Coming from someone who conducts lots of remote job interviews (not yc), some basics still apply:
1. Make sure you have solid internet, switch off your video if audio is breaking up.
2. Invest in a cheap mic (e.g. $20 lavalier) so you can be heard clearly and headphones so you can hear clearly w/ no echo.
3. You can’t read the room / body language as well so make sure you pause occasionally and ensure you’re answering the question sufficiently.
4. Like any interview, undertake a calming exercise beforehand (deep breathing etc)
off-topic: I have been actively participating in HN since 2010, and recently I started seeing prominent tech people on twitter backlash against pg. Not sure if It was there before, or if I'm barely noticing this. i.e. many of them show screenshots of getting banned by pg on twitter.
pg has fallen out of touch. The world is very different for the young ones. I’m not old but my tech career started back around 2007. It was very different.
Back then tech was exciting and new. We were changing the world.
Now we have changed the world. Mobile is king, web is emperor. We’ve won.
Tech is to 2020 what finance was to 1980. And VCs are seen as the big baddies.
People don’t join this industry for the love of nerdy tech anymore. They come because it’s where ambitious people go.
I'm even less old, my career started in 2009. My personal experience was that people back then were both more nerdy and more ambitious, not a tradeoff. And now people are "ambitious" but it's a personal ambition to play the game and earn more money than their peers. The people I worked with in 2009 were ambitious in the sense of building products and teams and companies to succeed in the marketplace, or creating new marketplaces. It seems like tech is where greedy people go nowadays, not ambitious people in any greater sense of ambition in the world at large.
If I look back at the company I was thinking of when I wrote that, the "top half" of the people there are VPs/MDs in fintech, staff engineers at companies like Twitter, ~2-3 mildly successful founders, CTOs at startups, and several have one-person-consulting-shop lifestyle businesses. The other half are mostly engineering managers at (boring, non-FAANG) larger companies. I've bounced around doing greenfield projects / new products at several B2B companies. I just find interesting projects I want to work on and then leave after a few years once the politics become overwhelming for me.
Our recruiting/interviewing process would be criticized nowadays as completely bias-ridden. We sent teams of just-graduated first-year people back to their school's career fairs, built relationships with career offices at those schools, and just basically would have people walk around and be outgoing and try to just chat with interesting students and see if they wanted to join a cool tech company in NYC with cool people. Our interviews were mostly gut-feel after talking to someone about whatever and doing a very simple many-to-many-linking-table exercise to see if they could visualize simple data relations in their head. We didn't even test coding skills, for the most part.
I dunno if it would surprise anyone, but those teams actually were, by far, the most diverse teams I've worked on in my career in terms of age, gender, and race (not to mention socio-eco background). We invested heavily in training people on the job and building culture together internally. We ended up being merged into a larger entity by our parent company and the culture was utterly demolished, and everyone quit around the same time.
I just don't see what context would attract these sorts of people back together at a tech company nowadays. If you find something that isn't a startup founded by rich brats trying to completely fleece slightly-above-average engineers in secondary-market cities with 10-yr-old market rate salaries, and isn't a big tech company ruining society, completely driven by political-insider-donors-- ahem, sorry, I mean investors -- please let me know also!
Find the people who criticize current developments in terms of the original promises of (the relevant) technology. People with a sense of history and the big pictures that no longer exist or which are being actively destroyed as inconvenient to business plans.
Look for places where laws can be broken with relative impunity for whatever reason -- maybe they're small laws (like hotel regulations), maybe they're laws that address a relatively small and poor group of people (like the taxi medallion service).
Find those laws, and develop a startup that can break them or exploit loopholes, and you've got your next startup of 2009, in 2020.
There's probably room in environmental regulation, maybe there's a minimum amount of toxic waste you have to dump for it to be regulated, and you could create an "uber for toxic waste" where people could pick some up from a pollution-heavy plant on their way home from work and take it home to their toilet to dump in.
I also get an impression that a decade ago people mostly went to IT because they loved computers, and now they mostly go to IT because they love money. A decade ago, telling people about design patterns would make you a guru, now it makes you a nerd.
I've never fully understood that saying. Failure to stay relevant and understand the world as it is without your blinders on doesn't make you the victim of time. That's a choice you've made.
It's simple to lose touch. You did what the youth are doing a decade ago; hell, you're still in the game, albeit in a much different role. The world shifts around you, but you are so rich and powerful that people in your personal circle either don't see it themselves because of their wealth and power, or would NEVER point out your shortcomings because they need access to your wealth and power.
In other words, assigning that statement - die a hero or live long enough to become the villain - says, to me, that he hasn't actually done anything wrong. That it's not his fault, he's just been around so long that tastes have changed. He's the victim, is what I read there.
I would argue, though, that it is his fault. He's out of touch with the world as it is for people just starting out, AND he's made the mistake of believing his view is the view, right and proper.
No idea what all that means in this context, but there it is, I guess.
You usually don't become a hero without staking a position. Once you've staked it, it becomes part of your identity, and is pretty hard to let go of. Even if you shift your views, much of the rest of the world will hold you to your younger self. (Though with enough time, they'll forget. Remember when Arianna Huffington was a conservative commentator, or Donald Trump was a Democrat, or Elizabeth Warren was a Republican, or Benedict Arnold was a Patriot? Hmm, maybe some of those aren't great examples.)
I think the inflection point was when tech, the valley and the internet itself became mainstream, circa 2000. It came along with millenium hype.
Even then only maybe 1/3 of Americans had consistent Internet access, but everyone was talking about it. 'The Matrix' films remember are about hackers.
Then the metastasizing with mobile, which really took root post 2010 when even poor people around the globe became connected.
I think AI, in the long run, won't be the thing we look at, it will be the internet itself.
In 500 years, I wonder if even Television or Radio will be remembered as 'a thing' - they were foundational and transformational, but only for a few decades until the internet took over.
The mishmash we have now, may resemble whatever it is we have in 1000 years. Protocols, sources, viewing tech will all change, but I think that it will actually kind of feel similar. It won't have the orthodoxy of 'TV Channels' with 'set program timings' etc..
It's like all those articles you see in Medium :"What life has taught me" They all start like : "In my youth, the US was a very different place, blah blah" Then you scroll down and notice the author is 28 yo at most.
And after reading it you realize the author is ignoring everything that happened before them, but if they did put their own experience in historical context the profoundness of their insights would disappear.
I think peak web was around 2005, when Google was still working, Amazon was non-bloated, personal pages still were easier to find, and medium/wordpress nonsense was scarce.
Then the fundamental greed driven changes happened, and here we are with an AOL situation again.
So the difference between 2005 (or 2009) and 2019 is greater, and it is for the worse. A lot of programmers are backstabbing and greedy creatures now who pretend to be good but are only after money and power.
I'm not talking about startup founders here, it is the corporate programmers who are insufferable now.
> I actually don't think Amazon retail (i.e. sans AWS) is an important artifact in the big picture.
If only considering the WWW impacts, then sure. In the physical world, however, it's definitely an important artifact, considering how much it's upended things for brick-and-mortar (at all scales) and the whole supply chain / fulfillment / logistics realm.
(And note that "important" should not be taken to mean "beneficial" here; it's already important to the history of these sectors in the same sense that giant asteroids are important to the history of Earth-based life - that is, outright destructive of the current landscape, but might very well result in new opportunities in its wake)
One mistake pg makes here is assuming that to be an exploitative billionaire you have to be good at exploiting people or have personal manipulative qualities.
You don’t. Owning a large company in a capitalist system is inherently exploitative. Simply owning a large company and taking surplus value from a large number of people is exploitation.
"Simply owning a large company and taking surplus value from a large number of people is exploitation."
Who are these large number of people? Customers or suppliers? In socialism, customers are usually held captive because of limited suppliers. In capitalism, suppliers are usually held captive because of fierce competition to get customers. Neither sounds inherent exploitation by the entrepreneur.
I believe that the claim is that the workers are exploited, because they produced value but received less than the value they produced. And that does sound like exploitation. But consider the alternative.
Let's say that every worker was paid for the full value that they produced. That would mean that the profit of every company was $0, because the workers got all the value produced. How many companies would we have? Probably not very many. Risk my capital to start a business, for a return of $0? Yeah, no. I'll pass. So will most people.
And that would mean that we wouldn't have the things that large businesses produce, from computers to airplanes to vaccines.
Even for the workers, is that a net win? I don't think so.
I have little money but I write an amazing book and it sells to millions. Each books takes, say, $5 to print, and yet I sell it for $15. Therefore I end up wealthy from this endeavor.
Did I exploit the people who chose to buy my book? The people who printed it?
Did you personally sell millions of books on your own? Probably you used some service like amazon in order to sell those books and fulfil the orders, in this hypothetical, in which case the lefty argument would be that you are indirectly profiting from the exploitation of both amazon's workers and the employees of the printing company.
PG was cheering lambda school's free 4 weeks developer intern trial a while ago. If he doesn't think that is exploitative, maybe huge difference in morality.
Airbnb spamming forums early on, sketchy marketing techniques, avoiding commercial regulations that hotel has to go through for good reasons and displacing genuine local rent seekers is not exploitative then maybe the bar is high enough for YC.
Should the founder have to think about whether the idea could potentially be exploitative or he just needs to think about what is good for the users aka not exploiting the tourists?
Airbnb feels like a very bad example. It’s rich people renting out their homes to other rich people. You’re saying that’s more exploitative than rich people renting out those same homes to poor people? How do you think that really pans out?
No. Residential areas are different from commercial areas in good parts of the world for a reason. This is not a bad example.
Many people took loans to buy airbnb to aggressively rent them. Criminal activity go through roof with tourists in the neighborhood. You don't know who your neighbors are because they keep changing. It doesn't feel safe to let your 10 year old son out for many.
Drugs, garbage on the road, covid hot spots. Hotels also have to pay taxes which airbnb avoids. Price in the area goes up for locals. People move out to surrounding areas and have to commute more.
Would you say this collection of things you’re describing is, “AirBnb is exploiting someone?”
Anyway, there’s basically no evidence for any of what you’re saying, especially the crime part. The one not-yet-peer reviewed paper trying to show Airbnb’s causal effect on rents found a $9/yr increase (1), which is laughably, hilariously small - it could not possibly be playing a significant role in rent pricing in the biggest markets, and the researchers specifically excluded the possibility of AirBnb reducing supply. And this factual criticism is the one you actually omitted!
I think there is quite a bit of evidence that "Residential areas are different from commercial areas in good parts of the world"-- they operate under different regulatory regimes. For example, insurance, and health & safety standards.
Hotels have to have commercial liability insurance. Hotels have to maintain certain levels of fire safety, and food sanitation, etc.
My brother works for HUD. They have many examples of people (ab)using Airbnb to operate as slumlords; a type of exploitation which is outlawed. The corporation Airbnb has historically not been cooperative in assisting the HUD in this process.
So no, it is not just rich people renting to rich people. In many cases it is rich people using the platform to avoid regulations which prohibit exploitative renting to poor people.
And the corporation which enables this actively hinders investigations. Because Airbnb is also getting a cut of these rents.
But for people that poor, isn’t the alternative not living there at all? Or a different slumlord?
I have nothing but empathy for someone who can’t drive and cannot afford normal housing in the same place they receive services. I totally understand how some of those people would choose to have fewer services and leave, or god forbid be homeless.
But do those people you’re describing, who actively login into AirBnb - if they didn’t get something they paid for in-platform, or if the listing is lying, are you saying Airbnb doesn’t come through? It almost certainly does. A giant corporation is honestly better equipped to go to bat for a wronged customer simply because it has the money to provide a remedy and a case manager does not - the case manager must get all remedies from the richest institution of them all, the government.
Personally I believe Airbnb should just design a high minimum rental cost and ban all transactions that are too cheap. But I wouldn’t describe Airbnb as exploiting these people, they are obviously victims of landlords?
> Mark Zuckerberg wanted to engage online with his college friends.
His problem was being a horny brat. I am pretty confident Hot or Not would not have passed muster with Jessica Livingston.
Also even if he had shown Paul Graham the earliest Facebook numbers, the partner panel could very well just say those numbers were faked, which the Friendster people purely out of spite would say, and what would they do, call a college freshman about how much she uses Facebook?
> that the only way to become a billionaire is by exploiting people
Any statement that has the word "only" in it is guaranteed to be wrong. I wonder if PG worded it this way intentionally (straw man fallacy).
Most people agree early employees should get more equity. This doesn't address whether startup founders are hoarding equity for themselves and their investors instead of fairly rewarding early employees.
Isn't that true though? A millionaire? Sure there are a lot of ways to get there. A Billionaire? There are only 2000~. Are there any notable ones who got there without exploiting people or building/aided in building a business that does?
well, in the really pedantic sense, you could inherit a billion dollars and not exploit anyone. It may be difficult to hang onto without a certain level of exploitation
I wouldn't say this is a straw man. Every billionaire being exploitative/criminal is a real political position among the American Left, see e.g. this tweet [0] by Robert Reich. He was secretary of labor in the Clinton administration, so not some extremist weirdo.
I think Robert Reich is more left of center than the current political party since the 90s, in an increasingly polarizing nation. Here's the quote:
There are basically 5 ways to accumulate a billion dollars in America:
1) Profiting from a monopoly
2) Insider-trading
3) Political payoffs
4) Fraud
5) Inheritance
To disprove this, one must simply enumerate the 2000 or so billionaires and determine how they each made their money; then categorize them and see if a significant percentage (say, 5%? 10%) do not fit these five criteria.
This is a needlessly divisive interpretation of that tweet. The tweet lists 5 concrete ways of becoming a billionaire, and you're putting words in the author's mouth by labeling them all "exploitative/criminal", which were not used at all.
When leftists say "exploit," it's because they regard paying workers less than the marginal value they produce with labor exploitative. (Cf. boss makes a dollar, I make a dime.) They claim that it's unfair that that product of labor goes to the company's owners — hence, to fix this, leftists want to "seize" or "democratize" the means of production. (Sitenote: this a core tenet of capitalism: value going to owners.)
Others would disagree that this is exploitative because they believe that wages should be set by the market.
It's clear that workers are not compensated for all of the value they produce, and that the excess value goes to owners. The disagreement is whether this is exploitative. Leftists argue that it's not fair for owners to capture value without contributing any work. Rightists argue that capital is a scarce (i.e. limited) commodity, so owners deserve to be compensated for providing capital. Who you agree with is up to you to decide.
Pg's blog post strawmans "exploit" because he uses a different definition of exploit than leftists use. This might be because he misunderstands leftism, but the cynical believe that he is deliberately strawmanning them for his own gain (since pg benefits from capitalism). A more honest blog post would examine whether value going to owners or founders is exploitative or not.
Not sure if you're being serious, but assuming you are...
Nowhere did I state that all leftists are communists. In fact, seizing the means of production is also a socialist idea. One key difference between socialism and communism is that communism abolishes all private property in addition.
In leftist circles in the US, leftism colloquially refers to people who advocate for some form of social democracy, with most leftists supporting at least socialism. Those who support more center-left policies (like Keynesian economics and the welfare state, without advocating for socially democratic programs) are called "liberals," not leftists, despite the fact that they are left-leaning (in the US's sense of left-leaning).
