Capitalism and Wealth Creation - Kardashian Style

I was reading an article and came across a tidbit that apparently Kylie Kardashian is the youngest self-made billionaire now, beating out Mark Zuckerburg who was 23 when Facebook took off. As much as I despise the Kardashian clan, I cannot knock their hustle.

One of the fallacies that I see people often make regarding income inequality, wealth creation, etc is that they assume there is a limited amount of wealth. Inother words, the wealth pie is fixed. So if you make a lot of money, it is because you have essentially taken it from someone else. This could not be further from the truth. The pie is constantly growing.

I'd love for the usual suspects to come to the thread and explain how Kylie has stolen her wealth, taken someone else's piece of the pie, should be taxed at 70%, etc. Remember, Occassional-Kotex said that billionaires shouldn't be possible in a moral society. So is Kylie immoral because she created a booming makeup line?

Apparently, Kylie started her own cosmetics line to take advantage of her large instragram following in 2015. She created some lipstick or something. Anyway, it has become one of the most popular brands doing about $360 million in revenue and is now valued around $900 million.

She has created a ton of jobs with her company and she deserves every penny she gets.

Kylie Jenner Youngest Billionaire

originally posted by: watchitburn
a reply to: Edumakated

It truly is amazing.

Right. I wouldn’t call them “ill-gotten gains” but her wealth sure as hell doesn’t reflect any “real” value-added gains.

@OP: Is she a Jenner or a Kardashian? Not that it matters but I believe it’s Kylie Jenner...

a reply to: Edumakated

Yes, but she was only able to do all that because she had contacts.

Her family did not rise from the gutter.

Where does Caitlyn come from?

en.wikipedia.org...

Caitlyn was a very famous sportsperson, very high achieving internationally - well known champion. That gave her pretty daughters a huge helping hand. Their looks and LA opportunities did the rest.

It is very difficult to achieve any big success as an unknown unless you do something very amazing or people make a lot of money out of your idea. More usually they will take your idea and make all the money for it themselves if you come from a lowly place.

She got where she is on Caitlyn's name. I am not moaning about this. It is just family helping family at the end of the day. Wouldn't we all do that if we could?

It may look unfair to us to use dady's name and fame, but it is what humans do. Success means a bit for your kids too. There is a twist in the tale though because what is success? Is it fame and billions of dollars? I'm not sure it is.

Being a rap singer from a gang is not coming from a lowly place, so no stars earned there, homies. At the top of the gang you are seriously loaded with power and influence like a godfather and able to give "resources" and "opportunity" access to anyone you wanna help. They have contacts of their own and a network of their own - so does the Mafia.

originally posted by: Malak777
a reply to: Edumakated

Yes, but she was only able to do all that because she had contacts.

Her family did not rise from the gutter.

Where does Caitlyn come from?

en.wikipedia.org...

Caitlyn was a very famous sportsperson, very high achieving internationally - well known champion. That gave her pretty daughters a huge helping hand. Their looks and LA opportunities did the rest.

It is very difficult to achieve any big success as an unknown unless you do something very amazing or people make a lot of money out of your idea. More usually they will take your idea and make all the money for it themselves if you come from a lowly place.

She got where she is on Caitlyn's name. I am not moaning about this. It is just family helping family at the end of the day. Wouldn't we all do that if we could?

It may look unfair to us to use dady's name and fame, but it is what humans do. Success means a bit for your kids too. There is a twist in the tale though because what is success? Is it fame and billions of dollars? I'm not sure it is.

Yes, she had an advantage because she was already wealthy. However, she still took a small fortune and made it into a really big fortune. The money was not taken from someone else unfairly is the point.

Life is not fair. There is some truth to the old adage "It takes money to make money" or as someone told me "The first million is the hardest..." A fact of business and life is that you need contacts, networks, etc.

Regardless, I can put up other stories of people who were broke who created or built businesses into billion dollar empires.

a reply to: Malak777

your comment is spot on but need to add something to it. There is a difference between living off of your name or use it to your advantage. Look at the Hilton woman Paris. She did F all only spent the money couldn't even capitalize on her crap TV show, while the Kardashians had an idea, knew who they will target with it worked for it and made a lot of dough off of it. As much as I hate to say it because it is the Kardashians, gotta give credit where credit's due...

originally posted by: watchitburn
a reply to: Edumakated

It truly is amazing.

