Well, we don't know if they are philanthropic or not, but they seem to be conflicted about their wealth. It's not so much them, but how much value our society puts on money.
I was maybe a little too excited to read "When to Jump"
(https://www.amazon.com/When-Jump-Have-Isnt-Life/dp/125012421...) about taking a big risk in making a major career/life change against perhaps the wishes and/or expectations of your family, friends, colleagues, society, etc from an author I hadn't heard of before (but somehow got Sheryl Sandberg to write the forward for and Reid Hoffman to endorse) who left a cushy VC/finance job to travel around the world to play squash for 2 years.
After doing a little more research, I found that the author grew up in a wealthy east coast family, is a close blood relative to Sheryl Sandberg, went to an Ivy League school (likely aided by privileged upbringing and family connections), landed at a prestigious finance/VC firm straight from college (probably made possible again by an Ivy league pedigree/family connection), and could easily make the "jump" to doing something that paid nil for 2 years due to this enormous safety net of family wealth that most people simply don't have.
If there's one thing about the Travis Kalanick saga I wish the media would've told is that he is a rare successful founder who legitimately grew up in a middle class family and struggled for many years post-college trying to get to ramen-profitability on a series of failing startups before hitting it big. This is strictly in contract to the Zucks and Spiegels of the world who grew up very wealthy and went to the best schools and could take on the big risks associated with entrepreneurship because if everything failed they still had that big safety net to fall back on.
I saw Travis K. give a talk a few years back at Failcon in San Francisco about his previous startup Red Swoosh. What I remember about that talk is how he persevered through some serious s* which was the opposite of easy & fun. I'd add that while deciding when to jump, you should honestly assess whether you're really willing to go shopping for a fire extinguisher while simultaneously being burned alive.
I participated in at the time a no name incubator on the east coast(decade ago). Only one of the ten companies got funding and its founder had offers already going into the incubator. Offers all from his rich VC father’s other wealthy friends.
I’d love to see a list of all the successful founders who came from extreme poverty. Middle class startuppers have one or two shots at it if they live at home with a relative. The rich kids can keep trying and learning from their mistakes until well they become richer.
Makes you wonder how different the world might be if society provided a similar safety net for aspiring entrepreneurs (at least psychologically) as coming from a wealthy family.
Well, this exists in most of Western Europe right? They do have entrepreneurs (and I'm not talking solely VC-funded startups here) but I've read that at times there's some cultural issues with 'going above your station' (thinking maybe Scandinavia). Maybe some of our European founders could detail that a bit more.
Tall poppy syndrome, being moderate (lagom in Sweden?). Basically, things people have said on here or I've heard elsewhere that the cultural psyche is a bit different than the more individualistic American one, at least in terms of business. That sort of thing is what I was getting at.
I really need to excise that from my comments. I didn't have the right language to express what I was going for.
What you're saying is what I was trying to get at.
So, in Belgium, despite knowing that you could fail and that wouldn't be completely detrimental to your financial life, you're saying that there's an aversion to risking it with a startup due to social consequences?
It does exist in some of northern Europe, though I think "most of western Europe", while somewhat better off than the US in this regard, have very much been moving in the direction of the US over the past few decades.
In terms of different outcomes as a result, I have absolutely zero hard data on it, but my intuition would be as follows:
Rags-to-successful-job-creating-entrepeneur stories are a lot more common, and by that metric success rates are higher, but rags-to-riches is still relatively rare by simple virtue of the fact that greater success != rich because success rates and broader competition mean very big wins are rarer in general. Market regulation also affects this somewhat: it's harder to dominate.
Extra disclaimer: the above is intuition, would love to see actual data, whether it contradicts or correlates.
This is more what I was aiming at. Sorry for my poor phrasing before. Maybe replying on HN after some whisky isn't the best idea.
I tried to look up some of the past HN comments and the like I was looking at. While many complained about some missing SV style elements (missing VC, tougher working regulations) there were also mentions of different ways of doing things such as risk aversion or the style of business being more consensus-based (Sweden).
Here in the US, when thinking of dominate European innovative companies, I guess Skype (pre-acquisition), SAP, and even toss in IKEA would be ones that dominated (or in Skype's case, created) their markets.
Anyway, this was all speculative off the dawhizkid's premise of 'would a solid safety net create more entrepreneurs?' and, given we have good examples of that in Europe, I thought it worth taking a shot at.
I don't know why the writer think Americans link wealth with merit. I think Americans are suspicious of wealth because it's either lottery zuckerberg money or inherited trump money and most Americans know this.
This article implicitly assumes that intensity/amount of labour should translate directly into income. Dunno why it should, but it would be interesting to think of what the world would be like if that were truly manifested in reality. I wish upon all these socialist academics that they could live in such a world as they thoughtlessly describe/claim to desire.
> Meanwhile, few who make the “I did it all myself” argument question the absurdity of seeing earnings as a measure of grit and moral worth. Does anyone really think that a CEO, whose pay is on average 271 times greater than that of his typical worker, works 271 times harder than his employees, who might actually be doing strenuous physical labor?
