The point to me is that BILL GATES was not necessary for a personal computer operating system to arise and dominate the marketplace, clearly, there were competing operating systems out there, some BETTER than Windows from the get-go (the Apple OS) and out of that welter SOMEBODY was going to come up with the OS that most PCs use, and it happened to be Gates and Windows. Nothing magical about it, and Gates did not CREATE the marketplace for PC operating systems, he just took (admittedly, skillful) advantage of the opportunity that the rise of the PC created. If we did not have Bill Gates and Windows, we’d have somebody else and something else, not sure who or what but there is NOTHING to suggest that Gates was ESSENTIAL to the development of PC operating systems. If you will read the book “Hackers” in fact you will see that he was just one of many on that trail.
Bill Gates worked hard, he was smart, he was driven and he DAMN lucky. He won a lottery. Nothing wrong with that, but the argument for his massive rewards seems to be based on the notion that he made an essential contribution. He did not. His system and his business out-competed others, but there is nothing to suggest that it benefited society greatly that he was the one that did it. Another man, another firm, and the results would have been quite similar, I’m sure.
Well, he did. He offered a product that people wanted to buy. You’re measuring his reward with that metric–dollars–why would you measure the value provided by a different metric? Some squishy “societal benefit” or something? He’s worth exactly what he received (so long as he played by the rules), by definition. Same as anybody else.
This one’s fine, as all societies are both individual and collective.
You can’t gloss over “contributions” with “by whatever measure”. What measure? There simply isn’t some objective measurement of “contribution”, full stop.
Society doesn’t reward anyone. In term of income, it comes from individual transactions, not some transfer from society. “Society” doesn’t pay me, my employer does. “Society” didn’t buy Windows, individuals did.
Further, what’s a reward? It’s not just income or wealth. Some value family, leisure time, artistic pursuits, or what have you much more than wealth. If I were offered twice my salary at one and a half times the hours, I’d refuse, because I value what I spend that time doing more than that sum of money. Viewing worth as a question of income is odeous, and frankly something I’d expect you to attribute to your political opponents.
What’s a contribution? What’s a reward?
Evidence that wealth inequality exists, and has been increasing since the '70s? Yes. Evidence that this is proof of some dire trend? Rather more sparse. The hand-waving is of the vastly different causes of the inequality in the scary-comparables like Saudi Arabia. Inequality is a symptom, not a problem in itself. It Saudi Arabia it’s a symptom of a striated, legally unequal society. In America, it’s a symptom of economic growth, innovation, and relatively low tax rates.
As far as the idea of an “informal conspiracy” of CEOs and the rest of the business “elite” to raise their salaries; it seems to me people are dancing around the taboo words “class” and “caste”, because that’s what we have. A rich business caste that works to warp society to make itself even richer at the expense of everyone else. People just don’t want to admit that we’re a class-ridden society.
It does no such thing. The people who make the most money are the ones who are already rich and risk nothing.
America is one of the least socioeconomically mobile industrialized nations, for all our speechmaking about being a land of opportunity. If you want to climb out of poverty into the middle or upper class, you’re better off in one of those Evil Socialist nations.
You make a huge leap from saying that some people are not rewarded fairly to it is nothing like a meritocracy. Just because it is not perfect does not mean that it is not a meritocracy. Most lottery winners end up broke and most people who make smart decisions and work hard end up succesful. It does not mean that there are no exceptions, only that is the way it usually works out.
There are two members of my family. One flew bombers in WW2, came home became an alcoholic and smoked heavily. The other never saw combat, never smoked and hardly ever drank. The first outlived the second by twenty years. From that we can learn nothing about the health affects of combat, smoking, and alcohol abuse. Only that strange things can happen that defy the odds.
Bad luck and good luck do not change the fact that the market rewards people who create value, not perfectly but very well.
I was in the wealth inequality and no one provided any evidence that inequality was bad for the United States only that it was happening.
He may not have been “necessary”, but he’s the one who did it. It’s not like he stepped into the CEO slot of a Fortune 500 company. Microsoft didn’t exist before Bill Gates.
