Some items are "condition rarities" -- it's worth a fortune in never used condition, but nothing special when worn.
Other items are rare as long as they can be reliably attributed. You could run a 1804 US dollar over with a locomotive and it would still be worth six or seven figures as long as the date could be identified. I'd expect plenty of the "rare" stamps would hold a significant slice of value even used. Now, the fact you gave up possession of the expensive item is another issue.
Returning to main HN stamping grounds: that's what makes some of these "new collectible" schemes sort of weird (i. e. professionally graded/certified video games)-- they're not necessarily trading on inherently rare items, just creating a "condition scarcity" economy that previously didn't really exist. It's not "the only one of its kind", it's "the only one the grading service gave 9.452345/10".
I think my favorite was when Cards Against Humanity raised money for no other purpose than to dig a hole in the ground. The FAQ included the question, "why don't you give the money to charity?". Answer: "Why don't you give the money to charity?"
I don't think one donates money to Harvard just for the sake of a plaque.
I guess there is some sort of indirect benefit to be had after such a donation, like an entry pass for a child, an entry pass for a PhD, or something of that vein?
I can’t imagine $300mm is the standard price for whatever favorable treatment he’s buying for his kids. I imagine there is a steep billionaire premium. Similar to how a Western tourist is overcharged non-local rates.
They'll never have want of money their entire life. But a prestigious education... well that's something that's worth more than a lot of money to those who have almost limitless wealth.
I think that’s thinking too much into it. He could have spent 1/10th of that and got those things in return.
These billionaires want fame and to be the focus of discussions like this one. They know people will be in awe over such a huge sum of money. That’s what $300M buys you and is so much more interesting than buying a product: attention and fame.
That's also one of the riskiest ways to try to buy the love of the masses.
Countless rich guys have become persona non grata in the communities where they bought and mishandled the local club.
There's a few Chelsea or Leicester type stories where the buyer really is loved, a few where fans grudgingly accept they've done well but they'd rather not talk about where the (oil) money came from, and then quite a few where the new owners are reviled.
I'm fairly certain he already guaranteed that with his $150mm previous donation in 2014, which at the time was the largest gift in Harvard College's history. Note that in that case, $125mm was earmarked specifically for financial aid.
>I guess there is some sort of indirect benefit to be had after such a donation, like an entry pass for a child, an entry pass for a PhD, or something of that vein?
You could get that for a million probably. He donated it because he's a vain billionaire who wants the world to remember him despite not achieving anything memorable.
He previously donated $150m to Harvard College so his children are already all but guaranteed admission. He already has all the benefits Harvard gives mega donors, there isn’t any marginal benefit to this donation other than a department renaming. The only possible thing left for them to give him would be a seat on the Harvard Board of Overseers but that’s unlikely because he is now a politically controversial figure.
He also has a history of mega donations to universities in exchange for department renaming, like his $150m donation to UChicago which renamed their economics department after him (the most prestigious part of the university)
Perhaps the money will be used by Harvard to buy a security he holds or has options on washing his hands clean of SEC oversight.
Then he executes on the predictable market move, makes the money back and writes down the donation for taxes. Meanwhile, Harvard is still holding whatever long term position they opened so they too are happy.
Their cover story is some rather cheap commemorative plaque they put on a wall "thanking" him.
I'm not saying this IS what happened but the facts are a hedge fund guy "donating" lots of money to a tax deductible nonprofit that has a giant investment portfolio with rather lax regulatory oversight.
Also if I was working for Harvard, I'd absolutely think of offering services like this to court donations.
Maybe it sounds conspiratorial but if such schemes were available, I believe Harvard is too well connected to be subject to such scrutiny by those with the power to do such an audit.
The idea that people tossing around hundreds of millions of dollars are on the up and up otherwise they would have consequences doesn't seem to have much historical evidence supporting this dynamic
The Paradise papers leak outlined a lot of these schemes
Even without all that, donating highly apprechiated assets is super useful for taxes because you not only get to deduct the value from your ordinary income, you also don't have to pay capital gains on the disposition of the asset.
I don't know where Mr. Griffin pays taxes, but if you have the right conditions, donating apprechiated assets is very inexpensive.
For example, if you're in california with oodles of income, your ordinary income will be at a marginal rate of 37 federal and 12.3 state, and your capital gains will be a total of 23.8 federal (includes niit) and again 12.3 state. So donating $1 of highly apprechiated assets avoids 26.1 cents of tax, and allows a deduction for 49.3 cents; it has the same effect on wealth as donating 14.6 cents. So it may have only cost $44M to donate $300M.
Of course, most people don't have $300M of ordinary income to deduct against, and aren't at the highest of the high brackets (and Mr. Griffin has residences in no income tax states, so he may not pay state income tax on capital gains anyway)
Invest it in a beverage company whose customer base is conservative, frat boys, and the working class then aggressively rebrand it with everything they oppose front and center. Proceed to lose six billion dollars of capitalization in six days.
This article very briefly encapsulates everything wrong with Effective Altruism: a boneheaded assumption that this money is being donated for its societal impact, an unwillingness to try to actually understand what's going on, instead choosing to engage with the Harvard endowment on its own terms by taking the university "mission statement" seriously, and a screenshot of an Excel spreadsheet purporting to identify better ways to donate based on character sheet style min-maxing.
I doubt anyone in EA is actually misled by what’s going on here. They’re trying to out it as not a charitable donation at all so no one who hasn’t thought about it is misled. This is a good thing to do.
Then why take it seriously at all. You're looking to perform a forensic analysis to determine whether the wallet inspector's credentials are a forgery. The whole thing is a scam.
If I point out that something you did is bad because of a particular outcome, that doesn't mean I thought your goal was to avoid that outcome. In fact it means exactly the opposite; if your goal was not to avoid that outcome, but it should have been, then my criticism is even more applicable.
Exactly. Anyone who knows Griffin knows he is essentially one of the core villains of the finance world already (which in of itself is a rather impressive feat, you really have to be villainous to be considered one of the worst people in finance). Trying to assume this isn’t just some villainous vanity play in the first place was the article’s mistake.