I think it does. Whether it's the subhead about linking work and reward or Johannes Siegrist's study of "unfair compensation: “effort/reward imbalance” (ERI)"
The implication is clear that some people are rewarded less for the same effort. Well not all effort is equally valuable. Anyone can sweep a floor, so the effort of doing so isn't worth much.
This argument always seems backward to me, because the important issue with this topic isn't about the supply and demand for the floor sweeping, it's the assumption that the supply for the work of the CEO position is lacking, as opposed to restricted due to power structures or incentive for control of money.
What I mean is, yes, everyone can sweep, the compensation is lower, but there is less power also. As you move up the hierarchy, you are not only potentially going up in skill, but also in the amount of power afforded and compensation enjoyed.
Let's take a hypothetical case where all employees are equally skilled. Just for argument. Now you create positions of more and more power. By definition, there will be fewer positions of greater power, otherwise those higher positions would not have so much power. Because of the power those positions afford, there will be more competition for positions of more power, under the assumption that people want more power. Because those workers are all equally skilled, though, something other than skill must determine success in gaining those positions. And once they have those positions, they can use that power to increase their compensation relative to other employees. They can also use that power, consciously or subconsciously, to create or shape a narrative that they deserve that compensation more than others.
This is hypothetical, and reality involves something in between the "floor sweepers get paid pennies because everyone can sweep" and "CEOs are randomly assorted into positions of unlimited power" but the point is that there are properties accrued by the inherent nature of power structures, and those properties lead to inequities just as much as supply and demand of skills.
I can't believe that in the US the power structure side of reality is ignored so much in favor of the supply and demand side of reality, even when it's staring us in the face and glaringly obvious. And that you can't see society as complex and nuanced, and have to choose to be either a rabid capitalist or socialist.
This article implicitly assumes that intensity/amount of labour should translate directly into income.
Perhaps because that's how employers typically exhort their staff to greater productivity? Never once have I had an employer say 'there's a fat bonus waiting for someone who can figure out a clever shortcut through this problem' or the like. For people who genuinely start at the bottom, personal initiative is often discouraged rather than rewarded and the benefits of innovation or exceptional performance often accrue to the nearest manager rather than the eager beaver.
More like never once was the bonus based on who made the most phone calls rather than who made the most sales. Changing societal reward to reflect the greatest amount of virtue signalling based on a scheme where you get points for possessing the markers of victim hood is worse than the flawed system in place today.
It seems common for "personal" charities to have really high overhead. A typical cause would be that highly paid executives are actually family members with little commitment to the stated purposes of the charities.
(the story goes that back when executive compensation was highly taxed in the first part of the 20th century, many companies took out services for their executives which were tax free advantages. Things like yachts. Walt Disney is famous for building out a business for exactly that sort of thing : https://en.wikipedia.org/wiki/Club_33 )
> Clinton isn’t the only former president to include a residence in his library. George H.W. Bush’s library at Texas A&M University in College Station and Jimmy Carter’s in Atlanta both have them.
Imo dodging taxes is okay _if_ those funds are genuinely put to good use. (I can also see how an added incentive is redundant for the ultra wealthy) but I think the claim here is that the donors are being more duplicitous than that.
One's (monetary) value isn't defined by one's amount or intensity of labor, but rather by the value lost should one be removed from the equation. Factory workers can be replaced by virtually anyone else (and often by machines) while Hedge Fund traders / managers often cannot.
While algorithms are increasingly prevalent in Wall Street, at the end of the day there's a human who either writes them or reads their output before making a decision, and that person is not easily replaceable.
Beyond that, for every successful Hedge Fund there are countless that failed catastrophically, so any analysis of "how much a Hedge Fund manager makes" is subject to severe survivorship bias. [0]
The disparity between the CEO of a public company and its hordes of workers is even clearer. Very few people possess the combination of skills that make a high-caliber CEO successful, which is why very few people are rewarded like them. LeBron James also doesn't work 1,000 times harder than a factory worker.
Finally, it's worth remembering that 70% of wealthy families lose their wealth by the second generation, and a stunning 90% by the third. [1] I wouldn't lose any sleep over rich kids who feel troubled about their "entitlement".
I'd have to disagree with your point about CEO's having rare skills. CEOs appear to not be rated against anything. you have giant failures like Yahoo under Mayer or the executives at Toys R Us giving themselves bonuses as they are going through bankruptcy. Instead of not getting compensated for their failure they are getting amounts of money that most Americans could retire in.
When the business does well people say it's due to the CEO, but when they fail people argue about how bad it might have been. There's no way to know. It seems more like a scam vs investors or employees than some measurements skill that actually merits compensation
This is exactly the argument I am talking about. It's fine that we can't judge CEOs, but then why are they taking home millions of dollars?
If we can't judge them for failures then we shouldn't be able to judge them for successes as well and they shouldn't be able to pull out the "rare skills" argument
They are taking home millions of dollars because the owners of those companies want to pay them as much, and they have the final say over how much to pay.
> When the business does well people say it's due to the CEO, but when they fail people argue about how bad it might have been.
Do you have any data to back that up? In the meantime I'd rather believe the null hypothesis that CEOs are blamed for bad performance just as often as they are commended for successful results.
