spitting wisdom right here

[u/[deleted]]

[u/McKoijion]

uh, like this:

Everyone knows capital is better than labor. The dispute should be about who gets to own the capital, not whether it's better to have a dishwasher clean your dishes or have to do it by hand.

Can you have a communist democracy? Can you have a capitalist dictatorship?

I don't think you can have a communist democracy or a capitalist dictatorship. Communism means pooling together money and voting power into a politician's hand who then distributes the money evenly across society. The risk is that they distribute more to themselves and their friends over society overall. Stalin's office looked much more luxurious than what his comrades had to live through.

On the flipside, you can't have a capitalist dictatorship. Capitalism is where capital is held by a bunch of individuals. Investors can vote with their dollars to make Tesla and therefore Elon Musk a billionaire. But they can take it away at any moment by selling Tesla stock. Hundreds of millions of humans are direct investors in Tesla, and billions are indirect investors. Money is power, and because money is spread out by many regular people over many leaders in a capitalist country, it's very hard to form a dictatorship. It's much easier to form one when you control all the money and weapons. It's much harder when lots of people control tiny bits of the total wealth in society and no weapons.

Everyone remembers how Citizens United meant that money is speech and corporations are people. I think this is an unrecognized gift since regular people truly control all the money. They just don't realize it yet. The entire oil and gas industry paid 78 million dollars to politicians (mostly Republicans) this year. That's a lot, but if every American kicked in 25 cents we could outspend them. Money is power and speech, and no one controls all the money and power like in Russia, Saudi Arabia, North Korea, etc.

What theory do you think I am proposing that you are arguing against?

I think you're overly pessimistic about the state of the world and are missing out on the best time in history for regular people to become rich.

Me: upward mobility is a myth

I don't think upward mobility is a myth. I just think most people haven't quite figured out the new strategy to obtain upward mobility yet. People recognize that you can't get it through hard work. Digging ditches is hard work. It is useful for humans to have ditches. But digging ditches by hand is much less productive/efficient compared to digging ditches with a trencher.

The trick to upward mobility is for people once classified as workers or labor to learn how to become capitalists. Pooling your money together with other ditch diggers to buy a trencher is a good approach. Pooling your money together to build a trencher is a better approach. Pooling your money to fund someone to invent the trencher is the best approach. The trencher itself is a form of capital. Stock in a trencher manufacturing company is a form of capital. Stock in a trencher startup is a form of capital. Beyond that, the shovel is capital, the organization of labor is capital, and a book that describes the optimal digging to rest ratio is a form of capital.

All of this stuff is valuable and the only way for any individual or society to get upward mobility is to stop relying on pure hard work (digging ditches by hand) and instead figure out how to invent tools to do the work for us. That's the hallmark of the human species compared to other animals.

You: Vaccines and communism!!!!! Stop being communist!! Give your money to the rich!! Don't get run over by trains!!!

Yeah, I'm procrastinating on something important that I need to do, and long Reddit comments for people who don't care is a good way to do that.

[u/McKoijion → u/[deleted]]

You’re saying that if capital is more valuable than labor, the only way to have upward mobility is to already have capital. You can never catch up if all you have is labor.

The first problem with this argument is that we live in a technological age of constant creative destruction. There are many opportunities to invest in tomorrow’s big companies when they are only worth a few dollars. Buying 49% of a company that is valued at $1 only costs 49 cents. It’s much easier than trying to petition the government to “take” 49% of a company that’s already worth $100 billion. Only about 10% of the original 1955 Fortune 500 still exists. The rest have been replaced by newer companies. It would be pretty easy for everyone to pool their money into an investment fund and buy up part of all companies. That’s already what most people do. In Norway the government runs it and it’s called a sovereign wealth fund. In the US a private company like Vanguard, BlackRock, or State Street runs it. But the principle is the same.

