&gt;Can you tell me how &#x27;the ultra rich siphon off wealth from the rest of society?&#x27; I see this type of saying thrown around a lot, but I&#x27;ve never understood how those who believe it think the mechanism works, how you sequester wealth away so nobody else can benefit.<p>One mechanism is the things that go by the name &#x27;unearned income&#x27;: interest payments, dividends on shares you own, streams of rental income.<p>Another is simply fraud: <a href="http:&#x2F;&#x2F;www.peakprosperity.com&#x2F;blog&#x2F;bill-black-our-system-so-flawed-fraud-mathematically-guaranteed&#x2F;74785" rel="nofollow">http:&#x2F;&#x2F;www.peakprosperity.com&#x2F;blog&#x2F;bill-black-our-system-so-...</a><p>Their money buys condos (which they leave empty) in large cities suffering from a shortage of housing. That&#x27;s one example of wealth sequestration that hurts everybody else.<p>&gt;Have you read the linked essay?<p>I have.<p>&gt;Do you disagree with the central premise, that a society with no income inequality is a society that is not innovating and getting better?<p>I disagree with this part:<p>&gt;Doing what people want is not the only way to get money, of course. You could also rob banks, or solicit bribes, or establish a monopoly. Such tricks account for some variation in wealth, and indeed for some of the biggest individual fortunes, but they are not the root cause of variation in income<p>With a hand wave Paul Graham dismisses all evidence of fraud which has accelerated income inequality in the last ~10 years and the mere existence of the principal&#x2F;agent problem and nepotism (which explains how bad CEOs get paid so much).<p>His argument boils down to &quot;in theory you can be 50 times as productive as someone else&quot; =&gt; &quot;nearly all people who are paid 50 times as much as their workers must be 50 times as productive&quot;. Just world fallacy.<p>&gt;When we say that one kind of work is overpaid and another underpaid, what are we really saying? In a free market, prices are determined by what buyers want.<p>Also this. Unfortunately no such thing as a free market exists anywhere.