> How you move on from a bad situation is your decision. Wallowing in self-pity because the world has done you wrong is a good way to never succeed.
I agree with this but it doesn't have to do with luck. You could pick yourself up and keep going after a stint of bad luck but if you continue to have bad luck then you will still have a hard time succeeding.
This might be one of the biggest issues in America today. We have a seemingly large number of folks, or perhaps a small number of highly vocal ones on social media, that believe the system is so rigged against them and that they have no chance of improving their lot in life.
At the same time as this pessimism has permeated America, a global, friction-free marketplace for services and products has emerged that anyone can tap into: the internet and mobile phones.
This network is not only available to all, it also hosts the keys to the kingdom, with every single skill and clever strategy for building these products and services unlocked, for free, for everyone, on YouTube, Coursera, etc.
That's the disconnect I'm concerned about... so many people in America are giving up on the American dream, while other countries are copying it (i.e. China).
Most people who chase wealth will not succeed. Desiring and pursuing wealth therefore seems like a path to disappointment. Doesn't it make more sense to reframe one's perspective on life and accept that outcomes are almost entirely out of your control?
Just because not all succeed, that does not mean that success is random.
Taking entrepreneurial risk is a choice, and some people do succeed and build huge businesses employing thousands of people that way. Also those that succeed tend to be very smart and hard working, so the choices they made clearly contributed to their success, otherwise being smart and choosing to work hard would not have made a difference.
Conversely I have generally taken the safe road in my career, while still being willing to move on when the time was right. This strategy has served me well. I've seen others takes risks I would not have, for some it worked out well but for others it was disastrous. For example a friend had catastrophic health problems, but he was working as a contractor so it was financially disastrous too. If the same had happened to me, I was on a very generous benefits package and I and my family would have been well looked after.
Individual choices really do matter. Sure you can still be hit by a bus, but most of the things that happen in our lives are tractable to mitigation strategies. Conversely luck certainly can be a factor in success, but even when it is you still need the sense to recognise it and take advantage of it, and that can often involve taking calculated risks.
A more parsimonious explanation is that people’s incomes are less than or equal to their expenses (rent, healthcare, food, taxes, etc) preventing them from accumulating wealth. Until we reverse the trend of stagnating wages and rising expenses and pay people more for their work and/or reduce the cost of living, people will not be wealthy.
It is worth listening to the Dave Ramsey podcast just to understand how people spend their money foolishly. Yes, there is bad luck and lack of opportunity, and there is also boatloads of foolish spending and borrowing too.
There are plenty of people who could build wealth on the average salary in the US if they were on a budget, were reasonably frugal, and in general lived like our grandparents did say 1950-1970 or so.
while I was putting aside at work 25% of a very good salary most of my peers with higher salaries spent it all on luxury until huge layoffs came. No luck involved there
A colleague remortgaged his house when prices went up and spent 30k on a new car and big holiday. A few years later the housing market crashed and he had to sell his house because he got a new job in another city, saddling him with crippling debt. Ouch.
I have relatives on one side of my family who are all on relatively low incomes, but they make terrible financial decisions. When my uncle retired he sold his house, moved into a bungalow and gave the difference in price to his sons. They all had mortgages and children, but instead of saving it they all spent big on new cars and big holidays. It seems to be a bit of a pattern. My wife and I are considerably better off, but in many ways we live far more careful and frugal lives.
who can philosophize better about wealth than the people that became successful and wealthy? The other kind of social media philosophers is the Socialist type that were never successful but blame the system and everything else
Being successful does not make you uniquely qualified to assess how to be successful. In my experience most people will rationalize success stemming from their own superiority and minimize the role of luck and standing.
Or it could just be like Skinner's superstitious pigeons - it was mostly chance and now they attribute it to some series of events that really have nothing to do with it.
> who can philosophize better about wealth than the people that became successful and wealthy? The other kind of social media philosophers is the Socialist type that were never successful but blame the system and everything else
Sociologist who studied average outcomes, successes and failures. Also, an independent person not personally invested in making oneself sound as awesome. Also, someone not having personal interest in changing how other people act for own benefit.
