PG Essays Inequality and Risk
8 snips
Oct 29, 2023 Exploring strategies to reduce economic inequality, the impact of reducing economic inequality on risk-taking and venture investing, the effects of economic inequality on startups, the relationship between inequality and risk, and the connection between wealth, power, and economic inequality.
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Equality Equals Taking From The Rich
- Reducing economic inequality is mathematically identical to taking money from the rich.
- That framing reveals consequences like changing incentives for risk-taking and reward.
Capping Rewards Kills Risk Appetite
- Risk and reward must be proportionate, so capping rewards reduces willingness to take risks.
- Many risky activities, especially startups, become unviable if top returns are curtailed.
Startups Are Small Boats
- Graham describes startups as small boats where one big wave can sink you.
- He notes roughly one in ten startups succeed and his startup returned 36x to early investors.