These discussions are pretty difficult to have as it's clear that many people have dysfunctional ideas around corporate/brand worship (e.g. "he created such a great company") as well as success worship.
To what degree Jeff Bezos is benevolent doesn't factor into this for me. Whether or not Amazon is a great company doesn't factor into this for me. It's a larger discussion about whether or not it's grotesque for a nation with such a large number of billionaires to have some of the most serious socioeconomic issues of any modern, developed nation.
I'd feel more happy and congratulatory toward Bezos' increasing fortune if, say, homelessness weren't a serious problem in America, and if every child were guaranteed a decent meal, which seems like it could be accomplished with a tiny sliver of the overall wealth of America's billionaire class.
> To what degree Jeff Bezos is benevolent doesn't factor into this for me
I agree it's grotesque, but given the utterly inconceivable amount of money he has, maybe making a name for himself via donation wouldn't hurt his public image. The richest man in the world twice over could probably afford the same sort of PR that's softened how people feel about Bill and Melinda Gates.
I don't disagree with the sentiment, other than it seems you're somehow "blaming" Bezos for this. Why? The States has those socioeconomic issues for historical and political reasons. They're certainly something people can change.
But Bezos' wealth, large as it is, is tiny compared to the wealth the government manages. The government's money is allocated via a democratic process. There's certainly good cases to be made for fixing a lot of issues - I just don't think those cases should start with "Bezos is too rich, while there are people in with serious issues". Better to just focus on the people with the issues and figure out ways to fix that.
My point really had nothing to do with Bezos in particular. He's one data point among hundreds of America's billionaires. And their collective wealth is by no means tiny.
You're right in that the U.S. has socioeconomic issues for political reasons. But we can't disconnect the billionaire class from our political class. Billionaires have ridiculous, outsized influence over politicians and therefore public policy in the United States. And that influence ranges from crafting tax law that benefits them to modifying rules and regulations that given their businesses advantage.
When wealthy people have tax law changed in their favor, we could charitably say that it is "indirectly" pulling money away from social programs that matter.
I rarely make blanket statements: Anybody who sees this and thinks the downsides of this society are lesser than the downsides of undoing it (both the direct result of wealth redistribution, as though by a magic wand, and the indirect results of using the kind of heavy-handed federal regulatory changes that would be required), is immoral. You are somewhat less unreasonable to say, "yes, we must change it, but first we must find a way that doesn't involve gross socialism stuff", and I may reasonably disagree with the practicality of your position, but to cross the line into, "no, the state of things is natural and amoral", is monstrous, and such people must be defeated at any cost.
A logically defensible position against this is: "I trust those 400 people to do more good, to spread more wealth, to create more value, to create more jobs, to innovate more, than I trust the government." Its a calculation of best return on investment, and not just return in a dollar sense. It might be more efficient for those 400 people to dump all their money into a charity that redistributes the money, than it is to trust elected officials to understand how to handle it.
This isnt cash he has in a bank account. It's his money, reinvested into a conglomerate that builds, delivers, creates, serves.
I think it's important to remember that most of Jeff Bezos wealth is in Amazon stock. I say this because it seems like people see $171b and assume Bezos has that amount of spending power. In reality if Jeff tried to liquidate all of his Amazon shares into USD it would crash the stock price and he would get nowhere near the quoted figures.
That’s just an artifact of a mass selling event right. If he had instead given more stock to employees as they worked for him over the years and helped him build the company, then the wealth would be spread around less unequally. It’s not just a given that he should be worth this much.
They got a salary in return. They did not ‘help him’ build the company. They were paid to do so. They didn’t take any risk working for a salary. Employees don’t inherently deserve anything other than a salary. It’s a matter of incentives
That's right. Although based on some quick Googling Jeff Bezos owns 11% of Amazon which has a market cap of $1.4 trillion. So Bezos has generated about $1.2 trillion of wealth for other people.
That's a good alternative perspective. But IMO it's still worth pointing out that it's not JUST Besos, it's him AND everyone else who has worked at Amazon since it was founded. There's 10000x more man hours and brain power that have gone into that company than just Besos himself. A lot of people busting their ass to produce that value.
With that kind of money I would keep a couple billions for myself and slowly liquidate the rest and give it away. Charities, public schools, research institutes, universities, the Red Cross, Doctors Without Borders, the Bill and Melinda Gates Foundation, etc. There's so much work to do.
I'd probably produce movies too, with zero expectations of them turning a profit, just to experiment with various storytelling ideas I have in mind.
Perhaps but I get the feeling that when people become that rich they suddenly find reasons for why they should keep their wealth solely under their control. That’s why you see them setting up foundations of their own instead of giving it away to various existing charities.
How does one create a society that is both free and yet safeguarded against this kind of egregious, unnecessary and possibly dangerous amassing of wealth and power in the hands of so very few people?
One way is to get the state to tax the rich, like many first world countries did in the post-war period. It's hard because the rich get a lot of say in the government, and they don't want to get their taxes raised.
Correction: investors from all over the globe value the shares in Bezos' possession at 172B.
These investors could also arbitrarily declare these shares as worthless (theoretically), and Bezos' net worth would crater to only consist of his leftover cash and physical assets in his possession - real estate, art, cars, etc.
That's an irresponsible use of the word "theoretically". What actual theory would have them do that? You're describing a coordination problem of absurd proportions and you haven't even proposed a shared motive.
It like saying, "This specific aspect of society could change if a potency-majority were fully committed to the idea that it should be changed in that way."
You're absolutely right. I don't try to pretend that it would be possible in the slightest. Just that stock wealth is a societal, and thus arbitrary, construct, unlike, say, gold and precious gems, which have intrinsic value across time, space, and cultures.
At some point stock is as intrinsically valuable as gold, when it has legal support and billions of people buying and selling it. I have no interest in gold and I never will afaict.
Bezos’ wealth is a function of the Amazon’s stock price. It is a company with a P/E ratio of 137. That is not normal. He does not set his stock price.
So when people talk about taxation, its taxation based on the general stockholders speculation. Which seems fair if we think BTC or 401k holders should be paying taxes on their annual values. Pretty sure most on HN would want not want that.
