Neo-industrialists were let off their leashes and went straight back to their old favorite, wealth extraction. Rockefeller strangled the economy by controlling the trains and pipelines undermining his competition rather than competing on quality. When they can hoard enough cash to buy any potential competitors (see Meta buying Whatsapp and Instagram) it distorts the market. VCs no longer want to build companies they want to sell them.
Fossil fuel can't compete with wind and solar so instead it spends its resources trying to kneecap them rather than innovate.
PE buys up all off an industry in an area and puts the price squeeze on the consumers.
B2B has transitioned from one time sales to a focus on MRR.
Microsoft jams copilot into everything whether it makes sense or not so that it can goose the usage numbers for investors.
Google is incentivized to push ad clicks over legitimate results because it has no real competition.
I could go on for pages and pages. Industry consolidation is what's destroying innovation.
I’ll tell you exactly what broke: the social contract. When the rich find ways of not paying a dime “for the common good” and just free ride, plus move everything out of the country because it’ll make them a quick buck (but make everything worse in a decade-wise time frame), people stop agreeing to their enthusiasm for capitalism.
I asked AI and it looks like it is true. I asked what was the tax rate percentage for the top 10 percent of income earners in the US for each of the decades from 1940 to now:
1940s: Peaked at 94% in 1944–1945.
1950s: Remained high, peaking around 91%.
1960s: Started at 91% and dropped to 70% by 1965.
1970s: Remained around 70%.
1980s: Dropped from 70% to 50%, ending at 28%.
1990s: 31% to 39.6%.
2000s: Decreased from 39.6% to 35%.
2010s: Ranged from 35% to 39.6%.
Current (2020s): 37%.
Also, in 1930 it was low as well.
So it looks like the years in which we did the things Gary wants us to do again in his essay were all done during periods of time in which we taxed the super rich heavily.
I think that’s a fair point, and it highlights part of the tension here. Total receipts as a share of GDP may be relatively stable, but the structure of taxation and where the burden falls has changed over time.
My point wasn’t that government lacked revenue in aggregate, but that many of the periods people point to as examples of large national projects coincided with higher marginal tax rates on top earners.
The interesting question isn’t just how much is collected, but how the burden is distributed and what tradeoffs people are willing to accept going forward.
Nobody ever paid 90% taxes. There were tax rates that high but lots of ways to avoid it same as now.
If you want a fair tax that treats everybody equally you want a flat consumption tax. No tax to make money. Just taxed when you spend money. Rich people spend more money so they pay more taxes. It can't be avoided by taking a dollar salary or using assets as equity for loans that dont get taxed.
As an aside, billionaires pay the same taxes you do on income. Demanding a wealth tax on billionaires is foolish. Every tax ever devised was sold as a tax on the rich. Look where we are now, forced to give a third or more of our labor to an entity that half the country likes on a good year.
Agreed that effective tax rates were much lower than the headline marginal rates because of deductions and avoidance strategies. My point was more about the policy environment and incentives of those periods, not that people literally paid 90% of their income in tax.
The broader conversation I’m interested in is how we realistically fund large public efforts today and what mix of taxation or spending people think is fair and sustainable.
I don't think an individual's tax burden should ever be more than 15%. I would prefer that people get to keep the fruits of their labor. The people created the government to serve and protect them not steal their wealth.
When we were selling our first startup, we hired an "expert" to value our company. He started the discussion with "what is the valuation you're looking for?"
Then he started playing games with his "model" in Excel.
The difference between industrial capitalism and financial capitalism is Excel.
These two attitudes are an excellent encapsulation. It's intractable. Civilization will continue, but in the long term we are done with the concept of large masses of people being happy.
I think pretty much everything worth building that could be built and was feasible to build has now been built. There are no more big projects left to conquer, barring some massive advances in material science.
Everything, absolutely everything needs maintenance. Even the pyramids won't last forever and if you want your society to be sustainable you need to factor in maintenance. And often times maintenance is a harder problem than the initial creation.
Maintenance also informs builders on what can be improved next time. For example, we now know that rebar reinforced concrete will eventually need to be replaced due to spalling. If we reinforced with glass or basalt rebar that problem is solved. It might fail a different way but it won't be from spalling.
Over time we learn to build structures that last a long time and require less maintenance. Unfortunately, building codes are often very specific. Sometimes requiring specific materials. Using a different material requires proving it is a suitable replacement before construction. We have to allow builders to take risks. Sometimes we get a Tacoma Narrows bridge, sometimes we get a Hoover dam. But, the builders have to be able to try new things even if we get a few stinkers once and awhile.
Neo-industrialists were let off their leashes and went straight back to their old favorite, wealth extraction. Rockefeller strangled the economy by controlling the trains and pipelines undermining his competition rather than competing on quality. When they can hoard enough cash to buy any potential competitors (see Meta buying Whatsapp and Instagram) it distorts the market. VCs no longer want to build companies they want to sell them.
Fossil fuel can't compete with wind and solar so instead it spends its resources trying to kneecap them rather than innovate.
PE buys up all off an industry in an area and puts the price squeeze on the consumers.
B2B has transitioned from one time sales to a focus on MRR.
Microsoft jams copilot into everything whether it makes sense or not so that it can goose the usage numbers for investors.
Google is incentivized to push ad clicks over legitimate results because it has no real competition.
I could go on for pages and pages. Industry consolidation is what's destroying innovation.
I think this thesis is completely broken.
All of US manufacturing went to China because labor was cheaper.
You can't build things when you don't have a robust manufacturing base
One of the biggest things though is housing.
The US, Australia and probably most developed countries have declining productivity in construction.
(1985) https://www.nber.org/system/files/working_papers/w1555/w1555...
(2025) https://www.nber.org/digest/202502/stagnation-us-constructio...