> Moving left doesn’t necessarily make one “more liberal.” At a certain point, the traveler leaves the province of liberalism for one that is more correctly identified as socialism, radicalism or leftism.
> Leftist: They believe the free market system is inherently flawed to favor the rich and powerful and believe that the government should either work within the framework of the market system but heavily regulate it and pay for more social services and welfare through higher taxation on the rich and corporations (social democracy) or abandon the free market all together in favor of socialism.
> Liberals are socially liberal and typically believe in democratic capitalism and the welfare state.
> Leftists typically believe in socialism and are against the ideas of capitalism.
And then later brings up that there are exploitative people that aren’t billionaires. Never is the central point, that exploitation is necessary for becoming a billionaire, ever refuted.
For many, this is a hard pill to swallow. Here's one way to judge it more objectively. Replace "billionaire", with something more neutral: "pro basketball player", "amazing musician", "prolific writer".
The arguments tend to make a lot of sense in other categories, but our natural inclination rebels on Billionaire. This is a great sign that something is off
All three are of your examples are wildly different in that they’re top-tier individual contributors. Of course you can become a prolific writer without exploiting anyone. A more fair comparison would be something like politician.
I think billionaires are much closer to what I mentioned than to politicians. You can tell this by the fact that most billionaires have engineering degrees or were tinkerers.
One defining quality is that billionaires need to scale work that often involves management. In this case consider prolific basketball coaches, or generals in war.
The reason I shy away from including politicians, is because their m.o is starkly different: it’s all about status.
Sure, coaches and generals are also much better comparison.
Either way, I think your argument is weak. “Sure you feel this away about billionaires. But change ‘billionaire’ to something different and your feelings change.”
Well, duh. That’s not even an analogy. You’re just literally changing the subject of the sentence. Billionaires are super different than writers in ways that are relevant to this discussion.
Then, you can be more confident in your conclusions. You may still be off, but heck, you would have subjected yourself to much more critical thinking than average, and can be much more confident in your opinions.
A big problem here is that the children of a musical prodigy aren’t necessarily musically talented, and the children of amazing athletes aren’t necessarily amazing athletes.
But the children of billionaires are (almost) all obscenely wealthy.
I think these are all more similar than you think:
Consider
- the children of musical prodigies are likely to be more musical then average. The children of billionaires are likely to be more entrepreneurial than average
- both are likely to be wealthy
- neither are likely to be as prolific — I.e a child making an even more successful business, or being a better musician
- over a few generations, both are likely to revert to the mean. In some countries this is not true of the wealthy, but in America this is particularly true
I mean, just because someone squanders an advantage doesn't mean that one didn't have an advantage to begin with.
And that's the fundamental difference between the child of a musician v. the child of a billionaire. In order for the musicians' child to be a prodigy like one's parent, there's still considerable training and practice required. In order for the billionaire's child to be a billionaire like one's parent, the child simply needs to wait for one's parent to die.
That is: the passing down of musical aptitude through multiple generations requires each generation to put in approximately the same labor as the previous. The passing down of material wealth through multiple generations does not.
The descendants of American billionaires might suck at sustaining their advantageous positions right now, but that's only because America's upper class is relatively fresh, still full of bourgeois "new wealth" instead of aristocratic "old wealth", and lacking practice with migrating from the former to the latter. In a century or two (barring intervention to return wealth to the proletariat) I'd expect the American upper class to get into that groove of wealth consolidation, like how things evolved in Europe (and hell, if the US follows the same trajectory as the Roman Empire we might even end up with the same sort of feudal society in some places).
> That is: the passing down of musical aptitude through multiple generations requires each generation to put in approximately the same labor as the previous.
Let’s think on that a bit. Consider, if a parent is a musical prodigy, it’s akin to having a fantastic coach at an early age. They can teach you hard-earned insights, help you make the right choices, introduce you to the right people. This makes achievement considerably easier. It’s not as different from financial transfer as we think.
> In a century or two (barring intervention to return wealth to the proletariat) I'd expect the American upper class to get into that groove of wealth consolidation, like how things evolved in Europe
As long we live in a free-market society, I think this will be hard to do. Main reason: it is extremely difficult to invest well in the long-term. You can see this by how prized top investors are. Unless one invests well, in a free market society their wealth gets eaten up.
Europe avoids this through a highly regulated society — social mobility in and out of the upper class is extremely difficult there.
It’s certainly possible that the u.s will lose their position as the bastion of free markets — but whoever picks it up will become as powerful, and most people will start to immigrate there.
Investing well is a worse strategy that investing long. Doing a real low percent gain for 500 years is going to be more predictable than investing well over 5 years
You can't tell that investing is hard by how much endowment managers are paid. Convincing people you have the secret investing sauce is the most important skill of an endowment manager. All claim they can beat investing in index funds but there is no evidence they can.
> Even a low percent gain over the long term is very, very difficult.
In the words of those Screen Rants pitch meeting skits: "It'll be easy, barely an inconvenience!"
The easiest and most surefire form of investment out there is in land. There's a finite amount of it, so while on local scales values will fluctuate, on an aggregate scale the value of one's total land holdings will increase indefinitely as demand increases (which it will, both from a growing global population and a growing global economy). Land ain't especially liquid, but on long-term scales that ain't really a problem.
Until we as a society pull some moves out of the Georgist playbook and tax land value, the rich will always be motivated to consolidate that wealth into land control, and will be able to hold onto that wealth at the expense of everyone else.
> if a parent is a musical prodigy, it’s akin to having a fantastic coach at an early age.
...not really. Take it from a musician: performance ability and teaching ability are not as interconnected as you're implying.
And on top of that, even a fantastic coach can't really do much if the one being "coached" has no interest in learning something, or in practicing what one learned.
> As long we live in a free-market society
We don't, and arguably never have. A free market is pretty difficult to achieve when you have existing players motivated to hold onto that wealth and prevent competitors from unseating it.
> social mobility in and out of the upper class is extremely difficult there.
You think it's significantly easier here? Especially with wages tanking relative to cost of living for all but the upper class, I don't see this fixing itself any time soon without one heck of a course correction. We ain't that far off from a European-style regulated society (and indeed, political discourse in the US seems to be pushing for it).
> The crucial feature of the initial market is that it exist.
Should "exist" be replaced with "exists" in this sentence? If you wanted to use "exist" I think you'd have to use a helper verb like "should [exist]". Is there a name for the grammatical feature where someone omits the "should" and uses the conjugation that would go with it?
For a clearly smart guy it's so frustrating to see PG bring in a topic like the Billionaires being exploitative, and then taking such a thoroughly blinkered view. It's a massive blind spot that PG fails to address is that it's the exact same sense of mission that he sees in start ups that creates the permission structure to exploit people.
It's not that people set out to exploit people and as a result they become billionares. It's that their focus on their goal allows exploitation to happen as a by product. It's not that Uber set out to exploit drivers, it's just that get their business to scale they had to lure drivers in with big incentives, and then in order to make their business viable they had to then force their costs down to the point where drivers are paid less than the cost of vehicle maintenance.
It's just a bizarre primary school understanding or morality where there's a group of "Good" people and "Bad" people.
Right, Bezos didn't set out to bankrupt as many small businesses as he could. He started with providing a wider range of books to people over the internet. For the person who wanted a specific book and was only able to get it on Amazon this is a "good" thing. For the local bookstore who is now bankrupt that is a "bad" thing.
I've come to the conclusion that to be a CEO you have to wear these blinders and have faith that overall your company is a positive good for the world. That means that when you have a low performing employee you have to fire him even though you know that it may cause terrible consequences for him and his family.
Small businesses are dying because of small business refusal to use technology. They would rather grumble about how "millennials won't pick up the phone anymore" to order things.
In the case of small bookstores, they think it is enough to toss books on the shelf and wait for people to come browsing. Well, I can now browse from bed.
Really? That sounds like a self-fulfilling prophecy. If the only thing they do is provide book ordering services, but amazon does it better, should amazon really feel bad about that? When you successfully pass an interview and get a job offer, do you feel bad enough for those who didn’t do as well that you turn down the job offer?
EDIT: forgot to add, I suspect there are many things small bookstores could do in terms of building a local community (in-person and online) of people who love books, improving discovery options for new books from that community, that kind of thing. So maybe they should be doing that i.e. “do things that don’t scale” to try and delight their users more than amazon does, in a way where their lack of scale is an advantage?
""They haven't tried anything. Every business being beaten by Amazon""
This again, is glib.
To suggest that you somehow know all these vendors have 'not tried anything'.
How about lobbying government to subsidize their business like the US Government subsidizes delivery? Or the VAT tax breaks that Amazon gets? Or the fact that Amazon is dumping merchandise on the US by selling for negative margins, paid for by profits out of AWS?
A local bookstore has 6 staff. They have no power.
Amazon started off with 21 employees - do you think that’s a meaningfully different number? Amazon at that didn’t didn’t get any of the advantages you list. So do think it might be worth considering what they did differently at the beginning, when they were the tiny business, going up against huge and powerful companies like Barnes and Nobles?
I think some tried some things. Barnes and Nobles did some. The results weren't successful, and that was pretty discouraging to other book store owners.
As book store owner, I really think it's an irrational decision to invest heavily in fighting Amazon. You're chances of success are pretty slim.
As for big businesses ? Well, there's Walmart, Target.
In the end, the e-commerce industry is a place where most of the market share would be controlled by a few large companies. That was clear from the beginning.
Would you also argue that these small bookstores “delight their users”? If so, why aren’t they making money? If not, do you think that maybe that might be the problem?
The way that amazon has delighted their users, for a long time, was to heavily grow by reinvesting all their money into both expansion and subsidizing their infrastructure. That is simply not a path a small shop can take because they don't have investors. Nor do they it want to. Nor should they have to.
No, I don't think that's the problem, at least not for all. From the limited insight into the publishing industry I have it seems fairly obvious that the fact that Amazon can demand massively lower prices from the publishing houses, while at the same time being able to have more optimized logistics, access to better shipping conditions, ... thanks to scale, plays a large role.
Was that also the case when Amazon started? How did they get to scale? And are we arguing that Barnes and Noble didn’t have scale when Amazon started competing with them. If “scale = success”, how is it that the former incumbents failed and the initially small startup succeeded?
I’m working at my job doing just fine. My employer is pretty happy and so am I. Then a new guy comes along and says, “I can do thorough’s job better than he can.” My boss hires him and she agrees. At length, she decides to keep the new guy and fire me because he’s meeting her needs better than I am. She doesn’t need to pay me anymore.
There are two happy people in this story and one unhappy one. But the fact that there is an unhappy one doesn’t seem like nearly enough to me to decide it shouldn’t have played out like it did.
Does it seem like enough to you? If not, what other common element would this story have to have to decide it shouldn’t have happened?
If the new guy doesn't follow regulations or doesn't pay taxes like you do (Airbnb, Uber) or if he somehow provides drugs to the boss and as a result she needs him day in and day out (Facebook), then this shouldn't have happened.
Amazon didn't kill small businesses. We killed them by using Amazon. And I'm glad to have participated. I much prefer Amazon passing the savings of time and money to me rather than some small business owner. The small businesses I was forced to use previously were inefficient, slow, overcharging, had terrible customer service, exploited employees, etc.
As an example: we killed tons of movie rental businesses by switching to Netflix. Life is much better now for everyone who isn't a movie rental store owner, which is almost everyone.
Small business doesn't mean good business and big business doesn't mean bad business. What matters to me is the net effect, and in most cases with Amazon, the net effect is very positive.
The same is true for Google, Uber, and Facebook and most big tech successes. The ratio of bad:good is just worse for some of them than for others, making it harder to judge.
this is mistaken: you need multiple small businesses because competition trumps everything. competition results in lower prices, better customer service. to amazon, though they've excellent customer support or used - you're just another customer.
The small businesses you say were exploitative is because they were the only shot in town. i.e in a monopolistic position.
multiple small businesses result in a robust economy. if one goes bust there's plenty to keep providing a similar service. MSB's enable other auxiliary business look at Japan | German's economy for an example - mutliple suppliers etc. more employment. Guess the jobs the masses work at amazon - drivers, warehouse workers.
What amazon, provides could've been easily provided by a standardized api connecting different small merchants. some industries already do this - a flower shop needs roses, it can easily contact another flower shop to get roses to it's customers. everyone wins.
netflix yeah was a net positive. it's content so end of day, it was going to be aggregated in Ben Thompson's terms.
Uber is good for me as a consumer. But is it good for the driver, for the environment. if the US had robust public transportation, Uber wouldn't be necessary.
Small businesses are important for a whole host of intangible reasons.
They provide dignified employment (as opposed to invisible work in a warehouse), they encourage entrepreneurship, they increase the tax base of a locality (by ensuring money stays within a local economy), and they contribute to local culture, community and character.
Amazon killing small businesses has sucked even more of the life force out of small towns, and that’s sad because said towns were already shellacked by the death of manufacturing.
It’s hard to argue with Amazon’s excellent customer experience, but the externalities involved are nontrivial and IMO outweigh the benefits.
For every small business that treats their employees well, there is another hiring and abusing people with limited options such as undocumented immigrants and felons.
I would also claim that keeping taxes in the local economy, while a very worthy goal, does not require the presence of small business. Big business can be made to support local community and culture. Just because the Walmart headquarters are outside of my small town, doesn't mean they don't have to pay a percentage of their earnings from the local warehouse to that community.
Also, minor grammar nit, you may have meant to use "shell-shocked" instead of "shellacked", but shell-shocked wouldn't fit the context you're going for either.
I find all your reasons are either fluff, or just saying that small businesses are good for their owners. Economic efficiency is net positive, and people who aren’t small business owners benefit a lot from online, efficient shopping. If some segment of society needs charity, they need to convince either the gov or nonprofits to give them some money, not rent-seek on other people.
I feel that what happened with tech is that there were two things occurring simultaneously: one, there were many new useful ideas possible to build with IT that were not possible before and that delivered genuine value. With companies like Amazon or Airbnb or Google you had genuinely motivated "builder" founders who were first to scale, kind of like when a dam breaks and the water rushes out.
But, the second, more negative thing is that a lot of the inefficiencies removed by these companies were in the form of livelihoods for many people, or adherence to various regulations and laws that was a lot easier to omit with IT in the middle. Examples would be the Mom-and-Pop retail stores going out of business or Uber breaking taxi regulations.
Like you said, Bezos didn't set out to bankrupt Mom&Pop, it was just an unfortunate side-effect of using IT. The thing that I think pg is missing is that projects where this happens are exploitative to a degree, and is why they get rightfully criticized.
> It's just a bizarre primary school understanding or morality where there's a group of "Good" people and "Bad" people.
I think it's even more simple than that. It's a failure to realize that everyone is the plucky hero doing things with good intentions in their story about themselves, and that others don't see him as he sees himself.
