After being one of the top-rated commenters on HN for some years, I have not commented in a long while. For what it is worth, here is my two cents on a topic - a wealth tax - that may seem on the surface to be benign but that is in fact just the opposite.
Silicon Valley was founded in a spirit of freedom and flexibility but that spirit is clearly and dangerously on the wane insofar as the political environment surrounding the Valley is concerned.
By the 1970s, American enterprise was in decline, a victim of the "big government/big business/big labor" trends glamorized by establishment types of that day. What this did was take away choice and flexibility.
Tech changed all that and it did so from the heart of Silicon Valley. Tech arose from a spirit of freedom and flexibility. Founders would get an idea and would have countless ways of experimenting with what they could do with it with the aim of building a venture. Many of the most wildly successful ventures came out of nowhere. No central committee could have planned for them. No overlords of big business could have had the imagination or risk-taking fortitude to push them at the expense of their established cash cows of that day. No union could comfortably impose rigid work rules onto such amorphous ventures (the first thing Intel workers did even after the company succeeded was to reject unionization). No minimum wage or overtime rules applied. Benefits packages of the type widely deployed in the analog-based large businesses of that day were unheard of.
Regulators and taxers of that era continually tried to realize their vision of locking people into situations by which they would have guaranteed security, ossifying the mature businesses over which they had control, but tech simply outran them through innovation. And, in time, upended them by disrupting their industries through innovation and risk-taking.
Today, the spirit of Silicon Valley has changed and is yielding to a belief system by which the overlords of politics believe they can dictate outcomes that will give people locked-in security forever. Want to do something as an independent to earn a livelihood? Sorry, AB5 forbids that and will penalize the hell out of any venture that seeks to use fleelancing and flexibility as a foundation for innovation and growth. Your choice to act an an independent is frozen out by dictates that, if you act at all to make a living, you must do it within rigid systems that guarantee minimum compensation, regulate overtime, prescribe minimum guaranteed benefits, and the like. If this kills opportunities, no problem: there will be other rules that guarantee basic income, limit the rent you have to pay, and otherwise regulate society such that people are guaranteed a risk-free existence courtesy of decrees enacted by political proclamation.
This new mindset is precisely the one of the 1970s-era leaders who managed to choke off innovation and growth in old-line businesses and gave a massive opening to tech innovators, particularly those in Silicon Valley.
pg's modeling of the effects of a wealth tax is spot on. And it confirms that such a tax is an innovation-killing idea that would destroy the spirit of Silicon Valley. Of course, tech innovation will not cease. It will just move elsewhere to escape the tax. Europe in the 1990s had a couple of dozen or more countries that imposed wealth taxes. Today it has three, if I recall. There is a reason for that. It is a highly pernicious tax that kills enterprise and that veers from a capitalist (even progressive) philosophy into one that is directly of a Marxist/communist variety that has left so many nations in rubble once fully implemented. Smart, innovative people are not going to stick around for the con game. They will leave.
I have watched Silicon Valley grow and flourish for decades now and have been directly involved in working with thousands of entrepreneurs who have been a part of it. There have been a lot of political changes over those decades but one thing remained constant: the foundational thinking in California always assumed a capitalistic structure. Once that is abandoned, Silicon Valley will be no more.
I know that the vast majority of HN'ers are progressive in their thinking and we all can have our own ideas about what makes for a good and just society. I am not commenting on that here.
There is a line that cannot be crossed, however, without killing the Valley itself and all that it stands for. The wealth tax clearly crosses that line and, if things are allowed to go that way, the consequences may not be what you expect them to be. It doesn't take much to switch from a tax of .4% on assets over $30M (bad as that is in itself) to a tax of a much higher rate on a much lower threshold of assets. Once that monster is unleased, who knows where it will go. It will be fundamental transformation of the Valley, and not a good one.
I think you are forgetting the major difference between now and 70s - massive wealth concentration, and the complete destruction of sustainable middle class jobs. Look at the pandemic. 40 mn people were unemployed, but billionaire wealth continued to grow. Most people in the US are one paycheck away from bankruptcy. Poverty rates among minority population have soared, and the impact is starkly reflected in COVID related death rates. One can sit in an ivory tower and deflect all societies problems to be taken care of by some mythical concept of freedom. But more and more people are questioning why wealth in the US is not trickling down. And these are very valid questions today that should really span beyond political lines
People can question all they want about why wealth is not trickling down but that doesn’t change the underlying analysis or outcomes around why this is a bad idea. You may get income redistribution and trickle down but if it changes the underlying systems that create wealthy, those same people will just end up poorer but more equitable.
Is there any evidence for that assertion ? I mean you take any European country such as Norway, Denmark, Netherlands, Switzerland, UK, and even France. Where taxes are remarkably high, and definitely far fewer billionaires per capita. Europe has better health outcomes, better income equality, and extremely low poverty rate compared to the US. [1]
[1] https://data.oecd.org/netherlands.htm
Note: Income inequality [0] and poverty rate [1] are in-distribution relative measures, not absolute measures. You could “improve” these measures by making everyone worse off (i.e. a Pareto worsening).
Europe is not the egalitarian utopia most Americans seem to think it is. Germany's wealth gini coefficient is 79.1. The US is 85.9 (100% is complete inequality, higher is worse).
Sweden and Norway are both in the 80s also -- two countries people in the US constantly point to as places where things are "fair". But in terms of wealth (and income) inequality, it's not that much different.
Well in defense of the European countries, the wealth might be unequally distributed here as well, but you also don't need wealth/money for education, health care, child care and/or pension.
If you don't need money you need luck, especially for education. There are limited seats. And in Germany, you are on track for university or not when you are very young.
You point towards regulation as the culprit of innovation being killed; I wonder how you are not aware most people live pay-check to pay-check, and therefore can not adopt the risk necessary to be entrepreneurial?
We all, live in an extremely divided economic landscape - the _most_ divided in modern history.
I do not understand how this is not a focus of your argument.
With this in mind, if our government offers support to the individual; we can innovate freely without imposing further employer regulation on private businesses. In a globalist society, where jobs are exported to the most exploitative country, this seems to be a promising solution.
The savings rate in China is 40%. Economists have observed a negative correlation between the personal savings rate and the availability of a social safety net. In societies where the state does not provide a substantial safety net, people adapt by saving high percentage of their income, and this is why the savings rate in China is so high.
Incomes are higher today than during the periods in American history when economic growth rates were highest, so the fact that more people are living paycheck to paycheck is more likely explained by the establishment of a comprehensive social safety net reducing the incentive to build up personal savings.
Social welfare spending has massively increased over the course of the last several decades.
You're going from one extreme to another. Starting your own business is not the only alternative to working for big business. There is a remarkable difference between working at Lockheed Martin and working at SpaceX, for example. One is arguably a lot more innovative than the other. And you do know that politicians are responsible for globalism right? It can be curtailed as easily as it was expanded.
Inequality in your country has risen dramatically the past 30 years. That's what your legislators are trying to address. A lot of value is created in the early stages. Should that be exempt? Remember, companies don't exist primarily to pay back investors, their first objective is to contribute to society.
Undue† wealth inequality is tied to the sort of rent-seeking that this tax will enable. Given the inordinate ways to classify and exempt movable property from a wealth tax (even greater than the existing insanity in income taxes), it is essentially inevitable that this will invite more lobbying and corruption, net more rent-seeking, and compound existing inequality.
† vs. inevitable/natural wealth inequality, associated with real disparities in productivity and the nature of sampling individuals on a widening curve
This is sadly true, but we have to fix our libertine taxing authority and corporate law in any case. These are assets that are not adding to overall societal welfare, so I would rather criminalize and tax the thing society needs to change rather than the gains to productivity being taxed in the current system.
> Remember, companies don't exist primarily to pay back investors, their first objective is to contribute to society.
If a company does pay back investors, that almost always means that it has contributed to society on net. Let me explain.
If people don't pay for a company's products, that company will go out of business. Unlike a government, a company has little coercive power. If I refuse to use Facebook, Mark Zuckerberg can't send men with guns to my home and force me to create an account. Even companies that benefit from network effects (such as social media companies) must build compelling products that people want to use.
Now one could claim that most people are mistaken in what they want, or that they lack the knowledge to understand what they're really getting into, but that would also mean that you disagree with the notion of democracy (since those same mistaken, ignorant people will pick the policies and leaders that control our lives).
There are only a few ways that a company can capture value without creating it. The first is fraud, which is illegal. The second is coercion. That means using violence (or the threat of violence), blackmail, or if they lean upon the state to coerce people. This is usually illegal, though there are some exceptions such as patent trolls. The third way is if they create negative externalities. For example: if I buy a car from a car company, I am better off but everyone else is slightly worse off from the pollution I create and the increased risk of being run over. The way we solve externalities is through insurance and taxes. If I'm required to have liability insurance for my vehicle, and I'm required to pay taxes based on how much my vehicle pollutes, then I pay the costs of my externalities and am properly incentivized to alter my behavior. Perhaps I drive less than I otherwise would. Perhaps I buy a vehicle that pollutes less.
As long as we ensure that parties pay the cost of the externalities they create, we can be confident that any profitable firms are creating more value than they capture. That means they're a net benefit to society.
Of course if we follow this logic, this means that some rather ridiculous firms are beneficial to society. Is World Wrestling Entertainment, Inc beneficial to society? As far as I can tell, WWE is a way to get people to pay outrageous amounts of money to watch roided-out actors pretend to fight. But if WWE pays for their externalities (such as actors' medical bills), who am I to judge? Everyone involved knows what they're getting into and consents. So what if I think the whole enterprise is a colossal waste of time and resources? I'm sure those people think the same of some of my interests.
