In response to PG's article - I think most people would agree that wealth creation is a talent like any other. I think where people have a problem is that the particular talent of business and wealth creation buys so much more influence in society compared with being in the top 1% of teachers, policemen, academic researchers, or even programmers.
Furthermore, pg suggests that those who get rich innovate and drive society forward, which I agree with. Unfortunately this seems to be the case for only a minute portion of those who are rich. Most of the best and brightest are doctors, dentists, lawyers, and investment bankers. The smartest pursue these avenues not to push society forward, but to gain the influence that assured wealth provides.
Innovators (Peter Thiel's 0-1 innovators, not 1-n) absolutely deserve the highest possible influence in society - fame, status, and wealth - because they push society forward and raise the standard of living for all. On the other hand, the top 1% of doctors, lawyers, investment bankers, and non-innovative businessmen gain a disproportionate amount of wealth without contributing to society and in my opinion should not be valued tremendously more than the top 1% of programmers, teachers, or biologists.
Peter Thiel runs a hedge fund and most of his successful investments have been advertising-industry web startups. I'm not sure how much that really pushes society forward. At least Elon Musk is doing something truly socially useful with his money.
I suppose my brother and I are great examples of your point: I left engineering to become a lawyer, and he took his physics degree to an investment bank. More money in law and banking. But is engineering or programming really more socially valuable, as practiced? Like many engineers, I used to work in defense contracting--I feel someone more socially valuable as a lawyer, and that's saying a lot. Where does a talented programmer go these days? Silicon Valley? Where the big, world-changing work everyone seems engaged in is exploiting private information for advertising profit? I'm not sure if I believe that's any better for society.
You're dismissing paypal, which is the sin qua non and an actual 0,1 innovation. Thiel was also a lawyer by trade, who went into entreprenuership to do something useful. His investments in FB etc are also thru his vc fund, not his macro-hedge fund (clarium). These are details, but important.
Before the mid-1990s VC in fact were responsible for a lot of 0,1 type innovation. Intel, Apple et al. Wall street was not set up to provide asset lite companies debt. Nor was it set up to take public equity deals of early stage, cash bleeding, negative gaap earning early-stage companies. So they filled a market gap, and enabled new deals/businesses to get done.
Since then, the increasing sophistication of general market participants has commoditized everything about VC, except for perhaps certain elements of information flow. In that regard, you are right, that a stage agnostic hedge fund and/or a $NBillion VC funde start to look alike.
But Remember Thiel was in FB as an <Angel> in 2004. Clarium itself was a macro fund, taking positions on open public markets. They are actually quite disctinct lines of work. Its not like clarium was doing later stage VC or PE deals either (from my recollection).
Lastly, someone needs to write the contracts in a free market economy. So Legal and Finance guys are socially valuable. The underlying issue, however, is are they abusing or overleverageing their (privleged) position in the economy to extract opportunistic rents. See, eg.
That's an argument (perhaps for another day), because it is more an ethical/cultural/policy discussion and comes down to how people are educated/brought up, their values, etc. That kind of thing varies from decade to decade, from firm to firm, etc. Arguably, right now across all of what used to be the professions, we are losing the partner ethos, and replacing it with arguably a more a-moral, and mercenary one.
> Furthermore, pg suggests that those who get rich innovate and drive society forward
That's not quite what he said. He said that making money is a skill like any other, and that one way to make lots of money is to innovate and drive society forward. He didn't say that was the only way to make lots of money; of course it isn't, as you go on to note.
> I think most people would agree that wealth creation is a talent like any other.
Wealth creation is not the same as making money. Or, rather, it's only one way of making money. The talent pg was talking about was a talent at making money by whatever means are available.
> I think where people have a problem is that the particular talent of business and wealth creation buys so much more influence in society compared with being in the top 1% of teachers, policemen, academic researchers, or even programmers.
I would state this differently: I would say that where people have a problem is that the particular talent of making money buys so much more influence in society, even when it doesn't involve wealth creation. Which basically boils down to: money buys influence, regardless of how you got it.
I think the way to put it is: value/productivity inequality is an inevitable fact of life. We should support economic systems that maximize productivity/value by rewarding those who can produce the most of it. However, money income is a profoundly imperfect proxy for value/productivity, because it can only measure excludable property and services.
Which leaves us with the trouble of: what of people whose work-product is not excludable? This means precisely jobs like teacher, policeman, research scientist, programmer (if programs were so easily excludable, we would all still be running shrink-wrapped packages we bought at Software Etc).
Furthermore, pg suggests that those who get rich innovate and drive society forward, which I agree with. Unfortunately this seems to be the case for only a minute portion of those who are rich. Most of the best and brightest are doctors, dentists, lawyers, and investment bankers. The smartest pursue these avenues not to push society forward, but to gain the influence that assured wealth provides.
Innovators (Peter Thiel's 0-1 innovators, not 1-n) absolutely deserve the highest possible influence in society - fame, status, and wealth - because they push society forward and raise the standard of living for all. On the other hand, the top 1% of doctors, lawyers, investment bankers, and non-innovative businessmen gain a disproportionate amount of wealth without contributing to society and in my opinion should not be valued tremendously more than the top 1% of programmers, teachers, or biologists.