Yes, perhaps, but the missing part of this statement is that those who benefited from this arrangement would then have to compensate those who got screwed.

MZ, my experience is the opposite of yours. I, too, had to take shop courses I’ve never used, but I think they were VERY valuable, because I came to understand how things are done that, as a software engineer, I would otherwise never have done, and how people work that I would otherwise never worked with. I don’t propose this as an economic advantage, but just an advantage for “living in the real world.”

If you break up the Walton fortune into 7000 chunks and give 7000 people selected for entrepreneurial possibility 10 million a piece, and this theory is correct, wouldn’t the theory say that we would then see a wave of entrepreneurship from those 7000 which we would not see from the Waltons?

I think any counter-argument would have to invoke negative externalities – focusing on the negative effects of the confiscation/break-up itself, or the distribution; but any such counter-argument can be defeated by rewriting the argument to focus on preventing the creation of such giga-fortunes and favoring smaller fortunes. (For example, inheritance laws could be modified so that giving anyone more than 10 million is heavily penalized but any amount under that is favorably treated.)

Granite26: many people do not invest for those reasons. It’s hard to imagine that the investors in many techie-beloved startups like Tesla seriously expect to make billions of dollars off it; many tech millionaires invest to ‘do good by doing well’ or because the goal is crazy-awesome (John Carmack & Armadillo Aerospace come to mind).

And even if there is a negative effect, we don’t know that it would always and at every level of break-up be worse than its gain. To go back to my example, would breaking up and redistributing the Walton fortune do *so* much damage that the benefits of 7000 entrepreneurs looking to invest in something won’t exceed it?

From a social and cultural point of view, mixed in with rule breaking and exploration in High School, separating people makes a lot of sense. Hard to arrange it just so, but possible. Right now, most communities either force everyone together or have a cliff where kids are thrown off of into the pit of the “other” school. The nature and quality of the “other” options is what separates good districts from bad districts, but few or none do it right yet. Ideally, you need to keep fluidity so that one false move or bad quarter doesn’t doom you to the dungeon. As long as there is rapid mobility between realms, it is a great idea. Unfortunately, often the insidious things start small and aren’t clearly a problem until long after they have become infused in a clique. Making negative effects of attitude, habits, and choices apparent much sooner would be very good. Feedback loops longer than a few weeks are useless to a large chunk of teenagers. And any extremely discontinuous penalties lead to fatalism in some significant subgroup.

The problem is that many with wealth aren’t A) adventurous and B) don’t feel enough social responsibility to start businesses or otherwise directly foster the creative engines. Many have been convinced that they are doing that by investing in the stock market or some other indirect feeding of the Big Business Machine. I feel that, in the average case, that is exactly like thinking that you are directly helping the homeless guy you saw today by paying more Federal taxes.

I firmly feel it is my responsibility to, after doing as well as I can with my children and significant others, to use my skills to A) do the most good and, given A, B) make the most money so that I can find new ways to do or help other people do A. Having wealth creates a responsibility to perform at least as much as having high ability. Being neutral or negative in effect on the world is the only real sin there is.

For any wealthy individuals who truly pursue and directly support entrepreneurialism in a consistent and significant way, I would vote for zero taxes during those years they are cogent and active. When they are successful, I’d even vote for a rebate on some of the tax revenue they created (probably for some specific situations). For those hoarding and riding their wealth, I would double their taxes (or something along those lines). I totally applaud the former and despise, to some degree, the latter. And I despise societies that make the former harder than it is naturally, often by directly protecting big business thereby enshrining reverse economies of scale out of fear or ignorance. (Japan perhaps? France probably — their socialistish environment for small businesses is onerous.)

On the relatively poor entrepreneurs starting businesses, they tend to disappear more often, however they are more driven and are able to take existential risks more to some extent. Different businesses may require different types of actors for competitive success.

sdw