The alternative to this is a world in which the majority decides for everyone what is beneficial to society or not. Considering the competence of the average voter (and the competence of our government), I'd prefer to err on the side of non-intervention.
> If I refuse to use Facebook, Mark Zuckerberg can't send men with guns to my home and force me to create an account. Even companies that benefit from network effects (such as social media companies) must build compelling products that people want to use.
If this was 2008 you may have an argument. It isn't and in 2020 I have no choice about using Facebook. Even if I delete my account I am still their product just by virtue of being on the web. Or existing.
Last year I was tagged in a photo from a camping trip by a person I met on that trip. That person's brother's girlfriend used to work with a guy I know from a totally different circle of people. He asked me about my camping trip because FB made the connections just based on who is in the picture.
I don't need a FB account for this to be possible, deleting my account doesn't prevent this.
Zuckerberg doesn't need to send goons to my house. He already has surveillance on my camping trips.
> As long as we ensure that parties pay the cost of the externalities they create, [...]
Right but we don't do that. The rest of your argument collapses when this assumption doesn't hold.
> The alternative to this is a world in which the majority decides for everyone what is beneficial to society or not.
You mean like a democracy?
> Considering the competence of the average voter (and the competence of our government), I'd prefer to err on the side of non-intervention.
Woah so who gets to make choices for the unwashed masses?
> Last year I was tagged in a photo from a camping trip by a person I met on that trip. That person's brother's girlfriend used to work with a guy I know from a totally different circle of people. He asked me about my camping trip because FB made the connections just based on who is in the picture.
First, most of your ire should be directed at whoever uploaded the photo to Facebook. Second, please notice how far afield you had to go to try and shape this conversation into "Facebook is coercing me": a friend asked you about your camping trip.
Compare that to what happens if you don't do things that the government wants you to do. If I don't go to jury duty, men with guns will come to my home and put me in a cage. If I don't pay 40% of my wages to the government, men with guns will come to my home and put me in a cage. Even though I object to how that money is being spent (such as bombing people in the middle east or developing ever more horrifying weapons of war), I am coerced under threat of violence into funding such atrocities.
But please go on about how terrible it was that your friend asked you about your camping trip.
> You mean like a democracy?
Should a democracy vote on which vehicle we must all drive? Which movies we must all watch? Which jobs we must work? Of course not. Likewise for which businesses each of us patrons. The crowning achievement of our constitution isn't the form of representation (which mostly serves to prevent violent revolution), but the concept of human rights: No matter how much people want to vote for it, the government is forbidden from doing certain things to you.
When corporations effectively control customer choice and eliminate competition, then yes, a democracy should break up the corporation to restore a level playing field. US anti-trust laws that were fairly applied in the past are not being applied today. This is a position independent of whether a wealth tax is applied or not. Big companies have become far too big with mergers and anti-competitive practices - they need to be broken up - for the very health and continuance of precious capitalism.
> It sounds like you're saying that profit is all that matters and you can't contribute to society without making a profit.
Those who advocate for a wealth tax seem to only care about money too, don't they? Why taxing wealth in particular? How about "taxing" beautiful and healthy? There's a huge prettiness gap in this country.
I simply argued that in a system where certain failure modes are ameliorated, a company that creates more value than it captures is a net benefit to society.
If I argued that strawberry cake was a net benefit to society, would you dismiss my views as "all that matters is strawberry cake and you can't contribute to society without making strawberry cake"? Of course not. So too for economics.
The facebook not forcing you to create account does not sound that good on a day when they force Oculus users to log in with one. Unless you live totally off the grid you are forced to interact with corporations and at every turn they have more power.
They are usually fine. The inequality was way higher for most of the history and hungry peasants are no match for the army. We just remember the cases when the revolution won because it’s a good story. And the result was usually worse conditions for the poor.
I’m afraid that social equality peaked in XX century. Automation makes imposing social order so much easier, we might be stuck with this one for a while.
Those hungry peasants weren't educated. You have far more bright people in the 99.9% today than in the 0.1% cream at the top.
Unless you decide on complete and utter genocide, An Army is utterly no match for clever people who will utilise every inch of their ingenuity in guiding riots, carrying out guerilla warfare with committed assassins targeting the 0.1% (and their families).
And a nation who chooses to kill its citizens 'en masse via its military forces will not be a nation for very long. There will be civil war.
Without shared prosperity, a nation will shatter very soon. A revolution doesn't need to "win" for the prosperous to loose their lives by the million-fold.
4 - Spain, Norway, Switzerland, and Belgium. I don't think it has stopped very wealthy people living in Switzerland or Norway in particular - but also I'm not sure how significant revenue it raises for the state.
I think it's becoming quite clear though that we need some more taxation on capital, particularly the rent-seeking kind, and more levelling of the playing field particularly in the field of education, which is primarily funded through taxes.
I'm aware of Swiss taxation differences between different cantons, as well as the ability to negotiate your taxes. The OP mentioned wealth tax in Europe and my comment was in reference to that.
I'm personally not sure wealth tax is the best way to tax capital, but I wouldn't rule it out either.
I must have hit a nerve to warrant accusation of ignorance.
Norway is not famous for it's innovation or industry - much less than equally-populated Denmark and twice-as-populated Sweden with which it shares most culture, weather, genetics (and essentially also language). Neither are Belgium or Spain, and Switzerland, though more established, is no industrial powerhouse.
I do not claim that this is a result of the wealth tax, but it definitely doesn't attract innovators and industrialists.
1) Framing it as "winners" and "losers" is entirely the problem. It's a pretty poor mindset when you equate getting rich with "winning" while ignoring everything else, including factors that lead to people getting rich in the first place.
2) A footrace (and sports in general) is a really poor metaphor for economics & tax policy. A better metaphor is pruning trees in a forest so that smaller ones actually get enough light to grow instead of withering away on the floor.
The forest metaphor implies that people with wealth get it by taking it away from someone else. That isn't the case. Bezos' wealth, for example, comes from the fact that he owns ~13% of Amazon, the company he founded. He didn't steal those shares from someone else. They were created out of nothing when he started the company. They only became valuable because it turned out that the company did things that many people found very useful.
You aren't going to "prune away" shares from Bezos and have more wealth magically filter onto the masses from the heavens. Wealth doesn't stream in from some outside source and some greedy people just grab more of it than others. People make it themselves. Making it harder for people to do so is going to result in less wealth, not more.
It comes from killing the offline retail (this is technological shift, so it might not be a good idea to stop it) and being both a marketplace and a player in that marketplace. Coupling with a highly profitable AWS so they can undercut the remains of competition does not help.
Decline of American retail produced orders of magnitude more “losers” than switch from coal to natural gas which grabbed so much attention.
You realize that Amazon stole market share from all kinds of other retailers, right?
Also, you're completely misinterpreting the metaphor to suit your own goals. Wealth redistribution demonstrably benefits society as a whole when said society has as many fundamental issues as the US does when it comes to basic standard of living (healthcare, education, living wage, etc.). You're making the exact same argument as people who think income tax shouldn't exist because taking some portion of income away from high earners magically makes them want to earn less. This is, of course, also demonstrably false and completely irrational.
It stole it? The market share was the legal property of those retailers? How? Where can I purchase some market share?
A company like Sears was well positioned to compete with and crush a fledgling Amazon if they had had the foresight and wherewithal to do it. They didn't, so they lumbered on doing the same thing they always did as the world changed around them and they eventually became irrelevant.
Other companies like Wal-Mart and Best Buy adapted and have remained competitive. It has nothing to do with sneaky Amazon burgling market share that is somehow the rightful property of someone else. That's not how that works. Amazon won the market share by doing a better job of serving the market.
Are you truly defending Amazon, one of the leading stars of anti-competitive practices - in-fact the textbook definition ? I am utterly flabbergasted and also a bit scared that someone on HN thinks that what they do just fine and dandy.
Where to start ? Shall we talk about the way they changed their algorithm to put their products first after claiming with a straight face they were only a neutral market place ? This while exercising 40% (and rising) of all e-commerce in the US ?
https://www.wsj.com/articles/amazon-changed-search-algorithm...
The company that blocks sellers from using Fedex ? That flexes its control - illegally - on logistics ?
This is just the tip of the ice-berg. We can go talk about the corruption behind Amazon's Choice program, their environment sustainability "joke", the Amazon "real worker ambassadors' who are "paid to praise" on social media and claim "great working conditions" while shooting down genuine grievances. Corporate Communism at its finest - praise the Party of Bezos - makes the CCP look like an amateur.
You can vote out Trump. You can't lift a finger against the march of Bezos and Amazon.
They are a horror company who are a clear and present danger to both US capitalism and democracy.
Several nations and states have now opened anti-trust investigations against Amazon. Lets pray something comes out of it or the world will be kneeling to Bezos before too long.
> A footrace (and sports in general) is a really poor metaphor for economics & tax policy. A better metaphor is pruning trees in a forest so that smaller ones actually get enough light to grow instead of withering away on the floor.
By that standard, a legit analogy in that case would still be basketball. Let's cut legs a bit to everyone taller 6' so that shorter ones actually get enough opportunity to score, instead of them abandoning this amazing sport and spending their days at office in a hope to get wealthy by their economic skills one day.
And there you go still using sports metaphors. Life is not a competition. Treating it like it is generally leads to bad outcomes for both individuals and societies.
That's the thing, a bit of tax won't knock anyone down. Using that money to provide more equal access to opportunity creates more winners.
Running doesn't require much money, so a lot of people can do it and therefore you can get someone as insanely good as Bolt. If running required startup capital of $100k, would we have Bolt?
