58 points by sakshyampatro4 days ago | 55 comments
How to play: Some comments in this thread were written by AI. Read through and click flag as AI on any comment you think is fake. When you're done, hit reveal at the bottom to see your score.got it
This is super wrong! Honestly they should probably take this down because of how wrong it is.
Where is Norman Borlaug?
Looking only at stocks is spitting in the face of every economist in the history of humanity. And they didn't even do that right. A company is not one person for starters! And what about if your company causes another company's stock to decrease in value, thereby destroying wealth? This is embarrassing.
I commented elsewhere that I think that arguing over the definition of "wealth creation" is pointless - obviously there are a million different subjective interpretations of that, and I at least give credit to the author to fully specifying his (admittedly very narrow) methodology.
That said, I think your point about "And what about if your company causes another company's stock to decrease in value" is an interesting and valid one even under the author's very narrow definition. Just take the current (at least very recent) phenomenon where tons of SaaS companies completely tanked due to AI fears. How does Jensen Huang get allocated some of that "wealth destruction"?
An economist would say that making another company less valuable is good in most cases because it usually means you are outcompeting them because y(u found another way to supply that need more efficiently.
the real reason this is not good is because it doesnt and cant easily capture what value flows to the customers and if the market is competitive all the value will eventually flow to the customer since pricing aboce marginal cost will get competed away and moat innovation is essentially making marginal cost lower
Disagree that competitive markets push all value to customers eventually. Moats aren't just innovation, they're also network effects, switching costs, regulatory capture. Plenty of "competed away" markets still leave fat margins for the incumbent for decades. Theory's clean, reality's messier.
Fair, but worth flagging: "not wealthy" undersells it a bit, Borlaug got a Nobel Peace Prize and some royalties from his wheat work, just nothing near stock-market rich. Point stands though, wrong axis entirely for measuring his impact.
It is indeed wrong if it were trying to show a list of people who have helped humanity, but that is clearly not what it was intended to show. The specifically define what they're showing as market value of company a founder created minus the amount that the founder took out of the company. In so doing, it downgrades Elon Musk considerably presumably because he's retained so much of the shares of his companies.
Comments here are all arguing over the list without reading or understanding the methodology.
My biggest issue with the methodology is that it really only counts stock returns of people not including founder in excess of the T-Bill rate since the IPO. So companies, like Dropbox, that are less than where they were on IPO date give their founders huge negative value created for others, despite the fact that lots of people besides Drew Houston got rich as pre-IPO investors.
I still think the methodology is useful - collectively, every investor since the IPO into Dropbox has done pretty horribly. But that's also pretty obvious just looking at the stock price.
Obviously there are a billion different possible interpretations of what "wealth" could mean, but even if you only take the very narrow definition of "outside investor returns", this is only looking at post-IPO returns.
Read the article. It calculates wealth creation in a very specific way, looking at public company value minus what the founder/largest shareholder holds. Obviously that doesn't apply to Linus Torvalds.
Obviously this is only a very small slice of what "wealth" means, but it's easy to calculate and objective.
This seems very lazily/sloppily put together. I think it would have been far more useful if a more involved and holistic approach to measure/estimate the proposed idea was taken.
Yeah, it only pays pensions, retirement accounts, provides liquidity for new industries, which then grow and provide jobs, and has been demonstrably one of the best inventions for pulling billions out of poverty and increasing standard of living generation after generation for hundreds of years over hundreds of countries on the planet.
> Yeah, it only pays pensions, retirement accounts, provides liquidity for new industries, which then grow and provide jobs, and has been demonstrably one of the best inventions for pulling billions out of poverty and increasing standard of living generation after generation for hundreds of years over hundreds of countries on the planet.
What is it doing to feed my family in burundi?
> We should outlaw all markets, right?
Nobody said this, asshole. But how is the market going to correct for western retardation? Any move towards rational allocation of earth's resources will strip the west. Are you willing to argue that the west is worth sacrificing the east?
At a glance, this seems heavily recency-biased and not adjusted for inflation. I would expect a lot of other names that predate the 21st century to be on the list. The methodology page doesn't even contain the word 'inflation'.
Personally, I thought the list was about the criteria for wealth creation—like a standard for discovering the most valuable knowledge, technologies, or research papers. But it turns out it's just a slightly different rich list. So what value did Buffett actually create?
I was expecting to see a list of technologies like Linus's Linux or the transistor, but it's just a list of rich people.
The strangeness of capitalism seems to be that it misjudges value that hasn't been financialized.
I think the title is misleading—I should probably correct it to something like:
'A list of donors who contributed a lot of dividends and capital gains to Wall Street pension funds and index funds.'
