There's a cycle with blogs. The author starts a blog and they have a distinct, somewhat original voice with distinct, somewhat original views. In PG's case, the startup advice about building stuff that doesn't scale, not worrying about competitors, Lisp, etc. were quite fresh, at least to me. The author's blog becomes successful and their ideas become well understood throughout a community. But a person's ideas don't evolve that quickly. They start repeating themselves. The posts become variations on a theme. Maybe the author goes outside their area of expertise (No offense, but I trust PG's advice on startups a lot more than his advice on macroeconomics). By the end people are wondering what you're wondering. Why are we listening to this person?
> No offense, but I trust PG's advice on startups a lot more than his advice on macroeconomics
That's the key bit for me. I've found his writing about startups, software, hacker culture, product development, etc. to be mostly great and informative. But whenever I see anything he writes about society as a whole, I tend to find the conclusions he draws to be pretty out of line with reality, or at least (in the cases where I don't have data) counter to my experience and opinion.
You liked his idea that for a startup to scale, you should be doing things that don't scale. That article has mostly anecdotal evidence, and yet nobody ever pushed back on it. How do we know PG was right back then? (He was.)
A few years later, that same guy writes an extensive essay with footnotes and data that must have taken days to compile (going all the way back to 1892). And yet, this one rubs you the wrong way.
I am not defending PG or attacking you, but just consider this explanation as a possibility: when it comes to how to build a startup, you don't really have skin in the game. Whatever he says, it's unlikely to impact your life. But the minute we start talking about the Gini coefficient, the stakes are higher - it's getting political. Suddenly, it's like listening to Rush Limbaugh make an argument - isn't it clear that no Democrat will ever agree with anything that Rush has ever said, no matter how factual or not it is?
I, for one, appreciate PG's ability to tie together global macro movements in a way that I've never heard anyone else summarize. You might agree or not with his take on the Gini coefficient (and especially his lack of acknowledgement or suggestions on how to deal with its consequences), and you might also get frustrated that PG is starting to dabble in politics, which is going to make him very polarized no matter how right or wrong he is. But there's still a ton of useful advice in this essay no matter which side of the political fence you stand on (eg: in 2021, if you're debating between entrepreneurship and finance/VC, choose entrepreneurship).
While pg has extensive foot notes for this essay, there is a vast amount of research with orders of magnitude more citations contradicting him on the gini coefficient.
There is no argument about his footnotes. Quite likely the very richest might not be inheriting it. This has no bearing on the gini coefficient. And his essay on wealth tax is downright stupid. Are his essays as meticulously researched as Pikketys? Why does pg fail to refer to the most famous recent book on the subject in his footnotes? What could be the reason?
I appreciate this argument, except for one detail:
> his essay on wealth tax is downright stupid
What's everyone's deal with that essay? It literally has no subjective opinion stated anywhere - all it does is calculate how much percent of your wealth you're left with after 60 years of wealth tax [0]. You definitionally cannot push back on anything stated in that article, or otherwise your problem is not with PG's views but with math in general.
I appreciate the thoughtful reference to Thomas Piketty's book, which I think everyone should read. But IMO attacking algebra takes away from your overall argument.
The book's central thesis is that when the rate of return on capital (r) is greater than the rate of economic growth (g) over the long term, the result is concentration of wealth, and this unequal distribution of wealth causes social and economic instability. Piketty proposes a global system of progressive wealth taxes to help reduce inequality and avoid the vast majority of wealth coming under the control of a tiny minority.
PGs attack on the wealth tax is how much a zero effort investor could lose in 60 years. 45% in one case. 40hr per week income tax rates are very often higher than that. PGs paen to the idle rich is absolutely ridiculous. Some one who works hard like Musk will be barely affected by such a tax. It only mildly hurts the idle rich.
> 40hr per week income tax rates are very often higher than that.
You do realize that the wealth tax is on top of the income tax, right?
> It only mildly hurts the idle rich.
And therefore there's no issue! Lol. I shared elsewhere that France tried the wealth tax and then killed it after 42k French millionaires left the country. Why would it work in the US when it didn't work in France and 8 other European countries?