Healthcare, education and a safe environment does require a lot of money in the USA. Specifically, it requires you to be born in a family that has it already. If not, you are born with your legs cut off, but if you work really really really hard, you can be one of the lucky few who make it out, and compete with those born with two legs. It's just an extremely uneven playingfield.
This would’ve been a great opportunity to share your unique expertise on the history, efficacy, or real mechanisms of tax laws that us non-lawyers aren’t privy to. E.g. comparative analysis of property taxes, which are wealth taxes but limited to one asset class.
In retort, these companies are started by young risk takers, many of whom have a safety net. A set of redistributive policies could expand that volume to folks who are arbitrarily excluded.
A property tax is different from a wealth tax for several reasons. Wealth is constantly created and destroyed. Land, not so much. Wealth can be easily moved around the world. Land can't. Wealth can be hidden to evade taxes. Land is hard to hide.
These differences mean that a tax on wealth tends to encourage wealth flight, tax evasion, etc, while a tax on property tends to encourage more productive use of the land. For example: An empty lot in the middle of a city would be taxed based on its value, which would be quite high. The owner would be incentivized to either build something that creates value or sell it to someone else who would do the same.
> a tax on wealth tends to encourage wealth flight, tax evasion, etc
A tax on income tends to encourage inequality, tax-advantaged income schemes, tax evasion, etc. Also, you didn't actually refute the parent poster's point that property tax is a subset of wealth tax.
Taxes like this appear to be quite unpopular though, right? You would expect this to help solve issues in, say, California's tech areas but I think many would agree that it hasn't happened. I'd be curious about whether a result like that is inevitable or just how it turned out this time.
Thanks for sharing. I don't expect to convince you but I want to make my opposing view clear.
For me the most important benefit of a wealth tax is eroding the wealth of billionaires. This is important because having that much money gives you _power_ in our society comparable to elected officials, but without any comparable accountability. If you have a billion dollars, you can employ two hundred people from your _personal wealth_ at $100k for fifty years each. Or, if you prefer, 2500 people for a four-year term. (This ignores the resources you have influence in deploying in business, though at least in that case there are other stakeholders. It also ignores connections.) This is a great deal of power, comparable to being an elected official, all the more so because elected officials are often constrained by politics. In my view, the existence of such a powerful and unaccountable interest group can only be a threat to democracy. Other commenters have outlined particular ways that this class has achieved its political goals in the USA. The class of billionaires poses such a threat that I would seriously consider giving up the IT revolution of the last fifty years to be rid of it.
I really appreciate this voice of reason and would further like to add a few points. As a tax paying citizen in my country i think that taxes are needed for the upheaval of the country as a whole in an "aggregate fashion". So my question is that even if a country implements wealth tax how is that money going to benefit or trickle down to the lower strata of the society? Do we just add more social benefits which i am against as if you just take money from people and redistribute you are essentially becoming a socialist economy.
Another question that arises here is if the discussion is happening because the tax collected is not sufficient currently? If that is the case then a proper solution would be to and i hate to say this increase the tax rates for everyone. The number of billionaires the people want to tax are essentially pretty low and in a country based economy where there are pretty large numbers haggling away their 1 percent wont really make a difference to a big country.
The issue with wealth tax is that it focusses on a particular well off section of society and that particular section of society is actually just being targeted because they are wealthy. The thing people take for granted is the number of jobs and employment they generate and the services they provide. They actually are so well off that i worry if someone would be able to stop them if they just decide to leave?
Its rather mundane to say that the wealth is not trickling down. These people are generating wealth. Why do you think US is the biggest world economy? Hint: its because of these billionaires we love to hate.
Thanks for coming back to share your perspectives.
While I agree that AB5 stifles freedom and innovation, it just doesn't compute for me that a wealth tax (especially the example of 1% over 50mm) would damage the spirit of freewheeling invention, creation, and capitalism.
As an entrepreneur, I feel much more stifled by FAANGs or regulation than the idea I might be taxed at less than my real rate of return one day.
I agree the spirit of the valley is on the decline, and part of that is due to things like AB5, but it feels more like the tech giants are just new giants, like those of the 70s, and will trend towards preservation of establishment and gradual decline as always.
Here we go - the insanely maximalist interpretation of copyright law by the Federal Circuit, with its concomitant ludicrously restrictive idea of fair use, now goes to the Supremes. The DoJ had actually argued against the idea of the High Court's taking up of this appeal (on grounds that this case was not the proper one for the Court to use to clarify these issues). I couldn't disagree more. The Federal Circuit Court has been positively adamant in its rigid views, right down to second-guessing how the jury rendered the key facts, and the case therefore is a very compelling one for a better assessment to be made by justices who are not so fixated in their views as the Federal Circuit has been. This area of the law is critical to the whole idea of inter-operability going forward and it is welcome to see that the Court will be deciding it sometime this term.
This may seem to be on its face another dull instance of people haggling over fine points in the esoteric field of defining patentable subject matter.
But it is not.
It is a potentially huge development and not a good one for tech startups and innovators.
Setting aside fine points, what we have had until just the last few years in the tech world is an insane pattern dating back to the 1990s - thanks to the Federal Circuit Court's seriously flawed interpretation of then-existing caselaw - by which the legal test for patentable subject matter essentially became "anything new under the sun."
An orgy of frivolous software patents followed and this bedeviled tech innovation for well over a decade and allowed patent trolls to run wild with patent claims that swarmed authentic technical innovation and clogged it with endless junk consisting of patents on what were essentially abstract ideas or on what were long-established innovations done "on a computer" with nothing else added and similar claims on which the lawyers feasted and the public suffered.
Fortunately, in recent years, the U.S. Supreme Court stepped in and reined in the Federal Circuit decisions, narrowly restricting what constituted patentable subject matter under Section 101 of the patent laws. The Bilski case started this reining-in process and many other important cases followed, culminating most recently in the Alice case. (See my elaboration of this trend here: https://news.ycombinator.com/item?id=4633163#4633950)
This reining, coupled with liberal use of inter partes review to allow for a relatively swift and efficient procedure by which frivolous patents could be challenged and swatted away, has brought some sanity back to the field in recent years. (See my comments on this procedure here: https://news.ycombinator.com/item?id=16913013#16915378)
So, junk patents have become much more vulnerable to attack in recent years. This reform has been judge-driven - primarily by the U.S. Supreme Court. It has been an imperfect sort of reform but hugely important. The orgy of junk software patents that so burdened the tech industry was radically curtailed.
True reform was to await an act of Congress. Congress sets the bounds of how patent law is implemented and a clean resolution of the issues depends on its acting to fix things definitively.
However, far from fixing things, the Senate is in the process of enacting a bill that would radically do away with the recent Supreme Court reforms and open the way for a new patent system that once more makes junk patents freely grantable and sustainable.
The article I posted here is from a conservative source.
The proponents of this bill attempt to dress it up as a valuable protection of property rights. Speaking as one who strongly supports IP rights, but also as a lawyer who knows how rights become meaningless if lawyers are permitted to litigate everything to death, I would suggest that this attempt to codify within the patent law a regimen that allows virtually anything to be patented, with few meaningful checks on what is eligible for patentability, will serve only to arm the trolls and litigators at the expense of true innovation.
It is a disaster in the making for tech innovators and startups and ought to be stopped. Let us hope it can be.
1. The student "protests" erupted the day after the 2016 election results came in, with a corresponding politically inflammatory element at work in the background.
2. The underlying incident involved an underaged black student who attempted to buy a bottle of wine, was refused, and was then found to have 2 other bottles under his coat as he walked out. When the owner's son chased him out, an altercation ensued and, as police arrived, they found the owner's son on the ground being hit and kicked by three persons, including 2 female friends of the shoplifter.
3. I use shoplifter, instead of "alleged shoplifter," because a guilty plea was entered admitting to the crime and also acknowledging that racial profiling had nothing to do with the incident.
4. Protests immediately erupted and were so volatile that the local police chief said he felt he had to call in outside help from a riot squad.
5. The students who did the protests claimed that Gibson's bakery not only had engaged in racial profiling in the particular incident but also that it was a long-time racist presence in the local business community. (Gibson's had been founded in 1880 and was strictly a family owned business, with the business supporting 3 generations of the family at the time of the incident).
6. The Oberlin dean of students (Merideth Raimondo) appears to have joined in the protests directly, shouting through a bullhorn and handing out fliers calling Gibson's racist. She claimed she used the bullhorn for 1 minute only and only to tell the students to observe safety precautions. Multiple other witnesses at the trial claimed she did so for a half hour and that she was a direct participant in the events. The jury obviously did not believe her. Also, she denied that she had handed out any fliers, was contradicted by a local reporter who said she had handed one to him, called that reporter a liar, and (at trial, once under oath) later admitted that he was telling the truth that she had handed him a flier knowing him to be a reporter.
7. The college immediately joined in the affair by terminating its long-term contract with Gibson's. A couple of months later, it reinstated that contract. Then, when the Gibson family filed suit, it terminated the contract permanently.
8. The college took the position that the matter would be dropped if Gibson's dropped the shoplifting charge and if it committed in the future to bring all incidents involving students directly to the college before it got the police involved. Gibson's refused to comply with this condition.
9. Gibson's in turn offered to forego any and all legal claims if the college sent out a mass communication stating that Gibson's had not engaged in racist activity and had no history of being racist. The college declined to do this.
10. Gibson's took a huge financial hit as a result of all this, barely managing to stay in business. It had to lay off all of its 12 employees and the family owners continued to operate the business without salary for 2 years.
11. Gibson's sued the college and its dean of students alleging libel, intentional infliction of emotional distress, and interference with business relations.