Obvious example: If 10 people takes same risk and 9 of them ends up super poor and 1 super rich, then the risk taking philosophy wrote by the 1 will be significantly different then the one that takes into account also those where risk part happened.
if luck does not explain 100% of the variance on average more successful people will have better skills than those who are not. It is a pretty big bias to think in terms of 1 or 10 or units
As someone who personally makes high seven figures and who's met dozens of people of 9, 10-figure net worth -- I think it's ridiculous that anyone thinks becoming phenomenally wealthy is not overwhelmingly determined by luck. None of the rich people I've met have any notable characteristics that explain their "success" -- although certainly, some have convinced themselves it was due to some quality of theirs that they could control (and not just that, for example, they were lucky to get into the right team, at the right firm, at the right time, etc.).
I assume people who believe wealth and success of individuals can be explained by predictable qualities or behaviors of that person have simply never met a rich person in their life.
how can you be sure that you and me are not biased since the definition of bias is to belong to the losing group? (you are upper quadrant for sure but still)
Better skills in one specific thing does not imply better skills in another thing. For example, ability to sell well does not imply ability to create accurate philosophy about what makes people end up rich vs poor. Different skill.
If one person rolls a die and gets a six and another person rolls the same die and gets a one the person who rolled the six will claim it was the way they rolled the die that led to their success.
An impression I have of USian culture is that one is only “allowed” to spend time on pursuits such as essaying, the humanities, etc. without mockery after one has made a fortune
Something missing is that there's a difference between how owners and employees are rewarded.
An owner's income doesn't necessarily scale with effort. Instead, it scales with impact (not necessarily theirs, either). An owner can make a decision or do some work and get exponential rewards. Or someone they employ can make a decision or do some work, and the owner can get exponential rewards. An owner can also completely stop working, and by virtue of being an owner still reap the rewards.
Employees on the other hand don't have this leverage. Your income basically scales with effort. Working hard or having a huge impact can get you a promotion and increase your income, but only a little. You won't get a million dollar bonus by earning the company a million dollars. Importantly, if you stop working, you stop earning (this is a big roadblock for many people who do want to try starting their own business, people who want to be an owner).
Besides aptitude and opportunity, the economy wouldn't function if everyone started their own company. Many things truly do need teams working together to get things done. Perhaps we should be talking about how to reward workers in a way that scales with their collective impact rather than their effort.
Easy. The Capitalism system is about predators and those who get eaten.
There's a food web where Lions and Eagles keep everybody else bow down to them.
Most of the other comments tell you to level up and become predator yourself. That's one solution, but that is to become Eagle yourself and then you'll have the problem of defending your territory against others.
So much stress in this system. Those indoctrinated to this won't see this big picture and believe that this is all we can do as humans.
I suggest you listen to Anthropologist like David Graeber instead of Economist.
>Easy. The Capitalism system is about predators and those who get eaten.
The primary ways people in capitalism get successful is by developing new technology or products, providing valuable services and employing people. The heroes of capitalism most celebrated here are people like Steve Jobs, Bill gates and Elon Musk. All of them have built fantastically successful companies, developing innovative and valuable new products and payed the wages of thousands or tens of thousands of people directly, and built ecosystems employing millions. All of those people benefited. Their customers benefited from useful products. Their suppliers benefited, their employees benefited otherwise why work for them? That is what capitalism is about.
But ok, you disagree, that's fine. I'm sure you must have good reasons. Please, tell me what non-capitalist system is better, how does it work and where has it been shown to be successful?
When you look at the success of people like Bill Gates or Mark Rober (he didn't build the glitterbox but got the credit) or Elon Musk the first step is to already have money. Then the "hero" uses that money to get the new product from someone else and then do something the inventor couldn't do because the "hero" has better connections: sell the thing to a (big) customer.
Bill did have a wealthy parent but didn't really leverage that in the early days. Anyway Steve Jobs and Steve Wozniak founded Apple from a garage, but I notice you ignored my mention of them for the purposes of your response. Elon Musk stated with pretty much nothing, and has talked about how he lived off a dollar a day when he founded Zip2.
If you go looking for people from wealthy backgrounds you'll find them, although you actually failed even at that, but they aren't the only kind. As another example Zuckerberg and Saverin founded TheFacebook.com with $2,000 scraped together while they were students. Google was also founded out of a garage.
Anyway, what's wrong with people with money using it productively to found successful companies, and employ people and provide valuable services? Surely that's a good thing? It seems to have worked well for China over the last 30 years, certainly compared to the previous 30.