Because of network effects an OS that is slightly better than another one is likely to get used more and thus become much more valuable. The heir to the In and Out burger chain is a billionaire even though they are the 15th largest burger chain in the US, but making the 15th most succesfull OS will probaby get you no money at all. That is why software with network effects is kind of like a tournament. The winner takes almost all of the rewards. Ussain Bolt makes a lot more money than the 10th fastes guy in the world despite being only a fraction of a second faster. Tournaments don’t always produce great outcomes for those who are only slightly less good than the winners but they are great motivation for people to work hard and produce a great product. That competition is what makes our country so rich and people so much better off than they used to be.
There’s little evidence of entrenched conspiracies like you are talking about. Wealth and privilege create networking opportunities, but these people compete with each other as well. Rich people don’t have an allegiance to other rich people out of some conspiracy to keep the club selective, at least in part because unlike liberals most rich Americans know enough about economics to know wealth is not a zero sum game and it is no skin off Carl Icahn’s ass or Bill Gate’s if you wake up tomorrow a billionaire.
But wealth does create opportunities for your children, and the children of the wealthy are more likely to be networked with one another which creates a web of opportunities that can be difficult for the poor or regular middle class to break into. We’re still markedly better than the literal class and caste systems. Even compared to the UK, which despite the complaints of its leftists has only a weak class system these days, we have no class system at all.
The most logical explanation for inflated CEO pay is the same explanation for anytime the market price of something exceeds what a free market would value it at: some form of market inefficiency or failure.
Some people are born rich yes, but that’s not interesting in the discussion of people becoming rich. For anyone to ever be rich, someone has to become rich. Even most billionaires that are born wealthy aren’t born billionaires. They risk capital and are rewarded when that risk pays off. I don’t understand why leftists get so offended at us using the word “risk.” I have a decent net worth but was not born wealthy, I saved and invested my whole life and went into business after I retired from the military. I’m never going to join the realm of people who have homes on Lifestyles of the Rich and Famous or etc, but I’m very comfortable. If I go to a casino tomorrow and wager $100 on a single spin of the roulette wheel it’s mostly nothing to my larger financial health if I win or lose. But I’m still taking a risk. Just because someone is rich doesn’t mean they can’t take risks.
Wealth inequality is meaningless entirely. It’s only meaningful when one group gets to have lots of benefits that are considered essential to happiness (food, shelter, etc) and the other doesn’t. Think: French peasants starving to death while the King and Queen dined on feasts and threw away food the peasants couldn’t afford with a lifetime of earnings.
People making 2x the poverty level in 1970 are far better off in any measureable way in 2013 than in 1970.
-Cars are safer for roughly same value. They have more amenities. Air conditioning used to be a luxury feature, as did antilock brakes, power steering, power windows etc. You can find all of those on a Ford Fiesta for under $17k.
-Medical treatment is better and still highly available. It didn’t matter if you were Bill Gates or Der Trihs in 1970 the world record for survival if you needed a heart transplant was something like a few months. Now you can conceivably live a decade or more with a heart transplant and even get a refresh if you need another. The long list of now routine medical procedures and treatments that millions of people in the middle and lower classes receive every year that the wealthiest man alive couldn’t get with all his money in 1970 is astounding.
-The variety of food, restaurants, entertainment etc is far greater and available in 2013 than in 1970. In 1970 I couldn’t get a dragonfruit in a local grocery store, period. Now I can get it in seven.
-We have more television channels, powerful cellphones and personal computers, much cheaper air travel, much safer air travel etc.
Wealth inequality is meaningless when life is good and getting better. About the only metric where you can even suggest life isn’t better in dramatic ways than it was in 1970 or 1980 is in weird metrics of “wealth inequality” that have nothing to do with happiness or enjoyment.
I read an interesting study once that up to about $85,000 a year people got happier the more money they made. Over that point, it’s mostly flat. Great wealth isn’t any immediate means of getting happiness, nor is lack of great wealth a bar to happiness.
The key word here is “essential.” As there were a lot of people doing what he was doing, he was not “essential.” Some OS would have come along, probably another version of Apple’s OS.
For the last few generations, probably back to the early 1800s most business innovations have been accretive such that the groundwork was strongly laid for multiple people to have the same general innovation or have the same general success. That’s why it’s vague on who actually invented the automobile, a lot of people were banging around with similar ideas and then it gets dicey as to how you want to even define “automobile.”