> a boneheaded assumption that this money is being donated for its societal impact
Pretty hard disagree. The subtitle of this article is "Buying status is as close to bad as a good act can be." The author seems pretty clear-headed about what the purpose of this gift is. The also seem to say "sure, EA isn't the end all/be all of donation guidance", but it is an easy way to highlight that Griffin's act of altruism is a vanity play.
I definitely don't think the big schools like Harvard/Yale/etc. need any more money, but I will play devil's advocate here.
> "he donated $300 million in such as a way as to do as close as possible to zero good with it."
Oh there are a lot worse ways to spend it with the best of intentions. The Turkana frozen-fish plant is a classic example, a charitable project where back in around 1975 around $150 million (in today's money) was spent on a frozen fish factory next to a lake... a lake that regularly disappears... and in a location without reliable electricity [1] [2]. It was utterly useless.
There's a shocking amount of charitable money that just winds up having utterly no impact whatsoever.
On the other hand, giving $300 million to Harvard is probably going to have a good chance of some long-term impact. It is ultimately funding education for smart people who are well-positioned to use that education productively, and for research and arts that are meant to benefit humanity. It's not just throwing it away. I absolutely agree there are many institutions with a much greater need for the money, but "zero good" is extreme exaggeration. People have done much, much, MUCH worse with donating money.
Playing devil’s advocate is a great antidote to this article.
I also agree that Harvard doesn’t need any more money, but…
You notice something in that article, which is that Harvard is almost twice the size of the next largest school in that article’s list of richest schools per student. The undergraduate part of Harvard is extremely small and exclusive. Griffin gave the money to the graduate school of arts and sciences, which is actively building the capacity to serve more students. They’re building what is effectively a second campus on the Boston side of the river, with even more land than they have in Cambridge.
they have plenty of money given tiny, static class sizes, and that population you're referring to is already a small one of a small overall student body.
Harvard produced many of the people that built a society with staggering and increasing levels of income inequality. Consultants, hedge fund managers, architects of super addictive social media platforms, politicians who write laws favoring corporations over workers, etc. etc.
Probably he means that by giving money to an “elite” school, it just makes it more likely that it will end up hurting the “non-elites”. I don’t necessarily agree with that point by the way because there are students who will have their cost of attendance potentially offset by this donation.
I never said trickledown economics. I just said that inequality doesn't hurt people. Some rich person having a 5 star steak dinner doesn't take anything away from how much I enjoyed my own dinner. It's not a zero sum game where a rich person enjoying something takes away from what I enjoy.
You ignored the part where money buys power, and ends up tilting the focus of an entire society towards benefiting the rich instead of ensuring the prosperity of its populace.
There are many zero sum things people want. Costal beaches are more accessible to the general public when their rental property rather than empty billionaire vacation homes.
Partly, but it was Milton Friedman at the University of Chicago who helped lay the framework for the "shareholder primacy" theory that really paved the way for the poor longterm corporate management of the last couple of decades.
> They didn't do the foundational research. They licensed a patent that came out of research from University of Pennsylvania and applied it to COVID.
Incremental research is still research. Application research is still research.
The over-emphasis on foundational research from the media & the general public has led to a myopic view of "revolution"-ism, wherein incremental progress in science is considered to be worthless relative to incremental improvements.
The discovery of penicillin was a medical breakthrough, but that doesn't mean that the industrial scale-up of penicillin production was comparatively worthless. In fact, in this specific case, the opposite is true: The benefits of penicillin wouldn't have been received if everyone thought that research into scaling up its production was worthless.
Moderna spent a few months on it before they had a vaccine ready for trials. The lab spent just under a decade building on decades of prior research. It's pretty clear who did the bulk of the work when it comes to the mRNA discoveries, and it wasn't Moderna or its shareholders.
In almost every sector of the economy, companies partner with suitable university departments and then oddly enough the universities never get any patents, but the companies do. This is due to how our intellectual property laws work, not any special kind of magic that having shareholders will yield.
Do those account for a significant portion of the effect, or are you just cherry picking a couple nice instances? The word modern is doing some heavy lifting as well; shareholder primacy certainly isn't responsible for most of the overall benefit from vaccines.
I'd say it leads to things like an average overinvestment in things that benefit shareholders rather than things that might benefit the company or society over the long term.
Weirdly timed stock buybacks instead of money going to R&D or attracting talent and the like.
The real problem is that "shareholders" stopped being people and started being large funds.
When the shareholders are people with a long-term stake in the company, like the founders, they can make long-term decisions or choose not to want the absolute most profit-maximizing thing because actually they're already pretty rich and maybe some things are more important.
When they're fund managers, they want quarterly profits because that's how they get their bonus, and their fund may not even own shares in that company in a year's time.
Who says large funds don't have long-term stakes and can't help make long-term decisions?
Fund managers want perhaps to see quarterly profits for their fund, but that's not the same thing as quarterly profits at the underlying companies. Your fund can also profit, if the stock prices of the underlying companies rise.
To give some existence proofs, have a look at how Amazon, Microsoft, Google, Tesla etc had rising share prices long before they ever returned any money to shareholders.
Or how shortly into the covid pandemic market prices for stocks recovered, even though the pandemic wasn't over at all: that was purely based on investors looking to the longer term future.
> [...] and their fund may not even own shares in that company in a year's time.
For that to happen, they need to sell the company to someone else, and that other person will pay more for a company with a bright future.
> To give some existence proofs, have a look at how Amazon, Microsoft, Google, Tesla etc had rising share prices long before they ever returned any money to shareholders.
This was also true of Juicero and Pets.com.
Moreover, the people investing in small startups are generally not huge funds. The funds buy in after the company is established. Tesla turned a profit before they were added to the S&P 500.
> For that to happen, they need to sell the company to someone else, and that other person will pay more for a company with a bright future.
Most of the scam comes from information asymmetries. The current owners hire managers who they know will boost short-term prospects in a conspicuous way by damaging long-term prospects in subtle and hidden ways, e.g. by removing slack that increases short-term efficiency but is an existential risk to the company if anything goes wrong. This makes the company look like it's in better shape than it is to less than fully informed investors (also known as investors) and allows you to sell the shares to them for more than the company would be worth if they fully understood the risks they were taking.
> Moreover, the people investing in small startups are generally not huge funds. The funds buy in after the company is established. Tesla turned a profit before they were added to the S&P 500.
