Misleading (and not original) title. The 'economic environment' has not changed, the prevailing economic environment is that if you're an incumbent, sooner or later someone fitter comes along and eats your lunch. Which is also pretty much the tl;dr of TFA.
While I'll certainly agree that the rate is variable, the underlying mechanism seems fundamental to how trade/markets/capitalism function. Perhaps my definition of 'environment' is wonky.
What's so striking is the high percentage of family-owned large companies in emerging economies. Arguably, this is also happening in the US, with two-tier stock schemes keeping founders in control. 80 people now own half the world's net worth. Here's the list.[1] The 20th century was the century of the big, publicly held corporation. The 21st century may be the century of the oligarch.
This is new. Only four years ago, it was 388 people, not just 80.
The top 10:
1 Bill Gates $76B USA Tech
2 Carlos Slim $72B Mexico Telecom
3 Amancio Ortega $64B Spain Retail
4 Warren Buffett $58B USA Finance
5 Larry Ellison $48B USA Tech
6 Charles Koch $40B USA Diversified
7 David Koch $40B USA Diversified
8 Sheldon Adelson $38B USA Entertainment
9 Christy Walton $37B USA Retail
10 Jim Walton $35B USA Retail
In the 1960s, there was one billionaire in the world - John Paul Getty, of Getty Oil. We've come a long way.
One nice thing about having such outsized concentration of wealth is that once the rest of us get totally fed up with this shit, it is much easier to confiscate.
Is it? Since most of their money exists only on paper (they don't just have a bunch of gold in their basement), all you need to do is stop respecting the wealth (change the currency / nationalize the corporations that they own part of / default of the bonds they own), and that scales up for any number of oligarchs.
You don't need to nationalize anything(1). Property rights are important.
We just have to realize that society is the issuer of currency and can just spend when necessary.
One of the big debates of the 21th century should be the nature of fiat money. Money is now a social construct (2). Money is infrastructure and it's all that society need to advance common goals (3).
Few think property rights aren't important. But it's a relatively small number of people who think they're more important than anything else.
Property rights fundamentalists, like all fundamentalists, have the emotional benefit of experiencing low cognitive dissonance. But if inequality keeps increasing, they're going to be very surprised when they discover that when push comes to shove, most people value other things over property rights.
So you don't care that all of humanity is living objectively better now vs. the rest of history. You just care that some people are filthy rich and you don't like them one bit. So, lynch them, take their money, made mostly through their labor and inovation and let the proletariat rule! Nice. Very nice actually, except for the fact that this idea already played out and crashed and burned as the biggest mistake in history.
"You have one more grain of rice than you did last year, so stop complaining that that guy over there has 1000 times more than he did last year. Be happy with whatcha got!"
Yeah that's very emotionally striking and all, but doesn't really put things into perspective, which is very typical for communist propaganda. "One grain of rice" does not even begin to describe how much more prosperous capitalist society is than (post) communist ones.
where is that downvote button when you really need it...
anyway, it's pretty damn obvious you didn't grow up in one of those marvelous "socialist/communist" societies that look wonderfully on the paper, yet fail miserably and consistently in real life. I've been there, and still getting to position of understanding naivety of some otherwise clever people in this topic (popular in western europe among young who grew up in a different systems, not sure about rest of the world). All these regimes do is bring out the worst in people in it, get into very ineffective modes of rule and centralized management, gradual (or sudden) loss of various freedoms, etc.
Hard work, innovation should be rewarded, not corrupt allegiance to current ruling elite. This mode brings the best out of people in matter of contribution to mankind. What we can improve is the ruleset/boundaries in law, punishing usage of loopholes, off shore taxation and similar. But people on that list didn't get there by avoiding taxes.
it would be nice if some Star Trek utopia would work, but we as humans and mankind are just not there yet, for various reasons. Maybe you are, but according to what you wrote, in contrary.
Now go throw a rock on some McDonald franchise, that will surely make you feel like contributing to well-being of all of us a bit. or even better - move to Russia, it's a fine example of a country sliding back to where it came from, or even better, true communist paradise - North Korea (let me guess, you don't have something important for that, do you)
You know, there doesn't have to be a strict dichotomy between "a dozen people own half the world" and "Stalinism". Other political possibilities exist.
("Their" labour is really an assumption we should challenge: Jim and Christy Walton didn't stack every shelf themselves, there's 2 million other Wal-Mart employees. Perhaps the future is they're all stacked by robots and you have two billionaires plus two million starving people; we might want to find ways of avoiding that future)
The person who I'm replying to advocates for confiscating people's money "because they are rich". So, I guess you either did not read it or you simply block it out because you don't want to comment on it, but still wanted to make an argument. I'm sorry. That's not how it works.