So despite there being a world where the society is becoming increasingly unequal, where the average American struggles to feel financial security and those born without access to education or the right geography (or, perhaps, who just aren't as bright or ambitious) are merciless casualties of a "meritocracy" that excludes them, PG feels like he can't be the bad guy because he can't pinpoint any specific situation where he did something "wrong".
His only fault, perhaps, is being a massive beneficiary of a system that is profoundly and deeply unfair and getting more that way every day, and he's not able to see that as something he's at fault for.
So I have some sense of empathy and understanding for his perspective. But I think he would benefit greatly from really trying to dig into understanding what it might be like not to share his perspective and vantage point, as well as to do a better job understanding how different the world is for people now than it was in the early 1980's when he began his professional life.
> His only fault, perhaps, is being a massive beneficiary of a system that is profoundly and deeply unfair and getting more that way every day, and he's not able to see that as something he's at fault for.
If some unfair system exists, and you didn't do anything to create it (it existed before you were born), and you don't do anything to make it worse (and maybe occasionally try to make it a little better)... and the system massively benefits you... are you at fault? Why?
You either contribute to improving it, worsening it, or keeping it the same.
In two of those three cases, you are at fault (or continually become more at fault, more precisely, as the ratio of "how much it existed before you" shifts).
Contribute to keeping it the same? What does that mean? If the system has unfair policies, and you never personally enforce them or advocate for them and occasionally advocate against them, have you contributed to keeping it the same, and are you at fault?
You don't exist outside of the world, do you? If the most you ever do is "occasionally advocate against unfair policies," you certainly don't get to pat yourself on the back much for helping anything or anybody.
If you replace the word fault with "responsibility" or even a more neutral "influence" it's much more obvious, I think. You would clearly have less responsibility than the person advocating for said policies, but more than the person fighting them more vigorously or more effectively.
Nobody looks back and says "boy, I'm glad there were all those people who occasionally complained about Windows in the late 90s," they look back and respect and value the people who built alternatives instead.
Not getting to pat yourself on the back much for helping is one thing. Being at fault is fundamentally different.
We punish people who do bad things. We don't punish people who have neither helped nor done anything bad. We might we wish they had done better, but wishing and enforcing are very distinct mechanisms.
I think it's one of those things that happen to people isn't it, a lot like becoming increasingly conservative as you age... I wish I could find the quote but it's something like: "there's nothing like getting to the top of the system to make you think it's okay".
I think he should have kept the essays separate instead of trying to tie them in with shoddy argumentation. That way we could have taken his good YC advice and tear down that blindness he has fostered separately.
This is exactly right. You would think a scientist wouldn't sloppily throw out weak arguments like this. I guess he hasn't been a scientist for many decades, though.
Of course you don't look for people who are exploitative to become billionaires, that's like looking for someone who has grease stains on their shirt to become a chef. Graham is way off here.
California legislators made this kind of argument earlier this year as they tried to force Uber to reclassify their drivers as employees. California voters rejected that. Uber drivers themselves overwhelmingly wanted to keep their contractor status. Maybe they don't consider themselves exploited?
There is some speculation (I haven't seen where the data for this preference for contractor status comes from other than "drivers surveyed") that the high preference is influenced by dark patterns in the ride-sharing apps, where the drivers are presented with in-app notifications very frequently until they indicate support.
I'm sure many would not consider themselves exploited and prefer to be contractors, but I'm personally skeptical that the breakdowns of this opinion are as reported by the companies.
Incredible that anyone reports this stat as useful. It's blatantly coercive. What driver wouldn't fear algorithmic reprisal from not indicating support?
Or maybe Uber et al outspending their opponents on political advertising by hundreds of millions of dollars had something to do with it? Not to mention constant advertising for free in their apps. They had the “no on prop 22” people hopelessly outgunned.
Even the idea that Uber drivers themselves wanted to keep their contractor status is questionable given that they collected those statistics via polls in the driver app. There is/was legitimate concern that Uber et al would collect that info and retaliate. There is no recourse for this on the workers’ behalf because they don’t have a union! This is a TEXTBOOK example of why gig workers need to be given the right to collectively bargain. Now, thanks to prop 22, overturning its provisions needs a 7/8 majority in the state legislature. Aka, not gonna happen, and that’s by the design of some really cynical lawyers.
More generally, the prop 22 campaign is an indictment of the referendum process, and how easily it can be abused in the absence of sensible campaign finance laws.
Your assumption seems to be that the side that spends more money wins - the prop 16 vote, with the YES side spending 20 million and the NO side spending just 1.5 million would seem to refute that idea.
Is it possible that maybe the voters actually have their own opinions regarding these ballot propositions? So maybe Californian voters think that drivers should have the right to decide for themselves whether to work with Uber or not?
Yes on 22 spent nearly $300 million on the campaign, along with utilizing their established network of apps to tell CA residents to vote yes on 22. The comparison isn't at all equivalent. Uber et al used their vast resources to essentially purchase a law and it's astounding to me that anyone would defend them for it.
Every analysis ever has basically concluded that money in politics only matters up until the point of name recognition. Once voters know about both sides of an issue, you actually have to convince them. That's why money is really only interesting for obscure offices (like judges)
The biggest thing you're ignoring is that Prop 22 brings real, tangible benefits to workers compared to what they have today. It has companies pay I believe 41% of their healthcare costs, whereas previously this was 0%. And it includes the 120% of minimum wage provision, on top of vehicle maintenance costs. This is real money that real drivers and couriers will be "topped up" in certain cases, that they simply weren't being paid before.
The choices were 1. the previous system where drivers were purely contractors, 2. the AB5 world where the vast majority of them can't work at all anymore but the ones that remain are full-time employees, without the flexibility that attracted many of them to this work in the first place as opposed to, say, getting a job at a traditional taxi company, or 3. a compromise where the work stays fundamentally the same but pays more in many cases.
Most of the people I saw opposing prop 22, which I'm guessing includes the above commenter, and certainly included the legislator behind AB5, were just bystanders who viewed it as yet another a philosophical showdown of unionized full-time work vs anything goes exploitation. Even though that framework is a poor fit for the details of this particular situation.
The people with skin in the game saw it differently, the details actually mattered to them and they voted accordingly.
> overturning its provisions needs a 7/8 majority in the state legislature.
Given that prop 22 overturns a law that had recently been passed by the current sitting legislature, there wouldn't have been any point to doing it if it could just be immediately repealed by the same people. Prop 22 can be still be overturned with just a >50% vote by a future ballot proposition.
> the AB5 world where the vast majority of them can't work at all anymore but the ones that remain are full-time employee
Why do people keep lying that AB5 had a requirement for people to be full-time employees? I know in many office-based work environments, there is a strong preference for all regular (non-contract) employees to be full-time employees, but that’s not true in lots of industries, and there is nothing in AB5 that requires people working in conditions which it defines as employees rather than contractors to be full-time.
It's really not just a norm that office workers assume most employees will be full-time. Many aspects of labor law are set up with the assumption that full-time is the normal state of affairs and part-time work is for exceptional or temporary situations. And legally many benefits are tied to full-time status. If you are part-time and get laid off you might not be able to collect unemployment, depending how few hours you were working. Under the ACA companies only need to offer healthcare options to full-time employees.
The bigger point though is there would still be major limitations on flexibility even if Uber/Lyft was able to offer every driver the option of full or part-time. They still wouldn't be able to set their own hours, only work a few weeks here and there with no predictable schedule, sign up and start working immediately with minimal overhead, etc.
FWIW, I've asked a number of Uber drivers how they felt about Prop 22 and they were all overwhelmingly enthusiastic about it. On the day that it passed, one was so excited he was telling me about the big bottle of vodka he was going to drink to celebrate. He was particularly thrilled that he was now going to get health benefits while keeping his contractor status.
I mean, it's a small sample of course. But the effect size was large.
> Uber drivers themselves overwhelmingly wanted to keep their contractor status.
Only after the ride shares corps spent over two hundred million dollars misrepresenting Prop 22. That's one fifth of a billion dollars... to write themselves a law. [1]
Asking in good faith, do you genuinely believe what you wrote above?
Maybe the more precise words are, where do the economic gains the company is concentrating into the hands of ownership come from? Where do you draw the line for how much rent is too much?
Taxi drivers have always been undocumented and much poorer than the people they were driving. Uber didn’t change that, and nobody needs permission to boss a poor person around - go to a restaurant, send your kids to school, shop, you will be bossing poor people around. The remedy is immigration and labor law reform, that is something Uber actively worked against - and won! They care because the economic gain they are concentrating comes from people driving below minimum wage because they lack documents or work authorization.
It had nothing to do with lures or whatever, everyone knows what the deal was. Cars could require no maintenance and people would still be screwed. Uber shut down its self driving car unit and none of that shit mattered. Nobody is out there designing cars that are cheaper, we already have $1,000 used cars, in fact all the effort pours into cars that are way more expensive. Uber blew a lot of money on incentives as long as Lyft does and vice versa, and people just drive for both and none of that shit mattered.
The difference I’m trying to illuminate here is, a permanent subclass of undocumented worker is enshrined in the law. The difference between a W2 and 1099 employee is enshrined in the law. Uber spent a fortune maintaining the status quo, not creating a new one, they did not write those laws.
Personally, I believe, like those guys in the 2006 Borat movie who wish they owned slaves, that people like this status quo, and that Uber could have spent 1/10th the money campaigning for Prop 22 and it still would have passed. People like cheap shit. They enshrine the divide in the law. Bernie Sanders was assailed by the NYTimes for his most divisive opinion, that if people are willing to work below minimum wage they will get the job, and that the government has enshrined that arrangement through immigration law - you’re just not seeing how deeply vested the average person is, not just Travis Kalanick is, in an exploitative status quo.
Meanwhile we type this all out on iPhones. Would you rather they cost 5x as much? I don’t know, if phones cost so much more, if you could ban the exploitation of Chinese labor for real, 50% of the ultra high paying jobs of HN readers would cease to exist overnight. It would be like a pandemic hit software, instead of just Main Street.
This shit is complicated, you can certainly point out that billionaires are bad people, but we all benefit from exploiting someone somewhere, and the road to justice will often visit the people who promote it. And maybe that’s why you and I aren’t out there protesting but those other people are.
Based on what I see in mainstream discourse from politicians and public figures that are pushing the "billionaires are bad" idea, I think you're making a much weaker form of the argument than many are. Most of the people who make this argument really do seem to see it as a group of Good and Bad people, and are arguing that all billionaires are in the Bad group. People like Bernie Sanders and AOC have said that repeatedly in no uncertain terms. And I think this PG essay addresses that form of the argument pretty directly.
What you're talking is a much more interesting conversation to be having. How can we tweak the rules to avoid misaligned incentives? And would it actually be better to end the so-called "exploitation" if it would mean killing most of these jobs altogether, when the allegedly exploited people actually have an ok quality of life and are doing this work because they like it better than their alternatives?
I like this comment. People don’t do good or evil because they choose to. They have incentives or goals that push and pull against others goals. Determining right and wrong often isn’t as simple as weighing those scales or determining which is correct. As both are “correct“ but in inherent conflict. We are forced to play zero sum games regardless of our own desire.
In this case, being a good CEO means making decisions that are worse for your workers over time. The world is set up in such a way to bias you towards that conclusion unless you work against it.
Does that mean you’re evil if you don’t? Or if you minimize your responsibility? Perhaps. But it’s still complicated. Thinking of the world as a massive weighted graph of wants, needs, and goals can be a helpful model.
A more or less capitalist system is more or less self correcting. Yes, billionaires gain their wealth, and yes, workers, businesses and even governments can have a poor experience with it in the process of the billionaire's company succeeding. The exploitation is real and should be discussed and appropriately addressed.
A couple of thoughts...
New, billion-dollar business are, many times, transformational. Amazon, Uber, AirBnb, DropBox and Stripe all transformed the market they profit from. For sure, it is difficult if not impossible to foresee how the business activities will impact the general population et al. Without foreseeing that impact, it's also difficult to mitigate the impact that the billionaire may genuinely have a moral reaction to. Is it not the nature of the beast to grow as fast as possible, damn all torpedoes, while investors and boards of directors push the business leadership forward? Running at an all out sprint means you have no opportunity to identify these moral slights, let alone address them. Perhaps the boards of directors needs a 'Moral Consequence Committee' to keep an eye on it on behalf of the CEO. I am not asking that rhetorically, by the way. Give it some thought.
The second thought is that in order for the business to prevail, it must provide real value to many, many customers and make their world a better place. Uber transformed the taxi experience and yes, may have wound up in the 'vehicular maintenance arbitrage' business for a while, but anyone with faith in market capitalism should believe that this will eventually balance out and Uber and its drivers will reach a mutually acceptable compensation level.
They're not, really. They lend themselves to monopolies and oligopolies, and lead to high levels of capital concentration and thus income inequality. Government intervention is required to correct this, but hasn't in over 40 years. I'm more or less making an appeal to authority to Piketty here but, people generally agree with him.
>For a clearly smart guy it's so frustrating to see PG bring in a topic like the Billionaires being exploitative, and then taking such a thoroughly blinkered view.
Why is it frustrating?
PG discussed an important topic I found to be very relevant in the business world to this day. Being exploitive is praised in most if not all business schools!
Cut throat, shark, shrewd, it’s even depicted in movies Wolf of Wall Street, the Founder (McDonald’s), greed is good...
No self made billionaire, at least in the last 100 years, was ever portrayed fairly in movies or history books!
Billionaire can also be framed as succeeding at creating a power differential at scale. The trick is that you can't achieve scale without using power differentials, and iphones are the fruit of scale. Idea: what you kind of want is for the power difference to decay at scale, so that way you don't have amazon workers pissing in water bottles. Remember: "Sufficiently Powerful Optimization Of Any Known Target Destroys All Value" [1] – I wonder if PG has read that? [1] https://thezvi.wordpress.com/2019/12/31/does-big-business-ha...
Very good, something I have been thinking about as well. Inequality is bad because of the massive power differentials. How do you propose we "solve" that while still being able to reap the benefits of scale?
Any pointers or books to read about this topic? Admittedly I haven't looked too hard.
Idea for the solution is to get everyone together to opt-in to a value system that demonizes excess accumulation. That sounds crazy/impossible today, but on lets say, a 2000 year timespan could we get there? 2000 years ago, "Thou Shalt Not Kill" was a seminal idea, eventually resulting in the world today where killing is demonized and this is existence proof of a solution. We can then abstract to the general class of game theory coordination dilemmas stuck at backstab/backstab, of which both covid and climate change are instances. The will/power of billions of people outweighs the power of a few (regardless of how concentrated the wealth is as wealth is an abstraction), and the internet offers a means for billions of people to coordinate. I conclude that the needed points of leverage are available today/ right now and simply awaiting a great leader to recognize the opportunity, figure out the play and execute it. And the way ideas spread online, I bet the world can reconfigure itself in not 2000 years, but 20 - a single business cycle.
I'm glad people like Elon Musk and Bill Gates have billions of dollars - they're solving some of the world's hardest challenges right now with their wealth.
>> Idea for the solution is to get everyone together to opt-in to a value system that demonizes excess accumulation.
