7 ms·

The world’s rich stay rich while the poor struggle to prosper

132 points by rrgmitchell 13y ago

gavanwoolery 13y ago
Sorry, but does this guy not realize that many of the world's richest people gave half their wealth to the Gates foundation, thus forming an engine for human improvement that could have never been attained by distributing their wealth? The wealth divide is not a "real" problem - the real problem is figuring out how to keep everyone employed in a world that is constantly evolving, where most jobs are getting automated or over-seaed (neither of which is a problem in of itself). A real problem is figuring out how to stop corrupt people that enrich themselves by being parasites to the poor/middle class, take advantage of our relatively indifferent government, or our screwed up law system (like patent trolls).
- buster 13y ago
  Many?
  - gavanwoolery 13y ago
    113 at current count. https://en.wikipedia.org/wiki/The_Giving_Pledge https://en.wikipedia.org/wiki/The_Giving_Pledge Yes, there are 1,426 billionaires at current count, but that is still a significant number. Many != the majority.
- deleted 13y ago
  [deleted]
- ehmish 13y ago
  Many did give much wealth to the Gates foundation, but it would be far from most.The wealth divide seems to be a pretty real problem. Concentrating all the wealth of the world in a few people seems pretty sub-optimal, trials[ 1] of directly giving cash to impoverished people demonstrates that if wealth was redistributed more evenly, it would not be wasted. [1]http://forbesindia.com/article/real-issue/direct-cash-transfers-what-money-can-buy/35525/1 http://forbesindia.com/article/real-issue/direct-cash-transf...
- benched 13y ago
  I don't think either wealth disparity or unemployment are themselves direct problems. I think the huge and fundamental problem, which is a problem even in a so-called 'rich' country like the US, is access to the basics of human life, which I think are food, housing, and education of a certain standard. Wealth disparity itself may be ok, but in the US at least it seems to contribute to costs of education and housing rising so as to prevent access by a large segment of the people. Ways must be found to solve that, even if wealth disparity itself doesn't necessarily need solving.
- vanderZwan 13y ago
  First, I don't understand what you are trying to argue, as that "engine" works by redistributing their wealth. Second, John Kay's arguments are not contradicting (or even discussing) the main premise of Bill Gates' letter - which is to convince people aid is effective, but one specific argument made within it regarding wealth and the global economy: > I was surprised and disappointed that the data you chose to support your case referred not to the distribution of average incomes across states – the subject of your letter – but to the distribution of household incomes across the world. These are very different things. If I was an economist, I would also point out that mixing up the data like is disingenuous and probably damaging to the overall argument, even if to lay-people like you and me it makes little difference. Finally, as far as I can see the author of this article and Gates want the same thing: to help the poorest on the planet. The difference is that Gates focuses on what has worked and what his vision is of what happens when things go right. Kay on the other hand focuses on what has gone wrong and is still going wrong and why, and thus is deserving of being paid attention to by people with the power and intent to change things (like Bill Gates for example). This is constructive criticism.
- Avshalom 13y ago
  Some of the world's richest people have signed a non legally binding pledge to give half their wealth to the Gates Foundation eventually
liquidise 13y ago
People like this grind my gears. Many things go into being rich, but the top of that list is making more money than you give away. Practically by definition, people who continue to do this will continue to get rich. There is no shortage of humanitarian efforts, funds, and foundations started by the wealthy for the sake of the underprivileged. To suggest these are insufficient because their founders remain wealthy is foolhardy.
- vanderZwan 13y ago
  > Many things go into being rich, but the top of that list is making more money than you give away. Practically by definition, people who continue to do this will continue to get rich. Except there is this thing called "diminishing returns" that somehow does not apply to being rich. Also, wouldn't "spend" be a more appropriate description than "give away" here? > There is no shortage of humanitarian efforts, funds, and foundations started by the wealthy for the sake of the underprivileged. To suggest these are insufficient because their founders remain wealthy is foolhardy. Luckily, the author of this article isn't suggesting that - he is arguing that in its current form these efforts are insufficient because the poor remain poor, and that he has good reasons to believe they will stay poor if we don't change specific problems not addressed in Gates' letter.
  - liquidise 13y ago
    I'll bite. > there is this thing called "diminishing returns" that somehow does not apply to being rich Once you hit a certain amount of money, investments begin to drive your income. Unlike salary which is additive, investments tend to be multiplicative in their wins and losses. So you stand to make (or lose, if you are bad at it) money faster. > Also, wouldn't "spend" be a more appropriate description than "give away" here? Semantics. Credit and debits are all i am referring to. The author is literally arguing that poor places are not getting richer fast enough. Money alone does not make for better living conditions. There are environmental constraints, infrastructure additions, and countless logistical issues. The author provides no solutions that i saw, and instead spends his time ranting about comparison between developed vs developing countries.