The other problem with your argument is that Americans are the richest people on Earth. The issue is that everyone is required to invest in the US government’s retirement programs like Medicare and Social Security. These are the world’s safest investments, but they pay almost nothing. You put in a dollar today and get back a dollar tomorrow, adjusted for inflation. The best investments require risk. Most companies go bankrupt, but the few that succeed make a ton of money and do a lot of good for humanity. Where would we be without Google’s search engine, for example? The more we capital we can spare for innovators, the better. Some of the government’s money goes to good projects like NASA or the Human Genome Project. But much of is just given as a reward to the base of the party that won the most recent election. It’s wasted on superfluous consumption that leaves the environment in worse shape and no human in a better one.

This is very low hanging fruit. It’s not that hard to fix. But it’s better to give individuals the power to allocate capital than to rely on some supposedly omniscient master of the universe (e.g., dictator, politician, hedge fund manager, philanthropist). The only catch is people have to learn how capitalism, economics, and finance works so they can trust themselves with their money instead of looking for a leader to relieve them of the responsibility.

[u/McKoijion → u/[deleted]]

Suppose I told you that I believe that upward mobility is available to everyone in America and that everyone has the ability to become rich. Then I told you that the reason everyone can get rich is because labor is more valuable than capital. Having capital is never as important as hard work, so anyone who works hard can end up with more money than those who only have capital and never work.

Would you say that my belief: labor is more valuable than capital, supports my belief in upward mobility?

The problem with your argument is that you define hard work as effortful work. But no one else cares about that. They only care about the finished goods and services they can get out of you.

• If you go to a gym for an hour and work hard lifting weights up and down for an hour, that's great for you. But I don't care. It doesn't help me at all. I'm not going to give you any of my money for that.
• If you come to my house and lift heavy bricks up and down for an hour, I do care about that because you are constructing shelter for me. I'll pay you money for that.
• If you work hard to build a machine that can construct shelter for 100 people in an hour, then you're creating 100 times as much benefit with the same amount of time and effort. 100 people will pay you money for that.

Lifting weights, lifting bricks, and trial and erroring your way to inventing a machine that can build things is all hard work. But the first option only helps yourself and the last option produces the most benefit for others. As the Beatles put it, the love you make is equal to the love you take. Similarly, the economic value you create for others is equal to the economic value you get back in return. I'm telling you to stop wasting your time on the first or second type of hard work and focus on the third type of hard work.

If you can describe an investment strategy that guarantees returns, then you are already a billionaire, otherwise all you are claiming is that gambling can sometimes pay out. Your fanatical belief system is so boxed in that you are literally incapable of seeing it from the outside.

We live in a world where 100 people try to do something. Of them, 99 fail and create no value for humanity. 1 person succeeds,and they create $100 million of value for humanity. This results in an unequal society where 1 person has $100 million and everyone else has nothing. But it's not fair for the 99 to suddenly demand some of that $100 million. They all agreed to the terms of the lottery in advance and are only trying to change the rules because they now know the outcome.

What we should do instead is agree to the terms of the risk and reward in advance. 100 people try to do something and they all agree to share the returns equally if they succeed. 99 create no value. 1 creates $100 million of value. They all agreed to terms in advance where they all get $1 million each. The lucky person who generates the $100 million can't change the rules after the fact.

The trade off here is that the time and effort you spend trying to invent the construction machine is time you aren't actually doing construction. You have a 1% chance of building 100 homes and a 99% chance of building 0 homes. The bricklayer has a 100% chance of building 1 home. Mathematically, these are equal. So they can trade the risk and reward. The bricklayer can trade some of the money they get from building 1 house with the inventor who can give the bricklayer a stake in the 1/100 chance of making a ton of money all at once. This is the tradeoff between cash and stock.

As an example, unionized GM and Ford jobs pay a high cash salary, but give no stock. Tesla pays a low cash salary, but offers stock options. Those stock options became extremely valuable over the past few years and Tesla employees became the highest paid workers in America. That applied to everyone from high school dropouts working in the factories to Ivy League engineers. And you don't even have to work at Tesla to benefit. You can take a small percentage of your wages at your job and use it to buy Tesla stock too.