Waltons might not stack shelves, but they invented vendor managed inventory, which transformed the global supply chain and lead to many, MANY other things coming to reality. They also manage a multi billion dollar company. Perhaps one of those shelf-stacking employees can substitute them for a day. I'm sure it's not a big deal.
Do you know any filthy rich people? Their money is made mostly through other people's labor and innovation. What they're good at is business, which is organizing and capturing the value of other people's labor and innovation.
I don't think there's anything wrong with that. I've started a number of businesses, after all. But let's not worship people whose talent happens to be particular sorts of commerce.
Depends on what you mean by filthy rich. By my definition (worth >$1bn), I don't know any.
I do know several people worth several hudrends of millions tho. They are CEOs of their own companies or companies they helped grow. I don't think anyone works harder than them in their companies. If there is someone, it probably is someone from the upper management.
>What they're good at is business, which is organizing and capturing the value of other people's labor and innovation.
You say that like it's easy-peasy. Everyone can do it, right?
> They are CEOs of their own companies or companies they helped grow. I don't think anyone works harder than them in their companies.
I also know people in that bracket. None of them work significantly harder than some of the house cleaners and construction workers I've met. And even if they did, it's not like they work 10 million times harder. There are only so many hours in the week.
> You say that like it's easy-peasy. Everyone can do it, right?
It's not easier than anything else. But it's not appreciably harder. Read Warren Buffet on this. He's one of the best in the world, and he describes his success as coming from talent and luck. E.g.: "I happen to have a talent for allocating capital. But my ability to use that talent is completely dependent on the society I was born into. If I’d been born into a tribe of hunters, this talent of mine would be pretty worthless."
I note also that he was born into a family with business experience. His grandfather ran a store; his father, a stock brokerage. That sort of early education is of enormous help. (I know myself; my dad started programming computers in the late '60s.)
Come now. I've started 5 companies at this point. I volunteer a fair bit helping entrepreneurs. If you can't tell the difference between critique of managerialist tropes and wholesale rejection of capitalism, you aren't trying very hard.
You seem to have shifted your metric from working hard to the work being complicated. But again, plenty of people do complicated work without getting zillions of dollars for it. I know math PhDs who do amazing technical work; it's far more complex than the workaday accounting done by executives. I know organizational consultants and senior HR people who are way better at designing organizations than your average executive. I know plenty of front-line managers who have much more complex managerial problems than senior execs.
What you're missing is that as with Cuba and North Korea, the people on top get disproportionate rewards solely because they are on top of a large power structure. They all "deserve" those rewards for the same reason: they won at the musical-chairs game of hierarchy. Were Fidel Castro and Mao Zedong smarter or harder working than their competitors? Maybe. Or maybe they were just lucky in either the talent lottery or in how things played out.
The only difference here is that our game is built around competing entities that, on average, create economic value, so there's possibly more social utility that results from the hierarchy games. But the people creating the economic value are mostly the ones doing the actual work.
I generally don't begrudge people the money they collected. The game is the game. But let's not confuse winning the game with "deserving" the winnings in some moral sense. That's the just world fallacy: https://en.wikipedia.org/wiki/Just-world_hypothesis
> So you don't care that all of humanity is living objectively better now vs. the rest of history. You just care that some people are filthy rich and you don't like them one bit.
Sort of, yes. But my issue with this is not that the obscenely wealthy have so much more per se - I guess there is a moral argument to make there, but I'm not the one to make since it doesn't bother me too much either. I'm mostly with you on that: speaking in strictly material terms we shouldn't mind too much if a small group of people are much much better off than everyone else, provided that everyone is still looked after and the situation is improving.
And, if you're some trickle-down theorist or whatever, you might even say that some people have to be obscenely rich for there to be any progress. I don't agree with that at all, but it's another argument you hear.
Anyway, outsized wealth inequality like this need not be just a problem in a material sense though. It's also a problem in a political sense. Wealth and power are pretty highly correlated, but democracy functions best when power is more diffuse. So a concentration of wealth interferes with healthy politics and governance, and that's why I don't like the massive disparity in wealth we see know, and why I think it's very dangerous.
Confiscate and do what with it? Distribute it to the poor? That would only be a (very) short term fix to a long term problem. These billionaires would be replaced by new ones.
Perhaps a better solution might be to fundamentally rethink the role of money, work, economy etc in a radically different world (robots, unsustainable population etc).