IBM wanted to put CP/M on their computer, and mistakenly thought Microsoft owned CP/M because they produced a CP/M add-on card for the Apple II. Initially Bill actually referred them to Digital research, who actually did own CP/M, because at the time Microsoft didn't have an operating system to offer. It was only after the deal between IBM and DR fell through that Microsoft got a second shot at it.
It helps if you know how to leverage the legal system to get a good deal (and the personality which can negotiate a good deal). If you can exploit something which is scalable using new technology, that helps. And the IP and copyright laws are tilted against their stated aim - to benefit society. They almost always protect the IP owner to the detriment of society.
I would agree that some IP regulations go too far nowadays. Software patents are a mistake and copyright terms too long, but the basic idea of protecting and encouraging creators and innovators is a good one. Society benefits when creation and innovation is protected and supported.
Anyway, beyond software patents and copyright terms do you content that IP protections in general are a mistake? How do you see an alternative system working?
Are you just going to ignore the predatory business practices, competitor strongarming and buyouts, deliberate sabotage and every other unethical thing those people did, and still do to this day?
No I'm not ignoring anything, that's why we have laws which by and large are actually enforced. Competition can be tough and so it should be, but we do have boundaries and when companies and individuals cross them they should be pushed back to face the consequences. Microsoft has been successfully prosecuted many times, for example. Google and Facebook are being reigned in by the EU. That's the sign of a system that works.
I'm genuinely interested in what you see as alternatives though. I'd love to turn this in a constructive direction. How do you see these weaknesses or failures of capitalism being addressed and what alternative system do you favour? How do you see innovations like those of Bill gates, Steve Jobs, Steve Wozniak, Elon Musk, Page and Brin, etc being created and being successful, building new businesses without Capitalism?
Considering the absolutely massive control corporate interests have over politics in the entire western world, I would say that the rules and laws have been ineffective at best, and downright harmful in a lot of cases.
The fact that MS have gotten a few slaps on the wrist, and that the EU rolled out GDPR to at least try to keep some semblance of privacy, is completely meaningless when you look at the massive profits MS gets from government contracts (through lobbying and favoritism), and the absolute havoc the latest EU copyright reform will cause for any internet-based business not big/rich enough to implement perfect automated upload filters. Funnily enough, Google and FB have the resources, so they're putting up a token protest, but in truth they know they will be benefitting from this legislation.
As for an alternative, you're arguing from a compromised starting point. You assume that we even need individual achievers like Bill Gates et. al., which is highly symptomatic of primarily American individualism and exceptionalism, and to a point also Ayn Randian objectivism. You see it everywhere, people put their heroes on pedestals, glorify them and attribute them great wisdom in all matters, due to their skills in one area.
It's the cult of celebrity, and there is a tendency to glorify the singular great achiever, while completely disregarding the foundations, all of the people who came before and laid the groundwork for progress. We are not standing on the shoulders of giants, we are standing on the shoulders of millions of ordinary people, who each did part of a greater collective whole. No man is an island, after all. No one came to where they are today purely through individual will and effort.
We don't need these massive businesses and we certainly don't need the people at the top, the rent-seekers who extract great wealth from the labor of others. Absolutely nothing created under the rule of Steve Jobs, Elon Musk et. al. created required their presence or even their existence. Innovation and progress doesn't happen on an individual level, it is a collective process.
So what I propose is to abolish to cult of imagined singular achievement, and realize that we can only achieve greatness by collective means, by working together. We may each be individuals with individualist streaks, but as a society we are a great collective of individuals.
What we need is to work together, to collectively own the values and value-creating constructs of our society. When people own a fair share, instead of a pittance, funnily enough their enthusiasm and loyalty goes way up.
Organization would be via horizontal democracy, everyone on equal terms and footing. In the case of larger groups, delegates can be chosen (with no additional power or authority, they simply represent the decisions of their group).
You're still thinking from a capitalistic viewpoint, of individualism to the detriment of collective progress.
Objectives would be set collectively, decisions would be taken collectively, success would be collective and incentivized by the collectively progress that would be achieved.
If personal financial gain is your only motivator, you need to check your greed.