CEO pay has been skyrocketing not because they have gotten more important, but because they're all sitting on each others' boards giving each other pay raises and because CEO pay is public knowledge, they just go back to their board and say "look what I'm now worth." It is a regulatory problem and a power problem.
It is laughable to think people have that much extra value. Those are teachable skills, and the cost of that education is not nearly as much as is being spent.
And someone who's been working in fast food since high school to support their family is unlikely to have the chance to get the education necessary to become a hedge fund manager, nor the connections to help them get their first interview if they do manage to get that education. Even if they have an equal or greater aptitude for the work than the kid who's about to matriculate to Yale with tuition and expenses paid in full by his well-connected family.
My experience, having dealt with successful people who were also born rich, is that they often legitimately feel that they are self-made. Because the truth is that no matter how privileged you are, you do still have to put the work in if you want to be successful. It is true that rich people have much better safety nets, but being successful will always take at least some level of hard work.
It's difficult to have the perspective it takes to admit that your success may be more due to a privileged starting position and luck than solely the hard work, especially when it's so easy to claim all your success is self-made and the hero worship of self made people in the United States
I attended a talk hosted by a wealthy founder who was born into privilege, and he said something like this: "Startups are really hard. You need to use every card that you've been dealt in order to succeed."
That's what meritocracy is, really. It's a system that rewards the most physically fit, the most genetically endowed, the people with the most resource rich support system, etc.
It's not necessarily a bad thing, but the fact that we're conditioned to think that a non level playing field is bad no matter what (vs a societal expectation that those with the most must give back the most), asking with a fetishistic of monetary success, really warps our outward facing behavior.
I'm not gonna go ahead and paste a dictionary definition here, but a meritocracy is structured on talent and ability as opposed to class privilege or wealth.
I believe you are misunderstanding the definition of a meritocracy.
Honest question: Are you mentioning this because you agree with him (that startups require a lot from anyone), or because you want to contrast that not everyone "has as many cards" as that founder?
I only mention this quote because it sheds some light on how a very privileged person might still legitimately think of themselves as struggling and suffering when making a startup.
I always think of everyone having their own personal spectrum, ranging (crudely) from the most positive experience they've had, to the worst. Any new situation encountered by someone is judged relatively, based on their own personal spectrum.
My point being that someone can honestly believe they are suffering at least relatively, if not absolutely. Each person has their own level of experience they consider "suffering".
I think the point is that there's a difference between simply "doing hard-work" and "self-made". The first is about what you did, the latter is what you think others did for/with you.
The problem with that, you are always asking someone todo something. I am not disagreeing that some people have a stronger safety net, but everyone has to ask somebody for something to succeed. Very rarely can you just succeed without outside influence. Be it a random connection or someone you grew up living next door to.
I agree that you need help, but I think the difference is not having a personal safety net and “earning” help from others by doing good work, not having it handed to you by default.
If my skill is common, it doesn't matter how much physical energy I expend, I probably won't make much because the supply of labor is high.
If it was easy to be a hedge fund manager, more people would do it. It's easy to cherry pick these professions that seem overpaid, but in a free market, people tend to make what the market values them at.
You could say that teachers are so important that they should be paid more and in a free market education system they might be paid differently than they are now.
Or maybe certain professions have a limited number of openings, which tend to go to people with connections, and cooincidentally these professions deal with large amounts of money, so taking 1% commission on a hundred million dollar deal for very little work seems reasonable.
Why would you assume the converse? Hedgefund managers and more junior employees deal with ie sell to the rich, be they extremely wealthy or others in the finance industry. Do you think that's going to work better as Dennis Rodman or James Van Der Something with the accent and style to match? Dennis got a game to rack up his astounding numbers because he's very tall. He wouldn't get a game as fund manager as 25 year old no matter how smart he was.
I'm a CFA, I have grades, never got a look in for fund manager jobs. Pivoted to computing at the age of 30 where I "look the part" or whatever.
Don't kid yourself about this stuff. I'm not from an underprivileged background by any stretch of the imagination and nor do I have any time for socialism and socialist posing.
Young Dennis will get a game somewhere and put up compelling numbers and will likely get to the NBA. The equivalent can't be said for young potential fund managers who won't get a chance to impress. Positive discrimination is not the answer to this, but neither is the ostrich strategy.
Because there are more people who have the technical skills to run hedge funds than there are hedge funds. You fill the manager role with someone you're comfortable with on many levels.
OTOH, professional sports leagues are about winning intense competition, and skill is much more important. Even then, coaches and owners play favorites.
It's not a binary system, it's a spectrum, and professional sports are towards one end of the spectrum and hedge fund management and VC founding are towards the other end.
The part people miss is that relationships rarely expand at random. They're local and koinophilia (liking alike) plays a huge role.
Even if J. Random put all their training into building and managing relationships it would likely not amount to anything of note. (They will have fewer resources and be excluded from some social circles.)
There are many necessary components of huge success.
This. It even applies in MANY more situations than just this one.
TLDR: the vast majority of markets are demand-bound. So if you are producing marginal supply, you're are simply hurting everyone and at best will do as well as the others.