12. Throughout the trial, the college took the position that it had done nothing wrong, was only protecting the students' right to free speech, and had no responsibility for what happened. It also took the position that Gibson's was worth no more than $35,000 in total value as a business and that such amount should be the maximum awarded in any damages award.
13. The jury award $11.2 million in compensatory damages, $33 million in punitive damages, and also said that Oberlin had to pay Gibson's attorneys' fees. Under state law, there is a 2x cap on punitive damages (2x times the amount of compensatory damages awarded) and thus the punitive award will be set at $22 million. The judge is still determining the attorneys' fees question. All in all, though, the jury basically slammed Oberlin to the max and also awarded major damages against the dean of students.
14. Oberlin sent a mass email to its alumni association essentially saying that the jury disregarded the clear evidence showing it had done nothing wrong and vowing to fight this through appeal. It also formally announced that it will be filing an appeal.
15. Oberlin has had a long-time "townie" vs. "gownie" culture but this far transcends the small tensions that have historically existed.
William Jacobsen at Legal Insurrection has been on this case in great depth from inception, believing it is a case of major significance concerning college activism run amok. Here is a link to his reporting on the original verdict that contains a ton of links to the prior coverage: https://legalinsurrection.com/2019/06/verdict-jury-awards-gi...
The article here is by Jonathan Turley, a distinguished liberal law scholar, who is pretty critical of Oberlin's handling of the case, as I think most people are.
> 14. Oberlin sent a mass email to its alumni association essentially saying that the jury disregarded the clear evidence showing it had done nothing wrong ...
In a move of awesome stupidity, that email was sent out while the case was still in court - just prior to the jury deliberating on the punitive damages.
This is a great summary, and I broadly agree with Jacobsen's take, but also took the time to read the primary source documents that he and others linked to. So, some finesse points:
2-3: I don't know that it's been well established that the student who sparked this incident and later pled out to shoplifting went into the store with the intent to steal. The other narrative presented is that he went in with a fake ID (so clearly had purchasing intent), the ID was spotted, the clerk attempted to confiscate it, and that's when things blew up. It appears undisputed that the student fled the store and was chased by Allyn Gibson, unfortunately resulting in Gibson getting beat down by the student and two friends --- the result was a felony robbery charge, at which point the student had immense incentive to plead out to anything the court would allow him to.
4: It's useful to know that there's a history of problematic interactions between Oberlin (the school) and the Oberlin Police (an unrelated department of the town in which Oberlin resides). That OPD felt the need to escalate a situation isn't dispositive. What we do seem to know is that, excepting an early incident where protesters entered Gibsons Bakery to protest indoors (and then left), the protests were not violent.
7: Oberlin didn't have a contract with Gibsons. They asked their cafeteria supplier to stop sourcing from Gibsons.
12: It's worth pointing out that the college didn't merely take the position that it had done nothing wrong, but also repeatedly in its own legal filings affirmatively supported the protesters claims --- apparently false --- that Allyn Gibson had "violently assaults" an "unarmed student".
Finally: I too have found Legal Insurrection's coverage of this case valuable, but anyone reading it should go in knowing that unlike Turley, L.I. is not "liberal", but rather full-throated conservative. It's always good to keep the agendas of news sources in mind, and that of course goes for L.I. the same way it would for DailyKos or PopeHat.
I think if Oberlin had been smart enough to redirect protest energy towards the Oberlin Police rather than to a private business, this all would have worked out better (and also, not for nothing, have been more just). As it stands, though, I'm shocked Raimondo still has a job; Oberlin's handling of the case was far more clownish than one could perceive from this summary.
Excellent additions - thanks for supplementing/clarifying!
Another note or two:
1. Damages might be reduced on appeal but, if not, this will really sting for Oberlin. Why?
2. Its insurer apparently is denying coverage because the wrongs committed were intentional and that removes them from coverage.
3. The legal fee award approved by the jury is likely tied to a contingent fee arrangement and will likely add as much as $10 million to the final price tag.
Bottom line for the risk to Oberlin: $11.4 million compensatory damages; $22.8 million punitive damages; $10 million attorneys' fees = $44.2 million judgment, an astounding number for something the college could easily have quelled at or near inception for almost nothing. Again, this could be reversed or modified on appeal but who in the world would want to be fighting from that position?
It's an insane situation. I have a generally high opinion of Oberlin as a school (my daughter was accepted there, and would have attended had she not wanted to remain closer to home; several friendly acquaintances are faculty there). I also --- broadly and with varying levels of intensity --- share the prevailing politics of its community. But the school's conduct here seems so simultaneously mendacious and clown-shoed that I can't help but think something's fundamentally screwed up about how it's run. I'm glad Oberlin wasn't closer to Chicago to tempt my daughter last year. I hope they figure stuff out.
Another facet of this story that doesn't seem to be discussed much is that the college is having financial struggles as it is. The grievous mishandling of the event is not helping the financial situation. For more on that, see:
Possibly, a plea bargain. Plead guilty to X and we won't charge you with Y. It could also just be leniency towards a first offender, independent of the issue of the protests.
From LI's reporting, if I understood correctly, the Gibsons' agreed to drop the assault charges if the accused students would make a statement that the Gibsons' were not racist.
Thanks for this. I hadn't dug deeply into this previously.
Reading this, I'm struck by how fragile our first amendment is that you can be sued for participating in a protest. It sounds like the only things that the university did "wrong" was end a contract and also one of their deans took active part in protesting.
Much of the glee seems to stem from the fact that the speech being expressed in the protest was dumb. I, for one, think dumb speech should be protected.
Multiple school officials were actively participating in the demonization of the business and using their authority to create economic sanctions on the same. I don't see how you can justify their behavior. Especially since Gibson's was an actual victim of a real crime unlike the narrative the school was trying to paint.
There was also a link to another article laying out the evidence of collusion by school administrators to do economic harm to the owners of the bakery. Do you defend that behavior as well?
I don't "justify" saying stupid things. I just care about freedom of speech.
There's another user who made the point that the facts of this case extend to a dean accusing the business of committing a criminal act. Based on those facts, I think there's a much better argument that you could be making rather than arguing that defending the right to say something is the same as defending the underlying stupid comment.
Freedom of speech does does carry with it freedom from the repercussions of libel and lost wages due to those erroneous statements. Now, you can argue the validity of those laws and their impact on the freedom of speech, but they aren't protected under the free speech laws. They have very real specifications and aren't cart blanche to be an asshole without repercussion. Ignorance of the law has never been a defence, and I would hope a college would have understood that.
I think you misread what I wrote because the statements aren't in conflict with one another. I'm saying there are limitations on libel as a result of the First Amendment, not that you can't have any libel laws at all.
Of course, but when you use your position of authority (as a professor would have) as a bully pulpit, to have a call to action (like boycott), it can be argued that damages are justified. I'm actually very pro free speech, and I think the damages in this case are egregious, but there was very much a call to action from a very influential person on a group of people who had limited capabilities (though, not legally, maybe). The precedent is more similar to yelling fire in a crowded movie theater and being responsible for the outcome rather than voicing your political opinions in a town square.... Though, I will admit, when I wrote this first comment I hadn't read far enough down in this thread =)
> The precedent is more similar to yelling fire in a crowded movie theater and being responsible for the outcome rather than voicing your political opinions in a town square
A closer precedent would be yelling "this sucks!" in a crowded theater of a film that in fact is quite good and then calling for people to boycott it on that faulty basis. Mostly joking with this example, but it kinda gets to where we disagree too.
Again, you’re missing how exceedingly narrow a defamation claim must be, and how the Oberlin dean threaded the needle tightly to fit into the requirements.
A defamation claim must be premised on a (stated or unstated) false assertion of fact. Pure opinions are not covered: http://www.dmlp.org/legal-guide/opinion-and-fair-comment-pri.... Whether a movie is good or bad is a pure opinion—it cannot be falsified and cannot be the basis of a defamation claim. Arguably, whether someone is racist is an opinion too, although on the flip side it generally carries the connotation that the conclusion is based on actual conduct and can be considered an assertion about these (unstated) facts.
But whether someone has a “long history of racial profiling,” as the Oberlin dean asserted, is a factual assertion about past events. It’s falsifiable, and was proven false at trial.
Defamation has long been deemed to be speech not protected by the first amendment. Because of the risk to freedom of expression, such claims have been limited in numerous ways, and are exceedingly difficult to win. But where a plaintiff does manage to overcome those hurdles, it is not an indicator of the fragility of the first amendment for the defamation claim to actually succeed. It’s simply applying well defined outer limits to freedom of expression, no different than ones for fraud, false advertising, and other malicious conduct that incidentally involves speech.
Two points @grellas mentioned are key.
First, this case involves falsehoods. Factually untrue assertions are generally outside the scope of protected speech: http://law2.umkc.edu/faculty/projects/ftrials/conlaw/lying.h.... (Otherwise, the first amendment would swallow claims for fraud, false advertising, etc). This case, moreover, doesn’t fit the scenarios where false statements can be protected expression, such as hyperbole or satire.
Second, the speech was against a private party. The first amendment restrictions on defamation claims are less stringent when it comes to private parties than to the government, politicians, or public figures. In particular, where defamatory speech turns out to be false, it might still be protected by the first amendment if it was directed to a public figure and the false statements were not made recklessly or knowingly. But if a private party is involved, that additional layer of protection doesn’t exist. (The theory being that there is a greater interest on making statements about public figures, where sometimes you might get the facts wrong, than with private figures.)
I’m a first amendment extremist, but a defamation claim here doesn’t strike me as problematic any more than a prosecution for fraud. There is no legitimate expressive value in spreading demonstrable falsehoods about a private party. Nor is there a slippery slope. The key elements of private party versus public figure, and demonstrably false versus possibly true statements are bright line limits that have long served us well.