I'm not going to post long political discourses here. Read Peter Kropotkin's "The Conquest Of Bread" and Thomas Piketty's "Capital In The 21st Century". There's a lot more to read than just those, but they're a good start, to introduce you to how capitalism is wreaking havoc on the world.
Have a look at Mondragon Cooperatives. It's a real life large scale implementation of Woker-owned Cooperatives. Not perfect but it does show a lot of the good possibilities.
Back in 2008 when the regular Capitalism crash happens where we plebs payed capitalists:
Mondragon: Spain's giant co-operative where times are hard but few go bust:
TL;DR of this article - Workers of Mondragon's Washing Machine factory got redundant due to recession lowering demand for their products. Instead of lay-offs, they compensated by lowering wages of managers (note that they have a rule where there is a max ratio of salary from lowest salary). Then offered these workers to retrain for free with commute allowance. Or offered early retirement with complete benefits and cash out their ownership.
---
In general, the Theory of Value makes sense to me:
This is just oblivious pontificating on politics and economy. He's obviously been immensely successful in tech, but here he's not connecting at all with the issues of young people, or with left scholarship.
> Conversely, if we pursue free services and money we will drive more power into the hands of a larger and larger incompetent government, and I think we know where that will end up — and it won’t be great for anyone.
Sure you can just state this, but no one has to buy it. My government has more than adequate at providing "free" healthcare to everyone, and it's pretty stupid to broadly dismiss that like it "won't be great for anyone". It's actually great for everyone. "Incompetent government" is a pernicious anti-social idea. Modern governments have a myriad problems but Government itself has proven its competence over and over again at addressing very difficult societal problems.
> Entrepreneurship has created the greatest gains in our standard of living to date, even if it’s hard to grasp the wild polarization of wealth in society.
You can sub in one of [Capitalism, Entrepreneurship, Western Civilisation] in this statement, and find it repeated over and over again like it's self-evident. Many "greatest gains" in our society had blatantly nothing to do with Entrepreneurship, take for example the Civil Rights movement, which certainly contributed greatly to overall standard of living. The Capitalist model can't slap a dollar figure on that though, so let's just ignore it.
Overall this piece is so confidently slap-dash I don't think Calacanis is actually listening to or reading any of the best opponents to his world view.
50 comments
[ 2.4 ms ] story [ 111 ms ] thread- investing time in things that ultimately do not pay off
- taking risks
- lots of small poor choices that add up
- bad luck (yes, to some extent you can make your own luck but sometimes things are outside of your control)
Honestly I find his list pretty poorly thought through, especially in comparison to the recent blog post by Sam Altman: http://blog.samaltman.com/how-to-be-successful
However, people generally are poor at calculating probability combined with risk/reward and simply make bad decisions.
And sometimes, all choices lead to bad outcomes.
What?! So going through a green light and getting hit by someone going through a red is a bad decision?
Getting cancer is a bad decision or bad luck?!
Yes, sometimes other people will cause you harm. Could you have avoided it, probably not as you can't always predict the future.
How you move on from a bad situation is your decision. Wallowing in self-pity because the world has done you wrong is a good way to never succeed.
As an aside: your chances of getting a particular cancer can be affected by your lifestyle choices so you can make better decisions to avoid it.
I agree with this but it doesn't have to do with luck. You could pick yourself up and keep going after a stint of bad luck but if you continue to have bad luck then you will still have a hard time succeeding.
At the same time as this pessimism has permeated America, a global, friction-free marketplace for services and products has emerged that anyone can tap into: the internet and mobile phones.
This network is not only available to all, it also hosts the keys to the kingdom, with every single skill and clever strategy for building these products and services unlocked, for free, for everyone, on YouTube, Coursera, etc.
That's the disconnect I'm concerned about... so many people in America are giving up on the American dream, while other countries are copying it (i.e. China).
Taking entrepreneurial risk is a choice, and some people do succeed and build huge businesses employing thousands of people that way. Also those that succeed tend to be very smart and hard working, so the choices they made clearly contributed to their success, otherwise being smart and choosing to work hard would not have made a difference.
Conversely I have generally taken the safe road in my career, while still being willing to move on when the time was right. This strategy has served me well. I've seen others takes risks I would not have, for some it worked out well but for others it was disastrous. For example a friend had catastrophic health problems, but he was working as a contractor so it was financially disastrous too. If the same had happened to me, I was on a very generous benefits package and I and my family would have been well looked after.