So it’s a question of limits, or a line, picked by society on how much something of arbitrary valuation one can own.
But I’d bet there are many here with >$1M is assets and >50% of the public would find that outrageous.
As far as AMZN being too big, I’d be fine with breaking it up as the components would probably be valued more than they are together (remember Standard Oil). Which would be good for my 401k.
The people have voted on the Walmarts and Amazons of the world. They lost something for the convenience, and it’s 100% their fault, not Bezos.
>But I’d bet there are many here with >$1M is assets and >50% of the public would find that outrageous.
171.6/137 is still $1.2525B. Lets say 15 is a fair P/E ratio, thats almost $19B. 1900 Million. People with >$1M is assets and >50% of the public still cant fathom the difference between a million and 10 billion.
And historically, despite having a high P/E ratio, Amazon exceeds growth expectations.
I don't know who is saying to tax his assets. But the laws, rules, economies of scale, feedback loops, and anti competitive behaviors that allow one person to amass that much money should be treated as glitches that need to be patched.
Bezos doesn’t care about his wealth or the valuation anymore than John D. Rockefeller did. It’s just more paper. He cares about maintaining control of Amazon and dabbling in his hobbies.
Kneecaping Amazon would result in hundreds of billions in wealth loss spread across millions of investors.
If you look at it from the perspective of Amazons own internal wealth being its own currency, money has a different value in the system and outside it. He buy things directly with stock, like we would use cash. He can downgrade his value store from Amazon bucks to USD, but he doesnt have to to spend it. Knowing how Amazon shares convert to USD is probably less useful than knowing what you can buy directly with Amazon shares.
I hope that he does something great with this - like building an open source medical record system and diagnostic tool that can be used for the global poor for free.
How is this not normal? Amazon offers great services, both for consumers and through the cloud. It makes total sense that their stock would continue to increase as more and more people use their services. Bezo's owns a lot of Amazon stock...so his wealth goes up. It's no different than with Gates or Jobs. Gates has just sold off a lot of his stock or donated it, and like with Jobs, had a lower ratio of stock ownership than Bezos. This is no different that any other time in period of company holdings.
Amazon certainly has its problems, and I'm a critic of it a lot...but they still offer services that are generally good for consumers, and that is something that drives its growth.
Bezos has about the net worth of the #2 and #3 richest people combined. The median wealth in North America is less than $500k per adult. North America is where it's highest. Bezos has over 400,000 times the net worth of the average North American adult. Nothing about this is normal.
People have paid Beyonce > 125,000x the musician down the street. Why should tell people who want to pay her money that they're wrong and we should steal from Beyonce to give to a musician no one wants to pay? Are you saying millions of people are wrong to prefer her music over a musician? That you're smarter than all those people how they should spend their money?
Life is Pareto, theft amplifies pareto-ness (see Russian oligarchs during and after USSR)
No, this is a winner-takes-all situation. Basically, Bezos has convinced a bunch of VCs to make a pile of money so big, that they could be the winner in this market. Your Beyonce analogy makes little sense here.
His work, personally? Not his executive team, not his engineers, not the warehouse workers making $15/hour, the work of Jeff Bezos and only Jeff Bezos?
if it was only Jeff Bezos he would be worth more than a Trillion.
Jeff started it, and did efficiently, so that he didn't had to sell out to too much VC.
He manages one of the most efficient companies in the world. and plenty of employees have equity, I wish companies here did the same.
His work personally started everything else. Without him, there wouldn't be an Amazon, and none of those other jobs would exist, and trillions less value would exist in the world.
Though to be fair, a good counterargument to what I just said is that likely something else would've existed, so it's not true that trillions wouldn't exist, just the difference between Amazon and the next best thing. And there are still plenty of good reason to tax Jeff Bezos heavily enough to make sure there is less disparity, or organize society differently to not allow such a large difference in wealth. I mostly don't agree with those arguments, but obviously there are some good ones.
According to levels.fyi, an "Amazon Distinguished Engineer" (L10) is making $960,000/year. The GDP per capita in Central African Republic is $681/year. Should someone that is basically a typist, earn 10,000 as much as another human being?
Yes, if that person's work is 10,000 times more influential? Which it probably is?
Also “someone that is basically a typist“ is so... dismissive. If I were paid for my typing I’d be broke, my most productive days are often days I type the least. I am paid for my reasoning and deduction, not my ability to type.
You’re confusing the work for the medium.
Does Stephen King deserve more per word than a courtroom stenographer?
This topic is on wealth inequality rather than amazon practices.
I am not sure where this was from but it went something like this like that:
If there was a staircase and you could take a step for each 100k networth you own. Somewhere around 50% would not be able to take a first step, rest would barely get to 10-20.
Bezos would be half way to International Space Station.
Just think about it and say its all normal and ok.
Lets go back 200 years - just because slavery is considered normal and lawful it doesn't mean its not immoral.
Imagine having a job that makes you 1 million dollars a year. Even if you didn't have to pay any taxes, someone else paid for all your living expenses and there was no inflation you would have to work for 171,600 years (yes, the same years we count from 1 A.D.) to get to the point Bezos is right now.
what is not normal is he is not paying much taxes compare to his wealth! He is selling around a $1B of Amazon shares each year and if he doesn't deduct anything he is paying 15% capital gain on it. That's 1/1000 of his net worth, I am pretty sure we all are paying way more than that. How is that fair?
And also the taxes supposed to be progressive, rich supposed to pay more, our dream here is to have the rich pay as much as a teacher!
First: I think the tax situation with capital gains is not fair or warranted, and that we should tax long-term capital gains like regular income instead of having a separate 15% rate for it.
That said, your assertion is not true. 15% is higher than the effective tax rate of 10.5% paid by the average single teacher in the US:
Average salary: $60477 [0]
Standard Deduction for single filers: $12400.
10% bracket for $0 through $9,875 == $988 tax.
12% bracket for $9876 through $40125 == $3630 tax.
22% bracket for $40126 through ($60477 - $12400 - $40125) == $1749 tax.
This totals $6367, which is 10.5% of $60477. Less than 15%.