One reason those small startups can attract capital in the first place, is because their early investors can reasonably expect to cash out by selling to huge funds once the company gets established.
Remove the late investors, and you dry up the payouts for early investors.
> Most of the scam comes from information asymmetries.
That's hardly news. Investors take that into account.
What keeps investing from turning into a market for lemons is that companies can communicate to prospective investors and show them transparently that they eg didn't remove the slack.
As an investor, you can go by the maxim of 'guilty, unless proven innocent'. So if a company does not have that transparency, you should value them as-if they have skeletons in the closet.
(And if companies explicitly lie, that's already a crime.)
Which only makes the problem worse, because the early investors then have the incentive to create and prop up garbage companies as long as they think they can sell them to do the next guy before the crash. Which is more possible the less the funds need to pay attention to each stock, i.e. the more "diversified" each person's investments are.
> One reason those small startups can attract capital in the first place, is because their early investors can reasonably expect to cash out by selling to huge funds once the company gets established.
The funds are an abstraction over the underlying investors. Right now you have Joe Middle Class who has a retirement account which is invested in thousands of companies he has no incentive to pay any attention to because none of them individually affect his savings by a significant amount. If it was four or five companies, he would have the incentive to keep track of management decisions there. He may even be working for one of them, because he is then using an information asymmetry to his advantage when he knows from the inside how well that company is managed. But then we try to inhibit this kind of thing even though it would make markets more efficient.
The bigger cause of the problem is that companies are huuuge, so that they can't be owned by any reasonable number of people. A trillion dollar company has to be owned by millions of separate individuals because even the 99th percentile individual doesn't have enough wealth to own a significant fraction of a company that size. But why do we need companies to be that big? Break them up. They could have the same total valuation as many separate companies, without each being so unmanageably large.
Potentially even higher total valuations, because the need to do the following is less when each company is smaller and less complicated:
> As an investor, you can go by the maxim of 'guilty, unless proven innocent'. So if a company does not have that transparency, you should value them as-if they have skeletons in the closet.
And that's the point. The transparency isn't possible, not because the company doesn't publish the numbers, but because it's not worth deep diving into their conglomerated operations when they're only 0.2% of your portfolio. And when investors will be doing this regardless of whether the company is actually sacrificing long-term prospects for short-term numbers, the company has the incentive to do just that.
Huh? Shareholder primacy might be a good idea, but it's an aspiration at best.
In practice, companies are run for the benefit of their managers.
Especially when they talk about something like 'stakeholder capitalism', because it's inevitable the managers that decide which stakeholders to listen to and how to balance their interests.
Harvard also taught John Franklin Enders Nobel Laureate and “The Father of Modern Vaccines.” Granted they handed him his PhD in 1930, but he played a pivotal role in developing a measles vaccine and Salk was heavily dependent on his work when developing the polio vaccine. That’s rarefied air in terms of net benefit to humanity.
More recent examples aren’t as impressive by comparison, but graduates of Harvard school of medicine has collectively done a great deal of critical medical research. And of course many recent graduates have their best breakthroughs ahead of them.
and yet, the problem remains that the US has the worst income inequality of all G7 nations and has been on the rise since 1980, regardless of what happens elsewhere
Global inequality has sort of fallen, insofar as China has reportedly lifted 800 or 900 million people out of extreme poverty. I suspect that's not what their were referring to though..!
However keep in mind that China is still only about as rich as Mexico or Russia in terms of GDP per capita. So hasn't joined the rich world, yet.
Ethnic Chinese people are very successful around the world. Mainland China actually has on average the poorest Chinese people. Compare eg Singapore, Taiwan, or even the ethnic Chinese populations in Thailand or the US.
(Not completely sure about the Chinese people in Thailand. Need to dig up stats.)
I myself migrated to Singapore a few years ago, as I agree with their pro-market policies. We also have great food here. Just the weather is a bit muggy.
Not yet, you're right - but if the World Bank is to be believed, it has raised 900 million people out of extreme poverty. That's astonishing compared to how everywhere else seems to be doing.
> weather is a bit muggy
On a rainy day in England, I can very much sympathise!
Just because eg inequality in the US might have increased, and inequality in China might have increased, doesn't mean that the inequality in their combined population has increased.
I'm talking about the combined population of all humanity.
Because our local society is the society against which we, as humans, tend to measure ourselves, and inequality within our in-group is the strongest predictor of crime, perhaps?
Why wouldn’t you? The fact that Chinese people are much better off than they were a few decades ago has almost no bearing on the well-being of me, my family, relatives, friends or almost anyone I know.
Increasing inequality in the country I live (or countries I have the right to live in or would ever consider moving to) does.
I'd go one further. There are plenty of actively harmful donations one could make. As one example, most people would probably feel that way about roughly half of political donations.
Actively harmful donations at least have an impact (Classic example: Hitler had arguably the greatest impact of anybody in the twentieth century). This donation probably won’t do much of anything at all, which is notable in and of itself
But what? What would be lost without the 300 million? If you can’t be specific then I think it’s to the authors point. I mean, just consider that he spent 300 million and the impact isn’t obvious.
At least in your fish example they used it for the intended purpose for some period of time and there is still some low utilization for dried fish. It’s also half of 300 million so it seems they did more with less despite it being a failure.
Regardless, effective altruism is bullshit. They can donate the money however they want. They wouldn’t be a better person or even more charitable if they were an “effective altruist.”
This is a fascinating question. It's incredibly rhetorical, and I've sat here pondering it for a bit. It's very easy to reply to this question with "well I suppose it depends." And then tack on "What do we consider 'doing good/more good'? What is the nature/species/alignment of the lives being saved, and how are are they equal? Who decides which two lives are better to save than the one, if it's somehow decided that one is better than two? Does the two lives vs one life involve picking between the same two lives, or is it an entirely different set of lives?" and a whole mountain of other questions. It's like asking a magical wish granter to "save two lives" and it does something predictably spiteful like saving two single celled organisms and causing a kitten to die. Thanks for giving me that to chew on.
One glaring obvious problem with the EA people, is that they double count.
Say I give money for bed nets, and the bed nets save 100 lives.
But say I only gave that money because Eliezer Yudkowsky convinced me to. Was it really him that saved 100 lives? Or do we divide them between us somehow? How many should go to the people who actually distributed the bed nets I paid for?