The page you've cited here appears to claim the opposite of what you're claiming, itself citing multiple cases in which the Supreme Court found factually untrue statements firmly inside the scope of protected speech. The counterexamples you're providing are motivated untrue assertions in which speech is part of a broader pattern of action (in these cases, to unjustly enrich the speaker; in others, to unjustly damage someone disfavored by the speaker).
Not that I disagree at all with what you're saying about defamation! But the idea that lies are unprotected speech seems like a very dangerous slippery slope. Like, Singapore would claim to support "free speech" with that (gigantic) exception.
Thank you for being the first person to agree with my fundamental point that there are actual implications to the first amendment when it comes to libel laws.
I'd love to hear any of the actual false statements ISSUED BY THE UNIVERSITY OR ITS STAFF. I relied on the so far uncontested statement of facts offered by OP. If those facts are wrong I'd be thrilled to revisit my position.
A university dean admitted to passing out a flyer that falsely stated that the Oberlin student had been assaulted: https://legalinsurrection.com/2019/05/gibsons-bakery-v-oberl.... A police officer testified that the Oberlin students had assaulted the bakery employee, not the other way around. The flyer also stated that the bakery had a long history of racial profiling. But at trial the dean admitted that she didn’t know whether that was true. Numerous witnesses testified it was false.
A high ranking university employee handed out a flyer containing damaging assertions of fact, with the intent that people believe and act upon those assertions, and at trial offered nothing to suggest she had even a good faith belief that those assertions were true. That’s not an exercise of free expression.
The assault (a crime!) claim on the flier is REALLY bad for the college. It makes me feel much better about the ruling, as much as I still disagree it's with a LOT less force now.
(False accusations of racism or racial profiling, on the other hand, should absolutely be protected.)
Edit: One thing I'd add. Even though our positions on this individual case are in opposition, we actually agree about the First Amendment issues far more than you do with people who are criticizing me for thinking the Constitution has any implications on libel law.
What about false accusations of pedophilia? Why is one kind of falsehood protected and another not?
I think what you’re really concerned about is when people, in good faith, level an accusation of racism or racial profiling that turns out to be debatable or wrong. They shouldn’t be prosecuted. But that’s not what happened here. It’s not a high hurdle to show that an accusation of racism or racial profiling is not at least colorably true. Had the university done so, it likely would have gotten off the hook. They could have, for example, pointed to a suspicious pattern of calling the police. The university didn’t even try to do that.
I think the law is correct here. It’s one thing to protect expression made in good faith that turns out to be wrong. That’s important to avoid chilling effects. It’s another thing entirely to protect expression where there is not even a good faith basis to believe that the allegations are true.
An accusation of pedophilia is unprotected because accusations of crime are considered, at law, to be intrinsically damaging. Racism (and, to some extent, racial profiling) is not against the law: I believe it's perfectly legal to stop only black shoppers for shoplifting, for instance (so long as they're actually shoplifting), even though 60+% of shoplifters in Oberlin appear not to be black.
Here, I wonder whether it's not the speech that got the university in trouble so much as the concerted and diligent effort to harm Gibson's business through multiple means.
I deleted my first reply because I think you're being disingenuous with this comparison. I think a better comparison is if I call someone a liar when speaking broadly about the person. Even if they have a documented history of telling the truth and I don't have a single lie, I think that's protected.
> It’s one thing to protect expression made in good faith that turns out to be wrong. That’s important to avoid chilling effects.
I agree with this strongly.
Edit: Also, I think, given you're a lawyer, you'd agree with me that a client of yours is on much safer ground when the thing they're accusing somebody of is about their general character rather than a crime. (Not that you'd have given your approval on the flyer with just that one claim struck out.)
The Oberlin dean didn’t just say the bakery was “racist,” she said they had a “long history of racial profiling.” That’s a critical distinction. The first amendment doesn’t directly protect falsehoods. But to give wide berth for free expression, we have carved out all these situations where even a false assertion will be protected: parody, hyperbole, opinions, assertions made based on good faith investigation, etc. If the Oberlin dean had, for example, said the bakery was racist, based on the fact that the bakery failed to consider that calling the police on a black student would subject the student to far graver consequences than under identical circumstances where the student was white, that would arguably be a non-falsifiable opinion, or a statement about someone’s “general character.”
But she went beyond expressing an arguable opinion. Saying that someone has “a long history racial profiling” is an assertion that a pattern of concrete events have taken place. It’s not an assertion about someone’s “general character.” It’s falsifiable. Moreover, the dean couldn’t even construct a fig leaf, some post hoc rationalization, to defend that assertion. She all but admitted she had tried to destroy someone’s business based on the equivalent of a “fake news” Facebook post.
Whether someone is a victim of assault or rightfully practiced self-defense is often a difficult question dependent on the states of mind of the people involved in a volatile situation, remembered through the veil of faulty human memories. Details like who used force first are pretty much impossible to determine without a video recording. Of course, police officers are as fallible as anyone else. Defamation requires a willful disregard for truth, and I have a hard time believing that “they committed assault” would be defamation when “they got in a fight” is accurate.
For what it’s worth, I consider myself a liberal, and I went to a liberal arts college cut from the same cloth as Oberlin and wrote anonymous posts debating what I perceived as the excesses of liberal campus activists.
I don't know if you caught that. But for me, "they pled guilty!" is meaningless. People are coerced into that all the time. So speaking generally, to those who think saying that is shorthand for winning an argument, it's quite silly.
In general it may not mean much. People do plead guilty even when they aren't, for many reasons, and even more so with minorities. In this specific case though we're talking Oberlin students, not some poor kids from the ghetto, already making this less likely, and even worse, while I would not necessarily expect rioting progressive students to make any sort of logical and factual argument, I would expect better from the administration. But interestingly, they also never presented anything based on logic, let alone facts, and never even made the claim that the assailants were coerced to plead guilty, witnesses bribed, investigations botched. They just took the narrative that fits with their ideological view and ran away with it, facts be damned.
There was no allegation that the Oberlin student acted in self-defense. As to the guilty plea, there are indeed lots of people who plead guilty to crimes they did not commit. It’s a country of 300 million people—in absolute terms, there are lots of people who do any given thing. But in percentage terms, any given guilty plea is likely the result of overwhelming evidence of guilt.
> Thank you for being the first person to agree with my fundamental point that there are actual implications to the first amendment when it comes to libel laws.
He's not the first - the reason I didn't bring it up in my reply was that I agree with it. Libel (and true threats, and incitement to imminent lawless action) absolutely are limits on the first amendment and free speech. They're limits I, even as a free speech advocate/extremist, happen to agree with, but they are limits.
It's funny. We're disagreeing so strongly here but we fundamentally are so much in closer position here than the people downvoting me and most of the folks disagreeing with me because I even brought up the First Amendment to begin with.
There's a line between dumb speech and libel. The faculty members were informed of the facts of the case, yet continued their counterfactual accusations of the bakery, and used the college to put severe economic pressure on the bakery.
If that doesn't qualify as libel, what does? That it was done as part of a protest is orthogonal.
I'm going based on OPs description, which nobody on either side of the debate seems to object to. A different list of facts could convince me of something different, certainly.
What were the libelous comments by the college, specifically? I looked at the link provided and didn't see any actual comments from the flyer or dean of student's speech.
Reading the article, several of the college faculty claimed the bakery's actions were racist, for which they had no evidence, and plenty of evidence against.
"Students, professors and administrators held protests, charging that the bakery was racist and had profiled the three students."
Literal comments or the flyer would be better, I agree, but it doesn't look like anyone is objecting to this description of the content of the protests.
>I don't think simply calling somebody "racist" should EVER be libel. Even when inaccurate.
So, what is your definition for libel? As it doesn't appear to be the same one in common usage. I am massively in favour of free speech, but I suspect even Voltaire would want some method of restitution to be available should people be spreading lies about him around town.
Whether something is libel and unprotected would obviously depend on the lie. We seem to agree about that so I'm not sure what you're claiming I believe.
I actually think that it depends pretty much completely on the context. There is no list of phrases that are innocent or malicious in and of themselves. Something that can seem innoccuous in most situations can be a matter of life or death in others. So no, I don't think we seem to agree. And could you answer the question rather than dancing around it?
What about calling someone a pedophile? Should that also not be libel?
And before you claim it's different because being a pedophile is a crime - it's not a crime. Acting on it is. Just how being racist isn't a crime, but refusing to serve customers based on race is.
There can't be, because "jerk" is a subjective assessment, and defamation requires a statement of fact. The "falsifiability" rubric Rayiner has been using is helpful. I'm not a lawyer, but I read lots of defamation lawyers, and note that you can further extend the requirements for defamation:
* It's (apparently, in many circumstances, consult lawyer) not defamation to relate your interpretation of facts already on the record. In other words, it's often not defamation if you're simply wrong about something, so long as you're not relating your wrongness in a manner that would lead a reasonable person to think you're authoritative for your claim. "Based on a bunch of stuff I read in the paper, Gibson's has a history of racial profiling" might be a much safer thing to say than "as faculty and administrators of Oberlin College I'm informing you that Gibson's has a history of racial profiling".
* If the injured party is a "public figure", you have to do more than prove a falsifiable false statement that causes actual injury; you also have to prove malicious intent, meaning that the speaker knows that what they're saying is false, and is saying it specifically in order to harm someone.
> you also have to prove malicious intent, meaning that the speaker knows that what they're saying is false, and is saying it specifically in order to harm someone.
I think you're talking about "actual malice" which as I understand it does not require a particular intent. It is just that you know the statement is false (or have reckless disregard for whether it is false or not). It doesn't matter why you said it.