> I'm glad people like Elon Musk and Bill Gates have billions of dollars - they're solving some of the world's hardest challenges right now with their wealth.
There's a difference between having billions of dollars and controlling billions of dollars. Having usually implies controlling, but it's not necessary for that.
A hypothetical value system that "demonizes excess accumulation" will can still allow talented people to use massive resources to solve challenging problems. For an actual real-world example: the US didn't have to wait for a SF fan to become a billionaire before it built rockets to travel to the moon. Similarly, billionaires often don't solve any problems with their wealth. Musk spends millions to build rockets and win government contracts, but other purported billionaires spend millions on money-losing golf courses and vanity airlines instead.
> 2000 years ago, "Thou Shalt Not Kill" was a seminal idea, eventually resulting in the world today where killing is demonized and this is existence proof of a solution.
Uh, what? Do you think murder was first outlawed 2000 years ago? I mean "Thou shalt not kill" is one of the Ten Commandments which is part of the Old Testament which predates Christ by at least several hundred years if not over a thousand. Even the Code of Hammurabi references charges of murder and it is closer to 4000 years ago. The idea that murder is bad is probably as old as civilization itself if not older.
But things are only valuable because people think they are valuable. It's not clear to me why I should need to change my behavior because other people have changed how they view me or my property.
If I find a special rock in my back yard that someone would pay me $100,000 for - I get to keep all that money in your system I assume. But if I find a special rock in my back yard that someone would pay me $1,000,000,000 for - I don't get to keep the money, or if I want to hold onto the rock, I need to give part of the rock away?
More concretely - imagine if TSLA has crossed the threshold because of the recent rally, where now Elon "should" be forcibly divested of part of his ownership of the company. Let's say he goes from 20% to 5%.
Later, the stock crashes back down below the threshold. Does Elon get his 15% back?
massive power differentials are a physical property of a complex system. not everyone knows how to run the internet, and anyone who does has power over ... most of it. any 'scale' will lead to a larger power differential than being monkeys in caves, which already was not 'nice'
I think there's an important point here. Bill Gates wouldn't be a billionaire if he didn't build amazing things, but he also exploited at scale the unjust IP ("ImaginaryProperty") system, which was a critical part of achieving the scale Microsoft achieved.
Startups like Airbnb and Lyft likewise have built amazing things, and would easily make their founders 100' millionaires, but there is a point where to reach a certain level you need to leverage some flawed, unjust legal system at scale (stupid regulations around housing/hospitality/and taxis, in these examples).
None of these founders created these legal systems, but their rapid success and scale I can't see happening without those dumb legal environments they found when they started.
Now, maybe the best method to fix unjust laws is exactly this: when you see a stupid legal system, found a company to exploit it, become a billionaire and then finally society will take notice that the legal system is stupid and will fix it.
So I could see an argument that maybe not only should we not penalize billionaires who built their wealth from scratch, but we should thank them, like we thank white-hats, for identifying inequitable laws that they were able to leverage at scale.
You offered up 3 examples of billionaires. Other examples might be:
* Tesla
* Twilio
* Stripe
Would you help
me see how those 3 leveraged unjust laws? As a software developer, I feel Stripe and Twilio have added a lot of value to me, to small businesses, and the world.
Sorry, I think my writing was a bit muddled (common occurrence). I love those businesses I mentioned. And the 3 you mentioned too. I 100% agree they have added a lot of value to me and the world. What I was trying to say is that to make billions, you need to 1) create a lot of value and 2) have some broken legal system that you are operating in. Maybe for the latter "exploiting" is the wrong word. But the government needs to have created a situation where you can somehow reap a disproportionate reward. Linus created Linux and Git, which have created unimaginable value, but he didn't do #2 which was to use the unjust IP system to make billions of dollars.
In other words. Lyft is a product of hard work and innovation multiplied by corruption and bad government in the taxi industry. The value created by Lyft comes from the former, but the value captured by Lyft is just as dependent on the latter as well. Nothing wrong with that—it's still a big net win for society, but maybe we could do a better job at refactoring our laws so we can get the value without the unnatural inequities. After all, I know a lot of these people and while they are almost all smarter than me, none of them is 10x smarter than me (well maybe pg).
In response to your 3 examples:
* Tesla
Carbons were subsidized and solar/electric better tech. Automotive industry is highly regulated and innovation was sloooow. Elon and company are the best of the best (a shareholder), but still I'm not going to pretend that the business opportunity would be so great if the governments around the world hadn't been creating corruption after corruption (look at the car dealership stuff with the states as a tiny but egregious example).
* Twilio
Oh man the telecom infra went from magic to just rotten in the past few decades. I don't know enough about government here to comment, but I suspect something bad here.
* Stripe
The amount of protection the finance and banking industry has (and their symbiotic relationship with the government) made me sick so many times. Finally someone had the stamina and determination to solve that. But Stripe isn't hitting $100B if US Government wasn't letting the finance industry sit on its ass for 3 decades with protective legislation.
did you forget you were arguing that billionares are inherently bad? all you argue here is that ... if laws were good, we'd hve had 100m tsla/twilio/stripe 30 years ago
It's less "your product is exploitative" and "you underpay (exploit) your workers for their labor."
Bill Gates didn't write Windows 95. Steve Ballmer didn't write Microsoft Office. But they owned stock in a company that employed people that did (and all the various other labor that goes into building software products). Why did they make so much more money from it than the people who were more directly involved?
This dynamic is reducible. If Person A starts a software company, Person B, C and D build the product, and then Person A gets $10,000 while Person B, C and D each get $1, something is off there.
The capitalist defense of this is more or less, "B/C/D agreed to those terms", but this ignores the context. If every B/C/D wanted to be As, there would be no B/C/Ds to build things. And it's not always possible to choose to be an A--it usually requires a fair amount of privilege to start a business. But nonetheless, their work is equally important, and even if it isn't, it's certainly not the case that A's work is 100,000x more important.
We need to recognize this kind of bonkers concentration of wealth is a huge problem, and fix it with profit sharing and taxation.
Didn’t Microsoft create hundreds of millionaires out of it’s initial employees? I mean, the people building the next generation of Microsoft products aren’t going to have trouble entering the upper income brackets of American society.
- Your argument could be rephrased as "profit-sharing isn't necessary as long as you pay people enough." This may work at mega-successful businesses like Microsoft, but doesn't work so well at something like a restaurant chain (or Amazon), where income inequality is far more pronounced. And those cases are far more common.
- Concentrations of wealth and capital have a destabilizing effect on society. It leads to political corruption. Further, even if we have a handful of companies where income inequality is relatively low, that's not the case for most Americans, even at those same companies. In other words, sure software engineers are doing fine, but most people aren't, including many people working for the same companies as those software engineers.
What is the point of being person A if you don't get any benefit over person B/C/D? Why would anyone take on the extra work and risk of being the person that starts the business when you can just be the person that joins and effectively get the exact same things with 1. less work 2. less risk?
Yeah that's a great point. I think we should make it a lot less risky to start businesses. You shouldn't have to risk give up earning years or career building years, to say nothing of the financial burden of raising money (or competing with people who are able to raise money while you have to bootstrap instead). I think we should do this both generally, but also specifically for women, people of color, and other groups who are underrepresented in the universe of small business owners.
Overall I think it would actually be really cool if we could get to where we think we are, where I can essentially pick from a menu of career options based on a risk/reward profile (OK not literally a menu but, yeah). But we're pretty far away from that right now; very few people are making these decisions based on that kind of calculus.
I agree that we should encourage everyone to be an entrepreneur. I disagree that the right way to approach it is by focusing on underserved groups. The right way to approach it is to make it easy for anyone to start a business.
The unfortunate reality is that you will never be able to pick from a menu of all possible career options because you (whoever you are) are not cut out for all possible careers. There are many people in the world who are better suited to doing job X, even if you think you'd like to do job X more.
> I disagree that the right way to approach [encouraging entrepreneurship] is by focusing on underserved groups. The right way to approach it is to make it easy for anyone to start a business.
The numbers are real bad though [1] [2] [3]. White people own 80% of small businesses, and men own 64%. In 2012 (admittedly old but, the Census site is very bad) white men owned 2,933,198 firms with employees on the payroll. Everyone else owned 356,816 firms. Those same white men's firms had sales receipts of $8,221,010,815. Other firms had $88,657,443. That's nuts. Even more so when you consider white men are only ~33% of Americans. My guess is that COVID-19 makes this even worse, but who knows really.
> The unfortunate reality is that you will never be able to pick from a menu of all possible career options because you (whoever you are) are not cut out for all possible careers. There are many people in the world who are better suited to doing job X, even if you think you'd like to do job X more.
I 100% agree but, I wouldn't say it's unfortunate. I just think people should get equal pay for equal work, and CEOs aren't 270x more valuable than average workers. Maybe it's 5x, maybe even 10x, but not 270x. And that's salary difference, we're not even factoring in lifetime earnings.
But white people are 73% of the US population. Obviously it'd be nice if everything was proportional, but all things considered (how recently black people got fully equal rights, for example), I think 7% over-representation is pretty damn good, not "real bad", and the trend is heading in the right direction. Seems like a gap that is very doable to close with purely "encourage everyone to start a business" policies, and egalitarian policies like those should be the preference when possible. With respect to men vs. women, I think a similar argument should be made. Women were < 30% of the workforce ~70 years ago, and still haven't even made it to 50%. Given the importance and biological realities around childbirth, I'm not sure women ever will be 50% (until we grow babies ex-vivo, that is). But as long as trends are positive, it is better not to use regulation as an attempt to overcompensate for perceived inequalities, as that can (and does) frequently backfire. Even if the number of women-led businesses is not going up, you can't just assume this is because women are actively being prevented/discouraged from doing so, you need to demonstrate that. Because an alternate explanation is that women (for whatever reason, maybe they like healthy work/life balances?) are choosing, very much of their own free will and without undue pressure from society, to not start businesses at a higher rate than men.
> Maybe it's 5x, maybe even 10x, but not 270x
This doesn't seem to be a particularly rational stance. If you don't have a good reason behind why it should be one multiple and not another, I don't think its your place to decide that multiple. This sounds a lot like the oft-repeated "nobody should be a billionaire". Um, why not? A billion dollars is an arbitrary amount of value. For example, a billion Zimbabwean dollars in 2008 wouldn't buy a coke[1]. Obviously in the case of USD right now, $1B is a lot of value. But if I make some useful piece of software (entirely on my own) that I sell to 100,000,000 people for $10 each, why should I not be a billionaire? Again, if you don't have a rational (rather than emotional) underlying argument for why X amount of value is "too much", it is not your place to decide that number.
The 80/64 numbers are pretty misleading because they count sole proprietorships. I'd reemphasize:
> 2,933,198 firms with employees on the payroll. Everyone else owned 356,816 firms. Those same white men's firms had sales receipts of $8,221,010,815. Other firms had $88,657,443. That's nuts. Even more so when you consider white men are only ~33% of Americans. My guess is that COVID-19 makes this even worse, but who knows really.
White people aren't 89% (or 99%, in the case of sales) of the population. And at numbers this big, 7% is 210,000 firms. That's not nothing.
> This doesn't seem to be a particularly rational stance. If you don't have a good reason behind why it should be one multiple and not another, I don't think its your place to decide that multiple.
CEO pay isn't meritocratic and has all kinds of ills besides [1] [2] [3] [4] [5]. I think generally the argument here is something like, "well, CEOs/CTOs/etc. just provide a lot more value than your average white collar worker", but the studies don't show that. Further, data show that (again) high relative CEO pay is bad for the company and bad for society in general.
I'd be remiss if I didn't also say that while we're spending a lot of time on high incomes here, high levels of wealth are far, far worse. We need policies to reign in disproportionate salaries certainly, but we also need a wealth tax. I could cite some more stuff but, frankly the best thing to do here is read Capital by Piketty.
> This sounds a lot like the oft-repeated "nobody should be a billionaire". Um, why not?
Because people are dying from poverty; they're losing their cars and houses; their kids aren't going to college; their parents aren't getting medicine they need to stay healthy and live; etc. etc. Meanwhile Jeff Bezos could give every person in the US restaurant industry $1,000/mo for a year and still have hundreds of millions of dollars.
You might dismiss that as emotional, but I think these are exactly the reasons people have money: to provide shelter for themselves and their loved ones, to get medicine, to get education. That's not emotional stuff, that's like, what are the basic needs of humanity stuff.
My problem with both parts of your argument are that they act as if all these are zero-sum games where if "white men" are winning, that means black people or women are losing. This is not the case. Most businesses are providing value to everyone, that's how they are successful businesses. You mention Jeff Bezos. Amazon isn't only selling to white men. In fact, women drive 70-80% of all consumer purchasing[1]. I don't need research to tell me that there are a lot of black families that have been doing a lot of shopping on Amazon during this pandemic. The great thing about GDP is that it can grow. White men (or jews, or any group in history that has been vilified for success) can do well while everyone else does too. Rather than begrudging the success of white men, how about we encourage non-whites and/or non-men to participate in that success. I 100% agree that we should get those numbers up for women and minorities, but the way it should happen is that those groups make successful businesses of their own. Not artificially inflate it with affirmative-action type policies or anything else. White men can maintain that $8B while the other firms build up their own numbers. But nobody wins when you tear the successful people down because you are jealous of their success. It didn't work in Nazi Germany with the Jews and it didn't work in the USSR with Kulak farmers, and it's not a good idea here either.
From there we are on to wealth inequality. Wealth inequality has absolutely nothing to do with poverty. The wealth gap has been growing for the past 50 years while poverty has been going down – not sure how much clearer of a sign is needed. Nobody is starving as a result of Jeff Bezos owning Amazon. And can we please, for the love of god, stop pretending that wealth (especially wealth in the form of owning a significant portion of a very successful business) is liquid? Jeff Bezos absolutely cannot give all those restaurant workers $12k, as the price he would get for selling all of his Amazon shares is nowhere near his current "net worth". The problem with this argument is not that it's "emotional", it is that it is wrong. It is also an emotional appeal, and sometimes those are useful. But only when they are also correct.
> I 100% agree that we should get those numbers up for women and minorities, but the way it should happen is that those groups make successful businesses of their own. Not artificially inflate it with affirmative-action type policies or anything else.
Race-conscious (and gender-conscious etc.) policies like affirmative action are effective because they directly address the systemic and institutional discrimination these groups face. If you're not a cis straight white man of a certain height and background, you aren't starting with the same advantages as those who are. Therefore, if we adopt policies that don't take those disadvantages into account--i.e. they benefit everyone equally--we don't solve anything. We simply magnify the existing inequality.
And it's important that we do solve this. White men hold a disproportionate amount of power in American society because it's easier for them to make more money, own more things, run for office, buy houses in neighborhoods where housing value increases at high rates, start businesses, invest in stocks, network with others who are able to do these things, send their kids to prestigious schools, avoid crime-ridden neighborhoods and food deserts, etc. etc.
> Rather than begrudging the success of white men, how about we encourage non-whites and/or non-men to participate in that success.
