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Henning Makholm
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I think you're wrong in your analysis about why the fortunes of Jobs and Gates don't generate more resentment. It's not that they are deserved -- nobody can possibly *deserve* that much wealth, no matter how hard they work and how brilliant they are. (Lots of people are as smart, and work as hard, without becoming multibillionaires. It doesn't make sense to claim that they all deserve Gateslike wealth; the world's resources are not large enough to allow them all to *spend* that supposedly-deserved wealth anyway). Rather, we accept that a few persons become extremely rich *without* deserving it, because the inequality it generates is an essential part of a system that brings about vast social benefits *apart* from a chosen few becoming undeservedly rich. The social benefit is that the system enables the economy to react faster and more precisely to new technological and cultural situations than any other system that's been tried, which in the end makes even the median citizen better off that if we didn't have it. The world today is too complex and unpredictable for anyone to know for sure what society will need in ten or even two years. In a market economy we solve that problem by having a swarm of entrepreneurs with small businesses try *everything* out in practice; some of it will turn out to be what we need, and the few businesses that got it right will be positioned to grow large and fill the demand quicker than if we had to wait for the demand to be obvious to someone in charge of everything. This, however, depends on an adequate supply of entrepreneurs who're willing to bet the house and work really hard for years in order to make their idea come true. Some of them will fail because they didn't work hard enough, or were not smart enough, or because the idea was stupid. But many others will fail even though they are smart and work hard on a good idea. It simply turned out not to be the right idea the world needed now -- which nobody could have known when they started out. A few will strike it rich and actually manage to make more money of it than they'd kept working for a salary. And *extremely* few will, by some freak coincidence combined with small a bit of business shrewdness, end up filthy rich. The mere fact that it is *possible* to end up filthy rich must be a major motivating factor for people to take the otherwise thankless and highly risky step of becoming entrepreneurs. If there weren't a few ones who actually became filthy rich, fewer people would try out new things with the necessary spirit. And that would make us all worse off. It helps that a few random cases of filthy wealth doesn't actually total up to very much money in the big picture. If some benevolent emperor of the world decided to divvy up Bill Gates' fortune equally among all of humanity, each of us would be able to buy, say, one pair of jeans. Yes, there are people for whom even that would be Really Nice, but still it wouldn't be a long-term effect.
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Feb 11, 2013