The numbers are different if the teacher is married, has children, interest, etc.
We can discuss whether it's fair. I said above, I think it's not; there's a "minimum overhead" to living in the US that takes up a much larger fraction of $60477 than $1B, regardless of lifestyle. But people act like Bezos et al are just not paying as much as regular people, and it's just not true. $150M is more in absolute terms, and in many cases relative terms as well.
"Bezos et al are just not paying as much as regular people"
they are not! they might pay more at the $ value, but not more of their net worth.
If you are making $100k and pay at least $20k in taxes, your net worth should be $20M to be in the same bracket as Bezos!
I'm not an economist or finance person, so I don't know why we really ended up where we are. I think a lot of people in this thread, and most of the non-investment-wealthy people in the US, would say it's because of lobbying and so forth to let the rich get richer. That may be true. But I am open to the idea that research and modeling points to this being good overall even if it appears to be (or: is) unfair to 'average' Americans.
I'd like to see some (comprehensible to a layperson) discussion about what would happen if all income - wages, tips, gifts, inheritance, interest, dividends, capital gains, etc. etc. - was treated dollar for dollar equally from a tax perspective. I don't understand why it couldn't be, or why it shouldn't be.
You've just discovered the problem with income taxes. A tax on labor favors capital. Good luck convincing any of your political allies that the income tax should be replaced with something more progressive.
Bernie/Warren wealth tax was a good idea in my opinion. It would increase Bezos's effective tax rate from 0.1% to 3%.
Bezos's net worth still would increase every year, as the normal capital gain is 8% per year and it is much higher in Amazon.
Wealth taxes are horrible because they'd require doing a balance sheet to determine all your assets. Things like pricing all your collectibles accurately or determining the present market value of art pieces is a huge pain in the ass. It's also really nasty having fines if the government disagrees on your assessment of values. You'd have issues like the government suing people over mispricing the pokemon cards shut away in their basement where 1st edition charizards are now worth $55,000. Doing a balance sheet every year for taxes really sucks. Income is much simpler to calculate and adjust. It might make sense for wealth above a huge magnitude but at that point it becomes a very small % of government revenue and not something that replaces income tax or truly affects the balance between capital and labour.
There are also nasty effects with start-ups stocks or options that may be worth quite a lot of money but you may not be permitted or be heavily restricted in selling the stock even if you execute the options. There may still be a possibility of the stock going to zero leaving you with a large tax bill and no value in assets.
1. It is for people with net worth above $50M. I don't think most of that net worth is pokemon cards!
2. Yes it might be a little bit harder.
3. " it becomes a very small % of government revenue" Tax is about fairness not how much money we can raise from it.
4. this is in top of income tax for high worth individuals.
5. on unliquid assets like startup options, maybe you can pay your tax with those stocks. If it went to 0, you didn't pay any additional tax, if it appreciated government(all of us) would make something on it too.
It is hard and not perfect, but we can't have everything based on income for high net worth people, they won't pay their fair share and keep getting richer and richer.
Personally I disagree with their approach. A tax on an unrealized gain is a farce. But I do agree with the sentiment. Alternative forms of taxation need to be introduced.
What's the issue?
amazon pays taxes in multiple ways, what's left it goes into amazon stock value.
I think it's perfectly fine to only pay the tax once you sell, why should you keep paying a tax just for owning?
With his portfolio, his salary wouldn't be able to cover a a simple 1% annual tax.
Now the issue is USA capital gain tax being lower than dividend tax, that's completely bonkers and encourages ridiculous uses of buybacks (which amazon has never done).
The capital gain tax should be the same as dividend tax
That Amazon, Facebook, Apple, Microsoft and other tech giants have become so big, is because competition is not always possible and free-markets do not regulate themselves. How can anyone compete with Amazon in its present form with hundreds of giant distribution centres worldwide? How can I create a competitor to Facebook and get even one person interested, if the other one billion are still on Facebook? How can I produce a competitor for the iPhone and get millions of apps ported?
Remember Yahoo, Nokia, Motorola, Kodak. Invincible leaders at some point.
Look at today's Intel or Boeing decline. Apple is also not as nearly as strong as it seems. There is Android competition in software and many bigger brands in hardware.
Things can change anytime even without a regulation.
Another classic case: the fall of the USSR. Gorbachev's Peristroika was not meant to collapse the country. It was meant to open the country up and grow its economy, much like what China did. Neither the leadership of the USSR nor apparently US or NATO intelligence thought the USSR was about to collapse.
I personally think the US is much closer to collapse and fragmentation than anyone would suspect. If a time traveler told me I'd be living the Pacific States of America (PSA) in 2035 and that this new nation would maintain a NATO-like alliance with Canada and Mexico, I would not be terribly shocked.
Things can be more fragile than they appear and definitely more fragile than their designers and operators think.
One more non-political case that comes to mind is the collapse of World Trade Center Building 7, a building that was not hit by a plane and is a frequent topic of controlled demolition conspiracy theories. A large fire broke out in the building apparently fueled by diesel fuel that was being stored on site. That should not have caused the building to collapse, but it did. Maybe the building wasn't as strong as people thought either because of a design flaw or corners cut during construction. I once read an analysis that ended "moral of the story? If there's a large fire in a modern multi-story office building, you might want to stand back."
Justifing this pile of money by saying that there are other billionaires (Jobs, Gates, etc.) is kinda weird. I'd rather compare his with the median wealth of Amazon's employees. Makes for a way more interesting discussion.
I am with you, but please argument your opinion. It is somewhat obvious from any "moral" standpoint, but every time I try to dig why people think that way I only find badly formulated opinions, based on nothing, but some vague belief systems of "right" and "wrong".
I think you have kind of answered it there in your own response. It is indeed obvious from a moral standpoint. Why you chose to put moral in quotes is kind of interesting to me, it's not inherently a less valid standpoint, hell, I would argue it's a more valid standpoint than many.
But fundamentally, yes, this is an argument about two things:
1. Inequality is at what many would consider to be unacceptable highs [1] and historically when that has happened in the past violence has followed, therefore I think it would be better that we had the conversation about it now.