That is not true. It was because Caitlyn already had fame and media contacts. Caitlyn did all the hard work for that family in terms of media and resulting business success.

originally posted by: szino9
a reply to: Malak777

your comment is spot on but need to add something to it. There is a difference between living off of your name or use it to your advantage. Look at the Hilton woman Paris. She did F all only spent the money couldn't even capitalize on her crap TV show, while the Kardashians had an idea, knew who they will target with it worked for it and made a lot of dough off of it. As much as I hate to say it because it is the Kardashians, gotta give credit where credit's due...

Well I agree with that. They do have business savvy and that is an important number in the sum of success.

originally posted by: Malak777

originally posted by: watchitburn
a reply to: Edumakated

It truly is amazing.
Building a Billion dollar empire from a video of some random slut getting pissed on.

That is not true. It was because Caitlyn already had fame and media contacts. Caitlyn did all the hard work for that family in terms of media and resulting business success.

Caitlyn didn't just give fame but he/she must have taught the kids some principles instead of feeding off the silver spoon. Say what you will, her newfound wealth didn't come without a bit of work and ambition. Good for her.

I bet her father is beaming with pride.

does anyone want to take her money? lol

there are some kid u-tube influencers who are making tons of money. personally i think that's kinda sad. will people have kids to turn them into influencers in the furture?

people like to be followers and it works out well for the one being followed i suppose..

originally posted by: LogicalGraphitti

originally posted by: Malak777

originally posted by: watchitburn
a reply to: Edumakated

It truly is amazing.
Building a Billion dollar empire from a video of some random slut getting pissed on.

That is not true. It was because Caitlyn already had fame and media contacts. Caitlyn did all the hard work for that family in terms of media and resulting business success.

Caitlyn didn't just give fame but he/she must have taught the kids some principles instead of feeding off the silver spoon. Say what you will, her newfound wealth didn't come without a bit of work and ambition. Good for her.

Yes, but if the young and pretty daughter of my fisherman friend went to the bank and told them she wanted money to make a billion dollar industry out of cosmetics they would ask her whether she had the contacts, network, customer base and security for such a business. They would want her to be able to secure any loan she required, any finances for setting up the billion dollar generating industry. In reality, she would never stand a chance of that happening in a billion years.

Caitlyn's daughter had the name to trade with and all the media hype that has stemmed and grown from media coverage and the contacts.

It is the name and the BRAND that gives you a head start. Trump's daughter, Ivanka, has just as much common sense. It gets you something, but not the whole meal. You need to have a daddy Trump and a parent Kaitlyn and Kris to start you off.

Kristen Mary Jenner (née Houghton /ˈhoʊtən/ HOH-tən, formerly Kardashian; born November 5, 1955)[1] is an American television personality, entertainment manager, producer, businesswoman, and author. She rose to fame starring in the reality television series, Keeping Up with the Kardashians (2007–present). She has four children from her first marriage to lawyer Robert Kardashian: Kourtney, Kim, Khloé and Robert, and two children from her second marriage to television personality and retired Olympic Games medalist, Bruce Jenner (now Caitlyn): Kendall and Kylie.

It really, really, really helps to have a TV personality like Ma Jenner and a famous controversial and very colourful other parent who is a famous sports star as your parents if you go into business. Success begets success.

Or am I just being totally unreasonable suggesting that the parents' world celebrity status got this savvy young business-woman her breaks???

First of all I agree with your statement that wealth isn't a zero sum game however this seems a rather poor example.

The valuation of the company itself seems a little suspect and comes from a puff piece in Forbes rather than a proper financial article.

The company valuation seems based entirely round a personal instagram brand (a notoriously fickle thing) and all production and distribution is outsourced.

The ton of jobs she has created seems to amount to 12 (5 of which are part time).

I am no expert on makeup but would certainly imagine that the majority of sales are substitutions from alternative brands.

I don't think argument is that individuals are immoral for being successful, but that the system it's self is flawed that has individuals accumulate such a high % of wealth.

a reply to: Edumakated

Ed. You opened a discussion on the nature of economics here that is still debated by professional economists. I am not one and I do not suspect you are either. The picture you laid out above, the nature of wealth creation seems fine, it feels fine and indeed does make sense if we take it at face value. I can not refute that theory as once again, I am not an economist.

However what I can do is pass on questions I have about certain aspects of the theory you present. Mostly I can only do that with little stories.

