The declining quality of our supply of extremely rich people - a rant

[Raphael]

Back when I was growing up, Bill Gates was supposedly* the richest man in the world. There were, of course, a lot of things to criticize about him back then. But, that said, it was not difficult to understand how he had gotten that rich: he was the founder and head of a business where we basically all knew some people who used some of the products sold by that business.

Gates continued to be the officially "richest man in the world" for a while; eventually, he lost that title, and then it bounced around between various people for a while, before eventually settling on Jeff Bezos for a few years.

There were even more things to criticize about Bezos than about Gates. But, again, it was not difficult to understand how he had gotten that rich: he was the founder and head of a business where we basically all knew some people who sometimes bought stuff from that business.

These days, on the other hand, the officially richest man in the world is Elon Musk. How did he get there? Well, his main claims to fame are

1) a car company whose cars are still very much a minority taste

2) a space company whose spaceships keep exploding

3) various potential future projects that are still in extremely hypothetical stages, like that hyperloop stuff

(He also owns the company formerly known as Twitter now, but he was already the officially richest man in the world before he bought that one.)

So, how on Earth did those three things make him so rich? When I asked that question on Mastodon a while ago, someone responded that he simply inherited his money. But while he did inherit a lot of money, from what I've heard, it was more the kind of money that turns you into a random run-of-the-mill local-country-club rich guy. Not the kind of money that makes you a triple-digit billionaire.

So it looks like he got as rich as he is now by investing his initial inherited money. But this brings us back to Square One, because his main investments were apparently the three things I listed above. How could cars most people don't buy, exploding spaceships, and hypothetical future projects be that extremely profitable?

Now, my guess is that these are all simply the kinds of projects that come across as "visionary" to a certain type of rich investor. So his main talent - yes, he does actually have one specific type of talent - is to convince other rich people that it's a good idea to invest their money in his businesses. Then, when they do that, the official estimated value of his businesses rises; therefore, the value of his own stakes in his own businesses rises; and therefore, his own net fortune rises.

So the world's super-rich went from horrible people who sold stuff to horrible people who mainly sell their own image.

*Bill Gates was, of course, never really the richest man in the world; he was given that title by Forbes magazine based on a rule made up by Forbes magazine that rich royalty doesn't count, so that they could spread the lie that the richest people in the world all got their money through "superior business acumen" or some such nonsense.

[Travis B.]

You know, I've had the exact same question myself.

[WeepingElf]

I think it is because so many people believe that electric cars and space tourism are bound to be really big things in the future. Yet, Musk is IMHO vastly overrated - I think he is quite right about electric cars but dead wrong about space tourism. Electric cars have great potential, but others, including the established automobile corporations, have realized that by now, so Tesla Motors is only one out of many in that expanding market. And space tourism - well, manned space flight has always been vastly overrated, but it is heroic, and that appeals to many people. An astronaut setting foot on another planet is a hero; an engineer typing commands for a space probe into a computer terminal down on Earth is not.

[Raphael]

I think it is because so many people believe that electric cars and space tourism are bound to be really big things in the future.

Exactly! That's kind of the point of my third-to-last paragraph.

[Ares Land]

Dear god, they have a real time richest billionaires list over at Forbes?
One first observation is that the attention only resumed after the 80s. Forbes' list dates back to 1987 apparently. I think pre-WWII people did pay attention to billionaires more; so presumably this all correlates to wealth distribution.
Anyway, who even was the world's richest person before 1987?

Other than that... the first name on the list is Bernard Arnault (not that well known internationally, but in France, the very image of the evil billionaire with Musk a distant second). He's a luxury industry magnate, owner of Louis Vuitton and Moët Hennessy champagnes, so not surprising. #2 is Musk, #3 is Bezos, #4 Larry Ellison (Oracle is still massive in the sector, so not surprising), #5 Warren Buffett (a very savvy investor, also unsurprising), #6 Bill Gates, #7 Bloomberg (huge media empire).

I think Musk is kind of an outlier here. The rest of the billionaires seem to be in much more reliable businesses.
Most of Musk's wealth is from Tesla, which is pretty successful. It's a minority taste... but let's keep in mind they're luxury cars with the assorted price tags. And, with that price in mind, there sure are a lot of Teslas around.
That said, I agree with you that the reason why Musk is so rich is very unclear. But that's not typical of all billionaires.

(I also see that Tesla only recently started turning a profit. But I also remember Amazon being unprofitable for a long time. At some point I just stop understanding how that stuff works.)

[Raphael]

Dear god, they have a real time richest billionaires list over at Forbes?

Yes, that's where all the talk about so-and-so being "the richest" is coming from.

Wait, you're telling me the currently richest man in the world is a French guy owning French companies? But... but... they keep telling me France is a run-down socialist hellhole where it's impossible to run a business successfully!

