I have a conspiracy theory that there are far more rich people than we are lead to believe, also that most of us are just working to prop them up and keep them rich.
I have a conspiracy theory that Forbes created the rich list
Which intentionally does not have despots oligarchs or royals to skew the conversation to a business matter which can get lost in the left/right divide
OP's conspiracy theory is absolutely true. There is a whole thread of academic research estimating the right tail of the wealth distribution (spoiler: the Fed household finances microdata is garbage).
Diff the Bloomberg and Forbes rich lists... they're not the same list. One oligarch on those lists had their estimated net worth double after the Appleby leaks turned up some trusts. I'm pretty sure Bloomberg just calls people up and asks them how much they have.
The Forbes rich list has some criteria such as from their own revenue or share prices. Basically private market generated wealth. There are exceptions and the line gets blurred really quickly, but thats their stated goal.
> there are far more rich people than we are lead to believe
This is almost certainly true — apart from oligarchs, dictators, and crypto billionaires, it's broadly understood that "500 richest" lists also miss a fair number of anonymous Omaha residents, for example.
> most of us are just working to prop them up and keep them rich
I think this part is probably a mischaracterization (though I could also just be misinterpreting what it means). To take the limit case, consider a wealthy dictator who stole absolutely everything he owns, and who flees his ruined country. In this scenario, the aggrieved parties are the people he stole his wealth from, as opposed to, e.g., the waitress who ends up serving him drinks on a Caribbean island.
That means to the extent you believe the "prop them up" part of the theory, you must also believe that most wealth concentrations arise more from things like theft, and less from things like value creation. My experience has been that this seems untrue today and almost certainly becomes more untrue every year (but I do understand that reasonable observers may disagree).
That contrast of value creation against theft is a false dichotomy. Reframing the latter as "value capture" or "wealth extraction" and treating it separately from value creation gives way to a far more robust analysis.
> the aggrieved parties are the people he stole his wealth from, as opposed to, e.g., the waitress who ends up serving him drinks on a Caribbean island.
I understand your logic here, but I think in these scenarios we are all losing - if the dictator's money is the only game in town you have to play his game and by his rules.
When the efforts of the waitress, and all the other effort and resources directed to fulfilling the dictators whims, it creates a network of economic activities around a single person's will.
If that money was being spent by the population he stole it from, the choices of the spenders will be more diverse, reflecting the desires of a that whole population, this creates a more complex network of economic activity and it also means that people supplying that demand have greater choice in how they participate.
it reminds me of the ant article from the other day.
>That means to the extent you believe the "prop them up" part of the theory, you must also believe that most wealth concentrations arise more from things like theft, and less from things like value creation. My experience has been that this seems untrue today and almost certainly becomes more untrue every year (but I do understand that reasonable observers may disagree).
It is pretty well demonstrated and accepted that both IQ and talent (in anything, business, sports, art, whatever) have a Gaussian (normal) distribution, but wealth does not. It has a Pareto (power) distribution.
So there is something more than just offering value (ie. the results of talent or IQ or even work) that contributes to the accumulation of wealth.
Some of this has to do with the "Snowball Effect" where it is easier to make more money at a faster rate, the more money you have.
But even that doesn't really get to the heart of the issue.
There is another surprising effect at play!
In a non-sophisticated version (ie. the version everyone is taught in the beginning economics classes) of economics, there is an assumption that someone pays money that they believe is equal to value of some thing that they want. And if this is true, no wealth actually changes hands. You paid $X for something that is worth $X to you ... and maybe others and the person that sold it to you got $X of value which is what they thought it was worth selling it at. The seller is richer by $X but you are richer by something worth $X, so it is really a wash.
But we have to pretend in this case that both sides know the worth of the item in question. And this is almost never the case!
If we allow for whoever "misjudges" the value to be the "loser" and the other to be the "winner" in the exchange as measured by one or the other getting a little more value out of the deal than the other, then something magical happens.
If you play out this scenario (and you can model it yourself in your favorite software) with many "agents" doing these deals, and if you give every single transaction a completely blind and fair chance of 50/50 of being the winner and loser in the transaction, and you do this many, many times ... one agent will always end up with ALL the money in the end!
And this is without theft (as the gp comment insinuated) and is also without there necessarily being any "real value" created (as you suggested).
There is very interesting and recent research in this area[1].
BTW, I used to think more like you than the GP comment (and I still don't really agree with the GP comment) but if you take the time to look into the research and understand the math behind what is going on, it is a real eye-opener and a different perspective on why wealth inequality seems to show up in basically every type of economy and society given enough time.
That's factually incorrect. It's easy to make a list of rich people specifically saying tax the rich more.
Leaving that aside, the 1% pay 38.5% of taxes, which seems quite fair as is. We already tax the rich quite heavily.
I'd rather the focus be on compliance. Close the loopholes and catch the tax evaders.
Wealth taxes, if you look at examples elsewhere both present and historically, are hard to do well. I worry the government is not sufficiently competent ( now or in the future) to implement it correctly and it does more harm than good. It's very easy to drive capital offshore and take the potential investment and job creation with it.