A man wants to have some potato salad. So he buys the potatoes and makes it into salad. Now, he is not unlimited in how much potato salad he can consume. Say for #s and giggles he can only eat five potatoes a day, and hence a fixed ceiling on the number of potatoes he will purchase each week, month and year. Extrapolate that out to all the other people who want to eat potato salad and we still end up with a fixed number of potatoes that will sell each year in the market place.

Does that sound reasonable to you so far? It does to me, so I will continue.

Taking that fixed ceiling of potato sales the next question comes to my mind is which potato companies does our man buy his potatoes from, and likewise, all the other people who buy potatoes. If there is a fixed ceiling on potato sales set by the maximum rate that they can be consumed, then all those companies that sell potatoes, produce potatoes and transport potatoes must share that market with one another. Agreed?

This is where the marketing comes into the picture. The marketing, the sales, the effiency of the growers, the streamlining of the whole process of getting them to market, etc. That is the competition part of it which affects the choice the potato salad eaters make in the market, Which potatoes to buy. But that still does not effect the maximum number of potatoes that will be sold every year.

Now each of those companies has a game plan for the sale and marketing of their potatoes. The companies that have the best potatoes, the cheapest potatoes, the freshest potatoes, all of that goes into which potato company sells the most potatoes. So if there are 100% of potatoes, which is the fixed maximum number of potatoes that can be consumed in a year, the company that runs the best business practices will get the biggest share of those potato sales.

Are we still together here? Im I making this theory as clearly as you made yours? If so, I will continue.

Those companies that grow and transport and sell those potatoes will by the nature of capitalism that we have today, employ as few people as possible to allow for the greatest possible profit for that particular company. So, going by this simple law of capitalist enterprise, each company will have a fixed number of employees in their company, fixed depending upon just how much of a share of the sale of potatoes in the market. Both are fixed numbers, fixed by the simple law of supply and demand.

So, if company one sells one hundred potatos and company two sells only ten potatoes, company one might need a hundred potatoe employees whlle company two might only need ten potato employees. Should, for one reason or another, company two find a better way to increase their share of potato sales, then they would need to increase their potato work force. But because the maximum number of potatoes people can consume is a fixed number, if company two is now selling a larger share of potatoes, then company one will be selling a lesser share, hence laying off a commensurate number of potato employees. So in the picture of labor and, jobs, the number of jobs is also dependant upon that fixed number of potatoes consumed.

Now, Ed, I don't know just exacly how accurate that whole picture is as once again I am not an economist or a potato pusher. But that theory does make as much sense to me as does the theory that you laid out in you OP.

So, is there not as well a limit on the number of lips that can lipstick can be used on? If so, then this young womans product does not create jobs because all she is doing is taking a larger share of that lipstick market, which by following the laws of capital production necessitates that other lipstick companies will need to lay off workers as their sales fall because she is now getting that higher percentage of the whole market.

So, if you have gotten though all of this, then my question back to you is this.

Is this not a refutation of your theory that ''One of the fallacies that I see people often make regarding income inequality, wealth creation, etc is that they assume there is a limited amount of wealth. ''

By that simple story, it can easily be assumed that there is indeed a limited amount of wealth that can be generated by potato sales, and likewise, lipstick sales.

Finally, as I am not an expert but only a guy trying to figure this all out before I die, if you can explain your theory that there is no limit on wealth that can be generated I would appreciate it.

originally posted by: Malak777

originally posted by: LogicalGraphitti

originally posted by: Malak777

originally posted by: watchitburn
a reply to: Edumakated

It truly is amazing.
Building a Billion dollar empire from a video of some random slut getting pissed on.

That is not true. It was because Caitlyn already had fame and media contacts. Caitlyn did all the hard work for that family in terms of media and resulting business success.

Caitlyn didn't just give fame but he/she must have taught the kids some principles instead of feeding off the silver spoon. Say what you will, her newfound wealth didn't come without a bit of work and ambition. Good for her.

Yes, but if the young and pretty daughter of my fisherman friend went to the bank and told them she wanted money to make a billion dollar industry out of cosmetics they would ask her whether she had the contacts, network, customer base and security for such a business. They would want her to be able to secure any loan she required, any finances for setting up the billion dollar generating industry. In reality, she would never stand a chance of that happening in a billion years.

