

You gotta wonder about the morality of a society that allows a person to amass 40,000 lifetimes of wealth and lets others starve. The ultra rich are a mathematical anomaly that exposes what a sham this "meritocracy" is. It is physically impossible to create $140 billion dollars of actual value for people in a single human lifetime (2.5 billion seconds). The only way is the amplification and exponentiation of that work through millions of other people, and to make the incremental cost of adding that value essentially zero. Which means that the market has absolutely failed to price the "goods" created by these people according to their incremental cost.

Rury 6 years ago | | |

> the market has absolutely failed to price the "goods" created by these people according to their incremental cost.

Your right. The wealth Jeff has vastly comes from his ownership of his business, of which he alone didn't make it what it is today. Many workers helped contribute and make it what it is today, but they're not anywhere as wealthy as they're weren't fairly given part ownership in the business they contributed in making...

You could argue the workers were paid a wage which they could of invested into a share of ownership in the business, but it's still unfair. There's a limited amount of stock to go around (unless the company issues more stock), existing owners stand to benefit more when this happens.

Stock behaves just like money in regards to it's store of value. Print alot of it, without making goods, and it becomes worthless and vice versa.

Therefore for fairness, ideally companies should print stock equal to the growth in their value and given to those who made the value. But lol at this pipe dream, as share prices wouldn't ever change much, so existing owners would be against it as they wouldn't benefit from it (unless they also worked in adding more value). Nevermind the difficulties in objectively attributing value...

icelancer 6 years ago | | |

>> physically impossible to create $140 billion dollars of actual value for people in a single human lifetime

Source? I think Linus Torvalds and Norman Borlaug both easily did this. Jeff Bezos and Bill Gates certainly might be up there. $140 billion is not that much when you compare the productivity gains just these four people have given the world.

j7ake 6 years ago | | |

There is nothing about morality in the billionaires that are mentioned.

People find value in the companies they create and willingly give their money to the companies in exchange for their services. Nobody is forced to give money to these companies.

The huge amount of wealth that is created from this process comes in part from the globalization and scale of their operations.

The lobbying, tax loopholes, anticompetition behaviors are a separate issue. Many of these are patently unfair and true competition starts to break down.

stanfordkid 6 years ago | | |

Look, human nature is to actually amass wealth without creating value. We are lucky we live in a society where value creation and wealth acquisition are at least tangentially related.

The problem in my opinion is not that a single person gets so much wealth, but rather what they receive the wealth for. Amazon just made life easier for the masses to consume goods. IMO someone like Einstein deserves a lot more money and someone like Bezos less. The people inventing the actual science that then enables something like Amazon don't really get compensated -- and perhaps they should.

oarla 6 years ago |

Couple of issues I have when I see such graphs or scale of inequality. I'm referring to those wealthy people who want to use their good fortune for benefit of society, not all of them.

1. Usually these comparisons imply that the super rich have a major chunk of their wealth sitting as cold hard cash. That's hardly the case. Most of the wealth is in assets or illiquid forms. Take Bezos for ex, a good chunk of his wealth is in AMZN stock. If he sells all of it to fund a philanthropic scheme, that'd trigger a massive selloff in the stock market and impact a lot of people negatively. Not saying that they're helpless, but I think they may be doing some good with all the excess cash that we may not be aware of.

2. From a logistics point of view, it's hard to ensure that money intended to help someone reaches them. Unless you are personally delivering the money, there'll be middle men who take their cut. If a billionaire decides to spend a billion dollars on charity, I'd think a bunch of orgs would want that money, to do charity as well as run their non-profit operation. Which would make it appear that not enough is being done by the billionaire, when it is employing a few and benefiting some more.

andrewfromx 6 years ago |

Feels like the author keeps making this point over and over that if we could just take x million from these people we could fix so many things. But I don’t see any vision painted for this new world where now everything is OK and fair. Maybe the current system we got is what makes people build things like amazon. Maybe jeff gets to be proud of his wealth and makes his own philanthropy choices.

otde 6 years ago | |

What’s mind-boggling is that Bezos is still a billionaire after all of the suggested changes. The amount this affects his day-to-day life is slim to none. He’d still get to be proud of his wealth in the new system!