2. I think it is fair to ask questions about what kind of moral and ethical lines have been crossed in order to reach a net worth of $171 billion dollars.
We as a society are within our rights to take moments like this as a time to stop and ask some questions about if "the system" is working in a way that seems fair to some or fair to the majority and ideally even all. I'm not offering an answer on that one just prompting a moment of reflection.
With your point 1 I can somewhat agree. Yes, inequality certainly seems pretty high - I'm not sure that's a slam dunk case that it's morally wrong, but it's certainly something worth thinking about and deciding whether we want to do something about.
But here's where I lose you:
> 2. I think it is fair to ask questions about what kind of moral and ethical lines have been crossed in order to reach a net worth of $171 billion dollars.
Why? I mean, sure, it's always a fair question to ask if moral lines have been crossed, but why do you assume that amassing great wealth is in in itself morally wrong, or only happens if you do immoral things? That's at least the implication I take from your statements.
Many people who are making the median wage in the States (as an example) have vastly more wealth than the poorest people in the world. Did they do something immoral? Not really. Maybe the "system" itself is immoral or something (though I'd love to hear an actual suggestion of a better system), but why start off assuming there's a moral failure instead of just "here's the way things work, ok looks like it leads to some pretty bad outcomes, let's try and think how we minimize those". Why start name-calling instead?
well, something being obvious does not make it an axiom, not worth of an argument and/or a proof. in fact, there are many examples "obviously right" views that can be proven wrong.
Thank you for the points you've provided, I agree with them totally. I just wanted to see what kind of logic stood behind your opinion, that's it :)
Every time someone argues in favor of equality as an unquestionable good I have to ask: Have you done a thought experiment where you have a perfectly equal society? Like tomorrow imagine that all the world's wealth was equally distributed for a moment. Now play out the scenario into the future one year, 5 years, 10 years, 25 years, 50 years. Think about all the unintended consequences of that policy.
What does it mean for those that now have power? What does it mean for those that do not? Is the equality maintainable? How are decisions made? Other than maybe land, is the wealth that has value today even valuable any more once divided equally and everyone has it? From the point in time where the wealth is divided equally, does it increase or decrease globally from that point forward? Why or why not? How does the change in incentives change people and change the world?
Now this thought experiment should be the most extreme end but not misaligned with what many people think is ideal. Ideal doesn't mean workable and it's important to explore what aspects are workable and what are not because if we're going to chase something utopian on paper, we better well understand the unintended consequences.
My bet is that anyone that honestly pursues this line of thinking and really considers the second and third order effects, that they'll quickly discover lots of problems and come to the conclusion that like extreme inequality, extreme equality is also bad over time, and it's only after coming to that conclusion do they concern themselves with the better question "how much inequality is the right amount of inequality and what kinds of inequality are in everyone's best interest?
Anyone that has spent time really pondering Rawls' thought experiments such as the original position and veil of ignorance should be right at home here.
> Like tomorrow imagine that all the world's wealth was equally distributed for a moment.
This is a straw man. No one is arguing equal distribution of all wealth. Any sane observer is arguing the historic levels of inequality are a cause of many undesirable social issues.
It's a thought exercise presented in socratic style so that someone learns to recognize the problems with the other extreme. Only when you see the dilemmas that exist at both extremes do you start figuring out where the balance it.
When someone is fighting equality with no hedging in their argument, that's usually a sign that they haven't considered what happens if they achieve what they are arguing for.
I'm not arguing that extreme inequality is good. It's bad in the same way extreme equality is bad. Once you recognize both are bad and why they are bad, you're more free to explore where you believe the balance point should be.
My personal view is that the problem isn't that we have a power law distribution (1/x). My view is that a distribution of 100/x is preferable to one of 1/x. The difference in equality from the top to the bottom can be extreme so long as the distribution between the two contains lots of people fairly evenly spread out and there is the possibility for someone to move up and down on that distribution on their own volition and effort. This produces a society that will produce productivity benefits that over time improve the conditions of those worst off.
I didn't see this response for whatever reason so sorry about the delay.
I think the premise is a bit flawed here. An argument for reducing inequality isn't an argument for enforced equality. I would actually largely agree with you in that one of the main flaws of an extreme communist / no personal property approach is that it fundamentally isn't compatible with human nature.
However, that wasn't something I was arguing for at all either so I can't really defend it.
Just so I am not accused of hiding behind vague statements though what I am actually arguing for is more aggressive taxes on billionaires both in terms of real numbers but also primarily in addressing avoidance issues. I am also extremely in favor of the idea that workers should receive a living wage. I don't see any aspect of that which I would consider to be incompatible with a healthy and functional democracy / capitalist society.
Inequality has positive consequences as well as negative ones. It's more likely to create venture capital and a market for high risk investments that have a significant chance to lose all the capital invested. Venture capital is a bad idea for retirement funds which would be the majority of investments in a relatively or perfectly equal world. I think it's likely you'd see significant declines in pursuing risky ideas that can change the world, for example a lot of the projects pursued by the Bill & Melinda Gates foundation, wouldn't be possible without the unequal capital that leads to billionaires contributing significant capital to such endeavours. Space exploration seems to be an area of substantial interest to billionaires where we now see private companies making substantial achievements while NASA and many other government space programs seem to be in decline from their peak.
As for maintaining inequality, it usually involves some form of force exerted on labour markets where voluntary exchange gets replaced by something involving almost entirely compulsion. Voluntary exchange of labour will always result in inequality as people's talents and the value of those talents are radically different. I'm not claiming markets get these problems correct (Many education and some health professionals seem to be dramatically underpaid relative to value), but people can at least make somewhat informed choices as to what they want to do with some knowledge of the value they will gain from it. A world where equality is enforced will have the government at a minimum telling people what they can earn from what they can do, and in sectors where demand is higher than supply they very likely end up enforcing who can do those things as well. Freedom of association in labour is very important to me and to me seems more valuable than enforced equality in a lot of ways.
I agree with the conclusion that the one big question is "How much inequality is right for society?". Another big question is some variant of "How can governments influence the distribution of that inequality without violating individual rights, while working to maximize a reasonable function of overall happiness?"