Unless, of course, you cheat, which is what these connections do.
Needless to say, there is a global fiction that everybody seems to believe that this is not true, both on the left and (especially) on the right. It is so ignored on the right that this situation is actually left out of economics education.
> You could say that teachers are so important that they should be paid more and in a free market education system they might be paid differently than they are now.
What is the present value of a teacher's pension? How much would you have to save to produce an investment stream that cannot be exhausted no matter how long you live? What value is attached to having it guaranteed by the government instead of being subject to market returns?
It's amazing how many people buy his story, given he grew up in Hamptons, went to boarding schools all his life, went to Princeton with no student loans, etc
Neither education or health care are 'free'. Someone has to pay for it. If, as I suspect, you believe it's possible to impose tax rates which would enable 'free' care for everyone then say so (it would be nice if you could flesh out the details!) but don't suggest that these services are free. You could add 'free at the point of service'.
When something is "free", it's always means free (of charge) for the recipient, and it's always enabled by something else.
It's a matter of choice (hence the taxes, hence the politics), of governance, of sight.
Now, if you believe free healthcare and education for everyone does not benefit the society as a whole, then say so (and flesh out the historical facts that support your view).
Everyone is self-made and no one is. We all stand on the shoulders of those who came before us and passed on their knowledge, genetics, or wealth. Wealth is just one component of inheritance and we are all lucky to have inherited what we have, wealth or otherwise.
Just curious, what should these people call themselves? Aren't there also plenty of people that start with these advantages and squander them? The self aspect has to come into play, is it simply we desire them to acknowledge their innate advantages?
I've come to realize that hard work is not what we get paid to do from 9-5 each working day, but what we choose to do with our spare time that either improves or degrades our position in life.
And it is the thousands of choices from early years through middle age that separate those with rarified skills and high wages from those with common skills and envy for their higher paid, lesser working (now) friends.
It does not matter where you start. When you spend most of your life studying or smoking dope, the end is predictable.
You make a valid point, but a lot of people spend their spare time studying common skills - basically free training for their current and/or future employers.
The problems we face today are not explained by the difference between studying or smoking dope. There's something more pernicious involved.
Yes, if you smoke dope all the time your outcomes in life will probably be worse than if you study some "rarified" skill, to borrow your phrase.
But studying takes resources, and time, and those are bought through money and social connections and luck. And increasingly, despite what we read about MOOCs and the new educational order, it doesn't matter if we study and learn, what matters is that we have a certificate of studying, a placeholder. And those placeholders are not the same as our knowledge, or one's ability to learn, and are subject to corruption and greasing like every other placeholder.
And in the end, what does this say about how much value we should place on that rarified skill? Does our society really allocate financial reward according to actual value? Does Amazon really improve my life that much compared to the plumber or electrician who fixed my house? Is Facebook a net benefit to society? If it disappeared tomorrow, would nothing replace it? Could our healthcare be delivered under a different provider structure? Do I pay my ISP because it's the best of many choices, or because it's acceptable enough to not go without internet access? Is Amazon successful because of Bezos in particular? If Bezos was going around spouting all the ideas in his head, marshaling an army of imaginary workers, without any actual labor, would we still have Amazon?
The point of this article is it's trivial to point out that hard work should and often is compensated. The problem is that the compensation structures in many fields are completely absurd in many cases relative to the actual value created.
I grew up in the ghetto. While my friends smoked dope, I studied with free resources from the local library. All the books were old and outdated, but I didn't care. The drive to learn and improve is still with me today.
>I grew up in the ghetto. While my friends smoked dope, I studied with free resources from the local library. All the books were old and outdated, but I didn't care. The drive to learn and improve is still with me today.
And thousands of others did the exact same but didn't make it out. That's the entire point of this conversation. Hard work isn't a sufficient condition. If it were tons of people would easily make it out. But instead it's a lot of luck along with it.
Oh please HN, stop posting articles that are 100% political theory without a single link to tech.
At the least, please create a category for naked politics. No, hide doesnt work very well (multiple devices, times out, etc).
One time a mod told me that articles with no link to tech got deleted. That really doesn't appear to be the. This is yet another capitalist vs communist (literally, the labor theory of value was a Marx thing) diatribe that has no relation to the tech oriented stuff many came here for. There are plenty of other political sites for stuff like this.
I often wonder, if you could vote down stories, these would probably have a severe split and maybe not make the front page or stay there. Only being able to upvote let's a small contingent push something up (just ask the bitcoin people).
I did. And hid it. Now I'll just have to hide it everywhere else, and ignore when it comes up looking through through old articles and search results.
Just because you can flag isn't carte blanche to post anything. I like the site much better (and I'm sure many others too) when it stays in its technical oriented wheelhouse.
> Just because you can flag isn't carte blanche to post anything
Just because you have certain preferences isn't carte blanche to launch off-topic diatribes in threads on articles that don't adhere to them about how you prefer HN should be focussed.
> I like the site much better (and I'm sure many others too) when it stays in its technical oriented wheelhouse.
That is neither the official focus [0] nor, evidently—from what the community submits and keeps on the front page—the consensus of the community.