- 13y ago
leobelle 13y ago
Personally I think this is a public policy issue to be addressed with the government which in democratic nations requires a sea change social movement given that most are pretty conservative. Addressing the issue of wealth disparity to rich people seems entirely pointless to me. Anyway, this more like a publicity stunt not meant to address poverty but to get this guy rich and or famous visa vis plugging his book.
quaunaut 13y ago
Y'know, I have seen Mr. Kay talk before, and I wouldn't regard him as an idiot. However, he's seemed to have missed the entire point Bill was making. > So what about China and India? Their recent growth performance has been exceptional, but both are still desperately poor countries by the standards set by Switzerland and Norway. The gap will take many generations to eradicate. Which Bill completely acknowledges? However, he also makes the point that today, China and India are moving up at considerable speed when it comes to income. They have the abject poor still, no one will disagree, but compared to where they were 20 years ago, even the poorest in those countries are much, much better off, and all signs point to it getting better very quickly. > But you do not have to venture far from the centre of Nairobi or Shanghai, and only round the corner in Mumbai, to see sights unimaginable in Norway or Switzerland. The appeal to emotions here wasn't needed, nor was it affective. Not to mention, it still misses the same point: Bill isn't saying that things don't suck currently, he's saying that while they're not great, they're considerably better than they were before and that's an ongoing trend.
- old-gregg 13y ago
  I think their disagreement stems from the difference in how they define "poor". Gates is certainly right (it just takes a bit of traveling to agree with him) that hungry-and-dying type of poor is rapidly disappearing all over the world. But if you look at living-hand-to-mouth poor, I can understand John's reasoning. Yes, average incomes (productivity) have gone up but you also see how prices on commodities are rapidly raising in the developed countries to make up for that. [1] This makes me wonder if the universal basic income is ever going to work. Look at insane costs of healthcare/education in the US - no doubt caused, in part, by "free money" either through government-assisted programs or employer-sponsored insurance. Perhaps it's an inherent property of capitalism: some things always end up barely within reach of a lower class. [1] Hence the need for things like http://en.wikipedia.org/wiki/Big_Mac_Index http://en.wikipedia.org/wiki/Big_Mac_Index
  - bsbechtel 13y ago
    >Perhaps it's an inherent property of capitalism: some things always end up barely within reach of a lower class. I wouldn't say that's true, we just need to figure out ways to produce those things cheaply enough (through automation, other technologies) that everyone can enjoy them. Take a look at agriculture in the US...even the poorest people here have access to (not very healthy) food whereas just under 100 years ago many were starving in the Great Depression. This is because agricultural technology has led us to an abundance of cheap food that everyone can afford at some level or another.
FD3SA 13y ago
I've always been baffled by the investment choices of billionaires. If you accept an empirical view of the universe, no matter what you do, you will eventually die. Your experiences of the world will cease to exist. Therefore, the only rational investment would be in life extension technologies (SENS, advanced prosthesis, etc.). At first, this might sound repulsive. The idea of a group of elites discovering and hoarding the fountain of youth for themselves while the masses suffer is dystopian. However, upon closer examination, it becomes clear that the money invested in achieving any significant life extension will have a massive public benefit. This is because combating aging requires curing almost every known disease at its source. Any progress made in this front will have massive benefits to healthcare worldwide. So the question is, why do billionaires invest so irrationally? Why do they buy yachts and invest in hedge funds and social media companies? From the comment below, 113 billionaires out of 1426 are current members of the The Giving Pledge. What are the rest doing with their money? P.S. I must be clear that I don't consider members of Bill Gates' Giving Pledge part of the group of "irrational billionaires". The Gates Foundation funds an incredible amount of basic research for a philanthropic organization.
- nostromo 13y ago
  Having kids is the old-school form of immortality. I imagine many of those other billionaires are thinking about their dynasty.
  - xenophanes 13y ago
    Their kids will need SENS ~30 years after they do. I get that the typical plan is to have a dynasty via grand kids, great grand kids, etc, but it's dumb to ignore SENS.
    - at-fates-hands 13y ago