You'd think the EA people would have good answers to these questions. Or at least, any answers. But they don't. Not any consistent ones. They cheerfully double-count in all their most famous arguments.
I don’t think EAs are focused on assigning credit here. It’s very consequentialist; they would say “it doesn’t matter who saved the 100 lives, it matters that they were saved.”
It matters if the 100 lives are suddenly 200 lives when you sum them up. It matters for decision making. It matters for questions like "should I rather do it myself or start a foundation to convince as many other people as possible to do it".
heya, you say that if they spent the money on helping more people vs. on vanity, "they wouldn't be a better person", but in fact they would be a better person
I'm sure it will have some impact, but a school that refuses to increase student body size at the expense of plenty of people trying to get in is disgusting to put it lightly. Not to mention their promulgation of a legacy system, which comprises nearly 30% of undergrads.
> It is ultimately funding education for smart people who are well-positioned to use that education productively, and for research and arts that are meant to benefit humanity. It's not just throwing it away.
You have to account for it as the marginal dollar, not the average dollar. If Harvard had less money, and they're competent, they would cut the least effective programs. But because their budget is so large, they've already fully funded everything in their wheelhouse with high utility and the least effective programs would be mostly waste and vanity. (And if they're not competent then you obviously don't want to be giving them more money either.)
I'm not generally in favour of elite universities so don't deeply disagree with the sentiment, but is there actually a way to justify more money under the pattern you established in your comment?
I'm guessing your intention was to suggest that in the presence of a large surplus (Harvard's massive endowment etc) it is reasonable to assume this goes unspent because it can't be turned into worthwhile education or research. Is that about the sum of the argument?
Meanwhile, somewhere with high impact research but nearly zero in reserves would presumably be more deserving?
God I just don't buy the "these people will go on to benefit humanity" argument anymore. We don't need more tech companies. We don't need more hedge funds. We don't need to feed our genuinely brightest minds into the wealth consolidation machine.
Occasioanlly one of these people will find some one-off bit of brilliance that lifts an entire class of people out of poverty, but that ticket has an expiration date tied to the 19th century. Eventually those free spaces will run out. They're already starting to in the western world.
> that ticket has an expiration date tied to the 19th century. Eventually those free spaces will run out. They're already starting to in the western world
I'm sorry but I genuinely don't understand what you're saying here. What will expire? Which "free spaces" are running out where?
Not OP but the college entrance scandal is a great example. With the super wealthy taking up all the philanthropic entrance positions the "just" wealthy set had to resort to cheating and rorts to ease little Johnny Blueblood's way into society.
Huge impact technologies like the steam engine, the factory line, electricity, and so on, that are not just incremental steps, things nobody asked for with minimal utility ("smart fridge") or glorified stupidification engines (the social web).
> We don't need more tech companies. We don't need more hedge funds.
What we absolutely don’t need, is autocrats dictating what society needs.
Luckily we already have this cool innovation called a market economy. It’s not perfectly efficient (especially in the short term), but pretty damn efficient.
By throwing off price signals, the market allows us to allocate efforts to things society wants more of. Unfortunately, contrary to the wishes of the King, it turns out society wants more tech companies.
But sometimes we do indeed over-allocate resources to tech companies! Luckily we have the hedge funds incentivized to make profit by arbitraging those prices back to reality (As we’ve just witnessed in tech). I guess we also need more hedge funds.
> Luckily we already have this cool innovation called a market economy
Market economy got us into the situation where the most brilliant minds in the world are researching best ways to make internet advertisements as addictive as they can be.
Very cool innovation, indeed. Ever read The Space Merchants?
I assume you're saying that ads are irrelevant because we have AdBlock?
Ads would always exist, but think about how many great (even lifesaving) solutions we're missing out on because market decided they aren't worthy of pursuit.
I'm saying ads aren't "addictive", because they're pretty despised. They might be effective, when people see them, but I don't think anyone is "addicted" to ads.
They're working together. Youtube algorithms compute the most likely influencer that is going to occupy your attention and serve you advertisements in the process.
"Nobody is addicted to ads" is true if you think only about the pop-ups and couple-second videos as "ads" - but the concept of advertisements is much wider than that. Some adverisements may not even be presented as such - they may be presented as "useful content", but which is chosen above other such useful content by the virtue of being paid for to the advertising company.
You're nitpicking an irrelevant detail. Expand "ads" in my comment to "screen time" (for the sake of serving ads) generally and the "despised" counterargument falls apart. The whole point of my comment is that brilliant minds are working on making stuff more addictive to people, instead of making the world a better place.
It's the content (and personalized curation, based on what the platform's learned you want to see) that's addictive, not the ads.
Users are addicted to the content creators, and watching ads is the price they have to pay to sit through to watch free content.
Picking ads that are relevant, or at least not annoying enough to make you switch off, is part of the platform's experience.
And there are creators who blend ads in as organic content, or at least a personalized endorsement which doesn't come across as phony, which MrBeast said gets the most positive response.
I recently turned off tracking, and suddenly started getting served ads for 'green cremation'. I guess statistically few people are interested in that, but conversions are lucrative, although the 99% of users who don't want to see it probably get mildly annoyed.
How about an even better -- and more salient -- example? Quant trading firms are gobbling up promising researchers in fields like physics and mathematics. These are people getting funded Ph.Ds at top universities (Oxford, Cambridge, Harvard, Yale, etc.), and they end up just going to companies which exist solely for the purpose of making rich people richer.
On the liquidity side, would you pay more for a security that you could easily and quickly sell with small slippage than you would for a security that could not be easily sold or only sold with a large slippage?
"People pay for [that]" because it's a genuinely useful property of an investment vehicle.
Luckily we already have this cool innovation called a market economy.
We don't really though. There are companies, and individuals, with enough wealth and influence to compete with entire markets. A well-funded startup can undermine whole industries by spending VC money to run at a loss long enough that the rest of the market fails (Uber, AirBNB) or they can become so massive that there's absolutely no possibility of competing (Amazon). People can start private companies that do things only governments have done before (SpaceX, Palantir). These businesses are not influenced by pricing, because they're either too well funded to care, or too influential for others to get a foot in the door.