Just to nit pick the 80 richest people own as much as the poorest 50%, not half the world's wealth. Having said this Marx is looking more like a prophet and less like a fool every day.
Did you notice this is an article about a limit to capital accumulation right?
Anyway, his theory on capital accumulation is based on a completely flawed framework, and completely useless for understand what's happening today. (Not a hard criticism of Marx, as most economists were using the same framework by the time - but a hard criticism of anybody that insists on pushing his theories around today.)
Well, the entire article is about how rich corporations are being threatened by newly created companies at poor(er) countries. With a subtle context about huge bureaucracies not being able to compete with smaller (but still big) more centralized ones.
If there is a problem of wealth accumulation (there is on my country - but I have no idea about the global situation), the worse thing one can do is describe the problem using outdated models that are known to give very incorrect solutions for this exact problem.
"Anyway, his theory on capital accumulation is based on a completely flawed framework, and completely useless for understand what's happening today."
Sorry but you've never read marx if you're saying that. Also check what a former national security advisor has to say on the matter.
"capitalistic accumulation itself... constantly produces, and produces in the direct ratio of its own energy and extent, a relatively redundant population of workers"
On the spying...
The (mass surveillance) by the NSA/others and abuse by law enforcement is just more part and parcel of state suppression of dissent against corporate interests. They're worried that the more people are going to wake up and corporate centers like the US and canada may be among those who also awaken. See this vid with Zbigniew Brzezinski, former United States National Security Advisor.
The poorest person in the world is the rogue trader Jerome Kerviel - he owes $6B. He's vastly poorer than a homeowner who owes $500k on a mortgage, and this person in turn is vastly poorer than a homeless person who owes no one anything. Donald Trump has gone bankrupt a few times - it's quite possible he was the poorest person in the world at that point.
Only Trump's businesses have gone bankrupt, usually after he got a substantial amount of personal wealth out of them. He has never personally gone bankrupt.
Don’t you think it a problem that 2 billion people don’t even own 50 cents of net assets?
Jerome is far from the poorest person in the world since he is not starving - hundred of millions of people would swap places with him in an instant if they could.
If you think it's a problem that 2 billion people have negative net worth, ban lending. Good luck with that.
As for Jerome Kerviel, take it up with the folks pushing this silly statistic. It's their methodology that counts him as the poorest person in the world.
Lending to the very poor is a real problem since the interest rates they pay are astronomical. A lot of poor stay poor because they can’t get out of their debt trap.
It is defiantly a hard problem to know how to best compare wealth between groups, but as long as you keep the method the same then the delta does tell you something interesting. There does seem to be a massive increase in wealth concentration at the top, which I don’t think is a good thing.
But loans are also a critical way to get leverage. You buy some equipment for your farm up front so that you can produce more food immediately. If you have to save up for a year to buy that equipment, then you're far behind where you are if you buy it with a loan.
This is why most people buy houses with a mortgage: because they'd rather live in a house today and pay it off for 30 years, than save up for 30 years (while living where?) and buy it in cash at the end. Lending is generally a good thing.
I'm not sure what to do about the cost of lending to the poor. Perhaps there should be government aid of some kind to help them find jobs or start a business. Ultimately, every person needs to make the decision for themselves about whether it's better to save and buy the things they need in cash, or take a loan to buy those things now.
Nope. As the article says, those companies are getting big, and staying private. And by staying private they get a set of interesting competitive advantages, so they'll probably won't change this.
The question is, what happens with the next generation? Also, there are public companies that are family-controlled, such as Ford, through two classes of stock. Family control of large companies is more common outside the US, in countries which allow cross-holding and have weak shareholder rights. Samsung and Hyundai are family-controlled, but the family owns under 1% of the stock. A successful company that tried that in the US would face a hostile takeover.
Arguably, Google and Facebook are "family-controlled", with two classes of stock that keep the founders in control.
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[ 2.2 ms ] story [ 104 ms ] threadTech and emerging market companies create low margin competition that incumbents can't compete with.
The rate at this happening is higher than ever before and has recently sort of exploded.
This is new. Only four years ago, it was 388 people, not just 80.
The top 10:
In the 1960s, there was one billionaire in the world - John Paul Getty, of Getty Oil. We've come a long way.[1] http://fivethirtyeight.com/datalab/meet-the-80-people-who-ar...
We just have to realize that society is the issuer of currency and can just spend when necessary.
One of the big debates of the 21th century should be the nature of fiat money. Money is now a social construct (2). Money is infrastructure and it's all that society need to advance common goals (3).
(1) except maybe monopolistic public utilities
(2)http://www.nakedcapitalism.com/2013/03/what-is-modern-moneta...).
