612
Mark Zuckerberg, Jeff Bezos, Bill Gates. Behind Every Self-Made Billionaire is a Father with Money
(mohaboelez.medium.com)
this post was submitted on 27 Dec 2023
612 points (96.9% liked)
Economics
1720 readers
1 users here now
founded 5 years ago
MODERATORS
you are viewing a single comment's thread
view the rest of the comments
view the rest of the comments
I have long said that if we look at typical success stories somewhat soberly, it is always a combination of luck and privilege. Hard work and talent can be very helpful, but they are in no way a prerequisite for success.
To illustrate: Whenever someone says "taking risks must be rewarded", it is always worth pointing out that you don't get rewarded for taking risks, but for getting lucky while taking a risk. Also, you have to be in a position to take a risk in the first place (i.e. have time, resources, and the means to not starve if it goes belly up); in other words, some degree of privilege.
Yep. I have no doubt that Gates and Bezos and Zuckerberg are genuinely very smart and hard-working people, but there are a LOT of smart and hard-working people with poor parents, and you don't see a lot of billionaires in that group.
I know a lot of talented hardworking homeless people. Many of them work harder than I do and I make 6 figures. We're not in a meritocracy, we're all one misstep or accident away from being disabled and on the streets regardless of skill or work ethic.
It's worth remembering that once you get to the street, you now live in a combat zone that will cause PTSD along with a host of other psychological issues.
Housing first initiatives are the cheapest option we have. Once society stops creating new psychological disorders in their homeless population, then the formerly homeless can move out of survival mode, and actually address their many other problems*.
*Provided of course that one can actually afford to thrive on a single income regardless of the job one takes.
Ideally, taking business risks should be rewarded as much as possible. That keeps an economy dynamic, flexible, and responsive to new opportunities. Otherwise you get an economy dominated by big brittle players that are content to sit back and milk cash cows. Oracle comes to mind, with its army of lawyers eager to shake down institutions that may not have quite the correct license for a server.
This is where bankruptcy for businesses is incredibly important. People should be able to start a business based on an idea, try to grow it, and not suffer personal ruin if the business fails. A good social safety net is beneficial as well to make sure that after a business folds, its former owners still have the bear necessities of life. Likewise, there needs to be a strong inheritance tax so the wealthy have their wealth significantly diluted.
None of this will make things equal between the children of the upper class and lower class, obviously. It just makes social mobility a little easier and benefits the economy as a whole.
That is the opposite of risk. A risk is something you do with a poor chance of success, possibly with a good reward if successful. What you're describing is a guarantee. Now look at the returns on guaranteed interest certificates and the high-risk stocks. Sure, some of the high-risk stocks outperform the guaranteed certificates, but many also end up being worth nothing.
Risk exists on a spectrum. US Treasury Bonds would be about the lowest risk asset you can invest in, but there's always risk at some level that the dipshit Republicans in Congress finally manage to blow up the bond market.
A healthy economy has a good mix of creation of new businesses, destruction of inefficient businesses, and retention of businesses that are well run. The family run corner grocery store may just not need to grow and change much.
Yes, exactly. Businesses should be less risky to open and that should be paid for by larger corporate taxes. Coca Cola is selling sugar water that costs 50¢ for a dollar. They can afford higher taxes because of their huge brand name. And I own shares of Coca Cola.
A lot of people also seem to ignore the fact that the risks are not the same for everybody.
E.g. four people get the same business opportunity. For person A, failure means they have to ask their parents to bail them out. For person B, they have to move in with their parents. For person C, they have to move their family into a tent under the bridge. And for person D, they have to ration their medication and risk dying.
Person A could probably try things out a few times without suffering too much other than embarrassment. Person B, maybe a couple times, but that's pushing it. The others have to pretty damn sure it'll pay off, and even then, the risk might be too much.