Caitlyn's daughter had the name to trade with and all the media hype that has stemmed and grown from media coverage and the contacts.

It is the name and the BRAND that gives you a head start. Trump's daughter, Ivanka, has just as much common sense. It gets you something, but not the whole meal. You need to have a daddy Trump and a parent Kaitlyn and Kris to start you off.

Kristen Mary Jenner (née Houghton /ˈhoʊtən/ HOH-tən, formerly Kardashian; born November 5, 1955)[1] is an American television personality, entertainment manager, producer, businesswoman, and author. She rose to fame starring in the reality television series, Keeping Up with the Kardashians (2007–present). She has four children from her first marriage to lawyer Robert Kardashian: Kourtney, Kim, Khloé and Robert, and two children from her second marriage to television personality and retired Olympic Games medalist, Bruce Jenner (now Caitlyn): Kendall and Kylie.

It really, really, really helps to have a TV personality like Ma Jenner and a famous controversial and very colourful other parent who is a famous sports star as your parents if you go into business. Success begets success.

Or am I just being totally unreasonable suggesting that the parents' world celebrity status got this savvy young business-woman her breaks???

The hardest part of entrepreneurship is getting seed money / angel investors. Most businesses are started with the three F's... friends, family, and fools. This is why so many of us who are business minded, get so annoyed with leftist constantly railing on business owners. We know the risks people take to start their businesses.

It is exponentially easier to build a business when you are already wealthy. However, it still hard to do and not always successful.

Sure, Kylie was born on third base, but it still doesn't diminish what she accomplished.

originally posted by: ScepticScot
First of all I agree with your statement that wealth isn't a zero sum game however this seems a rather poor example.

The valuation of the company itself seems a little suspect and comes from a puff piece in Forbes rather than a proper financial article.

The company valuation seems based entirely round a personal instagram brand (a notoriously fickle thing) and all production and distribution is outsourced.

The ton of jobs she has created seems to amount to 12 (5 of which are part time).

I am no expert on makeup but would certainly imagine that the majority of sales are substitutions from alternative brands.

I don't think argument is that individuals are immoral for being successful, but that the system it's self is flawed that has individuals accumulate such a high % of wealth.

I don't know what kind of multiple is used for make up brand valuation. Just taking the article at face value. Regardless, the brand has been extremely successful.

As far as job creation, you also have to think about all the indirect jobs that are created. Advertising, retail, manufacturing, etc as a result of the brand's success.

a reply to: TerryMcGuire

Thanks for the post. Don't agree, but at least you made an effort.

You are partly right. What you are describing is when a market matures, so growth becomes much slower and limited. Companies often steal share from other players. So yes, in some way, there can be limited wealth. Old players lose touch with customers and go out of business, while new players come in an steal share. You see this all time in many industries.

However, when talking about wealth creation, you cannot just focus on one industry. Innovative companies and thinkers are always finding new markets for products. For example, Apple and Samsung created an entire new industry of application developers. Or maybe you create a product that people didn't know they needed.

originally posted by: Edumakated

originally posted by: ScepticScot
First of all I agree with your statement that wealth isn't a zero sum game however this seems a rather poor example.

The valuation of the company itself seems a little suspect and comes from a puff piece in Forbes rather than a proper financial article.

The company valuation seems based entirely round a personal instagram brand (a notoriously fickle thing) and all production and distribution is outsourced.

The ton of jobs she has created seems to amount to 12 (5 of which are part time).

I am no expert on makeup but would certainly imagine that the majority of sales are substitutions from alternative brands.

I don't think argument is that individuals are immoral for being successful, but that the system it's self is flawed that has individuals accumulate such a high % of wealth.

I don't know what kind of multiple is used for make up brand valuation. Just taking the article at face value. Regardless, the brand has been extremely successful.

As far as job creation, you also have to think about all the indirect jobs that are created. Advertising, retail, manufacturing, etc as a result of the brand's success.

She has certainly has been successful and made excellent use of her personal brand. Just think its good to have a healthy cynicism about these types of valuation.

I am not convinced that new brands in makeup really create many new jobs as opposed to just reallocation of market share. As I said make up is not my area of expertise so could be spectacularly wrong.

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And thats why capitalism is superior to socialism.

Props to her, but damn.. Should we be celebrating a rich person getting richer?!?

I love capitalism, but not this current system of the rich making each other more rich..