That shouldn't be tied to China. Indeed arguably China might help with cheaper materials potentially.
Yes we stopped building.
Because every new technology is sold as a way to fire people and not “grow the pie”. What do you expect?
Rich folk don’t like it when poor people get more. It’s not partisan, it’s class based.
We wanted flying cars, instead we got 140 characters
To be fair, you can buy a flying car. But they are less efficient than a helicopter.
What happened to the US is the same thing that happened to florence, england and so on:
elites figured out that usury was easier than manufacturing, so they financialized the economy
I’ll tell you exactly what broke: the social contract. When the rich find ways of not paying a dime “for the common good” and just free ride, plus move everything out of the country because it’ll make them a quick buck (but make everything worse in a decade-wise time frame), people stop agreeing to their enthusiasm for capitalism.
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The wealthy also stopped paying taxes so...what does this rich guy want exactly?
That's categorically untrue.
I asked AI and it looks like it is true. I asked what was the tax rate percentage for the top 10 percent of income earners in the US for each of the decades from 1940 to now:
1940s: Peaked at 94% in 1944–1945. 1950s: Remained high, peaking around 91%. 1960s: Started at 91% and dropped to 70% by 1965. 1970s: Remained around 70%. 1980s: Dropped from 70% to 50%, ending at 28%. 1990s: 31% to 39.6%. 2000s: Decreased from 39.6% to 35%. 2010s: Ranged from 35% to 39.6%. Current (2020s): 37%.
Also, in 1930 it was low as well.
So it looks like the years in which we did the things Gary wants us to do again in his essay were all done during periods of time in which we taxed the super rich heavily.
This seems at odds with this from him: https://www.linkedin.com/posts/garrytan_larry-and-sergey-can...
I agree that we should do big things for the greater good. That's an easy sell for everyone.
The real conversation needs to be about who pays for it, and how.
Federal Receipts as Percent of Gross Domestic Product has been roughly stable for more than half a century.
https://fred.stlouisfed.org/series/FYFRGDA188S
The top quintile of income earners in the US pay 34% of all taxes. The next quintile 26% .
https://taxfoundation.org/research/all/federal/who-pays-taxe...
US Federal spending was 7 Trn in 2025. This is surely enough to fund things.
https://fiscaldata.treasury.gov/americas-finance-guide/feder...
That is more than the total GDP of any country except China and the US itself.
I think that’s a fair point, and it highlights part of the tension here. Total receipts as a share of GDP may be relatively stable, but the structure of taxation and where the burden falls has changed over time.
My point wasn’t that government lacked revenue in aggregate, but that many of the periods people point to as examples of large national projects coincided with higher marginal tax rates on top earners.
The interesting question isn’t just how much is collected, but how the burden is distributed and what tradeoffs people are willing to accept going forward.
> The top quintile of income earners in the US pay 34% of all taxes. The next quintile 26% .
And what percentages of all income & wealth do those quintiles have...?
Nobody ever paid 90% taxes. There were tax rates that high but lots of ways to avoid it same as now.
If you want a fair tax that treats everybody equally you want a flat consumption tax. No tax to make money. Just taxed when you spend money. Rich people spend more money so they pay more taxes. It can't be avoided by taking a dollar salary or using assets as equity for loans that dont get taxed.
As an aside, billionaires pay the same taxes you do on income. Demanding a wealth tax on billionaires is foolish. Every tax ever devised was sold as a tax on the rich. Look where we are now, forced to give a third or more of our labor to an entity that half the country likes on a good year.
Agreed that effective tax rates were much lower than the headline marginal rates because of deductions and avoidance strategies. My point was more about the policy environment and incentives of those periods, not that people literally paid 90% of their income in tax.
The broader conversation I’m interested in is how we realistically fund large public efforts today and what mix of taxation or spending people think is fair and sustainable.
I don't think an individual's tax burden should ever be more than 15%. I would prefer that people get to keep the fruits of their labor. The people created the government to serve and protect them not steal their wealth.
Seems good to me personally but how will we ever pay for all these aircraft carriers?
By not paying for a shit ton of other things.
Simplistic answer: Excel spreadsheets. Apparently complex answer: quants.
When we were selling our first startup, we hired an "expert" to value our company. He started the discussion with "what is the valuation you're looking for?"
Then he started playing games with his "model" in Excel.
The difference between industrial capitalism and financial capitalism is Excel.
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These two attitudes are an excellent encapsulation. It's intractable. Civilization will continue, but in the long term we are done with the concept of large masses of people being happy.
I think pretty much everything worth building that could be built and was feasible to build has now been built. There are no more big projects left to conquer, barring some massive advances in material science.
Everything, absolutely everything needs maintenance. Even the pyramids won't last forever and if you want your society to be sustainable you need to factor in maintenance. And often times maintenance is a harder problem than the initial creation.
Maintenance also informs builders on what can be improved next time. For example, we now know that rebar reinforced concrete will eventually need to be replaced due to spalling. If we reinforced with glass or basalt rebar that problem is solved. It might fail a different way but it won't be from spalling.
Over time we learn to build structures that last a long time and require less maintenance. Unfortunately, building codes are often very specific. Sometimes requiring specific materials. Using a different material requires proving it is a suitable replacement before construction. We have to allow builders to take risks. Sometimes we get a Tacoma Narrows bridge, sometimes we get a Hoover dam. But, the builders have to be able to try new things even if we get a few stinkers once and awhile.
Excellent points: I learn more from maintaining code than from writing new code.
Tell that to the New Jersey transit trains that get delayed 15 minutes every time they go in and out of New York.
That's just as nonsensical as the classic "Everything that could be invented has been invented already."
You didn't read the article. It talks a lot about housing, high speed rail. Those are just two things we could be building right now.
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