      Just as an FYI - I believe you're using SENS as in: "SENS stands for Strategies for Engineered Negligible Senescence, a detailed plan for reversing human aging. It is an engineering approach that seeks to slow and then halt aging processes that are the side effects of our body's metabolic cycles" source: http://www.wisegeek.com/what-is-sens.htm http://www.wisegeek.com/what-is-sens.htm Correct?
izzydata 13y ago
Seems like the point this guy is trying to make is that being poor is relative. So while poor countries are now better off than they were 50 years ago they are still about as poor as they were 50 years ago in comparison to other countries that also become better off. I don't know if this is a good or a bad way to measure a country. Would there not be any poor countries if all countries had about the same wealth distribution? Perhaps all countries would be poor then.
- tsotha 13y ago
  >So while poor countries are now better off than they were 50 years ago they are still about as poor as they were 50 years ago in comparison to other countries that also become better off. That seems like unambiguous progress to me.
lmg643 13y ago
Bill Gates would have to believe his efforts were worthwhile in order to keep himself motivated to try. He's essentially "all-in" on the Gates Foundation. His pronouncement on eliminating poverty is an aspiration he phrases as a "fact" and we are taken aback by the audacious claim, primarily because he's been wildly successful before, so hey, lightning might strike twice. What if? And why discourage him? It doesn't seem likely to me, but I don't have billions to spend proving my theories. When I think in terms of probably outcomes, it seems more likely that the US will regress towards the global mean, rather than remaining as a permanent statistical outlier. I also keep in mind that "poverty" has a way of becoming a dynamic definition. In the US, it's becoming that anyone below the 33rd percentile is poor by that definition. So poverty is always with us in that frame of mind.
- winfred 13y ago
  >When I think in terms of probably outcomes, it seems more likely that the US will regress towards the global mean, rather than remaining as a permanent statistical outlier. I'm not sure what metric you are using to compare the US to other countries that make you think it is a statistical outlier, but unless your key metric is military spending, I have some news for you...
- jacalata 13y ago
  In the US, it's becoming that anyone below the 33rd percentile is poor by that definition. So poverty is always with us in that frame of mind. I think you are conflating the measures of Relative Poverty and the Supplemental Poverty Threshold [0]. Relative poverty is a measure of inequality and is explicitly labelled as such. The supplemental threshold is people whose entire income is less than the 33rd percentile of spending on necessities, and it is not intrinsically true that this group must always exist. [0] http://www.census.gov/hhes/povmeas/methodology/supplemental/research/aea2013.kshort.pdf http://www.census.gov/hhes/povmeas/methodology/supplemental/...
acd 13y ago
We need to reform the banking sector, the too big to fail banks that creates credit out of nothing and gets saved by the state when they make misstakes. When the 1% superrich can't create money out thin air we will have a better middle class. See the GDP per capita vs median income development on the link below http://lanekenworthy.net/2008/09/03/slow-income-growth-for-middle-america/ http://lanekenworthy.net/2008/09/03/slow-income-growth-for-m...
ommunist 13y ago
What really drives me crazy is that robots are far more productive and generate so much more wealth than humans. And they are so poor.
gesman 13y ago
Poor are not staying poor by their "struggle to prosper". Poor are staying poor by keeping doing things that keeping them poor, like getting further down in debt, not acquiring new skills, not being productive and not expressing their creativity. And of course rich have their habits as well. Give money to poor guy, take all the money from rich guy and see where they are in in 5 years. Chances are they'll be back to their original platoes.
- JimmyM 13y ago
  Very true. Taking all the money from a coddled, unemployed trust fund child would definitely have no effect on their solvency in the long-term, because money is entirely distributed based on merit. I mean, thank god, can you imagine if it wasn't?
- dwaltrip 13y ago
  Do you have any evidence for your claims? From what I have read and seen, the effects of poverty are often are a reinforcing, positive feedback loop. Here is a small example: financial struggles alone, irrespective of inherent talent or background, actual reduces one's cognitive ability on a day to day level [1]. How's that for being kicked while your down? And I'm sure I don't need to explain how privilege and wealth benefits those who are born into it. [1] http://www.princeton.edu/main/news/archive/S37/75/69M50/index.xml?section=topstories http://www.princeton.edu/main/news/archive/S37/75/69M50/inde...
- benched 13y ago
  I hope that someday, saying garbage like this is considered the same as saying that women aren't as good at math as men, or black people aren't as hardworking as the chinese.
- john2x 13y ago
  > by keeping doing things that keeping them poor, like getting further down in debt, not acquiring new skills, not being productive and not expressing their creativity. That's because they don't have the choice, or the chance, to do not do things. At least for the poor people in 3rd world countries. If they don't spend their entire day working for scraps, they (or more likely their children) could die the next day.
leterter 13y ago
The American Dream!