(3)http://www.nakedcapitalism.com/2015/01/bill-mitchell-demysti...
Property rights fundamentalists, like all fundamentalists, have the emotional benefit of experiencing low cognitive dissonance. But if inequality keeps increasing, they're going to be very surprised when they discover that when push comes to shove, most people value other things over property rights.
-Chamfort, yeah, the French guy that shot himself in the head twice and still didn't finish the job
Also this;
> made mostly through their labor and innovation
is demonstrably untrue in many cases.
I'm just not naive enough to think that the ever widening income inequality and wealth consolidation/hoarding is not a bad thing.
And the grain of rice wasn't meant literally.
anyway, it's pretty damn obvious you didn't grow up in one of those marvelous "socialist/communist" societies that look wonderfully on the paper, yet fail miserably and consistently in real life. I've been there, and still getting to position of understanding naivety of some otherwise clever people in this topic (popular in western europe among young who grew up in a different systems, not sure about rest of the world). All these regimes do is bring out the worst in people in it, get into very ineffective modes of rule and centralized management, gradual (or sudden) loss of various freedoms, etc.
Hard work, innovation should be rewarded, not corrupt allegiance to current ruling elite. This mode brings the best out of people in matter of contribution to mankind. What we can improve is the ruleset/boundaries in law, punishing usage of loopholes, off shore taxation and similar. But people on that list didn't get there by avoiding taxes.
it would be nice if some Star Trek utopia would work, but we as humans and mankind are just not there yet, for various reasons. Maybe you are, but according to what you wrote, in contrary.
Now go throw a rock on some McDonald franchise, that will surely make you feel like contributing to well-being of all of us a bit. or even better - move to Russia, it's a fine example of a country sliding back to where it came from, or even better, true communist paradise - North Korea (let me guess, you don't have something important for that, do you)
I'm not a communist, nor have I ever believed communism as a system works.
Feel free to continue spouting your gung-ho rhetoric though.
("Their" labour is really an assumption we should challenge: Jim and Christy Walton didn't stack every shelf themselves, there's 2 million other Wal-Mart employees. Perhaps the future is they're all stacked by robots and you have two billionaires plus two million starving people; we might want to find ways of avoiding that future)
Waltons might not stack shelves, but they invented vendor managed inventory, which transformed the global supply chain and lead to many, MANY other things coming to reality. They also manage a multi billion dollar company. Perhaps one of those shelf-stacking employees can substitute them for a day. I'm sure it's not a big deal.
I don't think there's anything wrong with that. I've started a number of businesses, after all. But let's not worship people whose talent happens to be particular sorts of commerce.
I do know several people worth several hudrends of millions tho. They are CEOs of their own companies or companies they helped grow. I don't think anyone works harder than them in their companies. If there is someone, it probably is someone from the upper management.
>What they're good at is business, which is organizing and capturing the value of other people's labor and innovation.
You say that like it's easy-peasy. Everyone can do it, right?
I also know people in that bracket. None of them work significantly harder than some of the house cleaners and construction workers I've met. And even if they did, it's not like they work 10 million times harder. There are only so many hours in the week.
> You say that like it's easy-peasy. Everyone can do it, right?
It's not easier than anything else. But it's not appreciably harder. Read Warren Buffet on this. He's one of the best in the world, and he describes his success as coming from talent and luck. E.g.: "I happen to have a talent for allocating capital. But my ability to use that talent is completely dependent on the society I was born into. If I’d been born into a tribe of hunters, this talent of mine would be pretty worthless."
I note also that he was born into a family with business experience. His grandfather ran a store; his father, a stock brokerage. That sort of early education is of enormous help. (I know myself; my dad started programming computers in the late '60s.)
Managing a firm with 1200 employees for sure is 10 million times harder than moving boxes around.
But be my guest. Go to North Korea or Cuba. I'm sure people are very happy there. Everybody is equal. Just some are more equal than others.
You seem to have shifted your metric from working hard to the work being complicated. But again, plenty of people do complicated work without getting zillions of dollars for it. I know math PhDs who do amazing technical work; it's far more complex than the workaday accounting done by executives. I know organizational consultants and senior HR people who are way better at designing organizations than your average executive. I know plenty of front-line managers who have much more complex managerial problems than senior execs.
What you're missing is that as with Cuba and North Korea, the people on top get disproportionate rewards solely because they are on top of a large power structure. They all "deserve" those rewards for the same reason: they won at the musical-chairs game of hierarchy. Were Fidel Castro and Mao Zedong smarter or harder working than their competitors? Maybe. Or maybe they were just lucky in either the talent lottery or in how things played out.