Why does the middle class clamor to raise taxes on the rich, which won't appreciably benefit themselves, when they could instead push to lower taxes on themselves, which will benefit themselves?
Maybe different in Europe, but in the USA tax increases do not find their way back to benefits for the public.
I mean unless by "public" you mean the next country we want to "liberate" and bring "democracy" to...
100% true. bill hwang is a recent example he was on paper >$20 billion. though levered to the gills and it blew up. But there are a lot more examples that aren't big headlines.
I've lived in Fort Lauderdale which is sometimes called the world's yachting capitol. After seeing my first boat show I was actually kind of shocked by the number of people in the "own a large yacht" wealth bracket.
Not sure about the first sentence, but how is "most of us are just working to prop them up and keep them rich" a conspiracy theory? Isn't that the whole basis of capitalism? I am asking honestly. The social order being a mostly immutable pyramid has always been the natural model of how things work in my mind.
I think it's only exacerbated by government intervention (corruption) and regulatory capture.
I do agree that human nature tends to winners and losers, but right now the losers are being bashed over the head by a tool they think is helping them.
It's not really a conspiracy. You just need to know the right people intimately.
I live in a country with a thoroughly dysfunctional banking system which, by most accounts, fall right in the middle of the global income bracket.
Yet I know a ton of people in the upper-middle and lower-upper class and they all have the following characteristics of their wealth, which _do not_ appear in most wealth statistics:
* One or multiple bank accounts in offshore tax havens, with the US being the most important
* Multiple properties, whose real ownership is hidden by being assigned to family members, friends, and relatives
* A lot of overseas trips to buy things that are normally horribly expensive due to to import restrictions.
* A deep, thorough understanding not only of tax law, but also personal connections with people who work in tax agencies to understand when to avoid (legally), when to evade (knowing the tax agency won't pursue evasions under a certain currency amount) and when to get into convenient tax amnesty regimes.
Again, these aren't phenomenally rich people and they're easily hiding away 50-85% of their net wealth. By most metrics these people's income would, in theory, put them in median American lifestyle. Yet it's obvious that their standard of living _easily_ puts them in the top 2-5% of a developed country, with the addition that labor costs are so cheap that they can afford services even pretty wealthy people in other places cannot.
This is a classic in Latin America, and I have no reasons to believe it's any different elsewhere; the instruments are just different.
I just don’t buy the wealth distribution that they are showing us. I don’t think the government even knows the true wealth distribution. I think it’s also partly political, they can’t go, “hey! Look how many people have 100 million!”
Sure. You know those police officers and courts of law and militaries you pay for? Those are the guys whose job it is to keep you from grabbing things from rich people.
slifin|4 years ago
Which intentionally does not have despots oligarchs or royals to skew the conversation to a business matter which can get lost in the left/right divide
sig-reduction|4 years ago
Diff the Bloomberg and Forbes rich lists... they're not the same list. One oligarch on those lists had their estimated net worth double after the Appleby leaks turned up some trusts. I'm pretty sure Bloomberg just calls people up and asks them how much they have.
vmception|4 years ago
michael1999|4 years ago
unknown|4 years ago
[deleted]
lifeisstillgood|4 years ago
YinglingLight|4 years ago
[deleted]
edouard-harris|4 years ago
This is almost certainly true — apart from oligarchs, dictators, and crypto billionaires, it's broadly understood that "500 richest" lists also miss a fair number of anonymous Omaha residents, for example.
> most of us are just working to prop them up and keep them rich
I think this part is probably a mischaracterization (though I could also just be misinterpreting what it means). To take the limit case, consider a wealthy dictator who stole absolutely everything he owns, and who flees his ruined country. In this scenario, the aggrieved parties are the people he stole his wealth from, as opposed to, e.g., the waitress who ends up serving him drinks on a Caribbean island.
That means to the extent you believe the "prop them up" part of the theory, you must also believe that most wealth concentrations arise more from things like theft, and less from things like value creation. My experience has been that this seems untrue today and almost certainly becomes more untrue every year (but I do understand that reasonable observers may disagree).
akiselev|4 years ago
monkeycantype|4 years ago
> the aggrieved parties are the people he stole his wealth from, as opposed to, e.g., the waitress who ends up serving him drinks on a Caribbean island.
I understand your logic here, but I think in these scenarios we are all losing - if the dictator's money is the only game in town you have to play his game and by his rules.
When the efforts of the waitress, and all the other effort and resources directed to fulfilling the dictators whims, it creates a network of economic activities around a single person's will.
If that money was being spent by the population he stole it from, the choices of the spenders will be more diverse, reflecting the desires of a that whole population, this creates a more complex network of economic activity and it also means that people supplying that demand have greater choice in how they participate.
it reminds me of the ant article from the other day.
https://www.theatlantic.com/science/archive/2021/05/ant-tape...
dmcgee|4 years ago
Maybe, maybe not. [1]
[1] https://www.nbcdfw.com/news/tech/cybercrime-to-top-6-trillio...