I'm of the opinion that trending towards a guaranteed basic income in supported by higher taxes and reduction in redundant programs is likely to be a good path forward provided those programs are carefully designed around incentives and the taxes are designed to be revenue efficient and minimally disruptive. I'm partially of this opinion because I believe it frees people up to pursue their artistic goals and could usher in a wave of unprecedented creativity in society. Not everyone is willing to go homeless to produce the next Harry Potter but many people will choose writing over a minimum wage job if given the choice. I think lower supply in labour markets leading to higher wages for some of the terrible jobs that currently people are made to do because of lack of alternatives is a net good thing for society even with the consequences of higher prices on some essential goods.
"Inequality is at what many would consider to be unacceptable highs"
Many people also routinely watch the Kardashians. We're trying to get at the root of a moral right, and citing what "most people" think is basically irrelevant.
"Inequality is at what many would consider to be unacceptable highs"
Citation that shows causal relationship is needed here.
What's the problem with there beeing people with 100000 times my NW? specially if it's a guy that created one of the biggest business on the planet?
The problem is there being persons that can't afford to eat, but blaming bezos would only be fair if the way he got his money actually contributed to the lack of basic needs meet by the needed.
I think the standard counter argument to this is essentially:
1. Governments are ultimately responsible for this.
2. These social safety nets are funded by taxes
3. The specific man in this specific story runs a company that as recently as a few months ago was labelled the worst offender for tax avoidance. [1]
4. Jeff is now wealthier as a result of avoiding taxes on both a company and personal level
5. People who otherwise might have had a hot meal and a roof over their heads now don't.
There is a whole separate counter argument to what I have just said about how it wasn't technically illegal to avoid the taxes using the specific loopholes that he has used. My original comment about people are ultimately responsible for the kind of society they want to live in speaks directly to this.
Should we maybe think about closing some of those loopholes and getting a lot more serious about tax avoidance among the top 0.1% of companies and people in the world?
I think saying poverty is the issue is heading in the right direction, but I would even go further and say that poverty is not the issue, but that conditions not improving over time is the issue.
Most humans (except maybe Buddhists and Daoists) are on a hedonic treadmill. So long as their condition today is better than it was yesterday, they generally derive greater contentment than being better off in absolute terms and then plateauing.
This "most people were better off over time" is the stuff stable societies are made of. It's why post WWII America did so well. It's why China has been doing well for 20-30 years now. When most everyone is doing better today than yesterday and believes they will be doing better tomorrow than today, they are content.
Even poverty is tolerable if things are improving over time because you adjust your expectations.
The lack of improvement over time is what makes prisons for example such an awful punishment. You're placed in a state where your conditions are not only worse in absolute terms but there is no prospect of it really improving until your really.
I also think that too much information or mis-informations, or simply bias or selective information can damage the way you perceive if thinks are getting better or worse, but that's another topic.
I guess that depends on how you define poverty. When I first moved to San Francisco, I slept on an air mattress for about 8 months and ate for about $2-3 a day and spent about $200 a month for health insurance. I walked most places at the time with the occasional muni fare. So my total monthly expenses was about $300 to $350 month once you include necessary incidentals. I don't think I had more than $300 in my bank account at one time. The only large purchase I made in that time period was a $200 pressure cooker, which I used to cook the beans I ate. I would buy black beans, kidney beans and rice in 20lb bags.
Would you consider this poverty? Cost-wise and earning-wise most people would consider it poverty, but it didn't feel like poverty because I knew what I was doing and I adjusted my expectations accordingly. I reckon I lived on about $2700 over those 8 months in one of the most expensive cities in the world. Would I want to do it again? No. Could I do it again if I had to? Yes.
Wealth gives a person power. The people who get very wealthy (in our current system) are not generally the people who will do the best things with power. This seems like a situation which could be improved on.
A person or group with immense power can trivially achieve great good.
However, if you consider systems A and B, where system A is a bit better at using immense power for good than system B, you will notice that system A will result in a lot more good than system B. Therefore, if you care even a little bit about good things happening, you will be very keen to have system A instead of system B.
The fact that someone with immense power does something good becomes a lot less reassuring when you consider the opportunity cost of not having someone or some people who are a lot better at achieving good have that immense power.
Someone a lot better a doing good were not apparently good enough at getting the resources to do good.
You can't just dump a lot of power into someone you think that does good, because you have know way to know if (s)he is even able to manage that to start to do go.
At least bezos continues to improve the world infrastructure through amazon, and financing the space industry though blue origin.
If (s)he can't get/create resources, how can he do good? It seems you would just put a waster in power.
It's the difference between charity orgs with fading impact, and the ones that change people lives. Same applies to corporations, plenty changed the world for the better.
But this begets the question: How do we know that this system with Jeff Bezos is not already System A?
There are a lot of people who think they know what System A is and believe we are in System B but there's no lack of examples of people who get their chance to implement what they believe is System B and cause far more misery because they didn't know we were in System A (relatively speaking)
Personally, a system that generally rewards competency and is based on voluntary transactions to me is trending towards System A because people who amass power in such a system and maintain it generally do so because they are good at getting results through transactions that on the whole are generally voluntary and mutually beneficial.
>Personally, a system that generally rewards competency and is based on voluntary transactions to me is trending towards System A because people who amass power in such a system and maintain it generally do so because they are good at getting results through transactions that on the whole are generally voluntary and mutually beneficial.
It's easy to imagine systems which have more freedom and are better at rewarding competency. Like anarcho-syndicalism. If freedom and the rewarding of competency are what you value, why dismiss systems such as this? Throughout history humanity has gone through several systems. I'm not sure your justifications for believing the current one is the best would hold up to scrutiny.
The problem with more equal systems is that no one has that immense power to do good. So you end up needing to solve huge coordination problems that historically we are very bad at in order to achieve such projects. Governments have a bad track record of achieving such things relative to the private sector and they seem to be the best vehicle available for said coordination problems.
This sentiment comes up a lot as a protest against power laws; but they are perfectly normal, in that they're natural. In any situation where there are differences among individuals and a single axis store of value (currency) there is going to be power law.