aaron695 13y ago
Basically the author is trying to sell books by jumping on a crappy populist view and trying to imply Bill Gates mentioned him. As per the article yesterday on HN, India's life expectancy has raised by 5 years in the past 10 years. That blows my mind, and a quick google confirms it. http://goo.gl/X7H416 http://goo.gl/X7H416 And that's on 1 billion people. And no you can't get average figures like that unless it's the entire population getting some significant benefit.
tim333 13y ago
So Kay says “... rich countries got rich and why poor countries stay poor” and Gates says that's false. I think if you actually look at the data numerically then Gates wins eg. http://www.youtube.com/watch?v=jbkSRLYSojo#t=238 http://www.youtube.com/watch?v=jbkSRLYSojo#t=238
alexeisadeski3 13y ago
Inequality whining has already jumped the shark.
- quadrangle 13y ago
  Because it's got nothing more to say and nothing relevant anymore? The "jumped the shark" reference is to absurd things after running out of ideas. It doesn't apply at all here. Non sequitur. Inequality whining is just getting started, given that we're on track for the problem to just get worse.
  - alexeisadeski3 13y ago
    It never had anything to say, it never was relevant. These two facts are only now becoming obvious to more people, hence the shark jumping.
    - quadrangle 13y ago
      That's not what shark jumping means. It means that something was relevant but now has run out of ideas.
- 1stop 13y ago
  Can't those poor coloured people just die already, they are disturbing my white privilege! /s
dba7dba 13y ago
Wrong title. It should say: The world's rich get richer while the poor struggle to avoid getting poorer. Money makes money.
- bayesianhorse 13y ago
  Which is exactly the kind of attitude that gives nerds a bad reputation for lack of economic understanding...
huherto 13y ago
The article was frustrating since it is not clear on what the disagreement is. My guess is that John Kay is referring to the first myth. "POOR COUNTRIES ARE DOOMED TO STAY POOR" According to Gates, poor countries are making progress. According to Kay, there is a ceiling on how much progress a country can make. So really, the positions are not contradictory since there is a big space between the current state of poor countries (which are making progress) and the ceiling that Kay proposes. Furthermore the ceiling it self can move up overtime. And now I hate for Kay for not writing a clear article.
- AnimalMuppet 13y ago
  And, if I understand him correctly, the ceiling is set by the quality of the country's institutions. That's really hard to fix. Gates may be right that most countries will be out of absolute poverty. (In fact, I hope he is right.) But I suspect that Kay is right that most countries still won't be in the "rich" camp, even by 2014 standards.
tsotha 13y ago
I think it's a mistake to rely too heavily on productivity to explain wealth disparities among countries. Productivity increase, at least the way economists measure it, is mostly a function of rising labor costs and as such is a symptom of wealth and not a driver. It's not that you get wealthier because you're more productive. It's that your measured productivity increases as increased labor costs make automation pencil out.
downandout 13y ago
I have never heard of John Kay, but think it's normally a bad sign when someone believes that a very famous person they have never met or spoken to is talking directly to them through the media. It indicates that he is either a) crazy or b) so full of himself that believes that Bill Gates read his obscure book, and was so disturbed by its content that he decided to launch a worldwide PR campaign against the ideas contained in it. Either way, this is an interesting PR strategy.
xname 13y ago
"So what about China and India? Their recent growth performance has been exceptional, but both are still desperately poor countries by the standards set by Switzerland and Norway. The gap will take many generations to eradicate." -- This is kind of ridiculous. How can you pick an exceptional rich sample to set standards? Seriously? ????????
zvanness 13y ago
Not trying to be dismissed as a conspiracy theorist, but how many people have actually heard of the Rothschild Family? Niall Ferguson wrote a book on them called "The House of Rothschild: Money's Prophets". He said their wealth is measured not in the billions but in the trillions. They and a handful of other families have single handily started and funded wars, overthrown governments, chosen presidents and leaders, established central banks in almost every country, bought out the largest shares in every major news outlet, etc. The problem is that these few that have their hands on almost everything just don't know when to stop. They truly have no mercy. http://www.amazon.com/The-House-Rothschild-Prophets-1798-1848/dp/0140240845 http://www.amazon.com/The-House-Rothschild-Prophets-1798-184...
bayesianhorse 13y ago
As far as I understood it, Bill Gates was arguing that the worst of poverty is vanishing surprisingly well. Kay says this is wrong, because the countries with intermediate economies aren't on the top yet. I think the basic misunderstanding is that economic development - if it works - is a stochastic exponential process. Humans tend to underestimate this function badly. On the one hand it is very fast - after the US went from where Turkey is today to its current economy in "only" 50 years, but in every particular year, looking into the future, progress looks like a painstakingly slow crawl.

