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My ideas are constantly changing as I learn. Sometimes they even change midway through writing a post.

Thursday, September 29

Inequality, Risk, and Productivity

As usual with his articles, I got about halfway through and lost interest. His articles are thought provoking, but I just can't seem to stay focused on his particular lines of thought for the whole article.

Let's rehearse the chain of argument so far. I'm heading for a conclusion to which many readers will have to be dragged kicking and screaming, so I've tried to make each link unbreakable. Decreasing economic inequality means taking money from the rich. Since risk and reward are equivalent, decreasing potential rewards automatically decreases people's appetite for risk. Startups are intrinsically risky. Without the prospect of rewards proportionate to the risk, founders will not invest their time in a startup. Founders are irreplaceable. So eliminating economic inequality means eliminating startups.

I'm skeptical that risk and reward are equivalent in the way he suggests. I'm skeptical that decreasing "rewards" would necessarily decrease productivity. In some cases, that might be so, but I've seen studies that suggest more pay sometimes results in LESS productivity. I don't know which is right. I'm guessing the relationship is more complicated than he suggests.

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