Gates just happens to be who “won” in the real world, there were several products on the market when he won. Not just Apple OS and Microsoft, and you can’t actually divorce “Apple OS” from Apple. Part of why Apple failed in the first PC wars is because they believed you had to bundle the OS with the hardware and were not willing and did not desire unbundling them. They wanted to bundle their hardware and software together. Microsoft didn’t want to make hardware, they wanted to make software and get money off whoever used it so they could get a smaller piece of a much larger pie (any PC sold that could run their software vs Apple PCs for Apple OS.) IBM was going down a similar integrated approach with OS/2.
Part of the reason Microsoft won that round of the PC wars is because it was just a time and place much better suited to software that could in theory “run anywhere on any machine” than it was integrated stacks. Microsoft wasn’t the only non-integrated OS maker, but they ended up being the one to win the market.
Compare this to smartphones and tablets, where integrated iOS has proven extremely powerful in that particular space and where Microsoft’s many failed attempts at tablets and smart phones left them with a very small sliver of the market. (And while not often recognized, Microsoft has been trying with phones since early Palm phones that could run WinCE and tablets even earlier–and completely failed.)
Apple has also slowly built up a greater following in its PC business, by emphasizing quality and premium markups and a more integrated experience that is much more likely to avoid running into problems out of the box. Part of that is because of execution fail in the past, using their own specialized CPUs instead of just getting on board with Intel is part of why Macs became irrelevant in the 1990s and going the other direction has helped them immensely.
You are right, demonstrating that a given economic system does not function as a meritocracy for everyone does not demonstrate that it is not a meritocracy for most people. But when you couple it with data about the very low social mobility i the US and with data showing the income of the middle class shrinking and becoming increasingly like that of the poor, it becomes obvious to all who are objective about the numbers what is going on. The middle class isn’t becoming less meritorious, American society is becoming less of a meritocracy, and more of a lottery system.
The plural of anecdotes is not data. Put away the smoke and mirrors. They aren’t working any more.
Demonstrably false bit of handwaving. As shown in the wealth inequality thread, it’s a strong indicator of social instability.
You do not think people whose parents sent them to college will feel things are pretty much the same when they are unable to send THEIR children to college? Or when people who were able to buy a home are themselves unable to buy a home but must rent apartments all their lives? Or who must make decisions about health care vs. food to eat? That is the direction we are headed in, quite rapidly.
Yes, technology progresses, rendering overall quality of life better in some respects (better health care) while things get worse in others (38 million Americans without health care of any sort). The water we frogs are in is not boiling yet, a wonderful victory for unrestrained capitalism! Why am I even worrying? Oh right … all that steam rising up around me …
I read a similar quote, to the effect of, "after you make your first million, the lifestyle doesn’t change much. This does not change the fact that down here in the middle and lower classes, it’s changing a lot. And not in a good way.
This is laughable. Let me ask you this, using the metric you put forth above, can you point to anyone that was necessary—essential—to their innovation, invention or entrepreneurship? Henry Ford? Thomas Edison? John Rockerfeller? The Google founders? Anyone?
I think I understand where Evil Captor is going with some of his claims and because I agree let’s change the subject from how essential Bill Gates is to the Windows and similar purely “fan fiction” types of discussions.
What the issue is getting down to is - what is the appropriate reward for any one’s contribution to the society via what ever it is that they do?
For example, question of copyright is really a good way to illustrate how nation laws govern the amount of reward. In other areas it works pretty much the same only in copyright field example is much sharper. So, let me start with proposing that for music copyright the reward is determined by a special group but mandated and enforced by laws and law enforcement agencies. These laws are not built with the idea what is a fair reward for someone who makes 5 minute pop song but what market can bear. Please note, it’s not a market determined reward but rather reward is determined somewhere else with the assumption (based on some data) of market ability to take it. The reason why song is $1 at iTunes is not market but Steve Jobs vision. He “thought” it is a fair price but for totally different reasons.
My point is that many people are under illusion about “forces of market” when it comes to the way market operates but market is a construct of many factors least of them being some sort of “free” dynamic that includes demand and production.
When OPEC cartel gets together they do it to control the market not to make market “free”-er.
So, once we agree that market is a construct of many factors and it’s not free then we can discuss why would any Top 10 Bank CEO in US get more than $5M in compensation considering that banking market is alive thanks to a force of government working against the force of so called “free market”. Once we accept that notion of market is a bit more complicated than sloganeering we work toward more balanced reward system.