132 points by rrgmitchell 13y ago

Sorry, but does this guy not realize that many of the world's richest people gave half their wealth to the Gates foundation, thus forming an engine for human improvement that could have never been attained by distributing their wealth? The wealth divide is not a "real" problem - the real problem is figuring out how to keep everyone employed in a world that is constantly evolving, where most jobs are getting automated or over-seaed (neither of which is a problem in of itself). A real problem is figuring out how to stop corrupt people that enrich themselves by being parasites to the poor/middle class, take advantage of our relatively indifferent government, or our screwed up law system (like patent trolls).

buster 13y ago
Many?
- gavanwoolery 13y ago
  113 at current count. https://en.wikipedia.org/wiki/The_Giving_Pledge https://en.wikipedia.org/wiki/The_Giving_Pledge Yes, there are 1,426 billionaires at current count, but that is still a significant number. Many != the majority.
deleted 13y ago
[deleted]
ehmish 13y ago
Many did give much wealth to the Gates foundation, but it would be far from most.The wealth divide seems to be a pretty real problem. Concentrating all the wealth of the world in a few people seems pretty sub-optimal, trials[ 1] of directly giving cash to impoverished people demonstrates that if wealth was redistributed more evenly, it would not be wasted. [1]http://forbesindia.com/article/real-issue/direct-cash-transfers-what-money-can-buy/35525/1 http://forbesindia.com/article/real-issue/direct-cash-transf...
benched 13y ago
I don't think either wealth disparity or unemployment are themselves direct problems. I think the huge and fundamental problem, which is a problem even in a so-called 'rich' country like the US, is access to the basics of human life, which I think are food, housing, and education of a certain standard. Wealth disparity itself may be ok, but in the US at least it seems to contribute to costs of education and housing rising so as to prevent access by a large segment of the people. Ways must be found to solve that, even if wealth disparity itself doesn't necessarily need solving.
vanderZwan 13y ago
First, I don't understand what you are trying to argue, as that "engine" works by redistributing their wealth. Second, John Kay's arguments are not contradicting (or even discussing) the main premise of Bill Gates' letter - which is to convince people aid is effective, but one specific argument made within it regarding wealth and the global economy: > I was surprised and disappointed that the data you chose to support your case referred not to the distribution of average incomes across states – the subject of your letter – but to the distribution of household incomes across the world. These are very different things. If I was an economist, I would also point out that mixing up the data like is disingenuous and probably damaging to the overall argument, even if to lay-people like you and me it makes little difference. Finally, as far as I can see the author of this article and Gates want the same thing: to help the poorest on the planet. The difference is that Gates focuses on what has worked and what his vision is of what happens when things go right. Kay on the other hand focuses on what has gone wrong and is still going wrong and why, and thus is deserving of being paid attention to by people with the power and intent to change things (like Bill Gates for example). This is constructive criticism.
Avshalom 13y ago
Some of the world's richest people have signed a non legally binding pledge to give half their wealth to the Gates Foundation eventually

liquidise 13y ago

People like this grind my gears. Many things go into being rich, but the top of that list is making more money than you give away. Practically by definition, people who continue to do this will continue to get rich. There is no shortage of humanitarian efforts, funds, and foundations started by the wealthy for the sake of the underprivileged. To suggest these are insufficient because their founders remain wealthy is foolhardy.

vanderZwan 13y ago
> Many things go into being rich, but the top of that list is making more money than you give away. Practically by definition, people who continue to do this will continue to get rich. Except there is this thing called "diminishing returns" that somehow does not apply to being rich. Also, wouldn't "spend" be a more appropriate description than "give away" here? > There is no shortage of humanitarian efforts, funds, and foundations started by the wealthy for the sake of the underprivileged. To suggest these are insufficient because their founders remain wealthy is foolhardy. Luckily, the author of this article isn't suggesting that - he is arguing that in its current form these efforts are insufficient because the poor remain poor, and that he has good reasons to believe they will stay poor if we don't change specific problems not addressed in Gates' letter.
- liquidise 13y ago
  I'll bite. > there is this thing called "diminishing returns" that somehow does not apply to being rich Once you hit a certain amount of money, investments begin to drive your income. Unlike salary which is additive, investments tend to be multiplicative in their wins and losses. So you stand to make (or lose, if you are bad at it) money faster. > Also, wouldn't "spend" be a more appropriate description than "give away" here? Semantics. Credit and debits are all i am referring to. The author is literally arguing that poor places are not getting richer fast enough. Money alone does not make for better living conditions. There are environmental constraints, infrastructure additions, and countless logistical issues. The author provides no solutions that i saw, and instead spends his time ranting about comparison between developed vs developing countries.
13y ago

leobelle 13y ago

Personally I think this is a public policy issue to be addressed with the government which in democratic nations requires a sea change social movement given that most are pretty conservative. Addressing the issue of wealth disparity to rich people seems entirely pointless to me. Anyway, this more like a publicity stunt not meant to address poverty but to get this guy rich and or famous visa vis plugging his book.