As a side note I appreciate the urgency in the tone of the quoted here.
mhuffman|4 years ago
It is pretty well demonstrated and accepted that both IQ and talent (in anything, business, sports, art, whatever) have a Gaussian (normal) distribution, but wealth does not. It has a Pareto (power) distribution.
So there is something more than just offering value (ie. the results of talent or IQ or even work) that contributes to the accumulation of wealth.
Some of this has to do with the "Snowball Effect" where it is easier to make more money at a faster rate, the more money you have.
But even that doesn't really get to the heart of the issue.
There is another surprising effect at play!
In a non-sophisticated version (ie. the version everyone is taught in the beginning economics classes) of economics, there is an assumption that someone pays money that they believe is equal to value of some thing that they want. And if this is true, no wealth actually changes hands. You paid $X for something that is worth $X to you ... and maybe others and the person that sold it to you got $X of value which is what they thought it was worth selling it at. The seller is richer by $X but you are richer by something worth $X, so it is really a wash.
But we have to pretend in this case that both sides know the worth of the item in question. And this is almost never the case!
If we allow for whoever "misjudges" the value to be the "loser" and the other to be the "winner" in the exchange as measured by one or the other getting a little more value out of the deal than the other, then something magical happens.
If you play out this scenario (and you can model it yourself in your favorite software) with many "agents" doing these deals, and if you give every single transaction a completely blind and fair chance of 50/50 of being the winner and loser in the transaction, and you do this many, many times ... one agent will always end up with ALL the money in the end!
And this is without theft (as the gp comment insinuated) and is also without there necessarily being any "real value" created (as you suggested).
There is very interesting and recent research in this area[1].
BTW, I used to think more like you than the GP comment (and I still don't really agree with the GP comment) but if you take the time to look into the research and understand the math behind what is going on, it is a real eye-opener and a different perspective on why wealth inequality seems to show up in basically every type of economy and society given enough time.
https://www.scientificamerican.com/article/is-inequality-ine...
the_optimist|4 years ago
eloff|4 years ago
Leaving that aside, the 1% pay 38.5% of taxes, which seems quite fair as is. We already tax the rich quite heavily.
I'd rather the focus be on compliance. Close the loopholes and catch the tax evaders.
Wealth taxes, if you look at examples elsewhere both present and historically, are hard to do well. I worry the government is not sufficiently competent ( now or in the future) to implement it correctly and it does more harm than good. It's very easy to drive capital offshore and take the potential investment and job creation with it.
gaoshan|4 years ago
hanniabu|4 years ago
fit2rule|4 years ago
[deleted]
macintux|4 years ago
https://www.cnbc.com/2019/02/19/bill-gates-taxes-on-rich-sho...
https://www.theguardian.com/news/2020/jul/13/super-rich-call...
https://www.newyorker.com/magazine/2020/01/06/the-ultra-weal...
javert|4 years ago
Why does the middle class clamor to raise taxes on the rich, which won't appreciably benefit themselves, when they could instead push to lower taxes on themselves, which will benefit themselves?
Maybe different in Europe, but in the USA tax increases do not find their way back to benefits for the public.
I mean unless by "public" you mean the next country we want to "liberate" and bring "democracy" to...
dillondoyle|4 years ago
importantbrian|4 years ago
devmunchies|4 years ago
There must be some old noble families with vaults of gold that are "off the books".
admissionsguy|4 years ago
internetslave|4 years ago
reedjosh|4 years ago
I think it's only exacerbated by government intervention (corruption) and regulatory capture.
I do agree that human nature tends to winners and losers, but right now the losers are being bashed over the head by a tool they think is helping them.
Cyril_HN|4 years ago
Daishiman|4 years ago
I live in a country with a thoroughly dysfunctional banking system which, by most accounts, fall right in the middle of the global income bracket.
Yet I know a ton of people in the upper-middle and lower-upper class and they all have the following characteristics of their wealth, which _do not_ appear in most wealth statistics:
* One or multiple bank accounts in offshore tax havens, with the US being the most important
* Multiple properties, whose real ownership is hidden by being assigned to family members, friends, and relatives
* A lot of overseas trips to buy things that are normally horribly expensive due to to import restrictions.
* A deep, thorough understanding not only of tax law, but also personal connections with people who work in tax agencies to understand when to avoid (legally), when to evade (knowing the tax agency won't pursue evasions under a certain currency amount) and when to get into convenient tax amnesty regimes.
Again, these aren't phenomenally rich people and they're easily hiding away 50-85% of their net wealth. By most metrics these people's income would, in theory, put them in median American lifestyle. Yet it's obvious that their standard of living _easily_ puts them in the top 2-5% of a developed country, with the addition that labor costs are so cheap that they can afford services even pretty wealthy people in other places cannot.
This is a classic in Latin America, and I have no reasons to believe it's any different elsewhere; the instruments are just different.
dboreham|4 years ago
internetslave|4 years ago
vixen99|4 years ago
BLKNSLVR|4 years ago
If you're providing labour then it's likely that you're providing a small percentage of the return that those providing capital receive as dividend.
Value of labor provider being transformed into profit for capital provider.
cool_dude85|4 years ago