This is one of his best essays. However, PG is making an assumption here that is incorrect: Which in turn means the variation in the amount of wealth people can create has not only been increasing, but accelerating. The assumption that he is making is that wealth is something that has to do with work. If anything, to date, wealth has little to do with work, and more to do with organization. For example, technology did not enable Mark Zuckerberg to do enormous amounts of work. It enabled him to organize communication and to create an efficient organization to execute it. Same with Uber. Same with Ford. Those performing work get little wealth, whereas those performing organization get a lot. Decentralization of organization is going to upend this ecosystem. In time, the ability to drive a stranger across town for money will be a matter of leveraging a decentralized network. It will be a public resource, not administered by government, but simple there, like air. Furthermore, money is a poor proxy for value, and it does not have a reputation component. Reputation is going to become part of wealth.The form of fragmentation people worry most about lately is economic inequality, and if you want to eliminate that you're up against a truly formidable headwind—one that has been in operation since the stone age: technology. Technology is a lever. It magnifies work. And the lever not only grows increasingly long, but the rate at which it grows is itself increasing.
If we define "work" not as effort but as "creating wealth," the language Graham uses in the following paragraphs, then wealth is clearly associated with work. I would further define "wealth" as "stuff people are willing to pay for" (and define "pay" as "give up time, money, or other opportunities").
The tautological definition is, I think, better than making the mistake of confusing something like effort with work. A CEO does not exert 200 times more effort on the job than an average employee. How else can we define work to explain how technology enables people to "do more" today than before?But it is certainly not impossible for a CEO to make 200x as much difference to a company's revenues as the average employee.
Well, a tautological definition of anything will always be superior to an incorrect one. In the former case we learn nothing but are no worse for wear, and in the latter we may be acting on bad information. I'm not sure a new definition of work is needed. Some work requires less physical exertion and some requires more. Some work is quite valuable and some isn't. These parameters may or may not intersect.
I think you have the dictionary on your side. I also take your side in believing that the Facebook CEO has done a lot of work. When mk says "organize communication" and "create an efficient organization" that sounds like work to me. If we measure who is "productive in terms of work performed" by "who would have cost the business the most if they had never gone to the office" it's possible that MZ's income understates his contribution.
In a sense, MZ has done a lot of classical work; what in the past would have been done by letter carriers, stenographers, photographers, designers, publishers, etc, are all managed through Facebook. I think that's what Graham means when he says technology "magnifies" work. He doesn't literally mean that one is doing more work in less time, but rather creating the conditions where work is done by proxy for those who can figure out how. I think where Graham gets it wrong is in his assumption that most concentrated wealth is a result of technological innovation. In fact, most high paid people are financial services managers ("engineering" a new tradeable hedge instrument isn't the same as creating a new consumer product). Hyper-financialization is something that an be combated by policy tweaks, so long as they're well applied and root targeted. This is where I have a problem with Bernie Sanders. He seems to understand people's frustrations but doesn't seem to understand the root causes of them. Rich people are important to the world, and being rich isn't immoral, just like being poor isn't immoral.
Sure. Even so, the wealth hasn't gone to those that are more productive in terms of work performed. Technology has altered the ability to organize. It used to be that your family would inherit/acquire land, and the people that worked it sent you wealth. Industrialization changed this so that you could organize labor independent of land, and acquire wealth from the labor. Software changed this so you could organize labor independent of materials (or even independent of employees), and acquire wealth. The next step, is that organization will be possible without people as organizers.I think that's what Graham means when he says technology "magnifies" work. He doesn't literally mean that one is doing more work in less time, but rather creating the conditions where work is done by proxy for those who can figure out how.