Can I ask you where it seems like I was begrudging the success of white men? I think you're reading a lot into what I'm writing. I certainly don't feel that way. I'm not saying we should tax white male owners of SBs and redistribute the wealth to others; I'm saying we should tax Jeff Bezos et al down to $50 million and remake US society.
Further, what are your ideas for encouraging minorities to participate in that success? Is it something other than adopt policies that directly benefit them?
> But nobody wins when you tear the successful people down because you are jealous of their success. It didn't work in Nazi Germany with the Jews and it didn't work in the USSR with Kulak farmers, and it's not a good idea here either.
That's a little hyperbolic. I don't find it productive when you impugn my motives as "jealousy" and compare my tax prescriptions to the holocaust.
> Wealth inequality has absolutely nothing to do with poverty. The wealth gap has been growing for the past 50 years while poverty has been going down
I think it depends on how you look at it [1], but broadly yeah, I would agree wealth inequality isn't related to poverty. But I'm saying we take money away from billionaires and give it to those in poverty. I think that would have a direct effect on their poverty status. Maybe I wasn't explicit enough about this, I don't always make all the connections clear.
> Nobody is starving as a result of Jeff Bezos owning Amazon.
Not by virtue of owning Amazon, but quite literally because he didn't spend the money to feed them, yes they are. It's also the same for you and me, FWIW, it's just that I could maybe do it for 1-2 people and he can do it for millions.
Maybe that's what we're dancing around here, maybe you're a taxation is theft person and I'm a property is theft person.
> And can we please, for the love of god, stop pretending that wealth (especially wealth in the form of owning a significant portion of a very successful business) is liquid?
It actually seems like it's pretty easy for him to do this [2], and his ex-wife is proving it also [3]. Selling stock is pretty easy. I don't super care about the exact numbers, and I would prefer a better policy framework that prevented him from amassing so much wealth in the first place. But again I think that's profit sharing, taxing inordinately high comp, worker membership on corporate boards, etc.
But what about the value of having A tell you what to build? If A = Jeff Bezos, B/C/D, who would just be making a $150K salary at some other company, are now multi millionaires. The difference in value didn't come from their work, which is much the same as it would be for some other company, but by being told what to build by the right CEO.
This is kind of the "great man" theory of business, but study after study shows that broadly this is just luck (or crime)--with privilege thrown in. As a result, we shouldn't reward people for this by making them billionaires because:
- At best there's no behavior to encourage, person A just got lucky. At worst, person A cheated and by making cheaters super rich, we give them outsized influence on our society
- creating billionaires creates bonkers, destabilizing income inequality, for which we rarely get anything in return (not everyone starts the Bill and Melinda Gates Foundation)
- relying on this dynamic entrenches privilege, because it's much harder for women and people of color to become the next Steve Jobs (which is a weirdly super rare case to structure a society/economy/labor theory on, stipulating you think Steve Jobs was actually good at anything substantial).
> best there's no behavior to encourage, person A just got lucky
the behavior of ... understanding and creating a useful service like pagerank? or amazon?
> relying on this dynamic entrenches privilege
this is quite ridiculous, this is only believable if you consider having 3-4/5 quintile parents as 'privileged' as having ten billion net worth. equally so when you look at where their parents came from (quite often, poor farmers who immigrated) or their history (jews who had to leave poland or germany due to the nazis js)
> because it's much harder for women and people of color to become the next Steve Jobs
> quite confused at [broadly this is just luck], what studies?
I would recommend reading Success and Luck [1]; it's well-researched.
>> relying on this dynamic entrenches privilege
> this is quite ridiculous, this is only believable if you consider...
There are pretty good [2] papers [3] about it, which convinced me and might convince you.
> so? heard of 'lisa su'?
Your post uses a lot of anecdotal evidence, which is a fallacy [4]. I encourage you to build up a habit of diving deeper. Oftentimes our intuitions are wrong because they're influenced by our local experiences, which are very rarely representative. It's why we do things like run studies and experiments, because we've learned we can't trust our experiences and intuitions. This pattern is, unfortunately, widespread and leads to a lot of problems.
This is actually a great little microcosm of one such problem: income inequality is a huge problem in the US; societies with dramatic income inequality are historically corrupt and unstable. However, it's counter to a lot of people's intuitions and experiences. So whenever someone tries to rally people to address it, people like you toss out lots of unrepresentative anecdotes (and employ other common fallacies) to try and convince people either it's not a problem, or that it's a feature and not a bug. And it works, because these fallacies are common bugs in the way people think about things.
It's up to us to recognize these patterns in ourselves and others and work against them.
Anecdotal evidence doesn't really count when it's something you have personal and thorough experience with. Sun sets and rises, don't need study for that. Similarly, people who start and direct large enterprises have a strong command of people and understanding of their field. "Studies" don't disprove that.
> income inequality is a huge problem in the US; societies with dramatic income inequality are historically corrupt and unstable.
This seems ... less than proof of anything. Past societies were highly unequal due to 'half the population gotta farm' at the very least, so comparing them to modern societies seems like a mistake, and at any rate the 'successful' integrating empires were, well, integrating empires. Modern society hasn't existed for that long, and the US (land of inequality!) is quite a bit more stable than many poorer and more income equal (or ... poorer and less income equal!) countries. Historically, societies in europe were much more successful than ones outside europe, yet you wouldn't take that correlation as a causation, so i won't take yours either.
Anyway, you cant just throw a book at me and expect me to read it for a HN comment without laying out its argument at all lol
Your second paper says that 'racial discrimination exists'. The idea that asians somehow derive most of their success from systemic racism and entrenchment - "Overall, these results paint a picture of a rigid income structure by race and ethnicity over time" - seems absurd. Your second paper doesn't say anything about meritocracy though.
Your third study is also just 'black people are poorer'. That doesn't mean understanding of an opportunity (not 'general skill', but local, specific skill) doesn't lead to success. So i'm left with a book (i don't have time to read it, it's midnight) and two papers that don't relate to your point. Maybe asians are just really smart? Maybe they work really hard as kids while the whites play tennis or soccer, which explains why despite being 13% of the population they're 52% of the coders?
Persons B, C, and D are being paid a rate proportionate to the available labor market for their product building skill set. There was nothing stopping persons B, C, or D from being person A and founding a company for that idea.
If B, C, and D chose to strike for a higher wage then they could but there might be an E, F, and G which could take over for them at their previous rates.
Anybody can make a giant sized, billion dollar company. Those workers chose to work as employees under standard labor terms.
The early Microsoft employees that made lots of money from their stock options probably aren't bitter about their compensation.
> Persons B, C, and D are being paid a rate proportionate to the available labor market for their product building skill set.
The labor market doesn't set prices based on value to society and scarcity. If it did, nurses and teachers would be millionaires (there's a shortage of both and they provide high value to society) and middle managers would make very little (there's a glut and they provide very little value to society). It assigns value based on prestige. Capitalist labor market folks would argue strongly otherwise, but the evidence is very clear.
The law of supply and demand also doesn't explain or account for things like race/gender pay gaps, monopsonies, and collusion. And generally this doesn't pass the sniff test--if the labor market shifts and suddenly people in your profession are in higher demand, it's extremely rare that companies offer pay raises to keep their employees. That's because they know that while theoretically their employees can reenter the labor market to negotiate a higher salary with a different employer, in practice employment is very sticky and employees tend not to--for lots of rational reasons (some of which are "oh you're a job hopper, declined").
> There was nothing stopping persons B, C, or D from being person A and founding a company for that idea.
This is generally untrue. Companies build moats with patents, litigation, monopolistic business practices, and corrupt, ladder pulling litigation. I think a lot of committed capitalists believe the market will sort this out, but it clearly doesn't. How many upstart chip design houses are there? How many upstart medical device companies are there? Etc. Etc.
Furthermore and again, not everyone has the privilege required to be A. Being A takes more risk, and you have to have more resources to reasonably take that risk. It's also been shown that it's far harder for women, recent immigrants, and people of color to become As.
> Anybody can make a giant sized, billion dollar company.
What?
> Those workers chose to work as employees under standard labor terms.
Often people don't have the resources to start businesses (let alone billion dollar businesses). It requires a lot of privilege, and it's even harder for women and people of color. It's not at all a simple choice.
> The early Microsoft employees that made lots of money from their stock options probably aren't bitter about their compensation.
While being pretty tough to prove, I would say a couple things here:
- Microsoft continues to post multi-billion dollar profits, and people still work there. I don't understand why early employees are valued more than current employees here.
- It's conceivable that even if you made a few million dollars, you might be bitter if the person next to you who didn't work appreciably harder than you made a billion. Everyone's different but, that seems possible.
- Even if these effects are less pronounced or acceptable at a place like Microsoft, concentrations of wealth and capital have destabilizing, corrupting effects on society and governments. Taking a per-company view is short sighted. It's also worth saying that most companies aren't made up of relatively wealth software engineers, and income inequality will be more pronounced.
> If it did, nurses [...] would be millionaires (there's a shortage of both and they provide high value to society)
I know the situation in Germany will be quite different to that in the US, but the reason we have a shortage of nurses is that the pay is not decided on supply and demand in order to have enough of them, but rather as a political decision.
> The law of supply and demand also doesn't explain or account for things like race/gender pay gaps, monopsonies, and collusion.
I'll mostly (but not completely) agree here. Humans are never fully rational, and that irrationality is certainly a relevant element.
> employment is very sticky
Of course it is. Teaching an employee on your systems/way of working costs money and is an element in the decision of whether or not to hire an employee. This decision affects demand and therefore price/wages.
> I know the situation in Germany will be quite different to that in the US, but the reason we have a shortage of nurses is that the pay is not decided on supply and demand in order to have enough of them, but rather as a political decision.
Totally and this is the danger of state-controlled markets. Capitalists have a point here. I tend to argue that at least in democratic societies people have some control over it, whereas in a free labor market they don't. But in practice, like so many things democracy is supposed to fix, people largely aren't concerned with it.
> Of course it is. Teaching an employee on your systems/way of working costs money and is an element in the decision of whether or not to hire an employee. This decision affects demand and therefore price/wages.
Definitely, stickiness works both ways. We've all probably encountered situations where someone's made themselves virtually unfireable because no one can do the things they can. I think generally people characterize that as some kind of selfishness or at least a labor antipattern, but I tend to view it as a rational response to a lack of financial stability: if your employer can completely destabilize you financially, it's pretty rational to take drastic steps to guard against that.
Suffice to say it's complicated; far more complicated than the supply/demand curves charts you get in econ 101.
---
I'll add that my prescription generally is:
- Enshrine the right to organize
- Require equal profit sharing across all employees
- Require significant worker representation on corporate boards
- Heavily tax relatively high salaries, e.g. if everyone makes $1m then 0 tax. If one person makes $100k and 99 others make $1, insane super tax them down to $100 (include tricky stuff like bonuses or whatever)
- Heavily tax nationally high salaries with a progressive income tax
- Heavily punish tax dodging
- Set the minimum wage to a living wage and pin it to the CPI
Interested to see how quickly you can completely destroy productivity and an economy with your policies. It just sounds like communism with extra steps.
Eh, it's really just Germany+, and they're a pretty productive country. For example, profit sharing is "stock compensation" rephrased and not terribly uncommon [1]. Some of the most productive companies like Apple, Facebook, Google, Microsoft, and Amazon pay with stock.
As in with a constitutional amendment? Because the NRLA already guarantees this.
> Require equal profit sharing across all employees
Germany does not do this and neither should the US.
> Require significant worker representation on corporate boards
Germany does not do this and neither should the US.
> Heavily tax relatively high salaries, e.g. if everyone makes $1m then 0 tax. If one person makes $100k and 99 others make $1, insane super tax them down to $100 (include tricky stuff like bonuses or whatever)
Germany doesn't do this and neither should the US.
> Heavily tax nationally high salaries with a progressive income tax.
The US already does this, as the US does not have a flat tax rate for income tax.
> Heavily punish tax dodging
Addressing symptoms not causes. Reduce tax avoidance by simplifying the tax code. It's that simple.
> Set the minimum wage to a living wage and pin it to the CPI
I don't know how to say this without sounding super condescending but, if you want to have a discussion, please contribute to it in a meaningful way. You aren't asking questions, citing sources, or even making good new points. Beyond that, you're really uninformed.
Here's an example where you could have done even a little token searching; the title of this article is "Workers on Corporate Boards? Germany’s Had Them for Decades" [1].
Another example is when you write:
> Addressing symptoms not causes. Reduce tax avoidance by simplifying the tax code. It's that simple.
It truly is not that simple. There's a reason tax codes are complicated and broadly speaking, it's that you have to choose winners and losers to simplify them and that's politically and policy-wise very, very difficult.
I'm sure you'd like to dispute that, but the way you'll dispute it is with normative, opaque statements like "it's that simple" or "terrible idea" which will take you 8 minutes. The way I'll engage is by searching the internet and citing a post, and asking good questions to keep the conversation going. That will take an hour.
I'm not gonna do that, and I think this breakdown makes it clear why. I think you should keep in mind what you're asking of people you're having a discussion with, either implicitly or explicitly, and how your responses indicate what you're expecting to get out of a discussion. From where I sit, you're not looking to learn anything or to inform me of something, you're looking to win an argument. Sometimes that's productive but it's surprisingly rare, and besides that, I'm not interested. I haven't learned anything from you over the 3-4 threads you've chased me down on, but I do feel a little worse about humanity, and I get enough of that already.
And overall, I'd urge you to take a moment to consider the damage you do by logging onto public forums and spreading your ill-informed, normative opinions around. It greatly reduces the signal to noise ratio, and because it takes a lot of time to respond to things like this, it effectively DoS's productive conversations. I love a good internet argument as much as the next mega-arrogant software engineer but, we need to keep in mind the effect that has.
What is all this research you are talking about you doing? I don't see it. You've provided two links in response to two of your many points. You've made claims like "this is Germany+" without actually supporting that claim. The burden of proof is on you to prove this is Germany+ (as the one making the claim), not me.
I have no interest in winning the argument, I have an interest in the truth and sound fiscal and social policies that result in a good balance of strong economy + innovation + lack of exploitation.
For all the things in the discussion that you claim Germany does that make its economy stronger, you need to demonstrate that. For all the things in the discussion that Germany is not doing, you need to justify why they are good, as the one making the claim that they are good ideas. You have not done so. You made a list, and are now claiming everyone else is arguing in bad faith when they ask you to justify that list. My response was not very high effort because I was not actually responded to a thoroughly sourced list. It was just a list.
You accurately stated that I was incorrect about co-determination in Germany. I read your point as "majority representation on boards", when what you actually said was "significant" – an error on my part. Germany does indeed do that, and as such the policy would indeed fall under "Germany+". However, I maintain that amongst all your other bullet points, the only other point that 1. Germany does 2. US does not is living wage. And one (good) argument for why the federal minimum wage is not particularly looked after / updated is because the US is a federation of strong states, so minimum wage is better handled by states individually (which they currently do). Cost of living in Montana is very different from NYC.
Nice, this is great! I now feel like digging in might be productive here.
> You've made claims like "this is Germany+" without actually supporting that claim.