The only difference here is that our game is built around competing entities that, on average, create economic value, so there's possibly more social utility that results from the hierarchy games. But the people creating the economic value are mostly the ones doing the actual work.
I generally don't begrudge people the money they collected. The game is the game. But let's not confuse winning the game with "deserving" the winnings in some moral sense. That's the just world fallacy: https://en.wikipedia.org/wiki/Just-world_hypothesis
Sort of, yes. But my issue with this is not that the obscenely wealthy have so much more per se - I guess there is a moral argument to make there, but I'm not the one to make since it doesn't bother me too much either. I'm mostly with you on that: speaking in strictly material terms we shouldn't mind too much if a small group of people are much much better off than everyone else, provided that everyone is still looked after and the situation is improving.
And, if you're some trickle-down theorist or whatever, you might even say that some people have to be obscenely rich for there to be any progress. I don't agree with that at all, but it's another argument you hear.
Anyway, outsized wealth inequality like this need not be just a problem in a material sense though. It's also a problem in a political sense. Wealth and power are pretty highly correlated, but democracy functions best when power is more diffuse. So a concentration of wealth interferes with healthy politics and governance, and that's why I don't like the massive disparity in wealth we see know, and why I think it's very dangerous.
Perhaps a better solution might be to fundamentally rethink the role of money, work, economy etc in a radically different world (robots, unsustainable population etc).
1. https://en.m.wikipedia.org/wiki/Capital_accumulation
Anyway, his theory on capital accumulation is based on a completely flawed framework, and completely useless for understand what's happening today. (Not a hard criticism of Marx, as most economists were using the same framework by the time - but a hard criticism of anybody that insists on pushing his theories around today.)
Correct.
US distribution of wealth
https://imgur.com/a/FShfb
http://www2.ucsc.edu/whorulesamerica/power/wealth.html
http://www.oxfam.org/sites/www.oxfam.org/files/bp-working-fo...
If there is a problem of wealth accumulation (there is on my country - but I have no idea about the global situation), the worse thing one can do is describe the problem using outdated models that are known to give very incorrect solutions for this exact problem.
Sorry but you've never read marx if you're saying that. Also check what a former national security advisor has to say on the matter.
"capitalistic accumulation itself... constantly produces, and produces in the direct ratio of its own energy and extent, a relatively redundant population of workers"
On the spying...
The (mass surveillance) by the NSA/others and abuse by law enforcement is just more part and parcel of state suppression of dissent against corporate interests. They're worried that the more people are going to wake up and corporate centers like the US and canada may be among those who also awaken. See this vid with Zbigniew Brzezinski, former United States National Security Advisor.
https://www.youtube.com/watch?v=n7ZyJw_cHJY
Brezinski at a press conference
https://www.youtube.com/watch?v=VWTIZBCQ79g
Major powers, and imposing control over the awakened masses.
https://youtu.be/4usbR_kKCDs?t=397
http://www.oxfam.org/sites/www.oxfam.org/files/bp-working-fo...
"My niece, who just got her first 50 cents in pocket money, has more money than the poorest 2 billion people in the world combined."
http://blogs.reuters.com/felix-salmon/2014/04/04/stop-adding...
The poorest person in the world is the rogue trader Jerome Kerviel - he owes $6B. He's vastly poorer than a homeowner who owes $500k on a mortgage, and this person in turn is vastly poorer than a homeless person who owes no one anything. Donald Trump has gone bankrupt a few times - it's quite possible he was the poorest person in the world at that point.
Jerome is far from the poorest person in the world since he is not starving - hundred of millions of people would swap places with him in an instant if they could.
As for Jerome Kerviel, take it up with the folks pushing this silly statistic. It's their methodology that counts him as the poorest person in the world.
It is defiantly a hard problem to know how to best compare wealth between groups, but as long as you keep the method the same then the delta does tell you something interesting. There does seem to be a massive increase in wealth concentration at the top, which I don’t think is a good thing.
This is why most people buy houses with a mortgage: because they'd rather live in a house today and pay it off for 30 years, than save up for 30 years (while living where?) and buy it in cash at the end. Lending is generally a good thing.
I'm not sure what to do about the cost of lending to the poor. Perhaps there should be government aid of some kind to help them find jobs or start a business. Ultimately, every person needs to make the decision for themselves about whether it's better to save and buy the things they need in cash, or take a loan to buy those things now.
Arguably, Google and Facebook are "family-controlled", with two classes of stock that keep the founders in control.
Outrageous ! So you are saying we need to give the peasants MORE money ?? How am I supposed to live !