Individual choices really do matter. Sure you can still be hit by a bus, but most of the things that happen in our lives are tractable to mitigation strategies. Conversely luck certainly can be a factor in success, but even when it is you still need the sense to recognise it and take advantage of it, and that can often involve taking calculated risks.
There are plenty of people who could build wealth on the average salary in the US if they were on a budget, were reasonably frugal, and in general lived like our grandparents did say 1950-1970 or so.
I have relatives on one side of my family who are all on relatively low incomes, but they make terrible financial decisions. When my uncle retired he sold his house, moved into a bungalow and gave the difference in price to his sons. They all had mortgages and children, but instead of saving it they all spent big on new cars and big holidays. It seems to be a bit of a pattern. My wife and I are considerably better off, but in many ways we live far more careful and frugal lives.
Sociologist who studied average outcomes, successes and failures. Also, an independent person not personally invested in making oneself sound as awesome. Also, someone not having personal interest in changing how other people act for own benefit.
Obvious example: If 10 people takes same risk and 9 of them ends up super poor and 1 super rich, then the risk taking philosophy wrote by the 1 will be significantly different then the one that takes into account also those where risk part happened.
I assume people who believe wealth and success of individuals can be explained by predictable qualities or behaviors of that person have simply never met a rich person in their life.
And you don't believe a "winning group" would hold its own biases?
An owner's income doesn't necessarily scale with effort. Instead, it scales with impact (not necessarily theirs, either). An owner can make a decision or do some work and get exponential rewards. Or someone they employ can make a decision or do some work, and the owner can get exponential rewards. An owner can also completely stop working, and by virtue of being an owner still reap the rewards.
Employees on the other hand don't have this leverage. Your income basically scales with effort. Working hard or having a huge impact can get you a promotion and increase your income, but only a little. You won't get a million dollar bonus by earning the company a million dollars. Importantly, if you stop working, you stop earning (this is a big roadblock for many people who do want to try starting their own business, people who want to be an owner).
Besides aptitude and opportunity, the economy wouldn't function if everyone started their own company. Many things truly do need teams working together to get things done. Perhaps we should be talking about how to reward workers in a way that scales with their collective impact rather than their effort.
There's a food web where Lions and Eagles keep everybody else bow down to them.
Most of the other comments tell you to level up and become predator yourself. That's one solution, but that is to become Eagle yourself and then you'll have the problem of defending your territory against others.
So much stress in this system. Those indoctrinated to this won't see this big picture and believe that this is all we can do as humans.
I suggest you listen to Anthropologist like David Graeber instead of Economist.
The primary ways people in capitalism get successful is by developing new technology or products, providing valuable services and employing people. The heroes of capitalism most celebrated here are people like Steve Jobs, Bill gates and Elon Musk. All of them have built fantastically successful companies, developing innovative and valuable new products and payed the wages of thousands or tens of thousands of people directly, and built ecosystems employing millions. All of those people benefited. Their customers benefited from useful products. Their suppliers benefited, their employees benefited otherwise why work for them? That is what capitalism is about.
But ok, you disagree, that's fine. I'm sure you must have good reasons. Please, tell me what non-capitalist system is better, how does it work and where has it been shown to be successful?
If you go looking for people from wealthy backgrounds you'll find them, although you actually failed even at that, but they aren't the only kind. As another example Zuckerberg and Saverin founded TheFacebook.com with $2,000 scraped together while they were students. Google was also founded out of a garage.
Anyway, what's wrong with people with money using it productively to found successful companies, and employ people and provide valuable services? Surely that's a good thing? It seems to have worked well for China over the last 30 years, certainly compared to the previous 30.
Anyway, beyond software patents and copyright terms do you content that IP protections in general are a mistake? How do you see an alternative system working?
I'm genuinely interested in what you see as alternatives though. I'd love to turn this in a constructive direction. How do you see these weaknesses or failures of capitalism being addressed and what alternative system do you favour? How do you see innovations like those of Bill gates, Steve Jobs, Steve Wozniak, Elon Musk, Page and Brin, etc being created and being successful, building new businesses without Capitalism?