I wasn't like, making a legal statement or whatever. You're arguing "this is communism with extra steps" and my point generally is that these prescriptions largely exist in democratically socialist, productive, EU countries. There are actually not that many communist countries that aren't also authoritarian so, I don't think the "communist" characterization is super useful. But, either way I'll expound.
- Enshrine the right to organize
You wrote that the NLRA already created this "right", but it's been hobbled by the Taft-Hartley act [1] and subsequent legislation in multiple states [2].
On the other hand, Germany (like many other EU countries but unlike the US) has ratified the "Right to Organise and Collective Bargaining Convention", which, well it's in the name [3].
- Require equal profit sharing across all employees
Profit sharing is pretty common across EU countries, but it takes different forms and certainly isn't equal. The coop corporate structure is closer to my thinking here but, admittedly it's not mainstream yet.
- Require significant worker representation on corporate boards
We covered this one but, yeah generally the idea here is for workers to have a big say in how their company is run. Definitely not the majority though; my personal preference would be that there were no majority and representation would be equally divided between workers, c-suite/owners, and shareholders, but baby steps.
- Heavily tax relatively high salaries, e.g. if everyone makes $1m then 0 tax. If one person makes $100k and 99 others make $1, insane super tax them down to $100 (include tricky stuff like bonuses or whatever)
High CEO pay is (variously) subject to tax penalties in Germany [4] [5]. And it seems to be working; their ratio of CEO pay to average worker pay is 136x, just over half the US' at 265x [6]. That's not wonderful and I'm sure there are other factors but, these problems are tricky and one policy probably won't fix it all in one fell swoop.
It's also worth saying CEO pay is generally bad and not meritocratic [7].
- Heavily tax nationally high salaries with a progressive income tax
Germany's 3rd tax bracket is higher than anything in the US and kicks in around $69k (USD) [8].
- Heavily punish tax dodging
Germany does this a little [9] [10] but, obviously not enough. Re: simplify the US tax code, no administration since Reagan has done this, for reasons outlined here [11] [12]. TLDR tax prep is big business, and--like I said before--our tax code does a lot, and changing it creates winners and losers.
- Set the minimum wage to a living wage and pin it to the CPI
Germany has a comparatively high minimum wage of €9.35 ($11.33), but I don't know enough to say if that's a living wage or not. Something that's nice about their (relatively new, 2015) law is they have to update it at least every 2 years [13].
- Abolish "right to work"
I've been wrong about what this is called my whole life. Apparently what I mean is "at-will employment". Mea culpa. But, still the US has it and Germany doesn't. We should get rid of it.
---
OK that's my prescriptions. I do feel like what I've described is the natural evolution of democratic socialist policies in the EU, exemplified not just by Germany but other big EU countries as well and definitely don't qualify as communism. But I think a lot of people think democratic socialism is communism so, maybe we just have a definitions problem.
I'll quickly respond to your minimum wage point and say that you can peg minimum wage to a State's CPI, and cities can create their own minimum wages. New York/New York City do this, for example. I wouldn't say that States are handling this ...
Thank you for the comprehensive response. One overall point I'd like to make is that I think it is much more constructive to cite things that indicate the policies are having a good impact, not just sources showing that the policies exist. I have not done either in this response, however, as most of my questions/responses are about the theory, not the practice. For example, below I talk about CEO pay. You have pointed out that Germany has policies in place that reduce the gap between CEOs and their average workers, but I think first we need to determine why the gap is bad, if at all. Some gaps are fair, some are not. Anyway I have tried to be thorough with my responses, and have condensed our talking points into more cohesive groups when sensible.
-- re: unions
Right to organize is not the same as "right to force people to join a union". That is what right to work laws prevent. Anyone should be able to join a union. Any group of workers in any industry should be able to form a union. Unions should not be able to force people to join their union. This is a gross violation of individual liberty.
Right to organize and right to work are not conflicting goals. If unions need to force workers to join them, they're arguably not good unions.
I agree that unions are important. But unions are not universally good – they sometimes have serious downsides. Any push for unions need to be met with a measured understanding of this. Do you have a solution for the problem that unions with too much power are actually bad for the economy in that they stifle competition and decrease efficiency? Monopolies in general are bad, and that includes monopolies on labour.
-- re: profit sharing
You can start a coop in the US today. But a coop is not the end-all-be-all of business structures. I'm fine with people starting coops. In fact I think that's great. But requiring it has the potential to stifle innovation / (constructive) risk-taking while fixing a problem that doesn't need solving (because labour can already join coops if they want). There are many companies that want to re-invest profits into CapEx or similar, which becomes more difficult with a profit-sharing structure.
-- re: co-determination
Probably don't have a problem with this as long as it is not majority. Haven't thought enough about possible negative ramifications of such policies though. Want to steel man the counter?
-- re: CEO pay
I agree that executive compensation seems out of wack, but my real issue is that I don't understand how the problem exists, and am wholeheartedly against slapping band-aids on things until I understand the underlying cause. You seem to be taking the stance that wildly different pay is always bad, which I cannot agree with. Fair pay is pay which is proportional to the value delivered. If you are delivering 100x the value than the average worker, you should get paid 100x more. To be completely frank, I don't even think it is a requirement that people should be paid the same rate for the same work, but that is an argument we don't need to get into, as the aforementioned idea of "fair" comes before that anyway.
What I mean to say here is: assuming a free and competitive market, you'd think disproportionate executive pay (disproportionate not to other employees but to the value being delivered by the executive, as to my mind this is what fairness is about in business) would result in a company that is less competitive than one which is not overpaying its executives. So how did this come to pass? To my mind the only options are: 1. markets aren't actually competitive 2. American CEOs actually are delivering 256x the value of their average worker.
If 1, my preference would be to find ways to solve the underlying problem and make the market more competitive rather than this band-aid solution. If 2, then again I don't think there is a problem that needs solving.
> One overall point I'd like to make is that I think it is much more constructive to cite things that indicate the policies are having a good impact, not just sources showing that the policies exist.
I was responding to your assertion which was "It very much does not sound like Germany+." Further, the EPI article says right up top:
> Why it matters: CEO pay is not just a symbolic issue. High CEO pay spills over into the rest of the economy and helps pull up pay for privileged managers in the corporate and even nonprofit spheres. Because pay for top managers—CEOs and others—is not driven by their contributions to economic growth, this pay can be reduced and others’ incomes boosted if we can figure out a way to restrain CEOs’ market power. Importantly, the most direct damage done by excess CEO pay is to shareholders. Since shareholders are a relatively privileged group themselves (if not as privileged as CEOs), they could potentially wield power in this situation; policymakers should try to figure out how to enlist shareholders in the fight to restrain excess managerial pay.
> Right to organize is not the same as "right to force people to join a union".
I'll try and skip to the end here and say that the union system isn't optimal. It would be a lot better if we had a solid social welfare state and, coop-style profit sharing and worker representation on corporate boards, and better laws protecting workers. But here we are. All of this stuff is to enhance the financial and collective bargaining power of unions so they can effectively advocate for workers (note I specifically didn't say "their members", as unions represent everyone, members or otherwise).
Right to work laws are meant to undermine unions' collective bargaining leverage, and they've worked [1] (those WSJ studies are real bad, anything could've caused those effects). But besides that, you can also choose to just pay agency fees, not contribute to the union's political activities, and not become a member, even without right to work laws.
> re: profit sharing
Can you cite some things here? You write "a coop is not the end-all-be-all of business structures" and "requiring it has the potential to stifle innovation" without any kind of backing. Plus, I'm not at all saying cooperatives are perfect. I think they're a good way to achieve profit sharing, but there may be other models that are better. I'd caution against the stock comp idea though; that turns into short-termism really quickly.
> co-determination
I can imagine some pitfalls a-la term limits in governments, where when they're so short you don't allow anyone time to build experience. I think compared with the management or investment classes workers have less experience making company-level decisions, and that could have some weird effects. Boards also aren't perfect, you can bribe and blackmail people. But I think in the aggregate that probably doesn't have a big effect. I'm just spitballing, I haven't read anything.
> re: taxes
Haha I haven't been called an idealist in a long time, thank you :) I don't think the US will do even a single thing on this list and is doomed in probably a dozen ways. Maybe that's why my list comes off as idealism: if you're sure you won't get anything on it, it doesn't matter what you put on it.
But re: taxes, Paul Ryan tried his whole career to simplify the tax code. Libertarians have been pushing a flat tax for a generation or more. People come out of the woodwork when things like happen [2] [3] [4] and are generally (and understandably) a little flighty at "various" winners and losers [5].
Re: tax evasion/dodging/etc., I mostly mean it all but, in particular corporate tax avoidance should be fixed [6].
Re: progressive income taxes, as you point out the US tax system is really complex. Our income taxes are progressive. But many of the tax...
Be careful with labels / generalizations like "stupid legal system" and "inequitable laws". What you, some people and some companies might see as such, a whole bunch of other people and other companies might see as exactly the opposite. The world is not black and white. And it's all about perspectives ...
I would agree with you about the "be careful" part. A wise quote is "If you want to tell people the truth, you'd better make them laugh or they'll kill you”.
I believe in perspective too, and agree that perspective matters.
But I also believe their is a common perspective (very hard to get at, that is the journey of scientists), and so at some point when you have enough data you can say "well there really is a black and white here".
Fair enough. I'm glad that we seem to be largely on the same page on the subject, then. As for the "common perspective", I usually refer to that as consensus and, indeed, it is very hard - in some cases, I would say, excruciatingly hard - to achieve. Unfortunately, such is life ...
My first thought was that PG made a mistake blending these two topics since the discussion of what works in a YC interview is being short-circuited by the reflexive political discussion of billionaires.
Can someone pin point what is objectively wrong or out of touch with this article? Genuinely asking because the past three+ posts from pg have been met with negativity saying pg is a wealthy Londoner who doesn’t understand the prole struggle.
I don't really think this is a new theme for pg's essays [edit: I mean, I don't think pg's style or content has changed that much], although I've also noticed this change [in responses here].
Usually, HN is the space where his essays are most heavily defended.
I am not sure where the bitterness comes, and to be honest, I would like to know. We are reading the same essays.
More and more I am starting to think that people who are decrying pg's writing should come clean and say whether or not they've started a business, and if so, what was the outcome. The outcome isn't as relevant, but I bet there are very few people out there who have reached, lets call it "Fuck You" money through running their own business who would read this essay and go "Hah he's so out of touch he doesn't even see it anymore" and toss some link about Dunning-Kruger or whatever.
For people who are in the business of making money through getting shit built, I think what he's saying will resonate just fine. But then again it's one of those things where the people who need it the most are the least likely ones to take it, and vice versa. It's akin to the "It's a good problem to have" crowd when you say how you're sick of dealing with clients on the phone even though you have a 200-person company, and they look at you sideways because they have no idea why you are complaining.
He's talking about billionaires and interviews in this one, and he starts off saying how the two threads are connected. But what he's really talking about is building-a-business-by-convincing-people-you're-not-full-of-hot-air.
And unfortunately, when I see people tearing his essays apart, their ramblings strike me as nothing but hot air.
I think it's HN who is out of touch more than pg is, because I don't think the vast majority are here to build businesses whatsoever.
"He's talking about billionaires but he's REALLY talking about something else that people in the right audience will get, and just filter out the noise" sounds fairly out of touch, if he can't see that the framing he's using is needlessly complicating the issue. Or if he wants to connect to a larger political discussion about global economic systems but only has substance to discuss related to a narrower "building a business" question.
Would be easier to just talk about what he's actually talking about, then.
To be fair this is another article/essay in a very, very long string of his that can be filed under some kind of a "Fundamentals of Business" type category. If you talk to owners, they will inevitably say the same things he's saying, sometimes verbatim. But these owners wouldn't speak in direct words either, because "speaking to customers/users" is too context dependent to get into in an HN comment. There's too much nuance to bash the person over the head with it when writing this sort of an essay.
That's mostly what tipped me off to not take his words at face value but to interpret them through his lens as a VC and someone who is trying to communicate business ideas (ideals?) to people who, I would at least hope, aspire to create a business of their own. Whether it's a million or a billion, it doesn't matter. Nearly everything he talks about applies to "lifestyle businesses," which is I think partly why YC offers some small bit of money to get the ball rolling rather than go gung-ho and throw massive amounts of money at people. I don't know if this has changed, I don't think it has. Obviously it doesn't hurt to get a leg-up from the counsellors and whatnot that YC provides through their alumni program.
I am not sure if he's spoken about it but I wouldn't doubt that one of his philosophies is that a diverse number of businesses can grow to a reasonable revenue (where the founders are happy and working away at it) with a bit of money to start with, and that way YC doesn't have to spend a fortune early on and everyone walks away happy even if YC doesn't turn a sizable profit. Some kind of a threshold where YC feels anything above that means they're pissing money in the wind and their ROI isn't any better, but at the same time they're helping the founders as best as they can.
So you have to take the times he talks about being Ramen Profitable and talks about building a Billion Dollar Business and find the underlying threads tying it all together.
pg can't tell you exactly what, how, when, where, why you should be doing the thing you need to be doing to build a business. His words sound like platitudes most of the time to me personally, which is why I take the side of "the people who need this the most won't take it, and vice versa", because the person who started a business and is profitable didn't have anyone like pg telling them this sort of stuff. Would someone read his words before starting anything and be inspired to? Perhaps, but it's a long journey and counting on such flimsy motivation to keep you going is to me silly.
For some, certain things might be common sense. For others, not so much. Plenty of founders, even those with serious business experience, still have it ingrained in them that "if you build it, they will come", and they neglect every other aspect of business. Yes, I'm talking primarily about engineering types. This essay is to remind you to focus on the users, and the rest will follow.
Aside: I'm grateful for the Startup School library. I think it's a great resource. It's got a nice mix of obvious and non-obvious advice in there. When people disparage pg's writing, they should take a moment and see what his company has built for people who wish to create a business before declaring him out of touch.
I've started a business, we were recently acquired for a nine figure sum, and I think PG is increasingly out of touch. My best guess is that he's been rich too long, but I feel the bitterness and have been quite successful in my tech career starting companies.
He starts his entire essay with a faulty premise, that in order to be a billionaire you have to be exploitative, and then goes on to argue why Y Combinator doesn't look for exploitative people so therefore this must not be true.
Look, not even 'prole defenders' agree with this. You don't have to be exploitative to be a billionaire, it's simply a byproduct. There are only several thousand billionaires on earth and you'd be hard pressed to find any one of them without some sort of scandal involving their workers or consumers.
Pinpointing what is 'objectively' wrong with a subjective essay is hard, which is why most people are attacking the subjectivity itself, and I think that's healthy to do.
People have already minced words over "exploitation" and where to exactly draw the boundary between acceptable/tolerable and not. It strikes me personally as flimsy reasoning to harp on his writings.
If you're going to build a business and you hope to make money, you're going to have to EXPLOIT inefficiencies in markets, competitors, customers, processes, conventional modes of thinking, and so on. Doesn't matter if the business is making you a dollar or a million or a billion.
And also, this whole "scandal involving workers or consumers". YC's portfolio has plenty of companies who are making a killing with revenue who haven't had to do this.