Free market economics is a beautiful idea, but every big business (and some small businesses) do all they can to subvert the market and hold a monopoly on something. Heck, Peter Thiel literally wrote a book about how to do exactly that - Zero To One.
> so massive that there's absolutely no possibility of competing
Scale has no value unless it offers something to your customer base. What you're ignoring is that Uber, Amazon et al are so huge and dominant because customers flock to them. I can summon a taxi to my location in most cities in the world with a single app. I can have pretty much any item delivered to my door within one or two days. These were unfathomable 10-15 years ago.
Amazon has huge amounts of competition, as does Uber. I have absolutely no idea where you get this idea they are not influenced by pricing. Uber hasn't made any money in its entire existence. That is not characteristic of a monopoly.
I think your argument is missing GP's point entirely. The point was that a functioning market economy would evolve so that companies that sell products or services at a self-sustaining price survive, whereas companies that lose money continuously die. However, this is clearly not the case, given that companies like Uber, as you mention, do survive without being profitable at all. Competitors that are not backed by near-infinite money cannot survive this competition, regardless of their product or efficiency.
Whether or not a functioning market economy could ever exist in reality if of course another question.
I don't know that Uber turning a mere 14 years old is proof that the market economy isn't functioning. In a time of incredibly low interest rates and the resulting free-flowing money sloshing around looking for any possible return, I'd expect a lot of companies to reach their teens without that being proof that they can continue indefinitely without showing profits and returns to investors.
The market as implemented in the past, in a world with technology form the past, worked well in the past. This doesn't mean it won't need to be changed ever. No one is saying the complete market should be removed. We always have had rules putting boundaries on free markets (child labour, slavery), and these rules should move with the times.
The problem with this is who gets to decide what efficient means.
It's not exactly news that the market throws off price signals, the question is whether those signals are the correct signals.
After all, the market also decided it wanted opioids, slaves, and a betting shop on every high street in the UK. Are we wrong to question whether Mr Market is right?
Think about the counterfactual: a student doesn’t go to Harvard, they instead go to Duke or a public Ivy. They’re only marginally worse off. All of these schools already have enough money to where families making under $75-$100k won’t be paying anything.
Donations to Harvard are exposed to extremely diminished marginal utility at this point.
I think a lot of this investment for him is personal brand. Giving millions to community colleges would probably create tens of thousands of opportunities versus marginal benefit to Ivy leaguers, but having your name on a building at Harvard versus 180 community college libraries is big difference in prestige and brand-recognition for the types of graduates you want to apply to your firm.
In the sense, that most of education is about signalling, and funneling more money into education just fuels the arms race.
See Bryan Caplan's Case against Education for more details.
(The part of education that's actually about learning has mostly become cheaper than ever, thanks to the power of the Internet. But unless you got a piece of paper from a university, hiring managers seldom care. (Especially outside of tech.))
So donating money to further educational institutions is bad for society. It has a negative impact.
I have a theory that every internet comment that starts with Eh is always wrong. So far I haven't been let down.
I don't understand how you could possibly say education has negative impact on society. Top universities can and do hire faculty for the purpose of research alongside teaching. Top minds performing research obviously benefits everyone as they can make new discoveries and innovations. That has the side effect of a worse undergrad education as researchers view teaching as a side gig but ultimately necessary to fund the university and it's research ventures
I think he’s talking about the institutional capture and monopolization of higher education…essentially coming away with the same skills for free from YouTube but they’re worth nothing in the market because you didn’t pay $50k/year to the higher ed cartel.
Education has a negative impact on society, because we are forcing young people to waste years of their lives that they often neither enjoy nor do those years make them more productive. They don't get those years back, and even pay dearly for that privilege.
Individuals benefit from getting more education, but only in the sense of getting ahead in a signalling.
Perhaps an analogy helps: an individual tree benefits from growing taller than its neighbours, but the 'society' of trees scarcely gains any net benefit from that arms race.
Research is an entirely different topic that I didn't want to broach here.
For the sake of argument, let's accept that research is good for society. But we could get plenty of research without having to cross-subsidize it via education spending.
Do I understand correctly that you're making the argument that education is zero-sum? That's surprising to me, I feel like I have gotten a lot out of my education. In fact I would say that while most people agree that education system isnt perfect, we do gain quite a lot from a society where for example as a baseline everyone can read and write, and at a more advanced level understand at least the basics of other people's jobs.
At a university level, I can't say I have studied every course or "type" of education, but it would be really surprising to me if there were any that gave nothing at all to their students
Meanwhile Americans complain about $2 per year per Indian citizen spent on the Indian space program as if $2 could somehow meaningfully solve "poverty" in India.
A donation like this would be extremely impactful because it would: 1. Get a lot of people talking and 2. Probably cause a bureaucratic headache for a LOT of people and waste insane amounts of time nation wide.
Hmm I didn't consider second-order impact, but still think it's gotta be one of the least impactful ways, strictly speaking. "Spending," is a loose term but if burning a sum of cash that large... maybe that's impactful to the climate
Medical devices and medical innovation in general. There are so many medical devices and therapies that are technically possible, exist in some form or another, but do not meet the 10x returns that typical VC and big medtech players demand on their products. There are so many opportunities to really help people that are suffering that may not be super profitable, but aren't money loosers either.
It seems like the only morally acceptable outcome for the author is that rich people give away all their money in a way that comports with their view of what a “good” use of these donations would be.
Don’t disagree that the marginal utility for the world populace might be pretty limited, but it seems like it has utility for the donor
I’m always curious why more new universities/schools aren’t started by the super rich, seems like there were lots of them started 100-200 years ago, and but that trend has tailed off, and there is certainly the demand…
Same as why they don't make new sports teams. Much less risk in sticking your name on an existing institution that's already running.
Modern universities are also a heck of a lot more complex than 150 years ago. Same as modern sports teams, there was a period where those are also just founded by a company as a side arm.
290 comments
[ 2.6 ms ] story [ 277 ms ] threadThat man is chasing after something that he will never find.
No one ever comes out ahead by donating to charity, this is a common held misconception.
https://www.imdb.com/title/tt0088850/
Some items are "condition rarities" -- it's worth a fortune in never used condition, but nothing special when worn.