Imagine a world where everyone started with an equal amount of money, and people only paid each other to see them do X. X could be singing, playing basketball, make youtube videos, standup comedy, croquet, whatever. With the passage of time, money will concentrate in a fractal representation of the 80-20 power law. 80% of the money will go to the top 20% of the people best at X, and even in that 20%, 80% of that money will belong to the top 20% of the top 20% and so on.
If X was basketball, Michael Jordan would be a thousand times richer than me (he is) and a million or billion times richer than the poorest people (he is). Same for the best artists, most widely read authors, everything.
If the currency is power / reproductive rights, the top 20% would pass their genes on to 80% of the children, again fractally. This is also borne out in nature, we're all children of Genghis Khan or King David or Abraham or whoever your geography's alpha was.
What we can say, is that the situation is not rational, just, or merciful. All beneficiaries of the power law ride on the value provided by everyone else that cannot be quantified properly into the single-axis measure of value. Bezos could only build Amazon because there were already a country that was fought and paid for, roads, courts, electricity, planes and trains that society as a whole built for before he was born. That attribution is not being captured in any way, and we try to re-balance that value owed with taxes, which are again imperfect because we have only a single-axis value store.
So normal and natural, yes, but the value is not distributed correctly. That's a rational and ethical problem, both of which are very artificial human constructs.
That's true as a percentage of total world wealth, but if you're using money as a proxy for productivity, in absolute terms $200 billion probably outranks all of Egypt 2000 years ago.
And if you're talking about how much wealth he could realistically extract from Egypt, it's much much lower. Maybe even lower as a percent of global wealth.
Really? He was being literally treated as a god among man. And his word was rule there, and not just for the slaves.
Bezos is literally nothing. It's just that nowadays the average person has more power, and the average bourgeois has even much more power, but the old rulers could do anything.
>Bezos could hire a small army of mercenaries and defeat any cesar/king/emperor of the past.
The kind of army that governments would allow Bezos to own couldn't defeat the strongest rulers in the past unless he got very lucky and managed to pull a Cortes and ally with another much larger force.
And now we are in territory of bizarre wargame scenario.
If the army of the past came to present they are dead in the water. All you need is to know where their leader is and assassinate them, sniper rifle, explosives thrown from helicopter etc. You don't need military equipment, as the past people have no experience and knowledge of mode technology.
Other way around - modern army in the past - is a bit too complex (too many variables/scenarios) to write in a comment. That is territory of a podcast episode or two :)
You realize that Bezos didn't built Amazon on his own, right? There are many, many people who worked for that company (and many of these in this very forum), and all they got was a monthly salary. They own nothing. We are living in the alternative. Most of the people who built Amazon don't own anything of what they created.
What's the argument here. Salary is a salary precisely because of this reason. You get a small something, or you in a non salary scenario get either zero or something way bigger than a salary.
This "they took a risk!" stuff is just success worship crap grilled into people in our culture to justify someone amassing more wealth than most of us can even mentally comprehend.
Bezos came from a privileged background. What was the big risk involved that makes his current level of success so sacrosanct? It's not like he'd be thrown in jail (or worse) if the company had failed. He would have moved on and started a different company or gotten another 6+ figure job.
They received a salary in compensation. I salary they chose to accept. Bezos took all the risk. If Amazon failed he would have failed while employees would have gotten a salary. Risk taking is rewarded.
I'm pretty sure that if Amazon had failed at any point, all of its employees would have been out of a job (and not just the engineers, also the thousands of minimum wage employees), and it's not like Bezos would personally be billions in dollars in debt to the investors of the company -- companies don't work like this, at least in the US. What was exactly the risk taken here by himself, personally?
Amazon was founded in 1994, more than 25 years ago. You are talking about Amazon in 2020. There were many points throughout those 26 years were it could have gone down. The risk he took was building the company from zero, hiring people and paying them a salary. Amazon now employs over 800000 people. If you think that has no merit and Bezos took no risk, then you really don't understand how things work.
You said "people not owning what they create" as though it was an unthinkable option. It's literally what most people do for a living, you said it yourself. What makes Bezos special? Why does he deserve to own ALL the creation of all of these people? I guess it can't be because he came up with the idea of Amazon, right? It is usually pointed out in SV that "ideas are worthless" after all
Doesn’t have to be so boolean. The alternative is taxation.
He didn’t create all of that, he led and directed the efforts of others, who could’ve earned more form their blood, sweat, and tears if he had not.
This is not to deny he’s a smart, highly complement business leader whose management skills acted as a force multiplier that means it was Amazon rather than, say, Walmart, who is the dominant online retailer.
It’s just that saying he deserves all of that $171 billion seems as wrong to me as saying he deserves none of it.
That wealth is not cash. It's control. It's control of something he created and would like to continue to control. He can't convert it into cash without liquidating control.
Imagine is 98% of net worth was in your home. You can't mortgage that without giving up control. This is why even Bill Gates really only started being truly philanthropic at a grand scale once he had decided to relinquish control in Microsoft and pursue his philanthropic endeavors. It was only at that point was he free to do something with that wealth.
We would all be better off letting Bezos build wealth and then tax it at the end. There's going to be a lot more tax money to work if you tax at the end of the prosperity.
I am aware the shares operate like that, and that this is still the case even though he is cashing in enough to run a space program as a hobby. It is nevertheless a bad look for him to run a space program with pocket change while fighting against internal efforts to unionise his workforce.
To steal a cliché from a different sector, I believe that when a corporation is “too big to fail” is becomes a threat to the governments which it operates under and the societies which it operates in. There are many ways to manage this risk, and I am not qualified to study their pros and cons — taxation is a simple solution, and I will accept that simple solutions are probably bad solutions. This does not mean that there are no better solutions.
Many people (particularly in the lower income brackets) prefer to be paid in cash as opposed to equity[1]. Given the chance, most people prefer not to shoulder the risk of an equity stake at the expense of a reduced or non-existent salary.
Is it any surprise then that a lucky few who forgo cash in favor of worthless pieces of paper become super rich after the stock rises?
