The “Problem” is Wealth Inequality

The spirit of this piece is absolutely correct, but I think it misses an opportunity to go a level deeper. First let me clarify a couple of points I thought could have been better developed before I get to the main course.

Again, let’s quote the Oxford Dictionary definition of a “problem:”

A matter or situation regarded as unwelcome or harmful and needing to be dealt with and overcome.

One thing you’ll notice is absent from this definition is context around to whom this matter or situation is unwelcome or harmful, let alone how many people it affects. It’s just a matter or situation that is unwelcome. This is an extremely broad definition that quite easily encompasses “not knowing if you can get sushi delivered at 10pm” and “not knowing where the nearest dry cleaner is.” Are these not unwelcome situations? You think someone welcomes not knowing these things? Or doing chores for that matter?

Having a service that does my chores for me is absolutely a solution to a problem, however it’s not an important problem. I think that is actually the point, and it did come across, but I’d have appreciated a more rigorous explanation. There are important problems (eg, no access to clean water) and luxury problems (eg, not being able to listen to any song ever recorded whenever and wherever you like). Solutions to luxury problems can certainly be described as perks or privileges.

mo’ money, mo’ problems

Finally we come to what I think should have been the the main point of this piece; to paraphrase:

Solutions to luxury problems are not “changing the world.”

However I’d even be careful with this line of reasoning. To solve a problem for the rich is to change the world for the rich. Isn’t is reasonable to say that streaming music services like Spotify or Apple Music “changed the world” for those who could afford these services and pay for unlimited mobile data? The thing one could not claim, however, is that these services changed the world for a majority of people, or that these services solved any important problems.

I think that founders are prone to getting carried away with themselves. To found a company, it’s been said you (1) have to be a bit insane, (2) must have unwavering belief in your idea, and (3) need to think big (among various other trite observations about what founders “need” to do & be like). Isn’t it easy to go from daydreaming about some novel idea or technology to wondrously stating:

THIS CHANGES EVERYTHING!

I can hardly blame these starry-eyed jokers for getting carried away.

The question that I think we need to be asking ourselves here is: Why? Why are entrepreneurs spending their time solving luxury problems?

The thing is, adding this graph is almost unnecessary. Everyone pretty much knows that this is what wealth distribution in America looks like. But that is exactly why entrepreneurs are spending their time solving problems for rich people.

When rich people like Paul Graham asininely suggest that wealth inequality is actually good, what I think they mean to say is “wealth inequality is good [for rich people like me].”

If you’re an aspiring entrepreneur, are you going to spend your time trying to solve problems for the bottom 90%? Why would you? They have no money to spend. Meanwhile, the top 10%, and particularly the top 1% have loads of money. They have so much money that they’re willing & able to shell out loads of cash for your new luxury service that will rock Paul Graham’s world, and still be obscenely wealthy afterward.

This is precisely how wealth inequality is hurting — destroying, even — our society. It incentivizes businesses (and public services, as we’ve seen in some cases) to cater to the wealthy few at the expense of the many.

So the problem we need to solve here (and it’s a doozy) is wealth inequality. Once that problem is solved, entrepreneurs will naturally shift to solving problems for the many, since that will become a market worth pursuing.

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