quaunaut 13y ago

Y'know, I have seen Mr. Kay talk before, and I wouldn't regard him as an idiot. However, he's seemed to have missed the entire point Bill was making. > So what about China and India? Their recent growth performance has been exceptional, but both are still desperately poor countries by the standards set by Switzerland and Norway. The gap will take many generations to eradicate. Which Bill completely acknowledges? However, he also makes the point that today, China and India are moving up at considerable speed when it comes to income. They have the abject poor still, no one will disagree, but compared to where they were 20 years ago, even the poorest in those countries are much, much better off, and all signs point to it getting better very quickly. > But you do not have to venture far from the centre of Nairobi or Shanghai, and only round the corner in Mumbai, to see sights unimaginable in Norway or Switzerland. The appeal to emotions here wasn't needed, nor was it affective. Not to mention, it still misses the same point: Bill isn't saying that things don't suck currently, he's saying that while they're not great, they're considerably better than they were before and that's an ongoing trend.

old-gregg 13y ago
I think their disagreement stems from the difference in how they define "poor". Gates is certainly right (it just takes a bit of traveling to agree with him) that hungry-and-dying type of poor is rapidly disappearing all over the world. But if you look at living-hand-to-mouth poor, I can understand John's reasoning. Yes, average incomes (productivity) have gone up but you also see how prices on commodities are rapidly raising in the developed countries to make up for that. [1] This makes me wonder if the universal basic income is ever going to work. Look at insane costs of healthcare/education in the US - no doubt caused, in part, by "free money" either through government-assisted programs or employer-sponsored insurance. Perhaps it's an inherent property of capitalism: some things always end up barely within reach of a lower class. [1] Hence the need for things like http://en.wikipedia.org/wiki/Big_Mac_Index http://en.wikipedia.org/wiki/Big_Mac_Index
- bsbechtel 13y ago
  >Perhaps it's an inherent property of capitalism: some things always end up barely within reach of a lower class. I wouldn't say that's true, we just need to figure out ways to produce those things cheaply enough (through automation, other technologies) that everyone can enjoy them. Take a look at agriculture in the US...even the poorest people here have access to (not very healthy) food whereas just under 100 years ago many were starving in the Great Depression. This is because agricultural technology has led us to an abundance of cheap food that everyone can afford at some level or another.

FD3SA 13y ago

I've always been baffled by the investment choices of billionaires. If you accept an empirical view of the universe, no matter what you do, you will eventually die. Your experiences of the world will cease to exist. Therefore, the only rational investment would be in life extension technologies (SENS, advanced prosthesis, etc.). At first, this might sound repulsive. The idea of a group of elites discovering and hoarding the fountain of youth for themselves while the masses suffer is dystopian. However, upon closer examination, it becomes clear that the money invested in achieving any significant life extension will have a massive public benefit. This is because combating aging requires curing almost every known disease at its source. Any progress made in this front will have massive benefits to healthcare worldwide. So the question is, why do billionaires invest so irrationally? Why do they buy yachts and invest in hedge funds and social media companies? From the comment below, 113 billionaires out of 1426 are current members of the The Giving Pledge. What are the rest doing with their money? P.S. I must be clear that I don't consider members of Bill Gates' Giving Pledge part of the group of "irrational billionaires". The Gates Foundation funds an incredible amount of basic research for a philanthropic organization.

nostromo 13y ago
Having kids is the old-school form of immortality. I imagine many of those other billionaires are thinking about their dynasty.
- xenophanes 13y ago
  Their kids will need SENS ~30 years after they do. I get that the typical plan is to have a dynasty via grand kids, great grand kids, etc, but it's dumb to ignore SENS.
  - at-fates-hands 13y ago
    Just as an FYI - I believe you're using SENS as in: "SENS stands for Strategies for Engineered Negligible Senescence, a detailed plan for reversing human aging. It is an engineering approach that seeks to slow and then halt aging processes that are the side effects of our body's metabolic cycles" source: http://www.wisegeek.com/what-is-sens.htm http://www.wisegeek.com/what-is-sens.htm Correct?