(I also see that Tesla only recently started turning a profit. But I also remember Amazon being unprofitable for a long time. At some point I just stop understanding how that stuff works.)

In Amazon's case, there was always an open "promise" that they would dominate the market, and therefore, they would eventually be very profitable. This led to a lot of people pumping a lot of money into Amazon. This led to the market value of Amazon shares rising. This, in turn, led to the market value of the Amazon shares owned by Bezos himself rising. And this led to the rise of Bezos's own net fortune (what the billionaire class, rather inappropriately, calls the "net worth").

[Ares Land]

Wait, you're telling me the currently richest man in the world is a French guy owning French companies? But... but... they keep telling me France is a run-down socialist hellhole where it's impossible to run a business successfully!

There are a lot of French people on that list, and fairly high up too. It's somewhat worrying that all of them are heirs. (A lot more so than Elon Musk or Bill Gates.)

[Richard W]

So, how on Earth did those three things make him so rich? When I asked that question on Mastodon a while ago, someone responded that he simply inherited his money. But while he did inherit a lot of money, from what I've heard, it was more the kind of money that turns you into a random run-of-the-mill local-country-club rich guy. Not the kind of money that makes you a triple-digit billionaire.

As I understand it, it was Paypal that made Elon Musk rich - he got the money to invest in dreams from selling Payal.

[xxx]

everything that counts can't be bought,
and you're only enriched by what you share...

so the lists of egotistical hoarders
are no more than a pitiful pandæmonium,
parasitic vermin of Humanity......

[zompist]

On a larger time frame, no, the quality of tycoons hasn't gone down. The robber barons were just as bad— a bunch of laws were passed to make it hard to do the things they did. A lot of them were making things that were useful, like steel and oil and railroads, but most of them were bastards.

[Raphael]

I wasn't really commenting on the "bastard" aspect - that's pretty much a given for the super-rich - but more on the "what business are they in"-aspect.

[Torco]

sigh... I hate to defend musk.

yes, Tesla is kind of a scam, boring company is kind of a scam, hyperloop is definitely a scam. but SpaceX is a legit company. this is probably the merit of somebody else, like the chief of engineering or whoever, but still. those things made putting kilos in orbit a lot cheaper, as I understand it, they're quite reliable and they do, in fact, land the first stage. the big one that goes boom is really looking like it'll be actually functional sometime in the next 10 years: it's certainly being developped faster and cheaper than SLS, which is a bit of a laughing stock in rocket enthusiast circles.

anyway, yes, you are correct: there's been indeed a trend in capitalism from the richest people being aristocrats who began to play the game (for example investing in colonial ventures) to them being exceedingly successful industrialists, to them now being rentiers. I mean rentiers in a broad sense, of course: finance people as well as people who own platforms. in IT this manifests in the movement towards software as a service, and social media, etcetera. you've likely heard the saying: the biggest internet sales company doesn't sell anything, the biggest hotel chain owns no hotels, and the biggest taxi provider owns no taxis: they own *the things people need in order to work*: the apps, the data warehouses, etcetera.

Varoufakis explains is quite well, I think: he doesn't think it's capitalism but techno-feudalism, and I'm not so sure about that, but it's not a silly notion: the feudal lord had control over the land, which was the thing that people needed in order to work for a living, and the the modern lord owns, say, google, which is something people need in order to work. Bill gates was a trailblazer in this: windows isn't necessary because it's good, it's necessary cause everything runs on windows, and most things only run on windows just like farms only run on nice flat land (and not on, say, rocks, which is why mountain people tended to be less subject to the rulership of lords). A lot of the most valuable stuff in modern society is just network effects, you know: whatsapp is good cause all your friends are on whatsapp, and facebook used to be good simply cause everyone was on facebook: then everyone went to insta and tiktok and wherever. This was also sort of pre-figurated by the chinese internet and its greatest innnovation: the everything app.

[zompist]

A lot of the most valuable stuff in modern society is just network effects, you know: whatsapp is good cause all your friends are on whatsapp, and facebook used to be good simply cause everyone was on facebook: then everyone went to insta and tiktok and wherever.

That's kind of the Achilles heel of all these tech platforms. It's made worse by enshittification (companies replace consumer-friendly features with crappy algorithms and then try to monetize everything, eventually driving their customers away); but sometimes it's just consumer whim.

I guess that's OK with modern CEOs who can't think beyond 5 years anyway. But it seems like a step down from the robber barons, whose empires were built to last a hundred years.

