I'm not so sure that 50% of current billionaires got that way by creating value for others. I'd love to know the percentage that inherited the majority of their wealth, and/or gained the rest of it passively (unearned income). I.e. citation, please.
Let's also talk about the meaning of "creating value". Some financial innovators created all kinds of wealth for themselves, via a technique now known as as "privatizing profit and socializing risk". They also created the 2008 crash. To many quasi-economists, they "created value", as measured by the bonuses they took home; I disagree. I'm very interested in knowing what proportion of the average billionaire's wealth came from destroying value, or simply transferring it into their own hands.
I'm also inclined to quibble about shareholder activism. When I was young, that term meant things like demanding that companies stop doing business with South Africa's apartheid regime. Now it means demanding that companies do anything and everything in their power to raise their short term stock price. (Raising the stock price by layoffs and stock buybacks is called, confusingly, "creating shareholder value".) AFAICT, these stock manipulations sometimes destroy actual value, and rarely create any; they just move money around.
Other than that, I mostly agree with you. Except that Gates also created the tradition of shipping crap software that doesn't work reliably, which is now all we're able to get, unless we write our own. He can't give away enough money to make up for the amount of everyone's time wasted working around the multitudinous bugs in the very best software anyone's currently willing to sell.
I read all your articles ;-) I vaguely recall considering commenting on that one, but deciding I wasn't up for taking the time to express my reaction clearly and usefully enough. (Or perhaps I suspected I was reacting to my own preconceptions, rather than what you actually wrote.)
Fair enough! I think you've put your finger on something important, actually. How can we measure value creation? Not all digital innovation is necessarily good for people, eg, toddlers should be getting dirty in the park instead of staring at screens. How do we calculate whether the net impact is good or not?
I'm not so sure that 50% of current billionaires got that way by creating value for others. I'd love to know the percentage that inherited the majority of their wealth, and/or gained the rest of it passively (unearned income). I.e. citation, please.
Let's also talk about the meaning of "creating value". Some financial innovators created all kinds of wealth for themselves, via a technique now known as as "privatizing profit and socializing risk". They also created the 2008 crash. To many quasi-economists, they "created value", as measured by the bonuses they took home; I disagree. I'm very interested in knowing what proportion of the average billionaire's wealth came from destroying value, or simply transferring it into their own hands.
I'm also inclined to quibble about shareholder activism. When I was young, that term meant things like demanding that companies stop doing business with South Africa's apartheid regime. Now it means demanding that companies do anything and everything in their power to raise their short term stock price. (Raising the stock price by layoffs and stock buybacks is called, confusingly, "creating shareholder value".) AFAICT, these stock manipulations sometimes destroy actual value, and rarely create any; they just move money around.
Other than that, I mostly agree with you. Except that Gates also created the tradition of shipping crap software that doesn't work reliably, which is now all we're able to get, unless we write our own. He can't give away enough money to make up for the amount of everyone's time wasted working around the multitudinous bugs in the very best software anyone's currently willing to sell.
Thanks for the comment. Did you read the previous article on value creation? https://sharpenyouraxe.substack.com/p/notes-on-value-creation
I read all your articles ;-) I vaguely recall considering commenting on that one, but deciding I wasn't up for taking the time to express my reaction clearly and usefully enough. (Or perhaps I suspected I was reacting to my own preconceptions, rather than what you actually wrote.)
Fair enough! I think you've put your finger on something important, actually. How can we measure value creation? Not all digital innovation is necessarily good for people, eg, toddlers should be getting dirty in the park instead of staring at screens. How do we calculate whether the net impact is good or not?