izzydata 13y ago

Seems like the point this guy is trying to make is that being poor is relative. So while poor countries are now better off than they were 50 years ago they are still about as poor as they were 50 years ago in comparison to other countries that also become better off. I don't know if this is a good or a bad way to measure a country. Would there not be any poor countries if all countries had about the same wealth distribution? Perhaps all countries would be poor then.

tsotha 13y ago
>So while poor countries are now better off than they were 50 years ago they are still about as poor as they were 50 years ago in comparison to other countries that also become better off. That seems like unambiguous progress to me.

lmg643 13y ago

Bill Gates would have to believe his efforts were worthwhile in order to keep himself motivated to try. He's essentially "all-in" on the Gates Foundation. His pronouncement on eliminating poverty is an aspiration he phrases as a "fact" and we are taken aback by the audacious claim, primarily because he's been wildly successful before, so hey, lightning might strike twice. What if? And why discourage him? It doesn't seem likely to me, but I don't have billions to spend proving my theories. When I think in terms of probably outcomes, it seems more likely that the US will regress towards the global mean, rather than remaining as a permanent statistical outlier. I also keep in mind that "poverty" has a way of becoming a dynamic definition. In the US, it's becoming that anyone below the 33rd percentile is poor by that definition. So poverty is always with us in that frame of mind.

winfred 13y ago
>When I think in terms of probably outcomes, it seems more likely that the US will regress towards the global mean, rather than remaining as a permanent statistical outlier. I'm not sure what metric you are using to compare the US to other countries that make you think it is a statistical outlier, but unless your key metric is military spending, I have some news for you...
jacalata 13y ago
In the US, it's becoming that anyone below the 33rd percentile is poor by that definition. So poverty is always with us in that frame of mind. I think you are conflating the measures of Relative Poverty and the Supplemental Poverty Threshold [0]. Relative poverty is a measure of inequality and is explicitly labelled as such. The supplemental threshold is people whose entire income is less than the 33rd percentile of spending on necessities, and it is not intrinsically true that this group must always exist. [0] http://www.census.gov/hhes/povmeas/methodology/supplemental/research/aea2013.kshort.pdf http://www.census.gov/hhes/povmeas/methodology/supplemental/...

acd 13y ago

We need to reform the banking sector, the too big to fail banks that creates credit out of nothing and gets saved by the state when they make misstakes. When the 1% superrich can't create money out thin air we will have a better middle class. See the GDP per capita vs median income development on the link below http://lanekenworthy.net/2008/09/03/slow-income-growth-for-middle-america/ http://lanekenworthy.net/2008/09/03/slow-income-growth-for-m...

ommunist 13y ago

What really drives me crazy is that robots are far more productive and generate so much more wealth than humans. And they are so poor.

gesman 13y ago

Poor are not staying poor by their "struggle to prosper". Poor are staying poor by keeping doing things that keeping them poor, like getting further down in debt, not acquiring new skills, not being productive and not expressing their creativity. And of course rich have their habits as well. Give money to poor guy, take all the money from rich guy and see where they are in in 5 years. Chances are they'll be back to their original platoes.

JimmyM 13y ago
Very true. Taking all the money from a coddled, unemployed trust fund child would definitely have no effect on their solvency in the long-term, because money is entirely distributed based on merit. I mean, thank god, can you imagine if it wasn't?
dwaltrip 13y ago
Do you have any evidence for your claims? From what I have read and seen, the effects of poverty are often are a reinforcing, positive feedback loop. Here is a small example: financial struggles alone, irrespective of inherent talent or background, actual reduces one's cognitive ability on a day to day level [1]. How's that for being kicked while your down? And I'm sure I don't need to explain how privilege and wealth benefits those who are born into it. [1] http://www.princeton.edu/main/news/archive/S37/75/69M50/index.xml?section=topstories http://www.princeton.edu/main/news/archive/S37/75/69M50/inde...
benched 13y ago
I hope that someday, saying garbage like this is considered the same as saying that women aren't as good at math as men, or black people aren't as hardworking as the chinese.
john2x 13y ago
> by keeping doing things that keeping them poor, like getting further down in debt, not acquiring new skills, not being productive and not expressing their creativity. That's because they don't have the choice, or the chance, to do not do things. At least for the poor people in 3rd world countries. If they don't spend their entire day working for scraps, they (or more likely their children) could die the next day.

leterter 13y ago

The American Dream!