I have a hard time feeling like large-scale preventable deaths of six figures of real human children is worth Jeff Bezos’ warm tummy fuzzies he gets when he thinks about being unfathomably rich. Instead of thinking about whether innovations like Amazon would have materialized in this brave new world where people can actually get their malaria treated and have access to clean drinking water, consider: how many people might have made something just as game-changing as Amazon, but died a preventable death, or lived on, but weren’t given the same resources to survive and thrive as someone like Bezos?

andrewfromx 6 years ago | | |

i think what you are missing is it's a game of "whack a mole" way more than a game of a perfect puzzle where if you just do the ethical thing, and just be nice, and cure this and stop that, THEN, THEN everything will be... ok. But the reality is you plow 2 billion dollars into fixing one thing and this displaces something else and you can't get to this desert mirage utopia society we think we see just down the road if we could just get people like Jeff to fork it over.

titzer 6 years ago | |

The biggest problem society faces right now is not how an individual gets from $1 billion net worth to $10 billion net worth, or $100 billion.

m0llusk 6 years ago |

Looking at the scale is kind of interesting, but what we really need is more information about options for making things more equal in terms of their relative effectiveness and trade offs. America used to have 90% income tax on the richest. At some level that kind of worked, but it also led to a shell game where executives drove company cars to company condos and so on. Agreeing on reasonable taxation and enforcement could go a long way but we keep on minimizing land value taxation and other such alternatives.

titzer 6 years ago |

If you made $7000/hr since the birth of Jesus, you'd still have less money than Jeff Bezos.

bjourne 6 years ago |

I wonder if side-scrolling was chosen intentionally. Side-scrolling is so much more annoying because you cant press space or page down to scroll faster.

subrat_rout 6 years ago | |

You can press -> key of <- ->to scroll to right.

ash1794 6 years ago | | |

I just viewed the source to read the whole content.

hypertexthero 6 years ago |

A general strike [is needed][1] around the world demanding a basic income of between $1000 to $2000 a month for all human beings, and a one-time payment of around $100,000 to each person when they reach 25 years of age, financed by a [progressive tax][2] on the wealthiest people in the planet.

[1]: https://www.tbray.org/ongoing/When/201x/2014/05/01/Piketty-C...

[2]: https://news.harvard.edu/gazette/story/2020/03/pikettys-new-...

djyaz1200 6 years ago |

It's in the interest of the super-rich to advocate for a strong social safety net to prevent millions of hungry people with nothing to lose from taking what they need instead of waiting for it to be shared. ...at least until they can build a colony on Mars or something?

e73u3hdjfu 6 years ago | |

It's not clear to me why this is actually true. Food is cheap if you don't waste a bunch of time on anti-science regulations like the EU. California and New York aren't short on space, building is simply heavily regulated with anti-poor laws masquerading as environmentalism because people would rather protect their swamps and property values than see a construction boom. Water isn't scarce, if it was you wouldn't have booming agricultural industries in drought prone regions. And electricity is only expensive because people would rather tear down oil, nat gas, and nuclear now rather than after green energy has become not terrible. The idea that society isn't thriving because the billionaire class has most of the wealth ignores that in many developed countries the cost of living could be much lower if not for the regulatory environment. People have simply been convinced that there are more important issues than helping the poor.

triceratops 6 years ago | | |

Darned regulatory environment, inflicting clean air, water, and food upon the poor! How dare they!

(I agree with you about the property value stuff tho)

longtermd 6 years ago |

The confusion of wealth and income is big with this one. All of the comparisons, unfortunately, don't make any sense.

tincholio 6 years ago | |

In this case it's pretty much a rounding error. Median net worth for college-educated people in the US is < 300K [0] (and it drops fast for all other cases), so it's not far off from the annual income. You could plug the actual educational attainment distribution [1] and get finer numbers, but it won't change much for the purposes of this comparison.