You do realize that a wealth tax of 1% on 5% gain is basically a 20% tax on idle asset appreciation. American middle class pays 1% property tax on their primary asset without flinching.
It is not applying taxes on income. There is a separate tax for it - it is called income tax. A tax cut friendly premier repealing tax laws means nothing. France did not implode in the decades it had a wealth tax. Its not like the USA with a rapidly declining middle class is a fine counter example.
And why are you so hurt at the thought of a 20% tax on asset appreciation on the idle rich? No one really gives a shit.
I come here to learn and hopefully also share some insights with others. I thought you were genuinely trying to teach me something, which is why I engaged with you. But justifying sloppy arguments with "no one really gives a shit" doesn't really do it for me.
3. Pretending to be the only person who understands algebra
If so, I thought you must be made of thicker skin; able to take what you dish out. My adoption of your style might not do it for you, but no one really gives a shit.
No billionaire is hiding his cash under a mattress. Investment assets typically compound at 4% above inflation with zero effort by the investor.
Pg completely ignores the zero effort compounding of wealth and pretends that the investors wealth will be "reduced" by 45% and that too over 60 years!
He forgets to state by how much the zero effort investors assets inflate exponentially in 60 years! If he thought he was making a case against wealth tax, he failed hard!
Also, its really silly of you to assume I don't understand algebra! I thought that pgs article was obviously ridiculous on its face. Clearly, it wasn't obvious to everyone.
Nope, it wasn't. You do realize that the concept you're so stoked on was actually tested in Mr. Piketty's homeland and failed miserably? Oh, the irony!
From NPR [0]:
> Normally progressives like to point to Europe for policy success. Not this time. The experiment with the wealth tax in Europe was a failure in many countries. France's wealth tax contributed to the exodus of an estimated 42,000 millionaires between 2000 and 2012, among other problems. Only last year, French president Emmanuel Macron killed it.
Capital is like water - it flows in the direction of least resistance. That part should be obvious.
You do realize that using the phrase "you do realize" does not make your argument any stronger.
France did quite well in the decades it applied a wealth tax, irrespective of Macron's actions.
You seem to be obsessed with France. Have you considered Switzerland, one of the wealthiest countries with the highest standard of living and super high minimum wage.
Edit: seems like you added some more info to your comment. Ok, I'll bite. Nobody ever uses Switzerland in an apples to apples comparison with Western democracies because Switzerland employs bank secrecy laws that make it a crime to identify owners of bank accounts (which brings into question the legitimacy of much of the capital in those bank accounts). This is straight from Wikipedia [0]:
> Swiss banks have served as safe havens for the wealth of dictators, despots, mobsters, arms dealers, corrupt officials, and tax cheats of all kinds. In 2018, London-based Tax Justice Network ranks Switzerland's banking sector as the "most corrupt" in the world due to a large offshore banking industry and very strict secrecy laws. The ranking attempts to measure how much assistance the country's legal systems provide to money laundering, and to protecting corruptly obtained wealth.
Also, I mentioned elsewhere that a total of 9 countries in Europe implemented and then killed the wealth tax. This has nothing to do with just one politician in one country.
If you want to engage in cherry picking and rhetoric to insist on justifying your preconceived bias, allow me the same luxury.
High income inequality causes regulatory capture by a minority elite. Any financial discomfort to this tiny elite through popular movements that impose a very modest wealth tax, faces relentless attack by this tiny elite and their chattel, which includes the politicians they sponsor - ultimately resulting in the overturning of tax policies that benefit society as a whole.
High income inequality leads to regulatory capture by a tiny minority and results in a government primarily focused on the coddling of the idle rich. Hence, all examples of overturned wealth taxes you picked can be dismissed outright. Cherry picking is not a luxury available exclusively to you.
Your bias is obvious from the fact that you were fixated on France while completely ignoring their much more successful neighbor.
In other words there is a brand identity associated with the articles. And brand identity is a time/effort savings device employed by human minds when making a determination on what to consume.
You see this with consumer products all the time; for example the audiophile world may turn their nose up at Bose, but in the consumer space Bose is recognized as a known quantity (may be over priced for the quantity of quality you get but is recognized as not being extremely subpar generic).
