Often people assume that rich people are powerful. Balaji Srinivasan disputes that notion. Why would people leave for Dubai or Singapore if they are powerful? Why would Elon Musk escape California for Texas, if he could reform California? Why would startup founders flee San Francisco and set up a shop in Miami?
But let’s discuss money and inequality first. You hear politicians complaining about billionaires and millionaires in one sentence. According to some estimates, there are 62.5m millionaires globally, but only 3,500 billionaires. Most billionaires live in the US, but they are less than a thousand. But in the US, there are on the order of 30,000x more millionaires than billionaires. Between 20-30 million people in the US are millionaires.
To complicate the issue further – we need to enter the notion from previous two articles – we need to see inequality as a dynamic phenomenon. Taleb writes that around ten percent of Americans will spend at least a year of their life in the top 1% and around half of the US population will spend at least a year in the top 10% of the wealthiest people.
The inequality in the US is very dynamic compared to Europe. A third of the richest European families/dynasties were the richest centuries ago. Sam Bankman-Fried was 60th richest person on the planet just two months ago. Now he is not, nor is he a free man.
Inequality is dynamic also from the viewpoint of the ascending world/classes and descending world/classes. Some people used to be high-net-worth and high status, but technology disrupted their business. They might be part of the old establishment but have to live with a sense that the good days are in a rearview mirror and the scene and its scenius have moved to other cities, industries and countries.
This brings us to the very recent exodus of tech talent from San Francisco to Miami or the “Message received” tweet form Elon Musk. A power-rich politician can chase away built-rich entrepreneurs and immigrants, often as the born-rich heirs and nepotists (e.g. NYT owners) are cheering the process just to turn their undeserved wealth into status and prestige within the old establishment.
Power-rich people are what Balaji calls political billionaires. People overseeing over billion-dollar budgets. These are often anonymous, unelected and unfireable bureaucrats without skin in the game.
Balaji asks was Stalin rich? He might have empty pockets but the whole USSR belonged to him and he could take what he pleased. Similarly, billionaires that fled San Francisco for Miami or Dubai chose exit over voice and loyalty. Often leaving the city and friends you like behind is painful, so choosing exit often implies these people kind of lost the battle for political reform in places they used to live.
The old establishment scored a victory by tech founders and billionaires leaving. But they might end up being kings of nothing when the proverbial winter comes.