Patrick Collison is a regular poster on here. Go ahead and tell him he's exploiting people and he's scandalous with workers and consumers. I'd like to see someone go to one of the successful YC alumni and say directly at them half the shit you people spout out into the nether.
As I have mentioned in a comment to the throwaway account in this thread - I sincerely think a lot of commenters on here either have no experience or no ambition in starting a business, never mind getting a healthy revenue stream. Hell, I wonder what the percentage here is who got as far to having to talk to clients.
>why Y Combinator doesn't look for exploitative people so therefore this must not be true.
I have a dim recollection of an article many years ago that Y Combinator asked applicants a time when they gamed the system and the answer to that was on of the most correlated to success. Like saying you knew some technology that you didn't on a resume or selling some product that you hadn't built yet. They framed it as a positive. Finding opportunities and using them to your advantage. But a negative framing would be that they were looking for people that exploited whatever advantage they oculd find.
>Like saying you knew some technology that you didn't on a resume or selling some product that you hadn't built yet.
Are you sure you didn't just come up with that example yourself to suit the narrative? Until you know what all selected companies chose as an answer for that, aren't we just guessing as to what quality they were looking for?
To be clear, I'm not accusing you of making it up, as my memory of it is dim too, I just can't remember examples being given like lying on a resume.
I'm glad you found it, but I don't really see those as really changing my point. They looked for people that beat the system. They're amusing anecdotes when it's a plucky college kid hustling for a job. But when it's a head of a billion+ company beating the system (i.e. laws protecting workers and/or the general populace) it's a different story.
That’s an interesting thread ..altho not enough comments to make it super interesting..
I guess ‘hacks’ are what we call as ‘loopholes’ in tax audits. This is how I understand hacking. Every system has its strength/weaknesses and boundaries. As long as we can rearrange the system from within the boundaries by exploiting the available strengths/weaknesses to create an entirely different model/system/agenda qualifies as a ‘hack’.
I remember that(I applied twice. Won’t likely do it again because YC isn’t a good fit for me) and I wrote something to fill the blank..while thinking why on earth would I put that in writing here for the off chance that I might be get into an accelerator program.
I don’t expect anyone to answer that truthfully, but the ability to come up with a convincing and impressive response would score major points for creativity.
1. I think if PG was being honest with himself, he'd admit that they spend only 10 minutes interviewing because he personally wouldn't want to be stuck in a room with someone he doesn't like for longer. That's a weakness of someone who clearly disdains anyone he views as a lesser mind (see: "culture fit").
Making snap judgments about people seems to be one of his major personality flaws. Steve Jobs had the same flaw, so it's clearly not professionally debilitating, but it is reprehensible nonetheless.
2. YC could make the process less fickle and far more objective by having each startup get interviewed for 10 minutes by each partner, rather than in a high pressure groupthink session. It would cost no more of their time.
And of course, they could also just increase the time and interview just as many startups as they want. YC partners could treat it like a real job with hard work, rather than act like lazy VCs.
Anyone who has interviewed people knows that first impressions are often wrong, and yet YC bases their decisions entirely on first impressions, which is both funny and sad.
3. It's likely that YC's success is based on their much-more objective application process, and the interview is random noise in the process. It is probably even worse than random noise and YC might be 2-10x more successful just by eliminating the interview stage.
4. PG has no true idea how other YC partners make their decisions, it's likely to be very far from his own process, making his advice inaccurate and harmful to founders.
It’s so strange the YC comments and some Twitter comments are so focused on the billionaire part. The real part is to deeply understand your users, no? And the focus on YC interviews is reminiscent of media is the massage—-the hubbub places YC as a thing to pass but if you understand your users deeply, you won’t even need YC.
In a way all the YC interview prep stuff is written for the wrong people (for YC, and this is obviously a little wrong) but also the right people (who will chase prestige to read the article about interviewing at YC).
I felt the same way but pg has since changed the title from "What You Can Learn from How to Ace a YC Interview" to "Billionaires Build" so he obviously wants to emphasize that aspect.
Thanks for the heads up. The old title was also clickbaity but this new title is even more so. I wonder if even HN comment reactions are more towards the title vs the content.
I think there's an inevitable framing effect. There are lots of points I'd agree with if presented in isolation, and indeed PG has written solid essays before on the general topic of how destructive it is to say that business owners can only make money by exploiting others. But it's hard to talk about those things when the article explicitly builds towards a thesis that billionaires are great and all good YC founders should want to be one.
One way I could hear people interpreting your comment--I agree on the framing point by the way, there's also external framing now with a hate-billionaires view--is that the steps to get to the thesis make sense but the thesis is not palatable. I'm not sure you'd agree with that interpretation of your comment; I'd love to hear what the problem is with that interpretation
I actually do agree with that interpretation. My beliefs ultimately imply that there's nothing wrong with being a billionaire, but that's not a conclusion I find palatable so it's not something I'm particularly interested in defending on its own merits.
I'd say it's like writing an argument to decrease penalties for shoplifting and titling it "Don't Punish Thieves". It's not wrong, but it's certainly not a productive way to frame the discussion.
That's interesting and I think I can understand being in that same frame of mind. I wonder, if the implication doesn't match up with what you want the implication to be, how do you break that stalemate?
Here, I guess I'm of the belief that there's nothing wrong with billionaires; the wrong thing is how little there is for a billion people in the world.
It's just a matter of focusing on the motivating principles. I've had lots of good, productive discussions about why "you can get very rich if you make something lots of people want" is a win-win deal for society, or why a system where only the government can finance large projects wouldn't be good. If someone wants to talk about billionaires, I just say that the precise dollar amounts aren't the point.
To me, clickbait means that I'm luring you into reading an article by using a catchy title, but the content of the article doesn't exactly match what I expected; or that I use human psychology to trick you into opening a new web page (e.g. "you will never guess what happened next").
I instead find the title refreshingly nice and simple, and reading the article fully matched my expectations. Great "marketing" (the ability to pick a catchy title is good marketing) shouldn't be confused with being clickbaity.
I feel obliged to contextualize "Billionaires Build" on behalf of the unaware.
Marc Andreesen published an essay "It's Time to Build" [0]. He claims that ostensibly, COVID-19 inflicted acute trauma on the U.S. economy. But it merely excaberated the symptoms of a deeper dysfuntion. The root problem is the cultural decay of "a will to build". The solution is to rekindle this norm.
Several have published their own takes [1]. pg must have figured "What you can Learn from How to Ace a YC Interview" conveniently dovetails into the larger debate. Had he written the essay in a vacuum, I suspect he'd have emphasized "sell users what they want". Rather than the grand narrative "civilization is built by founders" which might increase exposure but possibly dilute the original intent.
Yea comments here are completely missing the point. It's far more likely to be successful and build a company / get into YC when you have an insight into specific users and build something they love. That's it.
People who have become billionaires from the companies YC has helped launch have that in common.
Some of the most successful YC companies are: Stripe, Airbnb, Cruise, DoorDash, Coinbase, Instacart, Dropbox, Gusto, Reddit, and Gitlab.
I guess DoorDash and Instacart are accused of participating in the exploitative gig economy. Airbnb is accused of circumventing hotel laws (is that exploitation?)
The other 7 on my list are pretty okay though, right?
There's always ways of looking at things negatively:
Stripe = Eat the gift economy and replace it with monetized capitalism.
Cruise = Mass unemployment for truckdrivers, plus inevitable computer-controlled accidents.
DropBox = Oh noes, your files belong to a company and you don't have physical possession of them anymore.
Gusto = [...I'm having a hard time here, people still need to get paid and ADP sucks.] Maybe "encouraging people to start businesses who would be better off in stable employment".
Gitlab = Think of all the potential copyright infringement!
The question is - which negative things do you want to believe? And how do they compare to the positive things the company does? It takes a minimum amount of effort to dream up something bad about a company's core value proposition, but that's not the whole company, unless you put blinders on.
Most of the people I know here (in Iran, no AirBnB clone yet) rent personal houses when they travel. Some people (including myself) have enough money (and an aversion to risk) that we prefer hotels, but the vast majority don’t need what extra hotels offer and don’t want to pay for them. The extra expenses (here at least) are not explained by taxes (similar hotel offerings are around 5x the price).
"Steve Wozniak wanted a computer. Mark Zuckerberg wanted to engage online with his college friends. Larry and Sergey wanted to find things on the web."
These are terrible examples in the context of the article.
Apple's computers, originally, led them to the brink of bankruptcy, and it wasn't until 20 years later when they started selling consumer electronics that they blew up, and Wozniak had little to do with it at that point.
The other two don't actually make money from the products mentioned, but by flat out exploiting people's ignorance regarding online tracking and advertising.
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[ 2.4 ms ] story [ 354 ms ] threadI get the retro-appeal this has, but user-friendly it is not.
https://twitter.com/paulg/status/1329094570056032264
Anyone screenshotting being blocked by anyone is definitely trading in fashion.
Back then tech was exciting and new. We were changing the world.
Now we have changed the world. Mobile is king, web is emperor. We’ve won.
Tech is to 2020 what finance was to 1980. And VCs are seen as the big baddies.
People don’t join this industry for the love of nerdy tech anymore. They come because it’s where ambitious people go.
Our recruiting/interviewing process would be criticized nowadays as completely bias-ridden. We sent teams of just-graduated first-year people back to their school's career fairs, built relationships with career offices at those schools, and just basically would have people walk around and be outgoing and try to just chat with interesting students and see if they wanted to join a cool tech company in NYC with cool people. Our interviews were mostly gut-feel after talking to someone about whatever and doing a very simple many-to-many-linking-table exercise to see if they could visualize simple data relations in their head. We didn't even test coding skills, for the most part.
I dunno if it would surprise anyone, but those teams actually were, by far, the most diverse teams I've worked on in my career in terms of age, gender, and race (not to mention socio-eco background). We invested heavily in training people on the job and building culture together internally. We ended up being merged into a larger entity by our parent company and the culture was utterly demolished, and everyone quit around the same time.
I just don't see what context would attract these sorts of people back together at a tech company nowadays. If you find something that isn't a startup founded by rich brats trying to completely fleece slightly-above-average engineers in secondary-market cities with 10-yr-old market rate salaries, and isn't a big tech company ruining society, completely driven by political-insider-donors-- ahem, sorry, I mean investors -- please let me know also!
Find those laws, and develop a startup that can break them or exploit loopholes, and you've got your next startup of 2009, in 2020.
There's probably room in environmental regulation, maybe there's a minimum amount of toxic waste you have to dump for it to be regulated, and you could create an "uber for toxic waste" where people could pick some up from a pollution-heavy plant on their way home from work and take it home to their toilet to dump in.
Sky's the limit if you want a 2009-style unicorn.
It's simple to lose touch. You did what the youth are doing a decade ago; hell, you're still in the game, albeit in a much different role. The world shifts around you, but you are so rich and powerful that people in your personal circle either don't see it themselves because of their wealth and power, or would NEVER point out your shortcomings because they need access to your wealth and power.
In other words, assigning that statement - die a hero or live long enough to become the villain - says, to me, that he hasn't actually done anything wrong. That it's not his fault, he's just been around so long that tastes have changed. He's the victim, is what I read there.
I would argue, though, that it is his fault. He's out of touch with the world as it is for people just starting out, AND he's made the mistake of believing his view is the view, right and proper.
No idea what all that means in this context, but there it is, I guess.
Now we have changed the world. Mobile is king, web is emperor. We’ve won."
You must be young.
The difference between 1999 and 2009 was an order of magnitude greater than 2009 to 2019.
This is your personal growth journey, not really an objective thing.
Professionalization marches on. Exponentially.
Even then only maybe 1/3 of Americans had consistent Internet access, but everyone was talking about it. 'The Matrix' films remember are about hackers.
Then the metastasizing with mobile, which really took root post 2010 when even poor people around the globe became connected.
I think AI, in the long run, won't be the thing we look at, it will be the internet itself.
In 500 years, I wonder if even Television or Radio will be remembered as 'a thing' - they were foundational and transformational, but only for a few decades until the internet took over.
The mishmash we have now, may resemble whatever it is we have in 1000 years. Protocols, sources, viewing tech will all change, but I think that it will actually kind of feel similar. It won't have the orthodoxy of 'TV Channels' with 'set program timings' etc..
Then the fundamental greed driven changes happened, and here we are with an AOL situation again.
So the difference between 2005 (or 2009) and 2019 is greater, and it is for the worse. A lot of programmers are backstabbing and greedy creatures now who pretend to be good but are only after money and power.
I'm not talking about startup founders here, it is the corporate programmers who are insufferable now.
But this I'm afraid is a little bit of mythology from those who were there at the time, and have/had a certain view of what the 'web ought to be'.
In the 'big big picture' - the web blew up between 1995-2005 in the modern world, and then blew up on a much bigger scale with mobile afterwards.
US is only 5% of world population. Europe not quite 10%.
Our view of 'what the web ought to view' I think has some legit elements, but I'm not sure if they're representative of what real material value is.
The world is big.
Just the mere presence of the web - in all it's incarnations - is a very powerful thing.
It's still roiling and people are still coming online and it's powerful.
I actually don't think Amazon retail (i.e. sans AWS) is an important artifact in the big picture.
If only considering the WWW impacts, then sure. In the physical world, however, it's definitely an important artifact, considering how much it's upended things for brick-and-mortar (at all scales) and the whole supply chain / fulfillment / logistics realm.
(And note that "important" should not be taken to mean "beneficial" here; it's already important to the history of these sectors in the same sense that giant asteroids are important to the history of Earth-based life - that is, outright destructive of the current landscape, but might very well result in new opportunities in its wake)
That tweet is actually pretty amazing though: pg discovering practices 37Signals has been using for a decade.
You don’t. Owning a large company in a capitalist system is inherently exploitative. Simply owning a large company and taking surplus value from a large number of people is exploitation.
Who are these large number of people? Customers or suppliers? In socialism, customers are usually held captive because of limited suppliers. In capitalism, suppliers are usually held captive because of fierce competition to get customers. Neither sounds inherent exploitation by the entrepreneur.
Let's say that every worker was paid for the full value that they produced. That would mean that the profit of every company was $0, because the workers got all the value produced. How many companies would we have? Probably not very many. Risk my capital to start a business, for a return of $0? Yeah, no. I'll pass. So will most people.
And that would mean that we wouldn't have the things that large businesses produce, from computers to airplanes to vaccines.
Even for the workers, is that a net win? I don't think so.
I have little money but I write an amazing book and it sells to millions. Each books takes, say, $5 to print, and yet I sell it for $15. Therefore I end up wealthy from this endeavor.
Did I exploit the people who chose to buy my book? The people who printed it?
Airbnb spamming forums early on, sketchy marketing techniques, avoiding commercial regulations that hotel has to go through for good reasons and displacing genuine local rent seekers is not exploitative then maybe the bar is high enough for YC.
Should the founder have to think about whether the idea could potentially be exploitative or he just needs to think about what is good for the users aka not exploiting the tourists?
