Wealth Inequality

    While I am generally in favor of free market capitalism, I do not agree with the assessment that we need to "lift everyone out of poverty and not worry about those at the top." This is a technocratic take that I have heard Silicon Valley gurus proclaim (Sam Altman included), and I think it is fundamentally misguided. Yes, capitalism is responsible for lifting billions of people out of poverty over the past few centuries and it is clearly a great system for spurring technological grown and ensuring constant economic progress. Yes, bringing the world out of poverty should be our number one goal. If we are rapidly curing diseases, avoiding war, and broadly alleviating poverty, who cares about income inequality? If there is a large income divide between the rich and the poor, but the "poor" have amazing, fulfilling lives, then we probably shouldn't care much. Fairness should never be our guiding principle. If everyone was capped at earning $10,000 a year, the would not be a better place. Dispersion between individual wealth is natural. People can take different sorts of jobs, work harder or not at all, and pass wealth to their children. People that take risks should be compensated. People that innovate should be compensated (in order to incentivize others). Now before I seem too Ayn Randian, here comes the counterargument.

    Money = power. In a system where the top .01% controls a massive portion of the wealth, that small portion of people have an outsized impact on others. Voting is driven in a large part by campaign donations, and oftentimes the richest people have zero altruistic tendencies. If you own the company that owns the AGI, yeah maybe you cure a lot of diseases and everyone has a universal basic income, but now you are the supreme ruler and the most powerful person on the planet. A quick point on financial returns. When you act ethically, you are sacrificing financial return. This is why "ESG" marketers are so focused on trying to prove that constraining your opportunity set to have an "impact" doesn't sacrifice financial returns. Everyone knows that this is false (spoiler, the sales departments are lying to you). Now, donations. Donating money decreases wealth, something a lot of rich people are allergic to. To make an impact, you have to lose money. This truth is unfortunate but will bring an immense amount of clarity to your life.

    The question is, how do we make people with money and power do good? How do we get them to lose money in effective ways (through greater taxes, greater donation incentives, greater guidance)? This is really the fundamental problem with capitalism. It is really good at building people's wealth, but it does nothing for guiding them towards the best ways to lose it.