Other items are rare as long as they can be reliably attributed. You could run a 1804 US dollar over with a locomotive and it would still be worth six or seven figures as long as the date could be identified. I'd expect plenty of the "rare" stamps would hold a significant slice of value even used. Now, the fact you gave up possession of the expensive item is another issue.
Returning to main HN stamping grounds: that's what makes some of these "new collectible" schemes sort of weird (i. e. professionally graded/certified video games)-- they're not necessarily trading on inherently rare items, just creating a "condition scarcity" economy that previously didn't really exist. It's not "the only one of its kind", it's "the only one the grading service gave 9.452345/10".
https://www.theguardian.com/technology/2016/nov/28/cards-aga...
I guess there is some sort of indirect benefit to be had after such a donation, like an entry pass for a child, an entry pass for a PhD, or something of that vein?
If I was one of the kids, I would have taken $100m directly.
Once you have so much money an Ivy League education is not important. you can buy your way into anything.
These billionaires want fame and to be the focus of discussions like this one. They know people will be in awe over such a huge sum of money. That’s what $300M buys you and is so much more interesting than buying a product: attention and fame.
Countless rich guys have become persona non grata in the communities where they bought and mishandled the local club.
There's a few Chelsea or Leicester type stories where the buyer really is loved, a few where fans grudgingly accept they've done well but they'd rather not talk about where the (oil) money came from, and then quite a few where the new owners are reviled.
You could get that for a million probably. He donated it because he's a vain billionaire who wants the world to remember him despite not achieving anything memorable.
He also has a history of mega donations to universities in exchange for department renaming, like his $150m donation to UChicago which renamed their economics department after him (the most prestigious part of the university)
Perhaps the money will be used by Harvard to buy a security he holds or has options on washing his hands clean of SEC oversight.
Then he executes on the predictable market move, makes the money back and writes down the donation for taxes. Meanwhile, Harvard is still holding whatever long term position they opened so they too are happy.
Their cover story is some rather cheap commemorative plaque they put on a wall "thanking" him.
I'm not saying this IS what happened but the facts are a hedge fund guy "donating" lots of money to a tax deductible nonprofit that has a giant investment portfolio with rather lax regulatory oversight.
Also if I was working for Harvard, I'd absolutely think of offering services like this to court donations.
The idea that people tossing around hundreds of millions of dollars are on the up and up otherwise they would have consequences doesn't seem to have much historical evidence supporting this dynamic
The Paradise papers leak outlined a lot of these schemes
I don't know where Mr. Griffin pays taxes, but if you have the right conditions, donating apprechiated assets is very inexpensive.
For example, if you're in california with oodles of income, your ordinary income will be at a marginal rate of 37 federal and 12.3 state, and your capital gains will be a total of 23.8 federal (includes niit) and again 12.3 state. So donating $1 of highly apprechiated assets avoids 26.1 cents of tax, and allows a deduction for 49.3 cents; it has the same effect on wealth as donating 14.6 cents. So it may have only cost $44M to donate $300M.
Of course, most people don't have $300M of ordinary income to deduct against, and aren't at the highest of the high brackets (and Mr. Griffin has residences in no income tax states, so he may not pay state income tax on capital gains anyway)
Pretty hard disagree. The subtitle of this article is "Buying status is as close to bad as a good act can be." The author seems pretty clear-headed about what the purpose of this gift is. The also seem to say "sure, EA isn't the end all/be all of donation guidance", but it is an easy way to highlight that Griffin's act of altruism is a vanity play.
Who knew?
> "he donated $300 million in such as a way as to do as close as possible to zero good with it."
Oh there are a lot worse ways to spend it with the best of intentions. The Turkana frozen-fish plant is a classic example, a charitable project where back in around 1975 around $150 million (in today's money) was spent on a frozen fish factory next to a lake... a lake that regularly disappears... and in a location without reliable electricity [1] [2]. It was utterly useless.
There's a shocking amount of charitable money that just winds up having utterly no impact whatsoever.
On the other hand, giving $300 million to Harvard is probably going to have a good chance of some long-term impact. It is ultimately funding education for smart people who are well-positioned to use that education productively, and for research and arts that are meant to benefit humanity. It's not just throwing it away. I absolutely agree there are many institutions with a much greater need for the money, but "zero good" is extreme exaggeration. People have done much, much, MUCH worse with donating money.
[1] https://www.washingtonpost.com/archive/politics/1986/04/05/h...
[2] https://www.ibtimes.com/kenyas-turkana-learns-failed-fish-pr...
I also agree that Harvard doesn’t need any more money, but…
You notice something in that article, which is that Harvard is almost twice the size of the next largest school in that article’s list of richest schools per student. The undergraduate part of Harvard is extremely small and exclusive. Griffin gave the money to the graduate school of arts and sciences, which is actively building the capacity to serve more students. They’re building what is effectively a second campus on the Boston side of the river, with even more land than they have in Cambridge.
For poor students, Harvard and its peers are pretty much the only free college options besides merit scholarships.
That distribution really is extremely heavily skewed, so I think the original comment is correct, I can't see how it's improving equality.
If 1.8% were poor and Harvard helped them become rich adults, probably 65% were rich and Harvard helped them stay rich as adults.
55% receive needs based scholarships, with families making less than 150k per year paying less than 15k per year.
Sure there are a lot of rich kids and legacies. But to say it only benefits the wealthy is just wrong.
1 - https://college.harvard.edu/guides/financial-aid-fact-sheet
But extreme inequality is also very unhealthy for society. People with less get exploited. People with more feel entitled to exploit them.
Incremental research is still research. Application research is still research.
The over-emphasis on foundational research from the media & the general public has led to a myopic view of "revolution"-ism, wherein incremental progress in science is considered to be worthless relative to incremental improvements.
The discovery of penicillin was a medical breakthrough, but that doesn't mean that the industrial scale-up of penicillin production was comparatively worthless. In fact, in this specific case, the opposite is true: The benefits of penicillin wouldn't have been received if everyone thought that research into scaling up its production was worthless.
When the shareholders are people with a long-term stake in the company, like the founders, they can make long-term decisions or choose not to want the absolute most profit-maximizing thing because actually they're already pretty rich and maybe some things are more important.
When they're fund managers, they want quarterly profits because that's how they get their bonus, and their fund may not even own shares in that company in a year's time.