[0] From the guidelines: “On-Topic: Anything that good hackers would find interesting. That includes more than hacking and startups. If you had to reduce it to a sentence, the answer might be: anything that gratifies one's intellectual curiosity.” Obviously, whether any particular article meets they standard is subjective, which is why we have upvotes and flags and algorithms taking them and other factors (e.g., the flamewsr detector) into account.
I can't wait for my own success and fortune. After I've sacrificed my personal life and weekends for ten years, I'm glad that reputable, non-biased publications like the Guardian will have fed the rest of the population an ideology that places me as a undeserving oppressor, regardless of my individual characteristics or political viewpoint. That way, I'll only have to wait a year or two before I'm thrown in the White Privilege (TM) gulags, to spend the rest of my days carrying 100 lbs. bags of salt from one end of the gulag to the next. Thanks, The Guardian!
I fear you're taking this article too personally. No one is discounting your personal sacrifice. You work damn hard. You stay in when others go out drinking. You've done this for a long time, and you're working towards the payout. That takes an immeasurable amount of perseverance.
The Guardian is not discounting you or your efforts. The Guardian is saying: there are those with a safety net to experiment, and there are those without a safety net. When we look at the achievements of both populations, is it truly fair to compare those with such different circumstances?
It's saying more than that. It's saying that you may get nowhere unless you have the connections high up in other companies that you'll only have if you're rich to begin with.
Without those, in many cases, no amount of perseverance will pay off.
Could you please not post ideological rants to HN, regardless of how wrong someone or some publication is? It makes for lousy conversation, and HN is supposed to be for good conversation. One needn't approve of The Guardian to see this.
IME, most people want to craft a narrative that lets them feel OK about themselves without too much introspection. If their lives are good, they'll take credit for their fortune like the people in the article. If their lives are bad, they'll blame everyone but themselves.
I've made a small jump in socio-economic class, and I try and keep it in perspective. I try and remember the bits of help I got a long the way. And at the same time I'm trying to let go of my resentment about people whose parents set them up with cars, tuition and house deposits - because one day I hope to be that parent.
> Does anyone really think that a CEO, whose pay is on average 271 times greater than that of his typical worker, works 271 times harder than his employees, who might actually be doing strenuous physical labor?
I'm not against the general mindset the author is telling, but this garbage thought process needs to stop. This isn't about working harder, but smarter and you can easily provide 271 times more value through decisions that higher ups are tasked with than a bottom level individual contributor.
***Anecdotal***
The top level people at my company are making decisions daily that govern multi-million dollar investments which can be vastly beneficial or detrimental to our profitability. When working on investments that large in size, marginal improvements on decision making provide huge sums of value which somewhat justify the pay.
Now, are these people self made? That's more open to debate but every C*O and SVP has been with the company for at least 10 years and most VPs also have also been here for that long/have an amazing track record. You generally don't get 10+ years of promotions providing nothing.
There have been many studies surrounding CEOs.[1] A large portion of them keep showing that a bad CEO is worse than no CEO, an average CEO likely isn't actually doing anything, and a good CEO is probably just lucky. This topic has been researched and had the data poured over to the ends of the earth to find that "special CEO sauce". The reality? There is likely a tiny subset of all CEOs that are actually worth 271 times what the typical worker is making (Steve Jobs comes to mind). That subset of actual talented visionary CEOs is probably a ridiculously small number (eg 1% of CEOs in a global pool). The rest of the time it's just a good ol' boys club for the already rich.
[1] an example https://hbr.org/2015/11/are-successful-ceos-just-lucky
To be fair, people are not born with a built-in frame of reference. I used to think I was good at math due to hard work/dedication but I have since met people who worked far harder than me and still were not nearly as good at math. It works the same way with money and pretty much everything. Good-looking people think they are charming, naturally athletic people think they train harder, etc. It's just what it is.
In reading the reactions to the article, it seems like most of HN is onto the game: Feign poverty.
That said, whom are some people that really did 'make it' from rags to riches? What can we learn from them? I'll start:
Andrew Carnegie
Jack London
George Soros
Larry Ellison
Ursula Burns
Ingvar Kamprad
JK Rowling
Sam Walton
Oprah
The only thing that I can think of that all of them had in common was that they were really hard workers that got lucky. That hard work was the price of the lotto ticket. What am I missing here?
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[ 3.0 ms ] story [ 138 ms ] threadEspecially now that social responsibility has decoupled from privilege.
Such duty and stewardship helped justify and bring balance to their privilege in days past. No longer.
After doing a little more research, I found that the author grew up in a wealthy east coast family, is a close blood relative to Sheryl Sandberg, went to an Ivy League school (likely aided by privileged upbringing and family connections), landed at a prestigious finance/VC firm straight from college (probably made possible again by an Ivy league pedigree/family connection), and could easily make the "jump" to doing something that paid nil for 2 years due to this enormous safety net of family wealth that most people simply don't have.
If there's one thing about the Travis Kalanick saga I wish the media would've told is that he is a rare successful founder who legitimately grew up in a middle class family and struggled for many years post-college trying to get to ramen-profitability on a series of failing startups before hitting it big. This is strictly in contract to the Zucks and Spiegels of the world who grew up very wealthy and went to the best schools and could take on the big risks associated with entrepreneurship because if everything failed they still had that big safety net to fall back on.