See this is why people call out "not a lawyer" on message board threads; you're right, "actual malice" is apparently knowledge of falsehood or reckless disregard for the truth.
That's a good point. The difference is that 'jerk' is on its face a subjective assessment, an opinion, while 'racist' is less so. I have a feeling there's supreme court precedent drawing a more exact line.
Of course, devoid of context, 'racist' is pretty subjective as well. I'm guessing if the statements had been left sufficiently ambiguous, they might have gotten away with it. But they weren't - they accused them of a very specific racism, and demonstrated a reckless disregard for the truth.
From a quick search, looks like in cases such as these, the standard would be that the statements are made with 'actual malice' [1].
Edit: I noticed you asked what the law should be, not what it is. I guess I'm not so sure of the answer, but I'd venture that statements made with 'actual malice' should be included in libel.
It would suck to live in a world where people can destroy your life by spreading lies about you, and you have no recourse. That's not the world we live in. What benefits do you think free-for-all slander and libel would give society exactly?
I think the idea is that the accusation of racism isn't really a concrete, well-defined concept that can be falsified: in terms of specificity, its closer to calling someone a dumbass or a butthead than it is to calling them eg a shoplifter; the former isn't legally actionable (right? Perhaps I'm wrong here), but the latter is concrete enough to be.
I'm not sure if I agree with the gp commenter, but it doesn't seem to be a particularly unreasonable opinion to hold.
I'll answer your question but I hope you answer mine: Do you think I should be able to successfully sue you for millions of dollars if you had SERIOUSLY just called me a racist? If not, we're closer in viewpoint than you want to admit.
Now to your question:
> What benefits do you think free-for-all slander and libel would give society exactly?
I DON'T favor "free-for-all" slander or libel. But to the extent that I draw the line differently from you, the benefit to society would be that society gets to debate what exactly it means to be racist and hopefully that open debate leads to something useful. I like the idea that you combat speech with more speech because I think it leads to better outcomes for all of us. I don't think it's helpful to have people live in fear of saying anything controversial.
> Do you think I should be able to successfully sue you for millions of dollars if you had SERIOUSLY just called me a racist?
If I damage you with lies in word or in print, you are entitled to be made whole. If I lied about you and it cost you millions of dollars as a result, yes, you should be allowed to sue me to get those millions back.
What problem do you have with this system?
Edit: and if the damages were done with malice, society is absolutely entitled to add punishment on top of correcting the harm that brought the case to court.
I think people define "racist" differently. Some see it in terms of systems. Some people think calling out racism is itself racist. Some view certain types of jokes as being a sign of being racist. There are as many definitions of the term as there are people.
I have repeatedly mentioned there are limits, but my problem with the system you laid out (which I'd argue is far more extreme than what was decided in this case) is that I'm a free speech guy who thinks we're better off when we can discuss issues openly.
Also, nobody gets sued for libel over honest debate. They do, however, face social repercussions for taking positions out of line with society's values. Freedom of speech isn't freedom from consequences.
You just argued below that if I had bad economic impact based on the FACT that you called me a racist that I should be able to sue you over this very honest debate and win. You've taken a very extreme position here. At least one person, you, are arguing this. So don't say "nobody."
That's not an extreme position, it's the law of the land and has been for a long time. It's basic civil law that if you harm someone they can take you to court to be made whole. Civilization is sort of built on this concept.
The thing here is that you're not being harmed by rhetoric. If you were, you'd have a case.
> So if Eli Cash was my actual name (rather than a Royal Tenenbaums character), and if I didn't get a job because the employer googled my name and your claim came up..? You really think I'd have a real case?
Would a reasonable person read my post in context and somehow walk away believing you were a racist? You know they wouldn't.
So if Eli Cash was my actual name (rather than a Royal Tenenbaums character), and if I didn't get a job because the employer googled my name and your claim came up..? You really think I'd have a real case?
I guess if we still disagree nothing can be done about that. We've both made our points.
You cited NYT v Sullivan in several places in this thread. What facts lead to you weigh to come to the conclusion that the Gibsons are public figures?
Maybe you have some intellectual humility and give deference to the judge and jury that heard all the facts rather than declaring them to be wrong based on a summary of a summary.
The college argued they were (limited purpose) public figures. The judge disagreed, clearly. I was making a point that to argue there are no First Amendment implications to libel laws is so far from established interpretations of the Constitution that it should give people who care about free expression pause.
> based on a summary of a summary
Are you disputing the summary? If so, which parts? I don't agree that judges and juries are always right and we should not form our own opinions, if that's what you're implying.
Do you think simply calling somebody racist, even when wrong, should be protected by the first amendment? My bet is that you do. And so this comes down to the set of facts. If you have contrary sets of facts, let's hear them!
The argument that they're public figures is available online in PDF form, so you have even LESS of an excuse to not have read it or even seemingly to have been AWARE of it.
You can't be sued for participating in a protest, the lawsuit against the dean was for libel and targeted harassment, particularly from a position of power.
There are limits to libel laws as a result of the First Amendment. I understand your confusion/question, but that's why I bring it up -- there's a lot of disagreement over how to interpret these speech protections and lots of people weigh the issues involved differently. From OP's description at least, it's a bad ruling for people who care deeply about freedom of expression.
Sadly, most people only care about scoring points against those they disagree with politically. Even at the cost of these freedoms.
There's no confusion here. The amendment is a restriction on government, not individuals suing. Aside from that, not everyone who cares deeply about freedom of expression would agree that this ruling is bad in that context.
Any individual suing in civil court is using the apparatus of the government in order to enforce controls on speech. This is settled law - the alternative is that the government can control speech through allowing private parties to sue over speech in civil court. Take, for example, a law that would allow school shooting victims to sue people who made violent video games that the school shooter played. While this is not direct suppression of free speech rights to make violent video games, it is definitely using the apparatus of the government to suppress protected speech.
It seems to me that the real issue is the college itself claimed that the bakery was racist.
It was more about libel and slander then an actual protest. Throw in the fact that the college encouraged students to not go to the establishment... This isn't a first amendment issue.
If libel laws now allow you to successfully sue for tens of millions of dollars because you falsely accuse somebody of being a racist, that's a sad day for freedom of speech. The impact would be truly chilling on national debate.
As I stated elsewhere, there are absolutely limits to libel laws based on Constitutional issues as decided in NYT v Sullivan. I wish people were arguing that based on the facts of this case, not to worry. Instead what I'm hearing from comments like yours is that calling somebody racist and urging a boycott based on it should be enough, just because the underlying accusation is wrongheaded.
To me, the most important factor in this case is that after the protests, etc the Bakery first asked the University to simply retract it's claims that it was racist and had a history of racism. The University refused, despite having no proof of it's claims, which shows bad faith at least. Another fact that goes to bad faith are the lies they made on the stand, refusing to take responsibility for their actions. If you're reading was correct, and it was an honest mistake, then the University could have and should have corrected it's statement, and should not have lied on the stand.
Another point you make here doesn't make sense: this isn't about "national debate". This is, roughly, about one agent harming another agent with a set of lies designed to harm. If this case involved a newspaper editor getting sued for libel because he called a politician a liar, then yes, you might have a point. But it isn't.
I agree with you about things that make their case weaker.
I would disagree if you're claiming that the national debate about racism only applies to newspapers talking about politicians. There's a HUGELY IMPORTANT debate in the culture generally about racism that I'd argue just as important if not moreso.
(That said, from a legal standpoint it's obviously true that a politician is a clearer-cut case of a public figure. That obviously matters when judging the merits. But you seemed to be suggesting that talking about this case in terms of the national debate around racism is irrelevant.)
This was libel... There was an intentional effort by the college to smear the bakery as racist and hurt their business. What does this have to do with the First Amendment?
Libel absolutely has First Amendment limits. I think you can debate whether the facts of the case meet those limits, but to claim there's no Constitutional issues at stake is a pretty extreme argument to make.
A potentially explosive case in which protests/boycotts by college students/administrators based on claims of alleged racial profiling by a local business appear to have backfired in a big way - at least in the first big legal phase.
There is a ton of background at that link, but can you help me understand what portion of the protests and/or severing of business contracts was damaging and/or considered tortuous interference? With no opinion on either of the plaintiffs (I hadn't heard of the case), it's not immediately clear to me what happened that wasn't organized protest in a public space (which, presumably, would have been legally fine).
This site has followed the case closely and goes through a lot of the evidence in the linked items. In general, the defendants appeared to go over a line by asserting that the arrest of a shoplifter was based on racial profiling when there was utterly no evidence that the bakery had profiled anybody and when the evidence appeared open-and-shut that shoplifting had occurred (as the guilty pleas eventually confirmed). The other potentially inflammatory element is the huge impact the protests/boycott had on the bakery, essentially almost destroying its business. When you put it all together, it becomes a hard case to defend and the verdict reflects that. At the same time, this is a preliminary report on the verdict and I am sure more details/analysis will follow.
'Big Tech', unlike Telecom, has made itself friendless, having alienated pretty much everybody along the political spectrum, and that is a dangerous place to me with a field subject to such legal vagaries as antitrust law is. I am not talking here about lobbyists or about legal technicalities but rather about the visceral reaction we all can have as human beings to the basic question: do I sympathize or even relate to these people? At inception, Google, FB, et al. were seen as innovative, dynamic, helpful to average people and the like. Sadly, those days are long past and all too many people are instead inclined to reach for the nearest garlic clove in hopes of warding them off.
No tears will be shed, I am sure, if Google has to pay some billions to fatten the already fat pockets of Oracle but the decision by the Federal Circuit being appealed here made a hash out of key legal foundational items that facilitate the very idea of interoperability in the computing world and therefore cries out to be corrected.
