Thread by @enn_nafnlaus

Thread: The Sin of Wealth

There's been much discussion recently about millionaires like @berniesanders and @rbreich, who live relatively luxurious lives, attacking billionaires like @elonmusk for their recent paper gains.

The "sin of wealth" is not that "there's some high...

nominal asset value on paper". It's that the world has a finite capacity to produce goods and services. Money is an IOU on goods and services. When you use this IOU to direct a wasteful amount of goods and services towards yourself, it's unavailable to other people.

Contrarily, money that's invested is not doing harm - just the opposite. It's not consuming goods and services, but rather, it's helping create more capacity for goods and services. Let me reiterate: *money that's invested is a good thing*.

The question comes as to what's done when these paper gains are transformed into a real gains - something that has to be done slowly and methodologically over long periods of time, or the supposed gains vanish. Do you use the real assets to flood yourself with goods and services?

Or do you dedicate them to good causes?

This is the point of the Giving Pledge (to which Musk is a signatory): that the overwhelming majority of your assets will not be directed toward yourself, but towards good causes over the course of your life.

There is of course some nuance. "Overwhelming majority" != all, and billionaires - and yes, millionaires like Sanders and Reich - should be judged by how much of their assets they spend on themselves vs. how much they donate to charitable causes.

It's also certainly fair to judge the perceived value of said charitable causes to society, as reasonable people will always differ on this front - just like reasonable politicians disagree on the very same issue in terms of how to allocate tax money.

What's not fair is to insist that all paper gains be treated as instantly liquidatable real gains (they're not, and cannot be short-term liquidated for even a fraction of their value), or that it's even a good idea. Not simply because money invested in the market does good...

(creating goods and services), but because "charity dumps" are an inefficient way to spend money.

Let's say that your main goal was fighting rainforest destruction. Which would be more effective - spending $20B all in one year, or $1,6B per year *indefinitely*?

Just like with realizing paper gains, maximum benefits to good causes are achieved with a long-term planned disbursement. This should be *encouraged*, not *scorned*. Indeed, where charitable goals consume goods and services, rapid spending is highly inefficient.

So by all means, support - as do I - more equitable wealth distribution. Support higher capitals gains taxes (e.g. on realizing paper gains). But don't be stupid about it. The sin of wealth is about *wasting resources on yourself* - not about some nominal dollar figure.