I’d love to see a list of all the successful founders who came from extreme poverty. Middle class startuppers have one or two shots at it if they live at home with a relative. The rich kids can keep trying and learning from their mistakes until well they become richer.
Such is life.
The potential failure is more of an issue. People don't want to look stupid.
The "What will the neighbors think?" question is asked a lot in peoples minds.
What you're saying is what I was trying to get at.
So, in Belgium, despite knowing that you could fail and that wouldn't be completely detrimental to your financial life, you're saying that there's an aversion to risking it with a startup due to social consequences?
In terms of different outcomes as a result, I have absolutely zero hard data on it, but my intuition would be as follows:
Rags-to-successful-job-creating-entrepeneur stories are a lot more common, and by that metric success rates are higher, but rags-to-riches is still relatively rare by simple virtue of the fact that greater success != rich because success rates and broader competition mean very big wins are rarer in general. Market regulation also affects this somewhat: it's harder to dominate.
Extra disclaimer: the above is intuition, would love to see actual data, whether it contradicts or correlates.
I tried to look up some of the past HN comments and the like I was looking at. While many complained about some missing SV style elements (missing VC, tougher working regulations) there were also mentions of different ways of doing things such as risk aversion or the style of business being more consensus-based (Sweden).
Here in the US, when thinking of dominate European innovative companies, I guess Skype (pre-acquisition), SAP, and even toss in IKEA would be ones that dominated (or in Skype's case, created) their markets.
Anyway, this was all speculative off the dawhizkid's premise of 'would a solid safety net create more entrepreneurs?' and, given we have good examples of that in Europe, I thought it worth taking a shot at.
> Meanwhile, few who make the “I did it all myself” argument question the absurdity of seeing earnings as a measure of grit and moral worth. Does anyone really think that a CEO, whose pay is on average 271 times greater than that of his typical worker, works 271 times harder than his employees, who might actually be doing strenuous physical labor?
The implication is clear that some people are rewarded less for the same effort. Well not all effort is equally valuable. Anyone can sweep a floor, so the effort of doing so isn't worth much.
What I mean is, yes, everyone can sweep, the compensation is lower, but there is less power also. As you move up the hierarchy, you are not only potentially going up in skill, but also in the amount of power afforded and compensation enjoyed.
Let's take a hypothetical case where all employees are equally skilled. Just for argument. Now you create positions of more and more power. By definition, there will be fewer positions of greater power, otherwise those higher positions would not have so much power. Because of the power those positions afford, there will be more competition for positions of more power, under the assumption that people want more power. Because those workers are all equally skilled, though, something other than skill must determine success in gaining those positions. And once they have those positions, they can use that power to increase their compensation relative to other employees. They can also use that power, consciously or subconsciously, to create or shape a narrative that they deserve that compensation more than others.
This is hypothetical, and reality involves something in between the "floor sweepers get paid pennies because everyone can sweep" and "CEOs are randomly assorted into positions of unlimited power" but the point is that there are properties accrued by the inherent nature of power structures, and those properties lead to inequities just as much as supply and demand of skills.
I can't believe that in the US the power structure side of reality is ignored so much in favor of the supply and demand side of reality, even when it's staring us in the face and glaringly obvious. And that you can't see society as complex and nuanced, and have to choose to be either a rabid capitalist or socialist.
Perhaps because that's how employers typically exhort their staff to greater productivity? Never once have I had an employer say 'there's a fat bonus waiting for someone who can figure out a clever shortcut through this problem' or the like. For people who genuinely start at the bottom, personal initiative is often discouraged rather than rewarded and the benefits of innovation or exceptional performance often accrue to the nearest manager rather than the eager beaver.
Arguably, the units are dollars. A dollar's worth of work is worth a dollar.
I'll never give to a rich pricks charity knowing what I know now.
https://nypost.com/2016/10/02/bill-clintons-executive-suite-...
(the story goes that back when executive compensation was highly taxed in the first part of the 20th century, many companies took out services for their executives which were tax free advantages. Things like yachts. Walt Disney is famous for building out a business for exactly that sort of thing : https://en.wikipedia.org/wiki/Club_33 )
> Clinton isn’t the only former president to include a residence in his library. George H.W. Bush’s library at Texas A&M University in College Station and Jimmy Carter’s in Atlanta both have them.
While algorithms are increasingly prevalent in Wall Street, at the end of the day there's a human who either writes them or reads their output before making a decision, and that person is not easily replaceable.
Beyond that, for every successful Hedge Fund there are countless that failed catastrophically, so any analysis of "how much a Hedge Fund manager makes" is subject to severe survivorship bias. [0]
The disparity between the CEO of a public company and its hordes of workers is even clearer. Very few people possess the combination of skills that make a high-caliber CEO successful, which is why very few people are rewarded like them. LeBron James also doesn't work 1,000 times harder than a factory worker.