My comment at the time the decision was rendered: "This ruling will do what its [the Federal Circuit's] prior expansive reading of patent law did: it will set up a legal standard that invites lawyers and litigants to engage in endless second-guessing over copyright and fair use in areas of connectivity and inter-operability in the computing world and this in turn, as a standing invitation to litigate, cannot be good for future development." (See https://news.ycombinator.com/item?id=16691774 for fuller analysis)
The Supreme Court quite often fails to take up discretionary appeals even if the issues loom large for a particular industry or even if an important case was wrongly decided. Sometimes it does so to resolve conflicting rulings among lower federal courts on an important issue; other times, because a case raises important issues of public policy. Don't know if this case will fit the criteria (it didn't on its first cycle of appeal - see my comment here: https://news.ycombinator.com/item?id=9801251#9802457; also, https://news.ycombinator.com/item?id=4050490#4051761).
I have long been an advocate for solid protection of IP rights but the Federal Circuit here has almost fetishized the idea of copyright protection to the point where it has, in the API and fair use areas, become a caricature of itself. Strong correction is needed on the legal merits of the case.
Let us hope that the high level of interest in the tech community, as revealed by the number and quality of amicus briefs filed, will prompt the Supreme Court to intervene and bring soundness and clarity to an important area of law that affects the tech world in profound ways.
> Sometimes it does so to resolve conflicting rulings among lower federal courts on an important issue; other times, because a case raises important issues of public policy. Don't know if this case will fit the criteria
It will. The CAFC's rulings are in open conflict with the normal court that would handle this, the ninth circuit.
It would be easier and clearer, I think, for Congress to intervene. Copyright is a legislative creature, the judgements are about the meaning and scope of the legislation. Congress has the power to clarify it and thereby overrule any previous interpretation taken by any of the relevant courts.
When a lot of money is at stake, it is no surprise that litigants abuse the legal system.
Uber is contractually required to pay the up-front arbitration fees so that the JAMS arbitrations can move forward. I super-slow-walks the process. What is the remedy?
Well, JAMS itself does not really have a remedy. It is a private organization that moves forward with the arbitration process as its rules are complied with and as it gets paid.
Nor is there an obvious remedy in the courts for individual failings in this or that arbitration procedure. Courts normally are not even involved in such processes.
Only when a clear pattern emerges (as it now has) can a court intervene to remedy a problem such as this.
In the meantime, what has happened? A lot of time has passed. A lot of the claimants (I am sure) have become discouraged and have possibly lost their motivation to move forward with their claims. And Uber has moved well along the path toward ultimate success in winning it all in its market, currently resting on a valuation of $120B.
Is any of this defensible? No. Will Uber try to defend it? Yes, through double-talk and prevarication. Will it be doing so in good faith? Not at all. Will the aggrieved drivers be able to overcome it? Perhaps, but they will likely get too little, too late. And, for Uber, it will be a historic liability that vanishes into the ether as it looks backwards on eventually settling the claims while basking in its massive success.
In a just world, things like this should not happen and perhaps Uber will be upended by something or other along the way anyway. But this sort of cynical abuse of legal processes in neither rare nor the exception in cases where modern litigants have the means and opportunity to gain massively from the abuses. It is not the exception but the rule.
And this in turn illustrates the obvious limits of using law as a solution for society's problems. The law can and does help solve problems to a point. But it is always subject to abuse and, in the end, money, power, and corrupt motives often work to undercut its effectiveness. This sort of case is Exhibit A to prove the point.
> And this in turn illustrates the obvious limits of using law as a solution for society's problems.
This problem is a result of people being prevented from using the normal legal process to handle their disputes. "The limits of the law" only applies here so far the Supreme Court has ever-expansively applied the Federal Arbitration Act to override the laws of the states.
> this in turn illustrates the obvious limits of using law as a solution for society's problems.
So the government completely fails one of the few major domestic duties it has and this is excusable? What should people do? Revolt? Kill the Uber CEO? Or plan C, other type of violence? Because without a working government, what recourse do people have? Why should people hold up their end of the social contract if the government doesn't hold up its own?
Non-competes under U.S. law are neither all good nor all bad. They have their legitimate uses but these are the narrow cases and not the norm.
For example, you sell a business to someone who pays you a big premium for your goodwill value usually tied to the value of the customer base. It is entirely fair that, having taken the money in exchange for the sale of your goodwill interest, you not be able to turn around the day after the close and effectively steal it back from your buyer by setting up a competing business and conducting raids to get back your old customers. A reasonable restriction on your ability to compete in that case makes eminent sense and is not in any way unfair.
So too if you exit a professional practice and get bought out. Same principle. You get paid for the goodwill value and you should not be able to capitalize on the payment and simultaneously raid the goodwill of your former practice by competing against it. Fair and reasonable even though it restricts you in your livelihood.
Thus, even states like California, which basically ban the use of non-competes in an employment context, will fully enforce them in the situations noted above.
On the bad side, non-competes tend to operate unfairly and to burden ex-employees by preventing them from engaging in their normal livelihood even when they have been paid nothing for the privilege. Many jurisdictions do enforce them in that context and the only way to challenge them is to argue that they are unreasonably broad, which (if fought out) takes a tidy six-figure sum to prove in court.
So, yeah, all jurisdictions should adopt the California rule that largely bans non-competes in an employment context. But I don't see this happening anytime soon.
In the meantime, as an employee, you should try to avoid these if you can, negotiate to be paid for any non-compete if you have the leverage, or, if you have no choice, live with them as best you can until the law comes to a better place. As long as the law enforces them, you are sometimes just stuck.
There are many incentives available to prevent the seller of a company (and the employees) to not run out and start a competitor. You can give them shares that vest over time. You can offer them employment in the new company. You can make various offers contingent on the performance of the sold company.
Given that these NCs are generally negotiated as part of the sale of the company I don't really see a problem. If what you're being offered isn't worth agreeing not to compete then keep negotiating or walk away.
> For example, you sell a business to someone who pays you a big premium for your goodwill value usually tied to the value of the customer base. It is entirely fair that, having taken the money in exchange for the sale of your goodwill interest, you not be able to turn around the day after the close and effectively steal it back from your buyer by setting up a competing business and conducting raids to get back your old customers. A reasonable restriction on your ability to compete in that case makes eminent sense and is not in any way unfair.
During the sale the customer information and contacts can be (and by default usually are IIRC) considered an asset of the company, as such the seller reusing contacts can be considered a form of corporate espionage and can be prosecuted in that manner.
This holds just as clearly for departing employees, making unauthorized use of a company's assets after leaving a company is illegal whether it's sneaking in and using your old office or continuing to use contacts, just because in one of those cases the data might be in your phone doesn't change the legality.
But! This sort of corporate espionage is rather common and hard to prove. This brings us back to the commonly known point that sales people have a habit of ruining it for everyone else /s
> You get paid for the goodwill value and you should not be able to capitalize on the payment and simultaneously raid the goodwill of your former practice by competing against it.
No, employees don't get paid for "goodwill value" - whatever that means - they get paid for work they do in the course of their employment. If a company stands to lose if one of their employees changes jobs and works for a competitor, then the employer should be sure to give them generous raises and compensate them for the fair market value of their labor - not by relying on legal threats. I'm baffled by how widespread this belief that employees have some moral responsibility to sacrifice opportunities to the benefit of their current employer. Be a rational actor in the labor market, doing otherwise is an easy way to get taken advantage of.
> No, employees don't get paid for "goodwill value"
The passage you quoted and replied to wasn't about employees, it was one of two examples GP raised to argue that that non-competes can make sense outside of an employment context.
> Thus, even states like California, which basically ban the use of non-competes in an employment context, will fully enforce them in the situations noted above.
> So too if you exit a professional practice and get bought out. Same principle. You get paid for the goodwill value and you should not be able to capitalize on the payment and simultaneously raid the goodwill of your former practice by competing against it. Fair and reasonable even though it restricts you in your livelihood.
Unless "professional practice" specifically refers to something like being the partner of a law firm it does sound like it's saying that the spirit of non-competes should apply between employee-employer relationships.
Even then it seems like a bad thing you advocate. If I am at a law firm and I think I would be better served to go form my own practice, I shouldn't refrain from doing so out of some sense of goodwill on part of my previous practice. Sure, it may be a bad idea to burn bridges - but that's done out of a desire to maintain good relations and reputation, not because it's immoral to compete withy past employer.
The difference between the ancient way of working a lifetime for a salary, perks and a gold watch on retirement and the new one of building a breakout company in tech lies in a wholly changed business environment by which super-talented founders with a business sense can draw on a depth of knowledge/expertise (typically gained from work experience in a demanding tech environment) to conceive of a solid business model to profitably disrupt existing enterprises and thereafter apply grit, good sense, unbelievable perseverance, and basic street smarts to execute on that model via a startup world that affords amazing access to capital, an ultra-connected network of technically savvy persons with whom one can potentially ally, and a huge reservoir of resources by which founders can educate themselves to learn, grow, and develop.
One might sum this up by saying "Silicon Valley" but it really is most anywhere in the modern world where any modicum of freedom prevails, though Silicon Valley still offers unique advantages in my view.
The odds of failing are still stunningly high and those who make it to success are often bloodied by the process but the door is open today in a way it never has been before.
Another way of saying this is that, in the founder/investor partnering that is typically necessary to succeed, no arrangement was even possible for all but a rare few in mom/dad's ancient days, a reasonable arrangement that skewed heavily toward investors was possible just 20 years ago, and an even more reasonable one with founders and investors in near parity (when the founders are strong) is readily achievable today.
I actually don't believe that the story told in this blog post conveys a typical situation but what I have just said does so based on my having worked in depth in this world since the mid-1980s.
