The Mark Zuckerbergs of the world are changing the way we live — so they deserve to be richer than you.
That’s the controversial message that prominent Silicon Valley investor Paul Graham expressed in a recent blog post.
Graham is the cofounder of elite accelerator Y Combinator, which has backed big name startups like Airbnb and Reddit.
And he’s getting a lot of flak for his stance that economic inequality isn’t necessarily a bad thing.
In the post, Graham refers to himself a “manufacturer of income inequality.” He says he works hard to increase the uneven distribution of wealth.
He distinguishes between two types of wealth generators: Those who derive riches from “corrupt practices in finance, healthcare and so on” and those, like many startup founders, that don’t.
“Instances of inequality don’t have to be instances of the degenerate case. If one woodworker makes 5 chairs and another makes none, the second woodworker will have less money, but not because anyone took anything from him,” he said.
“Ending economic inequality would mean ending startups,” added Graham. “If you made it impossible to get rich by creating wealth in your country, the ambitious people in your country would just leave and do it somewhere else.”
One reason for economic inequality is productivity, said Graham. And that shouldn’t be punished.
Graham said he feels like a “wild animal overhearing a conversation between hunters” when people refer to economic inequality as bad.
Graham, who stepped down as president of Y Combinator in 2014, is hopeful people will give thought to how to “live with” income inequality. “There are lots of things wrong with the U.S. that have economic inequality as a symptom. We should fix those things,” he said, citing poverty.
Graham is getting a lot of heat for his views.
“…Trying to simplify the argument into a ‘we create jobs through innovation and deserve to be rich — you WANT us to be rich’ [sort] of argument doesn’t give the full picture,” wrote Mark Suster, general partner at VC firm Upfront Ventures.
“Instead of celebrating income inequality perhaps we would be a bit more compassionate about it.”
Rick Webb, an investor and cofounder of marketing firm The Barbarian Group, calls for Graham to revise his essay.
In a Medium post entitled “An open letter to Paul Graham,” Webbsuggests thatreducing inequality isn’t synonymous with eliminating it.
“No one believes that there should not be rich people,” said Webb. “What is wrong, Mr. Graham, with REDUCING income inequality by taxing EXCESS wealth, and spending it on public services to maintain or even (gasp) improve social mobility?”
The topic of income inequality in tech is becoming increasingly contentious. While technology has driven economic growth, some — including Stephen Hawking — say that it is making few wealthy, and leaving most “miserably poor.”