Finally, it's worth remembering that 70% of wealthy families lose their wealth by the second generation, and a stunning 90% by the third. [1] I wouldn't lose any sleep over rich kids who feel troubled about their "entitlement".
[0] https://xkcd.com/1827/
[1] http://time.com/money/3925308/rich-families-lose-wealth/
When the business does well people say it's due to the CEO, but when they fail people argue about how bad it might have been. There's no way to know. It seems more like a scam vs investors or employees than some measurements skill that actually merits compensation
It's perfectly possible Mayer did unique work that paid her compensation and much more in savings. Without the counterfactual, we cannot judge her.
If we can't judge them for failures then we shouldn't be able to judge them for successes as well and they shouldn't be able to pull out the "rare skills" argument
Do you have any data to back that up? In the meantime I'd rather believe the null hypothesis that CEOs are blamed for bad performance just as often as they are commended for successful results.
It is laughable to think people have that much extra value. Those are teachable skills, and the cost of that education is not nearly as much as is being spent.
This cartoon illustrates it well: http://thewireless.co.nz/articles/the-pencilsword-on-a-plate
We can, however, empower kids and foster an environment that is at a minimum good enough to let them achieve more than their parents did.
Regardless of the causes of such inequality, the fact is the CEO is more prepared than the janitor and is paid more accordingly.
It's difficult to have the perspective it takes to admit that your success may be more due to a privileged starting position and luck than solely the hard work, especially when it's so easy to claim all your success is self-made and the hero worship of self made people in the United States
It's not necessarily a bad thing, but the fact that we're conditioned to think that a non level playing field is bad no matter what (vs a societal expectation that those with the most must give back the most), asking with a fetishistic of monetary success, really warps our outward facing behavior.
I'm not sure you even realize, but that's the exact opposite of the definition of meritocracy.
Meritocracy rewards those who do the most. But those who can do the most are those who are the most well endowed.
This is separate from an even more perverse system where those who don't do the most are rewarded the most.
I believe you are misunderstanding the definition of a meritocracy.
My point being that someone can honestly believe they are suffering at least relatively, if not absolutely. Each person has their own level of experience they consider "suffering".
If you can’t say that, you’re not truly self-made. The “rags-to-riches” tale has to actually be rags to riches.
There’s still doing great work and making something of yourself, but it’s very different when you do it from scratch.
There’s always chance, but I see a distinction.
If it was easy to be a hedge fund manager, more people would do it. It's easy to cherry pick these professions that seem overpaid, but in a free market, people tend to make what the market values them at.
You could say that teachers are so important that they should be paid more and in a free market education system they might be paid differently than they are now.
I'm a CFA, I have grades, never got a look in for fund manager jobs. Pivoted to computing at the age of 30 where I "look the part" or whatever.
Don't kid yourself about this stuff. I'm not from an underprivileged background by any stretch of the imagination and nor do I have any time for socialism and socialist posing.
Young Dennis will get a game somewhere and put up compelling numbers and will likely get to the NBA. The equivalent can't be said for young potential fund managers who won't get a chance to impress. Positive discrimination is not the answer to this, but neither is the ostrich strategy.
OTOH, professional sports leagues are about winning intense competition, and skill is much more important. Even then, coaches and owners play favorites.
It's not a binary system, it's a spectrum, and professional sports are towards one end of the spectrum and hedge fund management and VC founding are towards the other end.
Even if J. Random put all their training into building and managing relationships it would likely not amount to anything of note. (They will have fewer resources and be excluded from some social circles.)
There are many necessary components of huge success.
TLDR: the vast majority of markets are demand-bound. So if you are producing marginal supply, you're are simply hurting everyone and at best will do as well as the others.
Unless, of course, you cheat, which is what these connections do.
Needless to say, there is a global fiction that everybody seems to believe that this is not true, both on the left and (especially) on the right. It is so ignored on the right that this situation is actually left out of economics education.
What is the present value of a teacher's pension? How much would you have to save to produce an investment stream that cannot be exhausted no matter how long you live? What value is attached to having it guaranteed by the government instead of being subject to market returns?
* Well-off parents who funded their education, allowing them to start off without the huge debt ball-and-chain most of us start off with.
* Well-off family who can act as a safety net / backstop for failed risk-taking. Baseball is easy if you can keep swinging until you hit the ball.
* Well-connected family or friends who helped with that critical first job, which often can set an entire career's trajectory.
* Pre-populated contact list of well-off or well-connected people, drawn from family or Ivy league classmates.
I don't think you can honestly call yourself self-made with these advantages.
EDIT: spelling
Although even they have, at least, access to the public infrastructure of the nations that they live in. France, Kenya, China, Argentina, the US etc.
It's not much... but it's something.
No one; everyone starts off in a particular social context with a particular set of assets and opportunities and limitations.
There's no need to draw a line; there's no valid binary classification here.
We’re penny-wise and pound-foolish with our dispensation of public funds.
Do you really think there's someone out there who wouldn't be aware of this fact without that added clarification?
When something is "free", it's always means free (of charge) for the recipient, and it's always enabled by something else.
It's a matter of choice (hence the taxes, hence the politics), of governance, of sight.