> The difference between the ancient way of working a lifetime for a salary, perks and a gold watch on retirement and the new one of building a breakout company in tech lies in a wholly changed business environment by which super-talented founders with a business sense can draw on a depth of knowledge/expertise (typically gained from work experience in a demanding tech environment) to conceive of a solid business model to profitably disrupt existing enterprises and thereafter apply grit, good sense, unbelievable perseverance, and basic street smarts to execute on that model via a startup world that affords amazing access to capital, an ultra-connected network of technically savvy persons with whom one can potentially ally, and a huge reservoir of resources by which founders can educate themselves to learn, grow, and develop.
The length and structure of this sentence obfuscates its meaning.
After several minutes I was able to read it in full... and lots of reading and back-tracing.
He says our business model is "wholly-changed" and now founders need to be super-talented and a long list of other things in order to succeed in the modern world.
I would argue that founders have always needed incredible smarts and a good product/market fit to succeed. I don't think anyone would claim that the "titans" of industry (think Rockefeller, John Jacob Astor) didn't have street smarts, grit, and perseverance.
> affords amazing access to capital, an ultra-connected network of technically savvy persons with whom one can potentially ally, and a huge reservoir of resources by which founders can educate themselves to learn, grow, and develop
For sure, there's more resources (cheaply) available than ever before.
IMO, this should all add up to make it easier to start a business and succeed. Maybe that's what he wanted to say.
> The difference between the ancient way of working a lifetime for a salary, perks and a gold watch on retirement
That system existed for at most 40 years, probably less. It lasted from the beginning of the post WW2 boom to the oil crash in 1973. It lingered on in companies built up during that era and the expectations and cultures built up then but it was surely dead by 1990. To call a system that barely lasted the working life of one human ancient is a bit much, no?
Governments and the church have supported that career structure for hundreds, maybe thousands of years. For example, military officers take salary, perks and retirement.
Also large, long lived companies like the 17th century East India Company employed tens of thousands of people, many for decades.
China also has centuries old companies and civil service institutions.
Neither entrepreneurs nor megacorps are recent inventions.
True but hardly relevant to the great majority of people throughout history. The modern civil service is a copy of the Chinese Imperial model but outside the Sinosphetr that started in what the ~1800’s? In China throughout the vast majority of its history you had well under one professional, career civil servant per 1,000 of population. The professionalised military is also a creature of the European Wars of Religion at the earliest. Officers didn’t get pensions, they got the opportunity to loot and if they survived and were lucky they got land. Converting officers from nobles or mercenary captains who brought their own men and equipped them to military civil servants was a long drawn out process.
Parastatal companies like the EIC or VOC were products of societies that had just barely mastered professional rather than personal administration. They were also very unusual. Setting them up took special acts of the legislature and vanishingly small portions of the population served in them, or any similar organisation.
Professional bureaucratic organisations outside the state were absolutely in place by the Renaissance, like Florentine banking houses but they were small.
Entrepreneurs and mega corps are not recent inventions but mega corps not intimately entwines with the state are. In what Francis Fukuyama calls a closed access order they’re impossible and open access orders are at most two centuries old. See his book, Origins of Political Order.
The efflorescence of megacorps, outside the state, that could believably promise a lifetime career with the security of the civil service was a time limited thing.
> The origins of the British civil service are better known. During the eighteenth century a number of Englishmen wrote in praise of the Chinese examination system, some of them going so far as to urge the adoption for England of something similar. The first concrete step in this direction was taken by the British East India Company in 1806.
> Thomas Taylor Meadows, Britain's consul in Guangzhou, China argued in his Desultory Notes on the Government and People of China, published in 1847, that "the long duration of the Chinese empire is solely and altogether owing to the good government which consists in the advancement of men of talent and merit only," and that the British must reform their civil service by making the institution meritocratic.
> Influenced by the Chinese imperial examinations, the Northcote–Trevelyan Report of 1854 made four principal recommendations: that recruitment should be on the basis of merit determined through competitive examination, that candidates should have a solid general education to enable inter-departmental transfers, that recruits should be graded into a hierarchy and that promotion should be through achievement, rather than "preferment, patronage or purchase"
Interesting I never knew that. I thought it came from the reforms post restoration in particular the Royal Navy.
Downside is it prioritises a classical education and the cult of the amateur chap who did a PPE but doesn't have any serious domain knowledge (Jen from the IT crowd)
No reason it can’t be multicausal, or that the actual reasons and the intellectual window dressing can’t be utterly at odds. Dewey’s American educational philosophy is very different from the Prussian model of schools as a factory for good, loyal subjects but while American teachers are taught about Dewey the system they work in is a Prussian one.
Winner take all systems occur anywhere that there are large differences in quality of performers and the top performers can serve many consumers (almost) as easily as serving as small numbers.
Before recorded music the very best professional musician probably made five times as much as the one who was just barely able to reliably get work.
There’s an entire economics literature on these systems.
> Tournament theory is the theory in personnel economics used to describe certain situations where wage differences are based not on marginal productivity but instead upon relative differences between the individuals.
Where this doesn’t apply you get Baumol’s Cost Disease.
> Baumol's cost disease (or the Baumol effect) is the rise of salaries in jobs that have experienced no or low increase of labor productivity, in response to rising salaries in other jobs that have experienced higher (low or no) labor productivity growth.
> The rise of wages in jobs without productivity gains is from the requirement to compete for employees with jobs that have experienced gains and so can naturally pay higher salaries, ...
"Winner-take-all" is an end result, not an explanation.
The explanation, or part of it, is a unified interconnected world market where even a tiny idea, well executed, can be incredibly well rewarded, since it scales across the economy of most of humanity.
Of course it was constructed. Aliens didn't just drop it from the heavens - the US specifically released the internet to the public and commercial interests, whereas previously it was limited to academic interests. Once commerce was up and running on the internet, it was simply a matter of companies getting big quickly and inserting themselves as middlemen between customers and producers/distributors. The fact that most of these companies eschewed profits for many, many years in favor of growth makes it self-evident that they understood that capturing the majority of the network (winner-take-all) was the primary goal.
Silicon Valley was founded in a spirit of freedom and flexibility but that spirit is clearly and dangerously on the wane insofar as the political environment surrounding the Valley is concerned.
By the 1970s, American enterprise was in decline, a victim of the "big government/big business/big labor" trends glamorized by establishment types of that day. What this did was take away choice and flexibility.
Tech changed all that and it did so from the heart of Silicon Valley. Tech arose from a spirit of freedom and flexibility. Founders would get an idea and would have countless ways of experimenting with what they could do with it with the aim of building a venture. Many of the most wildly successful ventures came out of nowhere. No central committee could have planned for them. No overlords of big business could have had the imagination or risk-taking fortitude to push them at the expense of their established cash cows of that day. No union could comfortably impose rigid work rules onto such amorphous ventures (the first thing Intel workers did even after the company succeeded was to reject unionization). No minimum wage or overtime rules applied. Benefits packages of the type widely deployed in the analog-based large businesses of that day were unheard of.
Regulators and taxers of that era continually tried to realize their vision of locking people into situations by which they would have guaranteed security, ossifying the mature businesses over which they had control, but tech simply outran them through innovation. And, in time, upended them by disrupting their industries through innovation and risk-taking.
Today, the spirit of Silicon Valley has changed and is yielding to a belief system by which the overlords of politics believe they can dictate outcomes that will give people locked-in security forever. Want to do something as an independent to earn a livelihood? Sorry, AB5 forbids that and will penalize the hell out of any venture that seeks to use fleelancing and flexibility as a foundation for innovation and growth. Your choice to act an an independent is frozen out by dictates that, if you act at all to make a living, you must do it within rigid systems that guarantee minimum compensation, regulate overtime, prescribe minimum guaranteed benefits, and the like. If this kills opportunities, no problem: there will be other rules that guarantee basic income, limit the rent you have to pay, and otherwise regulate society such that people are guaranteed a risk-free existence courtesy of decrees enacted by political proclamation.
This new mindset is precisely the one of the 1970s-era leaders who managed to choke off innovation and growth in old-line businesses and gave a massive opening to tech innovators, particularly those in Silicon Valley.
pg's modeling of the effects of a wealth tax is spot on. And it confirms that such a tax is an innovation-killing idea that would destroy the spirit of Silicon Valley. Of course, tech innovation will not cease. It will just move elsewhere to escape the tax. Europe in the 1990s had a couple of dozen or more countries that imposed wealth taxes. Today it has three, if I recall. There is a reason for that. It is a highly pernicious tax that kills enterprise and that veers from a capitalist (even progressive) philosophy into one that is directly of a Marxist/communist variety that has left so many nations in rubble once fully implemented. Smart, innovative people are not going to stick around for the con game. They will leave.
I have watched Silicon Valley grow and flourish for decades now and have been directly involved in working with thousands of entrepreneurs who have been a part of it. There have been a lot of political changes over those decades but one thing remained constant: the foundational thinking in California always assumed a capitalistic structure. Once that is abandoned, Silicon Valley will be no more.
I know that the vast majority of HN'ers are progressive in their thinking and we all can have our own ideas about what makes for a good and just society. I am not commenting on that here.
There is a line that cannot be crossed, however, without killing the Valley itself and all that it stands for. The wealth tax clearly crosses that line and, if things are allowed to go that way, the consequences may not be what you expect them to be. It doesn't take much to switch from a tax of .4% on assets over $30M (bad as that is in itself) to a tax of a much higher rate on a much lower threshold of assets. Once that monster is unleased, who knows where it will go. It will be fundamental transformation of the Valley, and not a good one.
As I said, just my two cents.