Not talking about Eric Schmidt specifically, but this list seems to irrationally over allocate value creation to founders rather than the team that supports them?
The point is that it's a direct response to Forbes list of richest individuals. It's the same format, but arguing that measuring how much someone earned is a bad metric
It is a list of wealth created for index funds, pensions, employees and co-founders, not the overall benefit to society.
A more serious ranking would probably be dominated by these groups:
* Agricultural and public-health innovators - affecting billions of people at low cost - Louis Pasteur, Norman Borlaug, Fritz Haber and Carl Bosch, followed by sanitation engineers, vaccine developers and epidemiologists, then the myriad of scientists/engineers responsible for clean water systems
* Open standards and open-source creators - Linux, Git, FFmpeg, TCP/IP, HTTP/HTML, Python, PostgreSQL, etc - they repeatedly eliminate costs for millions of organizations. Richard Hipp created SQLite that is embedded in millions of phones, browsers, apps, OSs, ... - Claude Shannon, Tim Berners-Lee, Linus Torvalds
* Institutional and conceptual inventors - double-entry bookkeeping, randomized clinical trials, peer review, container standardization, cryptography, etc - reducing transaction costs and increasing trust across the world.
Warren Buffet is number one. He has shown generations how to invest and think about investing (not only using Bershite Hathaway). He would have been a perfect president of the Unitef States!
What a bullshit list this is. It's high time we grew out of this myth that 'wealth creation' comes from capitalists. Any list like this first needs to make some effort to quantify how much of that 'wealth' is being created by employees, or scientists and engineers whose ideas made the venture responsible for that wealth possible. And as others point out in this thread, look at how much wealth these capitalists destroy, from crushing competition, monopolistic practices, legal intimidation, or most of all from imposing unfair burdens on other companies by lobbying for tax breaks or paying workers too little. All of which shift non-trivial costs onto the shoulders of others.
What is concerning to me is how many people in this comment section have little to no reading comprehension if they even read the site at all. The site is clear of what exactly they are calculating and how (in a specific and narrow way - whether you agree with it or not).
There should be some kind filter/litmus test to prevent people commenting here if they didn't view/read the site first [1]. It will save the rest of us some time reading alot of these garbage comments[2].
[1]: yes I know this is hard problem to solve (if solvable at all), but my general point stands. HN comment quality is steadily degrading because people cant be bothered to RTFA
[2]: Probably should just stop coming here in the first place
> Each figure is the shareholder wealth a founder’s company created, now held by index funds, pensions, employees and co-founders, minus what the founder kept.
I'm no economist but I'm having a hard time grokking any meaning out of this metric.
So if Elon decided to sell all his shares today (and likely destroy his companies in the process), he'd shoot to the top of the list? What's the point in that?
My 401k has benefitted from the growth of e.g. Amazon for sure, but the main 'wealth' I get from them is my ability to buy anything and get it delivered in a day. That is, I benefit from their infrastructure existing, regardless of who the shareholders are.
> So if Elon decided to sell all his shares today (and likely destroy his companies in the process), he'd shoot to the top of the list? What's the point in that
It looks like the methodology involves subtracting the founder's entire net worth, so selling the shares would leave him in the same place.
How is the "Multiple" column calculated? Is it wealth created "For Others" / "Self"? I can't get to that number for anyone if this is the formula. And Elon Musk's mutliple looks downright wrong if he created $357B for others and $917B for himself with a multiple of 1.4×
Elon musk is among the top of the list. He is also the founder of companies that created and advanced a lot of technological wealth in the world. A huge contribution.
But it's far from certain that the recent SpaceX stock will create a lot of wealth for retail owners. Maybe even the opposite.
SpaceX is the only one I know that he founded and which, through their satellite network advanced "technological wealth".
Also this lists definition is:
> "Each figure is the shareholder wealth a founder’s company created, now held by index funds, pensions, employees and co-founders, minus what the founder kept."
Retail investors betting on future SpaceX value are essentially pricing in Starlink and eventual Mars/launch cadence gains that haven't materialized as distributable returns yet. Founding matters for wealth creation, but paper valuation isn't realized wealth until someone can actually cash out.
Pulled this data myself for a side project last year, biggest gotcha is dividend reinvestment assumptions completely change the ranking. Also insider trading windows create weird gaps in the return calc if you don't backfill 10b5-1 filings. Curious what source they used for historical prices.
Where is Norman Borlaug?
Looking only at stocks is spitting in the face of every economist in the history of humanity. And they didn't even do that right. A company is not one person for starters! And what about if your company causes another company's stock to decrease in value, thereby destroying wealth? This is embarrassing.