The fact that MS have gotten a few slaps on the wrist, and that the EU rolled out GDPR to at least try to keep some semblance of privacy, is completely meaningless when you look at the massive profits MS gets from government contracts (through lobbying and favoritism), and the absolute havoc the latest EU copyright reform will cause for any internet-based business not big/rich enough to implement perfect automated upload filters. Funnily enough, Google and FB have the resources, so they're putting up a token protest, but in truth they know they will be benefitting from this legislation.
As for an alternative, you're arguing from a compromised starting point. You assume that we even need individual achievers like Bill Gates et. al., which is highly symptomatic of primarily American individualism and exceptionalism, and to a point also Ayn Randian objectivism. You see it everywhere, people put their heroes on pedestals, glorify them and attribute them great wisdom in all matters, due to their skills in one area.
It's the cult of celebrity, and there is a tendency to glorify the singular great achiever, while completely disregarding the foundations, all of the people who came before and laid the groundwork for progress. We are not standing on the shoulders of giants, we are standing on the shoulders of millions of ordinary people, who each did part of a greater collective whole. No man is an island, after all. No one came to where they are today purely through individual will and effort.
We don't need these massive businesses and we certainly don't need the people at the top, the rent-seekers who extract great wealth from the labor of others. Absolutely nothing created under the rule of Steve Jobs, Elon Musk et. al. created required their presence or even their existence. Innovation and progress doesn't happen on an individual level, it is a collective process.
So what I propose is to abolish to cult of imagined singular achievement, and realize that we can only achieve greatness by collective means, by working together. We may each be individuals with individualist streaks, but as a society we are a great collective of individuals.
What we need is to work together, to collectively own the values and value-creating constructs of our society. When people own a fair share, instead of a pittance, funnily enough their enthusiasm and loyalty goes way up.
You're still thinking from a capitalistic viewpoint, of individualism to the detriment of collective progress.
Objectives would be set collectively, decisions would be taken collectively, success would be collective and incentivized by the collectively progress that would be achieved.
If personal financial gain is your only motivator, you need to check your greed.
I'm not going to post long political discourses here. Read Peter Kropotkin's "The Conquest Of Bread" and Thomas Piketty's "Capital In The 21st Century". There's a lot more to read than just those, but they're a good start, to introduce you to how capitalism is wreaking havoc on the world.
Have a look at Mondragon Cooperatives. It's a real life large scale implementation of Woker-owned Cooperatives. Not perfect but it does show a lot of the good possibilities.
Back in 2008 when the regular Capitalism crash happens where we plebs payed capitalists:
Mondragon: Spain's giant co-operative where times are hard but few go bust:
https://www.theguardian.com/world/2013/mar/07/mondragon-spai...
TL;DR of this article - Workers of Mondragon's Washing Machine factory got redundant due to recession lowering demand for their products. Instead of lay-offs, they compensated by lowering wages of managers (note that they have a rule where there is a max ratio of salary from lowest salary). Then offered these workers to retrain for free with commute allowance. Or offered early retirement with complete benefits and cash out their ownership.
---
In general, the Theory of Value makes sense to me:
https://en.wikipedia.org/wiki/Theory_of_value_(economics)
Capitalism doesn't just take a huge cut in what we deserve. But has also stripped us of our humanity.
> Conversely, if we pursue free services and money we will drive more power into the hands of a larger and larger incompetent government, and I think we know where that will end up — and it won’t be great for anyone.
Sure you can just state this, but no one has to buy it. My government has more than adequate at providing "free" healthcare to everyone, and it's pretty stupid to broadly dismiss that like it "won't be great for anyone". It's actually great for everyone. "Incompetent government" is a pernicious anti-social idea. Modern governments have a myriad problems but Government itself has proven its competence over and over again at addressing very difficult societal problems.
> Entrepreneurship has created the greatest gains in our standard of living to date, even if it’s hard to grasp the wild polarization of wealth in society.
You can sub in one of [Capitalism, Entrepreneurship, Western Civilisation] in this statement, and find it repeated over and over again like it's self-evident. Many "greatest gains" in our society had blatantly nothing to do with Entrepreneurship, take for example the Civil Rights movement, which certainly contributed greatly to overall standard of living. The Capitalist model can't slap a dollar figure on that though, so let's just ignore it.
Overall this piece is so confidently slap-dash I don't think Calacanis is actually listening to or reading any of the best opponents to his world view.