Fund managers want perhaps to see quarterly profits for their fund, but that's not the same thing as quarterly profits at the underlying companies. Your fund can also profit, if the stock prices of the underlying companies rise.
To give some existence proofs, have a look at how Amazon, Microsoft, Google, Tesla etc had rising share prices long before they ever returned any money to shareholders.
Or how shortly into the covid pandemic market prices for stocks recovered, even though the pandemic wasn't over at all: that was purely based on investors looking to the longer term future.
> [...] and their fund may not even own shares in that company in a year's time.
For that to happen, they need to sell the company to someone else, and that other person will pay more for a company with a bright future.
This is why almost every sector of the economy is dominated by a few large firms.
This was also true of Juicero and Pets.com.
Moreover, the people investing in small startups are generally not huge funds. The funds buy in after the company is established. Tesla turned a profit before they were added to the S&P 500.
> For that to happen, they need to sell the company to someone else, and that other person will pay more for a company with a bright future.
Most of the scam comes from information asymmetries. The current owners hire managers who they know will boost short-term prospects in a conspicuous way by damaging long-term prospects in subtle and hidden ways, e.g. by removing slack that increases short-term efficiency but is an existential risk to the company if anything goes wrong. This makes the company look like it's in better shape than it is to less than fully informed investors (also known as investors) and allows you to sell the shares to them for more than the company would be worth if they fully understood the risks they were taking.
Yes, it's hard to predict the future.
> Moreover, the people investing in small startups are generally not huge funds. The funds buy in after the company is established. Tesla turned a profit before they were added to the S&P 500.
One reason those small startups can attract capital in the first place, is because their early investors can reasonably expect to cash out by selling to huge funds once the company gets established.
Remove the late investors, and you dry up the payouts for early investors.
> Most of the scam comes from information asymmetries.
That's hardly news. Investors take that into account.
What keeps investing from turning into a market for lemons is that companies can communicate to prospective investors and show them transparently that they eg didn't remove the slack.
As an investor, you can go by the maxim of 'guilty, unless proven innocent'. So if a company does not have that transparency, you should value them as-if they have skeletons in the closet.
(And if companies explicitly lie, that's already a crime.)
Which only makes the problem worse, because the early investors then have the incentive to create and prop up garbage companies as long as they think they can sell them to do the next guy before the crash. Which is more possible the less the funds need to pay attention to each stock, i.e. the more "diversified" each person's investments are.
> One reason those small startups can attract capital in the first place, is because their early investors can reasonably expect to cash out by selling to huge funds once the company gets established.
The funds are an abstraction over the underlying investors. Right now you have Joe Middle Class who has a retirement account which is invested in thousands of companies he has no incentive to pay any attention to because none of them individually affect his savings by a significant amount. If it was four or five companies, he would have the incentive to keep track of management decisions there. He may even be working for one of them, because he is then using an information asymmetry to his advantage when he knows from the inside how well that company is managed. But then we try to inhibit this kind of thing even though it would make markets more efficient.
The bigger cause of the problem is that companies are huuuge, so that they can't be owned by any reasonable number of people. A trillion dollar company has to be owned by millions of separate individuals because even the 99th percentile individual doesn't have enough wealth to own a significant fraction of a company that size. But why do we need companies to be that big? Break them up. They could have the same total valuation as many separate companies, without each being so unmanageably large.
Potentially even higher total valuations, because the need to do the following is less when each company is smaller and less complicated:
> As an investor, you can go by the maxim of 'guilty, unless proven innocent'. So if a company does not have that transparency, you should value them as-if they have skeletons in the closet.
And that's the point. The transparency isn't possible, not because the company doesn't publish the numbers, but because it's not worth deep diving into their conglomerated operations when they're only 0.2% of your portfolio. And when investors will be doing this regardless of whether the company is actually sacrificing long-term prospects for short-term numbers, the company has the incentive to do just that.
In practice, companies are run for the benefit of their managers.
Especially when they talk about something like 'stakeholder capitalism', because it's inevitable the managers that decide which stakeholders to listen to and how to balance their interests.
More recent examples aren’t as impressive by comparison, but graduates of Harvard school of medicine has collectively done a great deal of critical medical research. And of course many recent graduates have their best breakthroughs ahead of them.
What exactly are you talking about? Global inequality has been on a downward trend in the last few decades.
US has the worst income inequality of all G7 nations and has been on the rise since 1980.
UnAmerican people have moral value, too.
Because income and wealth inequality has been steadily increasing in (almost)all developed countries
However keep in mind that China is still only about as rich as Mexico or Russia in terms of GDP per capita. So hasn't joined the rich world, yet.
Ethnic Chinese people are very successful around the world. Mainland China actually has on average the poorest Chinese people. Compare eg Singapore, Taiwan, or even the ethnic Chinese populations in Thailand or the US.
(Not completely sure about the Chinese people in Thailand. Need to dig up stats.)
I myself migrated to Singapore a few years ago, as I agree with their pro-market policies. We also have great food here. Just the weather is a bit muggy.
> weather is a bit muggy
On a rainy day in England, I can very much sympathise!
Just because eg inequality in the US might have increased, and inequality in China might have increased, doesn't mean that the inequality in their combined population has increased.
I'm talking about the combined population of all humanity.
See eg https://archive.is/7xWtr
Because our local society is the society against which we, as humans, tend to measure ourselves, and inequality within our in-group is the strongest predictor of crime, perhaps?
Why wouldn’t you? The fact that Chinese people are much better off than they were a few decades ago has almost no bearing on the well-being of me, my family, relatives, friends or almost anyone I know.
Increasing inequality in the country I live (or countries I have the right to live in or would ever consider moving to) does.
At least in your fish example they used it for the intended purpose for some period of time and there is still some low utilization for dried fish. It’s also half of 300 million so it seems they did more with less despite it being a failure.
Regardless, effective altruism is bullshit. They can donate the money however they want. They wouldn’t be a better person or even more charitable if they were an “effective altruist.”
Future potential (“women and children first”), societal compliance (criminals vs not), etc.
What you think is objectively better with something as open ended as $300m is completely subjective.
One glaring obvious problem with the EA people, is that they double count.
Say I give money for bed nets, and the bed nets save 100 lives.
