Bill Gates' wealth grew much more after he left Microsoft than while he was CEO. Was that wealth earned through innovation? No. He simply owned something that became more valuable as other people labored to innovate.
Bill Gates' wealth grew much more after he left Microsoft than while he was CEO. Was that wealth earned through innovation? No. He simply owned something that became more valuable as other people labored to innovate.
Institutional innovation continues to pay off after you leave. You will make more over time if you build a company with a moat, if you set up a farm team system so your company can continue to innovate, if you eschew cash grabs in favor of solid customer service. If you take away the incentive to set up a continuous wealth generator, you will see founders spend their last year as CEO looting the company instead.
It is factual that ownership continues to pay after you are no longer laboring.
My position is that this is not a good thing.
When I build something for myself, a main goal is for it to work without my constant input so I can do something else. This is especially important for people who are capable of creating institutions. What if Elon Musk was stuck babysitting PayPal, or would lose all the payout from Neuralink the second he wanted to move on?
Also, a large share of the value I add to society is attributable to the person who set up the institution I'm working in. I work hard and am friendly but without someone setting up an organization that employs programmers usefully, the most I can do for you is fix your Wifi. I would vote to keep paying the builders after they leave.
Why would Musk be stuck babysitting PayPal? He would have earned money while laboring there. He can choose to do something different if he wants to, just like anybody else with a job.
If the value of MSFT tanked after he was no longer managing it, people would have said he didn't do a good job setting up effective systems.
So what? He owned the stock, he gets to share in the gains.
If we believed that the only people who should be morally allowed to benefit from asset appreciation are the people who actively work for that company, the entire economy would collapse.
For example, every pension fund, endowment, retirement fund, etc. are all invested in financial assets that they had NO role in. All they do is own something that become more valuable as other people labor and innovate! Shall we cast them as evil capitalists?
I don’t find “we need billionaires because 401ks” to be a compelling argument. We can build a different system.
AOC’s criticism is that “own stock, share in gains” is not the same as earning money.
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