aaron695 13y ago

Basically the author is trying to sell books by jumping on a crappy populist view and trying to imply Bill Gates mentioned him. As per the article yesterday on HN, India's life expectancy has raised by 5 years in the past 10 years. That blows my mind, and a quick google confirms it. http://goo.gl/X7H416 http://goo.gl/X7H416 And that's on 1 billion people. And no you can't get average figures like that unless it's the entire population getting some significant benefit.

tim333 13y ago

So Kay says “... rich countries got rich and why poor countries stay poor” and Gates says that's false. I think if you actually look at the data numerically then Gates wins eg. http://www.youtube.com/watch?v=jbkSRLYSojo#t=238 http://www.youtube.com/watch?v=jbkSRLYSojo#t=238

alexeisadeski3 13y ago

Inequality whining has already jumped the shark.

quadrangle 13y ago
Because it's got nothing more to say and nothing relevant anymore? The "jumped the shark" reference is to absurd things after running out of ideas. It doesn't apply at all here. Non sequitur. Inequality whining is just getting started, given that we're on track for the problem to just get worse.
- alexeisadeski3 13y ago
  It never had anything to say, it never was relevant. These two facts are only now becoming obvious to more people, hence the shark jumping.
  - quadrangle 13y ago
    That's not what shark jumping means. It means that something was relevant but now has run out of ideas.
1stop 13y ago
Can't those poor coloured people just die already, they are disturbing my white privilege! /s

dba7dba 13y ago

Wrong title. It should say: The world's rich get richer while the poor struggle to avoid getting poorer. Money makes money.

bayesianhorse 13y ago
Which is exactly the kind of attitude that gives nerds a bad reputation for lack of economic understanding...

huherto 13y ago

The article was frustrating since it is not clear on what the disagreement is. My guess is that John Kay is referring to the first myth. "POOR COUNTRIES ARE DOOMED TO STAY POOR" According to Gates, poor countries are making progress. According to Kay, there is a ceiling on how much progress a country can make. So really, the positions are not contradictory since there is a big space between the current state of poor countries (which are making progress) and the ceiling that Kay proposes. Furthermore the ceiling it self can move up overtime. And now I hate for Kay for not writing a clear article.

AnimalMuppet 13y ago
And, if I understand him correctly, the ceiling is set by the quality of the country's institutions. That's really hard to fix. Gates may be right that most countries will be out of absolute poverty. (In fact, I hope he is right.) But I suspect that Kay is right that most countries still won't be in the "rich" camp, even by 2014 standards.

tsotha 13y ago

I think it's a mistake to rely too heavily on productivity to explain wealth disparities among countries. Productivity increase, at least the way economists measure it, is mostly a function of rising labor costs and as such is a symptom of wealth and not a driver. It's not that you get wealthier because you're more productive. It's that your measured productivity increases as increased labor costs make automation pencil out.

downandout 13y ago

I have never heard of John Kay, but think it's normally a bad sign when someone believes that a very famous person they have never met or spoken to is talking directly to them through the media. It indicates that he is either a) crazy or b) so full of himself that believes that Bill Gates read his obscure book, and was so disturbed by its content that he decided to launch a worldwide PR campaign against the ideas contained in it. Either way, this is an interesting PR strategy.

xname 13y ago

"So what about China and India? Their recent growth performance has been exceptional, but both are still desperately poor countries by the standards set by Switzerland and Norway. The gap will take many generations to eradicate." -- This is kind of ridiculous. How can you pick an exceptional rich sample to set standards? Seriously? ????????

zvanness 13y ago

Not trying to be dismissed as a conspiracy theorist, but how many people have actually heard of the Rothschild Family? Niall Ferguson wrote a book on them called "The House of Rothschild: Money's Prophets". He said their wealth is measured not in the billions but in the trillions. They and a handful of other families have single handily started and funded wars, overthrown governments, chosen presidents and leaders, established central banks in almost every country, bought out the largest shares in every major news outlet, etc. The problem is that these few that have their hands on almost everything just don't know when to stop. They truly have no mercy. http://www.amazon.com/The-House-Rothschild-Prophets-1798-1848/dp/0140240845 http://www.amazon.com/The-House-Rothschild-Prophets-1798-184...

bayesianhorse 13y ago

As far as I understood it, Bill Gates was arguing that the worst of poverty is vanishing surprisingly well. Kay says this is wrong, because the countries with intermediate economies aren't on the top yet. I think the basic misunderstanding is that economic development - if it works - is a stochastic exponential process. Humans tend to underestimate this function badly. On the one hand it is very fast - after the US went from where Turkey is today to its current economy in "only" 50 years, but in every particular year, looking into the future, progress looks like a painstakingly slow crawl.