[0] https://www.marketwatch.com/story/whats-your-net-worth-and-h... [1] https://en.wikipedia.org/wiki/Educational_attainment_in_the_...

fallingfrog 6 years ago |

“Around 800 children will die of malaria today. A small group of super rich people could stop it for a sum of money so small that they would likely never even notice its absence. But they choose not to.”

Brutal.

The theoretical appeal of capitalism is that it allocates resources efficiently, is it not? Can someone explain to me how letting all these children die of malaria is efficient, given the cost/benefit of eliminating it? Is our economic system really allocating those resources in the best way?

Edit: come on guys if you’re going to downvote me then try to think of a reason I’m wrong..

fallingfrog 6 years ago | |

I think the reason that capitalism does not allocate money to save children’s lives is that the investor cannot claim any of the child’s future income. That’s also the reason that capitalism tends to under invest in things like education and nutrition for kids, or environmental protections or fighting climate change- how are you going to recoup that investment?

There is one way. If everyone were slaves, then the capitalist really would own every child they saved. You’d probably see rates of malnutrition and disease plummet. Of course, then we’d all be slaves. But that would be a purer, less dysfunctional capitalism. Maybe that’s the only direction capitalism can go- it might go that way through a maze of debts and complex contracts and property rights rather than legal ownership of persons, but that’s probably the direction capitalism is going to go, if you assume that capitalism is evolving to be the most economically efficient version of itself.

ZguideZ 6 years ago | | |

Let's not delude ourselves, workers are already slaves under capitalism. How many times have you heard someone say they were working until they could buy their freedom? That's what saving for retirement is, after all - and most end up failing and having to work in some capacity until they are either unable or dead. Wage slavery is slavery.

ZguideZ 6 years ago | |

Capitalism requires workers and consumers. The places those children are have plenty of workers and do not generally produce consumers of any volume. Capitalism weighs human life only in terms of profit and loss. It is profitable in capitalism for those children to die because they do not require resources, diminish worker capacity etc. Ugly system probably created by and for evil.

foobar_ 6 years ago |

I think this is a false equivalency. How much of the wealth is convertible to cash ? I think its 1% at best ... so bezos is worth 100 million.

Every years budget for U.S is in trillions, so its pointless to go after wealth of private people.

Even if we were to take the wealth of the richest, do you expect the government to spend it, with all the bureaucracy ? Even if you hand wave all the cash ... malaria and hygiene are not going to fix themselves without feet on the ground.

ac29 6 years ago | |

According to last year's 14A [0], Jeff owns 16% of Amazon. I'm pretty sure there are a long list of people and/or institutions who would gladly pay far more than $100M in cash for that.

[0] (see page 41): https://www.sec.gov/Archives/edgar/data/1018724/000119312519...

foobar_ 6 years ago | | |

Yes but the government is sitting on "cash" not stocks and its 100 times more than Bozos.

dntbnmpls 6 years ago | |

> I think this is a false equivalency. How much of the wealth is convertible to cash ?

All of it? But why would anyone convert all their wealth into cash?

> I think its 1% at best ... so bezos is worth 100 million.

What? Even if he dumped all his shares on the market, he'd net a lot more than $100 million. Sure dumping the stock would push down the share price and he wouldn't net less than $100 billion, but why would he do that? Even if he did, he'd easily net tens of billions as there is ample support from $2300 to whatever level the price eventually drops to.

foobar_ 6 years ago | | |

> But why would anyone convert all their wealth into cash?

How would you setup a malaria fund of 10 billion, otherwise ?

troughway 6 years ago |

It's quite clear that billionaires don't care about this. They will part ways with their money in a way they see fit. If it means donations to non-profits they own, or off-shore companies to lessen the amount of taxes they have to pay, then they will do just that.

All this talk about inequality is for naught. You don't have to tell Bezos how big his slice of the pie is. He knows. And he will take more by any means necessary.