I often see people say, "[Rich person] has 2000x your wealth - are they 2000x times smarter, more driven, more talented than you? No! Then how could they deserve it?"
This seems like a really gross misconception of value.
Example:
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You invent a water pumping system for your friend. Your friend doesn't have to walk to the river anymore; you've given him 1 hour of time a day. Wonderful!
Your tribe finds out; 50 people use the system too. Now 50 hours saved per day. Wonderful!
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The local village, 2000 people, starts using the system. You've now contributed 2000 hours of value, *daily*, to the community. This is huge. Yes, you only made a water pump, but the value doesn't come from what you made, it comes from the benefit to the whole around you.
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Imagine instead that you rent the water pump to them. Your income in increases but now for every hour they saved by using the water pump they have to work an extra hour to pay for it. Does your value still increase?
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If they don't gain any time then I don't see why they would bother to do that exchange. They'd only participate if they actually gained something from it.
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Someone will build off the pump design at some point and make it more efficient or cheaper. Would’ve never been possible if the original design hadn’t been produced.
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Interesting point. I think nowadays it's a lot less clear than your example - a lot of people's work goes into a company's success, but a few people in the company benefit a lot more than the rest.
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Yep. This is also basically why sports athletes, supermodels etc make more money than teachers and nurses. It’s about distribution, which is very unintuitive to lots of people
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So well put. That hardwork and intelligence is rewarded in free market is such a shallow defence of free market, when it ought to be argued on the basis of value one is adding to the lives of people..
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Distribution is a very important factor as you point out. However often people are trying instead to capture the r > g issue
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Agree. Now try explaining that in the context of the finance industry. Value to society can be heavily obfuscated. Especially when there’s huge leverage. You might be 3 or 4 gear cogs away.