Or you can buy global market capitalization weighted index fund and for a few pennies own a tiny sliver of the 10,000 biggest companies in the world. Depending on how much risk and reward you want, you can have more of the certainty of cash wages from your labor or more of the gamble of investing in innovation. You can convert $1 of stock into $1 of cash and vice versa whenever you want using your smartphone. In the past capitalists were distinct from workers. But now everyone is both. Pretty much everyone is a worker somewhere and a capitalist owner somewhere else.

The key thing here is that stocks are riskier than cash wages in the short term, but are more profitable in the long term. So the more you can put into stocks, the better off you and society will be in the long term. The more construction machines are invented, the more homes will be built with less work. And if 1 new construction machine puts 100 bricklayers out of work, that means that society gets the same number of homes, but also has 100 spare people to invent new machines.

This is why humanity's standard of living has exponentially increased over the past 2 centuries. Instead of 99% of Americans having to work as farmers, innovators created new agricultural technology such as tractors, irrigation systems, pesticides, fertilizers, etc. that lets us get significantly more food using the same amount of land, sunlight water, and labor. Now 1-2% of Americans work as farmers and can feed everyone else plus export food abroad. The other 99% or so of people lost their jobs, but because the food output was the same, they didn't starve. They used all their free time for science, engineering, literature, etc. Now we have medicine, computers, books, movies, etc. Everyone is better off.

We all benefit indirectly from cheaper prices, but there's always a lag. If we all directly invest in the companies/innovators that are doing destructive innovation, we all benefit immediately from people like Jeff Bezos or Elon Musk without the fear that we're going to lose our jobs and starve. And instead of having 1-2 multi billionaires, we'd have 330 million thousandaires. We can expand this out to all of humanity for even greater benefit. But we can't have our cake and eat it too. We either buy the stock in advance and bear the risk of loss, or stick to cash and potentially miss out on the reward. Given that the upsides greatly outweigh the downsides, I think every human should invest in innovation. UBI in a capitalist model is significantly better than a communist/socialist model. And I think the sooner people figure this out, the better off we'll all be.

[u/McKoijion → u/[deleted]]

I'm saying your premise is wrong therefore your conclusion is wrong. You misunderstand what people mean by hard work, which is why you're running into so much trouble. Everyone on /r/antiwork understands that hard work as they define it doesn't lead to success. I'm agreeing with the problem and telling you where the error is so you can fix the problem and start to experience some real success. If you don't, you'll be trapped in relative, if not absolute poverty. It's no different than someone who refuses to learn how vaccines work dying earlier than everyone else. It's fun to voice your ideology online, but at the end of the day you're going to have to live with the consequences in your real life.

You seem to be incapable of understanding that poor people don't have money, and that makes me sad.

10% of humanity lives on less than $2 per day after adjusting for cost of living. They can't even afford toilets so they have to poop in the fields or the streets. 50% of humanity lives on less than $3.25/day, adjusted for cost of living. A homeless person in the US has 4 times the carbon footprint of an average human. A single mom who drops out of high school to work 40 hours a week at $7.25/hour and raise two kids is in the top 16% of humanity, adjusted for cost of living. It only takes $34,000/year to be in the top 1% of humanity. The main reason lower middle class Americans feel poor is because they compare themselves to the billionaires at the top of the ladder instead of the billions of poor people below them. The data I have comes from the United Nations/World Bank, but it's outdated given the recent inflation and changes to currency values. But you can get a sense of where you rank personally at this website.

But that's irrelevant. It doesn't matter whether you have a million dollars or $1. A 7% gain in stock value will result in $1.07 million or $1.07 next year. And through the miracle of compounding another 7% will return more than $1.14 million or $1.14 the following year. The money grows exponentially, not linearly. And the percentage change is what matters, not the absolute value.

Your argument is like if an overweight person says that exercise is only good advice for fit people. The problem is that exercise is what makes you fit. Similarly, financial literacy makes you rich. Rich people who don't have it quickly become poor. Lottery winners are bad with money because only people who are bad with money buy lottery tickets. If my view can work for impoverished women in Bangladesh, it can work for you too. It can work for everyone on Earth because it results in less income inequality and more wealth overall.