Two of the most messed up “markets” in US - in my opinion - are healthcare and education. Without government it would not exist and government is an essential licensing and market building ingredient yet, people suggest we need to let “free market” determine the price. Price should be determined before you start bleeding is all I’m saying.
Finally, what I’m trying to say is that the question of wealth inequality is the question of how much of a delusion of free market is embedded in the way country is governed.
/* I realize there’s more to be done on my example and overall message but the basic idea is there
Please show it here, because I can tell you any such study would have nothing to do with the United States. In history all societies that had high degree of wealth inequality were usually poorly developed countries with limited freedoms, as was typical in the entire Western world before the mid-19th century when you had greater freedoms emerge and clamoring for greater wealth equality. But that’s because of situations unique to those times and places.
You cannot point to any society in history with high wealth inequality and very high standard of living, even for its poorest members. That’s where we are with the United States.
People with or without healthcare hasn’t actually grown in relative terms, and will be shrinking soon enough anyway to basically only be people that actively choose not to have it. So I don’t even understand that point.
I can’t think of any significant areas where you can actually say America is worse than it was in 1980. Homeownership has continued to grow in the United States.
Further, it has grown fastest amongst minorities. Further still, many young Americans are part of a generation that is intentionally eschewing homeownership and even the buying of new cars. Many younger Americans aren’t sold on the concept that homeownership is always better than renting (because in truth it isn’t, and it would actually be even more apparent if not for generations of massively subsidizing homeownership) and many younger Americans aren’t buying into cars as status symbols. If you read the Wall Street Journal (and I’m sure you don’t since it’s in black and white and not in red ink) you’d note many articles on this very topic.
Yes, many of the “Millenials” were hard hit by the recession and some continue to be, but there is a trend among even the successful Millenials intentionally not engaging in the type of purchasing behavior of previous generations. People that want to be mobile, want to walk to work instead of drive etc don’t value homeownership nearly as much as the middle class of previous generations.
Its folly to link homeownership with prosperity in any case, and it’s been the justification for all of the stupid economic decisions we’ve ever made in regard to promoting homeownership.
So take your data-sparse socialist crap and come back with actual data. Because everyone in the United States has a better life now than they did in 1980. That’s not analogous to Cuba before Castro, Russia before Lenin, or Venezuela before Chavez.
You mention networking a few times but that’s a relatively minor advantage that wealth brings IMO compared to being able to give your kids the finest education, and having many more investment options. You can start a business venture without having to convince someone else it’s a good idea or lose money on interest payments. In fact in general you can avoid interest payments on mortgages, rentals or credit cards; things that dribble away money if you’re on the bottom rung.
That’s why personally I’m fine with there being a robust social safety net.
Not because there’s an evil conspiracy among the rich, just that in Capitalism, the more capital you have, the more you have the opportunity to earn in the future.
I want to live in a society where fewer people (ideally none) are in a poverty trap.
[QUOTE=Mijin]
In fact in general you can avoid interest payments on mortgages, rentals or credit cards
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Sorry I know there are no interest payments on rentals; that sentence ended up a bit garbled. I mean obviously with rentals you are paying as much as you would approximately for a mortgage, but you’re not investing anything; you don’t own a house.
I don’t think that’s the issue at all. Bill Gates and Paul Allen didn’t win billions of dollars as a “prize”. They created a company starting with a couple of ideas. Sold them. Eventually they grew Microsoft to a $73 billion business with over 90,000 employees.
Like anything, your “reward” is whatever other people are willing to trade with you for your contribution.
What is “society” anyway but a bunch of individuals each with their own interests? I don’t care who invents the PC. I just want it to do what I need to do.
The “issue” is how do we prepare people to contribute to society in meaningful and productive ways. Someone who has been sent to the finest prep schools since birth is typically (but not always) in a much better position to contribute at a much higher level than someone who dropped out of high school.
Just because Jobs made a good estimation of the market sweet spot doesn’t mean that the market didn’t decide what the price would be. The price had to be low enough to be very attractive to consumers, yet not so low that the music companies who owned the songs wouldn’t say “go to hell”. And the latter almost happened.