Many investors are also opposed to giving the poor equity in the company. Richard Garfield encountered significant opposition when he gave equity to roles like cleaning staff in Wizards of the Coast.
Which Amazon products/services did Jeff actually create?
Obviously all the past and present employees created those products, many of which are based on, or dependent on research funded by govt, and also enabled/reliant on a stable society, rule of law, an educated workforce and customer base, transport networks, electric grids, and all kinds of other infrastructure.
The social bargain here is that successful companies then pay back those external govt/societal costs with taxes.
One alternative is to more evenly share the ownership of things that were created by a large group of people.
Jeff deserves a lot of credit for building Amazon; it is now a $1.44T company. But $171B is 12% of that, which for a single person is a lot. Maybe the other million+ people who helped Jeff build Amazon received a smaller share than they deserved?
There are a whole spectrum of options between unchecked capitalism and communism.
I'm just asking what kind of guardrails if any might be appropriate moving forward now that we can see for ourselves how the current system is working for everyone.
I'd say it is normal, the vast majority of time since humans started living in cities have been like this. A society based on a corrupt system structured to concentrate wealth and power in the hands of a ruling class.
The abnormal time period is our brief flirtation with systems aimed to harness competition between the powerful in service of the masses. But it doesn't seem this can survive without rules to limit the power of the super rich to control the media & create monopolies.
Of course it's not normal that's why it's news, but I don't see anything wrong with this. As long as he pays his fair share of taxes and Amazon pays it's proper share of corporate taxes then we're good. Problem of course is we all know that last part is very broken right now, especially on the corporate tax side.
Of course the problem lies in that the rich and powerful have an immense amount of sway in what is defined as the "fair share of taxes" they have to pay.
I'm suggesting that Amazon is insanely aggressive about corporate tax minimization and that if we held them to a minimum rate, Bezos's net worth would be substantially lower since it's all in Amazon's stock which is priced based on the future expectation of cash flow to equity holders.
The chipping away of effective corporate tax rates is one of the big untold stories of inequality, especially now that most most cash to equity holders comes in the form of buybacks which are untaxed and most shares are owned in tax havens so the presumed capital gains upon selling can be readily avoided as well.
Just saw your edit - you too. I don't really care about Jeff Bezos's wealth, he's just going to blow it on more mansions and boats, but I think it's worth thinking about the virtuous cycle of wealthy people having so much political influence to determine how wealthy they can be.
People like Bezos have far more influence on shaping the world than most of us mere mortals, and they are not going to make it easy to redistribute wealth.
Vladimir Putin's personal net worth was estimated to be between $70B and $200B in 2018, so it's quite possible that Bezos is not the richest man in the world.
I would love to know what goes on in someone's head when they could use their money to massively improve the lives of millions of poor or un-privileged people, or even save them from a premature and/or painful death, withough ever noticing the difference in your quality of life. But they don't.
I was aware that Bill Gates had given away at least half his money, given that he's still been left with more money than he could ever need by some large margin I'm not too interested in making him some sort of saint just yet.
What is your point? I have to be perfect before I can criticise other things or people?
I happen to be trying to make enough money so I can safely retire, hopefully before my mind and/or sight gives out, and so I can send my kids to uni. If I gave half my money away I'd be substantially poorer. If I Bill Gates gave half his wealth away, he likely wouldn't notice the difference.
1. People with so much money that they have enough to save thousands of people from starving to death, or dieing from prevantable diseases etc. etc. without ever noticing the difference to their wellbeing.
2. The fetishisation of people who give an irrelevant amount of their wealth away.
There are literally people alive today who won't be in a week or more because they don't have enough money, and these people could save them and they would never notice. All the difference to them would be the tiny change in a number on a balance sheet.
There are literally people alive today who won't be next week because they don't have enough money, and YOU could save ONE of them and the only difference would be a tiny change in a number in your savings account.
What's your excuse? Don't you see the hypocrisy here?
He's not doing enough by your very high standards, but you don't judge yourself by those same standards.
I could, but it would materially change my outlook for a comfortable/safe future.
It wouldn't for the super rich. That's kinda the point.
Me: I could help people, but it would weaken my future outlook
The Super Rich: Could help many people and they would never notice
The fact that someone who could never be be materially affected by improving the lives of others (for instance, treating warehouse staff better), but doesn't, is the key here.
No, there are people you could save for a couple dollars a day. It won't affect your life either.
It's the exact same thing. You're continuing with the hypocrisy.
When you can answer honestly why you don't do that, you'll have an idea why the super rich also don't do that. There's not just one reason, and maybe the answer makes you uncomfortable when you weigh your justifications against the value of a human life. But it is what it is.
While that is true, that is true for our entire society. Big projects are almost never started nowadays by selling somethings else (unless its a direct replacement). Instead, what usually happens is that you take a bank loan that is secured by assets, in this case his stock. Or to put it short: pretty much any bank would give Jeff a 10 bn loan that is tied to his stocks, its simply not true that there is any problem there.
Mostly because it is not that simple. Rendering effective aid is a hard problem. You can give too money and cause massive inflation, you can give too many goods and services and destroy local economies, you can give too much to one branch of research and cause a brain-drain on the others.
He could simply start by investing money in improving the terrible working conditions and wages of his warehouse employees, who contributed to his wealth.
Not everyone considers altruism objectively positive in all cases. It's possible that they consider it robbing the "un-privileged" of their agency, depriving them of their opportunities to grow their character by overcoming adversity, etc...
Isn't this question somewhat tackled in The Watchmen, regarding Dr. Manhattan's godlike powers and apathy?
> depriving them of their opportunities to grow their character by overcoming adversity
I'm not a fan of that sentiment. There will still be plenty of adversities to overcome, but just not the ones removed by the do-gooder. For example, being able to eat a healthy meal every day and then competing through all the other adversities on a more level playing field.
People have been trained to justify these capitalists for whom we place on pedestals, while at the same time disparaging the common worker for some perceived lack of "merit" and "effort".
As programmers, we encourage open source work with little to no return on the effort when compared to how these projects are utilized. Amazon is a fantastic example for how it abuses this effort and the community.