Now, if you believe free healthcare and education for everyone does not benefit the society as a whole, then say so (and flesh out the historical facts that support your view).
http://www.businessinsider.com/warren-buffett-on-the-ovarian...
And it is the thousands of choices from early years through middle age that separate those with rarified skills and high wages from those with common skills and envy for their higher paid, lesser working (now) friends.
It does not matter where you start. When you spend most of your life studying or smoking dope, the end is predictable.
At least, I feel that way..
Yes, if you smoke dope all the time your outcomes in life will probably be worse than if you study some "rarified" skill, to borrow your phrase.
But studying takes resources, and time, and those are bought through money and social connections and luck. And increasingly, despite what we read about MOOCs and the new educational order, it doesn't matter if we study and learn, what matters is that we have a certificate of studying, a placeholder. And those placeholders are not the same as our knowledge, or one's ability to learn, and are subject to corruption and greasing like every other placeholder.
And in the end, what does this say about how much value we should place on that rarified skill? Does our society really allocate financial reward according to actual value? Does Amazon really improve my life that much compared to the plumber or electrician who fixed my house? Is Facebook a net benefit to society? If it disappeared tomorrow, would nothing replace it? Could our healthcare be delivered under a different provider structure? Do I pay my ISP because it's the best of many choices, or because it's acceptable enough to not go without internet access? Is Amazon successful because of Bezos in particular? If Bezos was going around spouting all the ideas in his head, marshaling an army of imaginary workers, without any actual labor, would we still have Amazon?
The point of this article is it's trivial to point out that hard work should and often is compensated. The problem is that the compensation structures in many fields are completely absurd in many cases relative to the actual value created.
And thousands of others did the exact same but didn't make it out. That's the entire point of this conversation. Hard work isn't a sufficient condition. If it were tons of people would easily make it out. But instead it's a lot of luck along with it.
At the least, please create a category for naked politics. No, hide doesnt work very well (multiple devices, times out, etc).
One time a mod told me that articles with no link to tech got deleted. That really doesn't appear to be the. This is yet another capitalist vs communist (literally, the labor theory of value was a Marx thing) diatribe that has no relation to the tech oriented stuff many came here for. There are plenty of other political sites for stuff like this.
I often wonder, if you could vote down stories, these would probably have a severe split and maybe not make the front page or stay there. Only being able to upvote let's a small contingent push something up (just ask the bitcoin people).
Just because you can flag isn't carte blanche to post anything. I like the site much better (and I'm sure many others too) when it stays in its technical oriented wheelhouse.
Just because you have certain preferences isn't carte blanche to launch off-topic diatribes in threads on articles that don't adhere to them about how you prefer HN should be focussed.
> I like the site much better (and I'm sure many others too) when it stays in its technical oriented wheelhouse.
That is neither the official focus [0] nor, evidently—from what the community submits and keeps on the front page—the consensus of the community.
[0] From the guidelines: “On-Topic: Anything that good hackers would find interesting. That includes more than hacking and startups. If you had to reduce it to a sentence, the answer might be: anything that gratifies one's intellectual curiosity.” Obviously, whether any particular article meets they standard is subjective, which is why we have upvotes and flags and algorithms taking them and other factors (e.g., the flamewsr detector) into account.
"I am not a self-made man.
Every time I give a speech at a business conference, or speak to college students, or do a Reddit AMA, someone says it.
“Governor/Governator/Arnold/Arnie/Schwarzie/Schnitzel (depending on where I am), as a self-made man, what’s your blueprint for success?”
They’re always shocked when I thank them for the compliment but say, “I am not a self-made man. I got a lot of help.”
The Guardian is not discounting you or your efforts. The Guardian is saying: there are those with a safety net to experiment, and there are those without a safety net. When we look at the achievements of both populations, is it truly fair to compare those with such different circumstances?
Without those, in many cases, no amount of perseverance will pay off.
https://news.ycombinator.com/newsguidelines.html
I've made a small jump in socio-economic class, and I try and keep it in perspective. I try and remember the bits of help I got a long the way. And at the same time I'm trying to let go of my resentment about people whose parents set them up with cars, tuition and house deposits - because one day I hope to be that parent.
I'm not against the general mindset the author is telling, but this garbage thought process needs to stop. This isn't about working harder, but smarter and you can easily provide 271 times more value through decisions that higher ups are tasked with than a bottom level individual contributor.
The top level people at my company are making decisions daily that govern multi-million dollar investments which can be vastly beneficial or detrimental to our profitability. When working on investments that large in size, marginal improvements on decision making provide huge sums of value which somewhat justify the pay.Now, are these people self made? That's more open to debate but every C*O and SVP has been with the company for at least 10 years and most VPs also have also been here for that long/have an amazing track record. You generally don't get 10+ years of promotions providing nothing.
That said, whom are some people that really did 'make it' from rags to riches? What can we learn from them? I'll start:
Andrew Carnegie
Jack London
George Soros
Larry Ellison
Ursula Burns
Ingvar Kamprad
JK Rowling
Sam Walton
Oprah
The only thing that I can think of that all of them had in common was that they were really hard workers that got lucky. That hard work was the price of the lotto ticket. What am I missing here?