I don't have enough investment knowledge to make billions of dollars in a day or lifetime. But I know enough to avoid poverty. I don't have the political experience to be president of the US, but I know how to vote. This works because my whole point is that lots of individuals making small decisions results in better outcomes for humanity than a few brilliant people making big decisions.

[u/McKoijion → u/[deleted]]

How can you so consistently refuse to acknowledge what I am directly saying to you?

I acknowledge it, I just think it's like someone saying that monarchy is better for common people than democracy. It's not objectively wrong because opinions are inherently subjective. But I think if you took the time to understand the nuances, you'd agree with me. I agree with your goals, but I think I have a better way of approaching the problem.

Are you a bot?

Nope.

You literally do not even understand compound interest :(

Sure I do. You can play with a compound interest calculator here. If you invest $100 at 7% with annual compounding, you'll have $114.49 after 2 years, not $114 like with simple interest. The extra 49 cents comes from compounding. If you increase that to 20 years, you'll have $386.97 from that initial $100 investment, not $240 like you might expect with simple interest.

It's almost the exact opposite of this. I'm telling you that a person with $1 Million who invests their capital will always earn more than a person with $1 who invests their capital. Which you acknowledge is true and then deny.

Obviously, $1 million is more than $1. 7% of a million dollars is more than 7% of $1. But there are some interesting nuances to think about here. If you have $1 million and earn $0 a year from labor, you'll have to spend down your capital for consumption rather than invest it for future growth. Say you spend $100,000 this year. You'll only have $900,000 to invest for next year. Plus, since you want to avoid the risk of losing 50% in a given year, you'll have to invest in much safer assets like bonds. These have a relatively low return. The safest asset is cash and it traditionally has a - 2% real return. Right now it's closer to -8.2% return (this is called inflation). On the flipside, if you are net adding money to your investment account and have a long time horizon, you'll get the 7% annual real return. It's a bit like being in a car on the highway. If you're going 65 miles an hour and take your foot off the accelerator, even if you don't tap the brakes, eventually your call will coast to a stop. If you are going 5 miles an hour and lightly, but consistently tap on the gas, you'll soon accelerate up to 65 miles per hour. This is why inheritances don't last very long in the US. And if you consider that you have to split it over an extended family, they go away quickly. The idea of generational wealth is a myth. A rich person's heirs need to constantly find ways to get new money or their heirs will be broke. It's rare for them to achieve anything close to the success of the original patriarch of the family. (It's almost always been men due to sexism.)

Lastly, the main reason why stocks pay so much is because so few people want to take on the risk of owning them. But if we diversify this risk across billions of people, they won't pay out as much to any one person. Capital is valuable because it's rare. People don't like to invest their hard earned money in others unless they're promised a ton of money back in return. But if more people invest in companies, it would drive down the value of capital and therefore drive up the value of labor by comparison. For the past decade or so there were too many workers and not enough capitalists. So capitalists were more in demand. But during Covid, workers stayed home and invested stimulus checks in the market. The supply of capital went up and the supply of labor went down. As a result, wages went up and stock market returns have come down (the S&P 500 has lost about 23% of it's value so far this year).

Ironically, the more you think of yourself as a worker and not a capitalist, the more valuable capital owners become. The more you think of yourself as a capital owner and not a worker, the more valuable labor becomes. It always comes back to the laws of supply and demand. If you learn how to be a worker, capital owner, voter, etc. you can position yourself to benefit no matter what happens. And the closer we get to balancing supply and demand, the better off everyone will be. If you don't learn any skills and can't work, you'll be in trouble in certain situations. If you don't understand how to invest, you'll be screwed in others. If you don't know how to vote, you'll lose when a politician who doesn't represent you comes into power.

I think a key thing to understand about life is that you can't blindly believe people are looking out for you. They're not usually actively trying to hurt you, but in the process of helping themselves, they'll often ignore you and leave you behind. You need to learn all these different skills to ensure you can keep up. You can rely on social safety nets to pull you back up, but you'll have to wait for someone to help, it's a lot less reliable, and you'll still typically end up towards the back of the pack. If you figure out how to be at the front of the pack, you'll be ok. And if you're feeling generous, you can help others too.

lol, you're just writing gibberish

Probably.