[Torco]

I wonder if feudal lords used enshittification: like the first decade it was all "come to my fiefdom, you'll get land and you can keep *half* of your crop, and the lord keeps the church nice and clean, pretty frescoes in the town, safe roads, good irrigation" and then in the twelfth year it's all "new tax here, everyone has to plant six ninths of their fields with linen, what do you mean you want to marry someone from outside the fiefdom? coin? you can't take payment in coin, coins are for noblemen. beat that man, only the lord wears wool. did i mention that the lord's son gets to bed your daugther?"

[masako]

I wonder if feudal lords used enshittification: like the first decade it was all "come to my fiefdom, you'll get land and you can keep *half* of your crop, and the lord keeps the church nice and clean, pretty frescoes in the town, safe roads, good irrigation" and then in the twelfth year it's all "new tax here, everyone has to plant six ninths of their fields with linen, what do you mean you want to marry someone from outside the fiefdom? coin? you can't take payment in coin, coins are for noblemen. beat that man, only the lord wears wool. did i mention that the lord's son gets to bed your daugther?"

I think it's generally accurate to say that, historically, any system that marginalizes groups, exploits workers, and subjugates the masses, is doomed to failure over a long enough timeline.

"Enshittification" seems inherent to the equation, most especially re capitalism, which, if we're honest about it, is feudalism by another name.

[Raphael]

I think it's generally accurate to say that, historically, any system that marginalizes groups, exploits workers, and subjugates the masses, is doomed to failure over a long enough timeline.

I wish I could share your optimism. In some parts of Latin America, it's apparently been mostly the same people running the show for all the time since the initial Spanish and Portuguese conquest. And that was a long time ago.

[Ketsuban]

I wonder if feudal lords used enshittification

My instinct would be to say no, because there was no greenfield state where lords have to attract people to live in an area like modern tech companies do: everyone involved in a manorial system has lived in the area and been subject to the same social bonds of obligation and duty for centuries.

[Torco]

In some parts of Latin America, it's apparently been mostly the same people running the show for all the time since the initial Spanish and Portuguese conquest. And that was a long time ago.

i mean... truth, but in fairness in europe they literally have kings with lineages dating back to charles the fifth holy roman emperor or whoever. But yeah, systems of oppression can be stable for hundreds, even thousands of years. patriarchy, for example, has been quite stable for millenia, only recently being sorta kinda slowly eroded.

I wonder if feudal lords used enshittification

My instinct would be to say no, because there was no greenfield state where lords have to attract people to live in an area like modern tech companies do: everyone involved in a manorial system has lived in the area and been subject to the same social bonds of obligation and duty for centuries.

I really think we imagine feudal societies as a lot more static than they actually were: sure, people didn't move around as much, probably, but "everyone had been living there for generations" is too much. many feudal societies have laws against peasants leaving the lord's land, probably because people did, for example. also, very often when I read about medieval history in europe there's some detail or other like "oh, that time an entire ethnic group of people who lived in the urals settled in macedonia" or somesuch. the franks were from germany but moved to france, the danelaw in england, the varangian guard in byzantium, the vandals, while remaining recognizably "the vandals" supposedly started out in poland and ended up 10 years later living in spain, and 20 years after that in morocco... and that's just big scale stuff, a single family moving from here to there would not leave much of a trail and, upon arriving on their new village would just be known as "that family from munich" or maybe the sons of "il tedesco". and with all the famines and wars and sieges and so on, there was plenty of incentive to haul ass from places.

plus i'm too cynical to believe that the medieval nobility's obsession with fame and honour wasn't marketing for some business model or other.

[zompist]

I wonder if feudal lords used enshittification: like the first decade it was all "come to my fiefdom, you'll get land and you can keep *half* of your crop, and the lord keeps the church nice and clean, pretty frescoes in the town, safe roads, good irrigation" and then in the twelfth year it's all "new tax here, everyone has to plant six ninths of their fields with linen, what do you mean you want to marry someone from outside the fiefdom? coin? you can't take payment in coin, coins are for noblemen. beat that man, only the lord wears wool. did i mention that the lord's son gets to bed your daugther?"

Yeah, feudalism often gets worse over time. You can see this in (say) eastern Europe, where forests were cleared and new estates created in the Middle Ages. At first peasants were valuable and well treated, and their position goes down over the centuries. In China there was a tendency for the tax bite to rise on the peasants to intolerable levels— not least because the gentry bought up land and had ways to evade taxes, so the taxes rose on the smallest landowners. Only a change in dynasty allowed land redistribution and lowering of taxes. Then you get thing like the nobles stealing the commons in Britain.

Of course, in the Middle Ages proper, being a noble didn't always mean centuries-long prosperity; it also meant you could get killed in the endless wars. IIRC during the Hundred Years War half of England's nobles were killed.

[Torco]

Ah, you're right, China! dynasty changes seem to have been, at least in part, about tax and land reform. ah, may the suit-and-tie dynasty soon lose the mandate of heaven.