But say I only gave that money because Eliezer Yudkowsky convinced me to. Was it really him that saved 100 lives? Or do we divide them between us somehow? How many should go to the people who actually distributed the bed nets I paid for?
You'd think the EA people would have good answers to these questions. Or at least, any answers. But they don't. Not any consistent ones. They cheerfully double-count in all their most famous arguments.
You have to account for it as the marginal dollar, not the average dollar. If Harvard had less money, and they're competent, they would cut the least effective programs. But because their budget is so large, they've already fully funded everything in their wheelhouse with high utility and the least effective programs would be mostly waste and vanity. (And if they're not competent then you obviously don't want to be giving them more money either.)
I'm guessing your intention was to suggest that in the presence of a large surplus (Harvard's massive endowment etc) it is reasonable to assume this goes unspent because it can't be turned into worthwhile education or research. Is that about the sum of the argument?
Meanwhile, somewhere with high impact research but nearly zero in reserves would presumably be more deserving?
Occasioanlly one of these people will find some one-off bit of brilliance that lifts an entire class of people out of poverty, but that ticket has an expiration date tied to the 19th century. Eventually those free spaces will run out. They're already starting to in the western world.
I'm sorry but I genuinely don't understand what you're saying here. What will expire? Which "free spaces" are running out where?
Not OP but the college entrance scandal is a great example. With the super wealthy taking up all the philanthropic entrance positions the "just" wealthy set had to resort to cheating and rorts to ease little Johnny Blueblood's way into society.
There is only so much room at the top.
What we absolutely don’t need, is autocrats dictating what society needs.
Luckily we already have this cool innovation called a market economy. It’s not perfectly efficient (especially in the short term), but pretty damn efficient.
By throwing off price signals, the market allows us to allocate efforts to things society wants more of. Unfortunately, contrary to the wishes of the King, it turns out society wants more tech companies.
But sometimes we do indeed over-allocate resources to tech companies! Luckily we have the hedge funds incentivized to make profit by arbitraging those prices back to reality (As we’ve just witnessed in tech). I guess we also need more hedge funds.
Market economy got us into the situation where the most brilliant minds in the world are researching best ways to make internet advertisements as addictive as they can be.
Very cool innovation, indeed. Ever read The Space Merchants?
They're doing a great job, ads are so addictive I've even turned off my Ad blocker so I can get more of them! Won't someone save me!
Ads would always exist, but think about how many great (even lifesaving) solutions we're missing out on because market decided they aren't worthy of pursuit.
"Nobody is addicted to ads" is true if you think only about the pop-ups and couple-second videos as "ads" - but the concept of advertisements is much wider than that. Some adverisements may not even be presented as such - they may be presented as "useful content", but which is chosen above other such useful content by the virtue of being paid for to the advertising company.
I recently turned off tracking, and suddenly started getting served ads for 'green cremation'. I guess statistically few people are interested in that, but conversions are lucrative, although the 99% of users who don't want to see it probably get mildly annoyed.
Liquidity and price discovery are useful things. Nobody would pay them otherwise.
Is there any other evidence of their usefulness beyond "people pay for it"?
"People pay for [that]" because it's a genuinely useful property of an investment vehicle.
We don't really though. There are companies, and individuals, with enough wealth and influence to compete with entire markets. A well-funded startup can undermine whole industries by spending VC money to run at a loss long enough that the rest of the market fails (Uber, AirBNB) or they can become so massive that there's absolutely no possibility of competing (Amazon). People can start private companies that do things only governments have done before (SpaceX, Palantir). These businesses are not influenced by pricing, because they're either too well funded to care, or too influential for others to get a foot in the door.
Free market economics is a beautiful idea, but every big business (and some small businesses) do all they can to subvert the market and hold a monopoly on something. Heck, Peter Thiel literally wrote a book about how to do exactly that - Zero To One.
Scale has no value unless it offers something to your customer base. What you're ignoring is that Uber, Amazon et al are so huge and dominant because customers flock to them. I can summon a taxi to my location in most cities in the world with a single app. I can have pretty much any item delivered to my door within one or two days. These were unfathomable 10-15 years ago.
Amazon has huge amounts of competition, as does Uber. I have absolutely no idea where you get this idea they are not influenced by pricing. Uber hasn't made any money in its entire existence. That is not characteristic of a monopoly.
Whether or not a functioning market economy could ever exist in reality if of course another question.
It's not exactly news that the market throws off price signals, the question is whether those signals are the correct signals.
After all, the market also decided it wanted opioids, slaves, and a betting shop on every high street in the UK. Are we wrong to question whether Mr Market is right?
Donations to Harvard are exposed to extremely diminished marginal utility at this point.
In the sense, that most of education is about signalling, and funneling more money into education just fuels the arms race.
See Bryan Caplan's Case against Education for more details.
(The part of education that's actually about learning has mostly become cheaper than ever, thanks to the power of the Internet. But unless you got a piece of paper from a university, hiring managers seldom care. (Especially outside of tech.))
So donating money to further educational institutions is bad for society. It has a negative impact.
I don't understand how you could possibly say education has negative impact on society. Top universities can and do hire faculty for the purpose of research alongside teaching. Top minds performing research obviously benefits everyone as they can make new discoveries and innovations. That has the side effect of a worse undergrad education as researchers view teaching as a side gig but ultimately necessary to fund the university and it's research ventures
How can I become high energy physicist on YouTube ?
Individuals benefit from getting more education, but only in the sense of getting ahead in a signalling.
Perhaps an analogy helps: an individual tree benefits from growing taller than its neighbours, but the 'society' of trees scarcely gains any net benefit from that arms race.
Research is an entirely different topic that I didn't want to broach here.
For the sake of argument, let's accept that research is good for society. But we could get plenty of research without having to cross-subsidize it via education spending.
At a university level, I can't say I have studied every course or "type" of education, but it would be really surprising to me if there were any that gave nothing at all to their students
So not educating people would benefit them? I'd say it just makes them more vulnerable - looking at humanity's history.
Don’t disagree that the marginal utility for the world populace might be pretty limited, but it seems like it has utility for the donor
Modern universities are also a heck of a lot more complex than 150 years ago. Same as modern sports teams, there was a period where those are also just founded by a company as a side arm.