Fred Wilson's Comments

· January 24, 2019

Fred Wilson posted a (relatively long for him) blog entry about, roughly, whether billionaires are immoral, and the current progressive agenda.

And that’s where we are. We are not willing to move away from the things of the past to get the things of the future. So our elected officials decide to try to give us both and we struggle with how to pay for it all.

The post is worth a look, but the comments are particularly interesting. There is something in there I believe to be off, which is actually touched on in Fred’s post:

I believe that technological revolutions, like the industrial revolution and the information revolution, create opportunities for entrepreneurs to reimagine how the economy should operate. Those entrepreneurs, like Rockefeller, Carnegie, Morgan, Bezos, Page, Zuckerberg, build very powerful monopolies and amass billions.

I have a minor quibble with the idea of re-imagining how the economy operates. Almost of these businesses reshaped how businesses operate, while I would note that the people who probably did reshape the economy had a tendency to be the people who introduced significant infrastructural changes (which has an annoying propensity to involve the government). Reshaping the economy doesn’t often create exploitable benefit for the reshapers themselves - Bezos, Page and Zuckerberg benefited and profited in the reshaping enabled by the internet, Carnegie the railroads and so on.

More than that though, it encourages the Great Man approach to history, which is suspect on a few levels, but particularly so in that it attributes success to the characteristics of those people. For example, from the comments:

History has shown time and time again that when an economic system is setup in a way that does not incentivize those that are smarter, faster, more wise, more ambitious, i.e. whatever human trait(s) cause some to excel over others, that the overall economy suffers

Assuming that the reason some excel over others is human traits avoids you have to really grapple with the factors that constrain people with those exact same traits. I can see the arguments - would a high marginal tax rate have encouraged Zuck to sell Facebook to Yahoo rather than build it into a true company of his own? Maybe! But equally, its hard to say how many wonderful creations and enterprises we have lost out on because their potential creators simply don’t have access to the prerequisites.