I really don't like these kind of headlines and honestly I'm not sure why it's even posted on HN. What is here to discuss?
His wealth comes from his company and to brag about morale, justice and society usually ends up in fights.
I don't know Jeff, but I'm pretty sure he doesn't care much about money, like if it's $100B or $172B. From my point of view, money is only a way to make his visions come true. For me that is Blue Origin.
From watching from afar, it seems that right now he makes sure amazon grows just to be able to finance Blue Origin from his own pockets.
He is just a man with ambitions, whose "crime" people call out is amazon not paying profit taxes...
With all the taxes from the non cash business amazon brings, that is the least ethical concern about amazon, specially since most of time they indeed have no profit as they reinvest.
Now the warehouse conditions is another thing, but hey it's america, those are spoken about because every its like that but amazon is a big target.
Amazon is a big corp like any other it has a bunch of faults, but to point Bezos simply evil over it is ridiculous, he does not have full control of amazon like Zuck has over FB
I think that’s worth discussing (op asked what there is to discuss). I don’t think rich people are evil. But I wish we could come up with mechanisms for them to share their wealth with their employees who helped them build that wealth.
I know where you are coming from, but that is basically what the salary is for. We just have the bad situation that not everyone is in a driver seat to negotiate his salary (or have a choice). I'm not sure how it is in the USA, but in germany for example, there is minimum wage. I think the society and politicians are responsible to make sure that employees are treated gracefully and to establish mechanisms.
Ya I am split on the issue myself. The USA has min wage, but it’s pretty low and it there is more inequality than just that. It just feels like execs get more than their fair share. Like when the US is compared to Japan, Japanese execs have less extreme inequality among employees in the same company. I wish there were ways to incentivize that. No individual human needs to be worth a billion dollars.
And while it’s true that the execs have earned something, studies show that there is more luck and randomness to their performance than personality-cults will acknowledge. It’s annoying that they are entitled so much wealth when studies shows that performance of their companies is much more Influenced by other factors than that one execs work alone.
That's the power of leverage. Good for him. He is one of the greatest investors of all time, just only investing in growth of his own company.
I don't think any human needs that kind of wealth, but I also don't begrudge him of it. He earned it.
The problem with society is not that there are rich people - there always have been and always will be. It's in fact a sign of a healthy economy. If you have no inequality, it also means you have no growth or innovation - everyone is equally poor. Cuba and Soviet Russia tried to be examples of this kind of society, and few would argue they are desirable models to emulate.
The problem is rather the number of people who can't find steady employment, earn a livable wage, and take care of the basic necessities of food, shelter, and health. That does need to be addressed, and the sooner the better.
Yes he did, he took the risks, not them. He quit his high paying job and risked his financial future by opting to start Amazon. He sacrificed endless amounts of free time and sanity to build an empire. That's why he owns a large piece of it.
You could argue that maybe the employees should have a greater share in the company, and that could be correct. Many of the early employees no doubt did. But at the end of the day, they choose to work at Amazon over somewhere else. But they didn't take the risk, if it hadn't worked out they would've moved on to the next thing without batting an eye.
A good economic system must reward successful risk taking, otherwise nobody would do it, and nobody would have jobs. Whether it needs to reward it this much is another question entirely.
We do have a mechanism for redistributing wealth to maintain to a fair society, called taxes. It just doesn't work at all if you don't earn income, but instead accumulate wealth via capital growth like Jeff Bezos.
Some countries have a small tax on wealth, e.g. 0.5% of total wealth, per year. I'm not sure how well that works.
What about them? They signed a contract when choosing to work for Amazon. They can negotiate their compensation before signing. They can renegotiate after signing. If they don’t like what Amazon offers, they can go somewhere else.
It boggles my mind how much credit is given to the workers when it was Bezos who: knew how to hire the right people, started the company, provided the compensation and benefits, and has taken on the most risk.
First of all, many (most) of the people who work at Amazon are not engineers or managers in a position to "negotiate", and don't have "somewhere else" to go to work and get the money they need to eat. They cannot "renegotiate after signing", which in these situations is something traditionally done via worker unions, which Bezos has worked very, very hard to disable.
Second, without the workers who, according to you, don't deserve any credit, Amazon (the entire thing) wouldn't exist. These "right people" Bezos hired were workers, and hiring them is not what built the company. "Starting a company" is not exactly hard work. And he didn't personally provide the compensation and benefits out of his own pocket (besides the first 300K "from Jeff Bezos and his family" according to Quora), it was always investors' money, or the money generated by Amazon itself (who was running thanks to these people being compensated). None of these things are usually talked about, it's just Bezos and Amazon on the news. Do you really think that "the workers" are getting too much credit, when they never get none?
In a free market, workers are always in a position to negotiate. They can always renegotiate.
Is Amazon the only employer in the USA? No. So workers always have somewhere else to go for work.
The workers credit is the compensation they agreed to when deciding to work for Amazon. Nothing more, nothing less. There is nothing special about accepting employment. That’s what the majority of people do.
“It’s just Bezos and Amazon on the news” because Bezos willed Amazon into existence, a company that brings endless value to millions of people. You are right, starting a company is not difficult, but creating a company that brings so much value is.
Well, he might have taken the most risk, but let's be real, it was everyone else who did the work.
The CEO is the one who makes the most important/difficult/risky decisions and the company's fortunes rise or fall depending on how good is his or her judgement. That's called leverage.
That's why CEOs and founders are so highly compensated, they can earn their entire paycheck with one good decision. Funnily enough they don't always personally lose if they make bad decisions at the helm.
To what degree Jeff Bezos is benevolent doesn't factor into this for me. Whether or not Amazon is a great company doesn't factor into this for me. It's a larger discussion about whether or not it's grotesque for a nation with such a large number of billionaires to have some of the most serious socioeconomic issues of any modern, developed nation.
I'd feel more happy and congratulatory toward Bezos' increasing fortune if, say, homelessness weren't a serious problem in America, and if every child were guaranteed a decent meal, which seems like it could be accomplished with a tiny sliver of the overall wealth of America's billionaire class.