Many people took loans to buy airbnb to aggressively rent them. Criminal activity go through roof with tourists in the neighborhood. You don't know who your neighbors are because they keep changing. It doesn't feel safe to let your 10 year old son out for many.
Drugs, garbage on the road, covid hot spots. Hotels also have to pay taxes which airbnb avoids. Price in the area goes up for locals. People move out to surrounding areas and have to commute more.
Anyway, there’s basically no evidence for any of what you’re saying, especially the crime part. The one not-yet-peer reviewed paper trying to show Airbnb’s causal effect on rents found a $9/yr increase (1), which is laughably, hilariously small - it could not possibly be playing a significant role in rent pricing in the biggest markets, and the researchers specifically excluded the possibility of AirBnb reducing supply. And this factual criticism is the one you actually omitted!
(1) https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3006832
Hotels have to have commercial liability insurance. Hotels have to maintain certain levels of fire safety, and food sanitation, etc.
So no, it is not just rich people renting to rich people. In many cases it is rich people using the platform to avoid regulations which prohibit exploitative renting to poor people.
And the corporation which enables this actively hinders investigations. Because Airbnb is also getting a cut of these rents.
I have nothing but empathy for someone who can’t drive and cannot afford normal housing in the same place they receive services. I totally understand how some of those people would choose to have fewer services and leave, or god forbid be homeless.
But do those people you’re describing, who actively login into AirBnb - if they didn’t get something they paid for in-platform, or if the listing is lying, are you saying Airbnb doesn’t come through? It almost certainly does. A giant corporation is honestly better equipped to go to bat for a wronged customer simply because it has the money to provide a remedy and a case manager does not - the case manager must get all remedies from the richest institution of them all, the government.
Personally I believe Airbnb should just design a high minimum rental cost and ban all transactions that are too cheap. But I wouldn’t describe Airbnb as exploiting these people, they are obviously victims of landlords?
His problem was being a horny brat. I am pretty confident Hot or Not would not have passed muster with Jessica Livingston.
Also even if he had shown Paul Graham the earliest Facebook numbers, the partner panel could very well just say those numbers were faked, which the Friendster people purely out of spite would say, and what would they do, call a college freshman about how much she uses Facebook?
Any statement that has the word "only" in it is guaranteed to be wrong. I wonder if PG worded it this way intentionally (straw man fallacy).
Most people agree early employees should get more equity. This doesn't address whether startup founders are hoarding equity for themselves and their investors instead of fairly rewarding early employees.
[0] https://twitter.com/rbreich/status/1193526297647108097
There are basically 5 ways to accumulate a billion dollars in America: 1) Profiting from a monopoly 2) Insider-trading 3) Political payoffs 4) Fraud 5) Inheritance
Others would disagree that this is exploitative because they believe that wages should be set by the market.
It's clear that workers are not compensated for all of the value they produce, and that the excess value goes to owners. The disagreement is whether this is exploitative. Leftists argue that it's not fair for owners to capture value without contributing any work. Rightists argue that capital is a scarce (i.e. limited) commodity, so owners deserve to be compensated for providing capital. Who you agree with is up to you to decide.
Pg's blog post strawmans "exploit" because he uses a different definition of exploit than leftists use. This might be because he misunderstands leftism, but the cynical believe that he is deliberately strawmanning them for his own gain (since pg benefits from capitalism). A more honest blog post would examine whether value going to owners or founders is exploitative or not.
Nowhere did I state that all leftists are communists. In fact, seizing the means of production is also a socialist idea. One key difference between socialism and communism is that communism abolishes all private property in addition.
In leftist circles in the US, leftism colloquially refers to people who advocate for some form of social democracy, with most leftists supporting at least socialism. Those who support more center-left policies (like Keynesian economics and the welfare state, without advocating for socially democratic programs) are called "liberals," not leftists, despite the fact that they are left-leaning (in the US's sense of left-leaning).
https://www.washingtonpost.com/outlook/2019/09/12/stop-calli...
> Moving left doesn’t necessarily make one “more liberal.” At a certain point, the traveler leaves the province of liberalism for one that is more correctly identified as socialism, radicalism or leftism.
https://theconversation.com/the-difference-between-left-and-...
https://www.reddit.com/r/Ask_Politics/comments/6xlxpa/whats_...
> Leftist: They believe the free market system is inherently flawed to favor the rich and powerful and believe that the government should either work within the framework of the market system but heavily regulate it and pay for more social services and welfare through higher taxation on the rich and corporations (social democracy) or abandon the free market all together in favor of socialism.
> Liberals are socially liberal and typically believe in democratic capitalism and the welfare state.
> Leftists typically believe in socialism and are against the ideas of capitalism.
> the only way to become a billionaire is by exploiting people
needs to be revised to a keener straw-man in your very next paragraph:
> the key to becoming a billionaire — the defining feature of billionaires — was to exploit people
Here he's swapping necessary-but-not-sufficient for definitionally-equal-to.
For many, this is a hard pill to swallow. Here's one way to judge it more objectively. Replace "billionaire", with something more neutral: "pro basketball player", "amazing musician", "prolific writer".
The arguments tend to make a lot of sense in other categories, but our natural inclination rebels on Billionaire. This is a great sign that something is off
One defining quality is that billionaires need to scale work that often involves management. In this case consider prolific basketball coaches, or generals in war.
The reason I shy away from including politicians, is because their m.o is starkly different: it’s all about status.
Either way, I think your argument is weak. “Sure you feel this away about billionaires. But change ‘billionaire’ to something different and your feelings change.”
Well, duh. That’s not even an analogy. You’re just literally changing the subject of the sentence. Billionaires are super different than writers in ways that are relevant to this discussion.
Most people have a natural bias towards billionaires. To remove the particulars of the essay, to look at it with fresh eyes.
Yes, indeed it changes things, and no one change will map completely. Do this a few times though and a clearer sight comes through
And founders are not?
Some founders are at that level, and frankly, more important to society than most athletes or musicians.
MLB pitchers make $10's of millions of dollars a year, far more than most of our top talent.
But the children of billionaires are (almost) all obscenely wealthy.
Consider - the children of musical prodigies are likely to be more musical then average. The children of billionaires are likely to be more entrepreneurial than average - both are likely to be wealthy - neither are likely to be as prolific — I.e a child making an even more successful business, or being a better musician - over a few generations, both are likely to revert to the mean. In some countries this is not true of the wealthy, but in America this is particularly true
Is that true though? You made a big claim, without backing, to support your other claim.
That isn’t a good path to finding the truth. It only exposes hidden biases and assumptions.
And that's the fundamental difference between the child of a musician v. the child of a billionaire. In order for the musicians' child to be a prodigy like one's parent, there's still considerable training and practice required. In order for the billionaire's child to be a billionaire like one's parent, the child simply needs to wait for one's parent to die.
That is: the passing down of musical aptitude through multiple generations requires each generation to put in approximately the same labor as the previous. The passing down of material wealth through multiple generations does not.
The descendants of American billionaires might suck at sustaining their advantageous positions right now, but that's only because America's upper class is relatively fresh, still full of bourgeois "new wealth" instead of aristocratic "old wealth", and lacking practice with migrating from the former to the latter. In a century or two (barring intervention to return wealth to the proletariat) I'd expect the American upper class to get into that groove of wealth consolidation, like how things evolved in Europe (and hell, if the US follows the same trajectory as the Roman Empire we might even end up with the same sort of feudal society in some places).
Let’s think on that a bit. Consider, if a parent is a musical prodigy, it’s akin to having a fantastic coach at an early age. They can teach you hard-earned insights, help you make the right choices, introduce you to the right people. This makes achievement considerably easier. It’s not as different from financial transfer as we think.
> In a century or two (barring intervention to return wealth to the proletariat) I'd expect the American upper class to get into that groove of wealth consolidation, like how things evolved in Europe
As long we live in a free-market society, I think this will be hard to do. Main reason: it is extremely difficult to invest well in the long-term. You can see this by how prized top investors are. Unless one invests well, in a free market society their wealth gets eaten up.
Europe avoids this through a highly regulated society — social mobility in and out of the upper class is extremely difficult there.
It’s certainly possible that the u.s will lose their position as the bastion of free markets — but whoever picks it up will become as powerful, and most people will start to immigrate there.
Even a low percent gain over the long term is very, very difficult. You can tell this by noting how much endowment managers get paid.
In the words of those Screen Rants pitch meeting skits: "It'll be easy, barely an inconvenience!"
The easiest and most surefire form of investment out there is in land. There's a finite amount of it, so while on local scales values will fluctuate, on an aggregate scale the value of one's total land holdings will increase indefinitely as demand increases (which it will, both from a growing global population and a growing global economy). Land ain't especially liquid, but on long-term scales that ain't really a problem.
Until we as a society pull some moves out of the Georgist playbook and tax land value, the rich will always be motivated to consolidate that wealth into land control, and will be able to hold onto that wealth at the expense of everyone else.
...not really. Take it from a musician: performance ability and teaching ability are not as interconnected as you're implying.
And on top of that, even a fantastic coach can't really do much if the one being "coached" has no interest in learning something, or in practicing what one learned.
> As long we live in a free-market society
We don't, and arguably never have. A free market is pretty difficult to achieve when you have existing players motivated to hold onto that wealth and prevent competitors from unseating it.
> social mobility in and out of the upper class is extremely difficult there.
You think it's significantly easier here? Especially with wages tanking relative to cost of living for all but the upper class, I don't see this fixing itself any time soon without one heck of a course correction. We ain't that far off from a European-style regulated society (and indeed, political discourse in the US seems to be pushing for it).
Should "exist" be replaced with "exists" in this sentence? If you wanted to use "exist" I think you'd have to use a helper verb like "should [exist]". Is there a name for the grammatical feature where someone omits the "should" and uses the conjugation that would go with it?
It's not that people set out to exploit people and as a result they become billionares. It's that their focus on their goal allows exploitation to happen as a by product. It's not that Uber set out to exploit drivers, it's just that get their business to scale they had to lure drivers in with big incentives, and then in order to make their business viable they had to then force their costs down to the point where drivers are paid less than the cost of vehicle maintenance.
It's just a bizarre primary school understanding or morality where there's a group of "Good" people and "Bad" people.
I've come to the conclusion that to be a CEO you have to wear these blinders and have faith that overall your company is a positive good for the world. That means that when you have a low performing employee you have to fire him even though you know that it may cause terrible consequences for him and his family.
In the case of small bookstores, they think it is enough to toss books on the shelf and wait for people to come browsing. Well, I can now browse from bed.
This is a little glib. There's nothing most of these small business can do.
EDIT: forgot to add, I suspect there are many things small bookstores could do in terms of building a local community (in-person and online) of people who love books, improving discovery options for new books from that community, that kind of thing. So maybe they should be doing that i.e. “do things that don’t scale” to try and delight their users more than amazon does, in a way where their lack of scale is an advantage?
Even big businesses facing Amazon have done very little to compete.
This again, is glib.
To suggest that you somehow know all these vendors have 'not tried anything'.
How about lobbying government to subsidize their business like the US Government subsidizes delivery? Or the VAT tax breaks that Amazon gets? Or the fact that Amazon is dumping merchandise on the US by selling for negative margins, paid for by profits out of AWS?
A local bookstore has 6 staff. They have no power.
https://www.businessinsider.com/jeff-bezos-amazon-history-fa...
As book store owner, I really think it's an irrational decision to invest heavily in fighting Amazon. You're chances of success are pretty slim.
As for big businesses ? Well, there's Walmart, Target.
In the end, the e-commerce industry is a place where most of the market share would be controlled by a few large companies. That was clear from the beginning.
Then they need to do something that cannot be scaled. Being a general bookseller can easily be scaled.
There are two happy people in this story and one unhappy one. But the fact that there is an unhappy one doesn’t seem like nearly enough to me to decide it shouldn’t have played out like it did.
Does it seem like enough to you? If not, what other common element would this story have to have to decide it shouldn’t have happened?
As an example: we killed tons of movie rental businesses by switching to Netflix. Life is much better now for everyone who isn't a movie rental store owner, which is almost everyone.
Small business doesn't mean good business and big business doesn't mean bad business. What matters to me is the net effect, and in most cases with Amazon, the net effect is very positive.
The same is true for Google, Uber, and Facebook and most big tech successes. The ratio of bad:good is just worse for some of them than for others, making it harder to judge.
The small businesses you say were exploitative is because they were the only shot in town. i.e in a monopolistic position.
multiple small businesses result in a robust economy. if one goes bust there's plenty to keep providing a similar service. MSB's enable other auxiliary business look at Japan | German's economy for an example - mutliple suppliers etc. more employment. Guess the jobs the masses work at amazon - drivers, warehouse workers.
What amazon, provides could've been easily provided by a standardized api connecting different small merchants. some industries already do this - a flower shop needs roses, it can easily contact another flower shop to get roses to it's customers. everyone wins.
netflix yeah was a net positive. it's content so end of day, it was going to be aggregated in Ben Thompson's terms.
Uber is good for me as a consumer. But is it good for the driver, for the environment. if the US had robust public transportation, Uber wouldn't be necessary.
They provide dignified employment (as opposed to invisible work in a warehouse), they encourage entrepreneurship, they increase the tax base of a locality (by ensuring money stays within a local economy), and they contribute to local culture, community and character.
Amazon killing small businesses has sucked even more of the life force out of small towns, and that’s sad because said towns were already shellacked by the death of manufacturing.
It’s hard to argue with Amazon’s excellent customer experience, but the externalities involved are nontrivial and IMO outweigh the benefits.
I would also claim that keeping taxes in the local economy, while a very worthy goal, does not require the presence of small business. Big business can be made to support local community and culture. Just because the Walmart headquarters are outside of my small town, doesn't mean they don't have to pay a percentage of their earnings from the local warehouse to that community.
Also, minor grammar nit, you may have meant to use "shell-shocked" instead of "shellacked", but shell-shocked wouldn't fit the context you're going for either.
Amazon is substantially worse on most (if not all) of those metrics.
But, the second, more negative thing is that a lot of the inefficiencies removed by these companies were in the form of livelihoods for many people, or adherence to various regulations and laws that was a lot easier to omit with IT in the middle. Examples would be the Mom-and-Pop retail stores going out of business or Uber breaking taxi regulations.
Like you said, Bezos didn't set out to bankrupt Mom&Pop, it was just an unfortunate side-effect of using IT. The thing that I think pg is missing is that projects where this happens are exploitative to a degree, and is why they get rightfully criticized.
I think it's even more simple than that. It's a failure to realize that everyone is the plucky hero doing things with good intentions in their story about themselves, and that others don't see him as he sees himself.
So despite there being a world where the society is becoming increasingly unequal, where the average American struggles to feel financial security and those born without access to education or the right geography (or, perhaps, who just aren't as bright or ambitious) are merciless casualties of a "meritocracy" that excludes them, PG feels like he can't be the bad guy because he can't pinpoint any specific situation where he did something "wrong".
His only fault, perhaps, is being a massive beneficiary of a system that is profoundly and deeply unfair and getting more that way every day, and he's not able to see that as something he's at fault for.
So I have some sense of empathy and understanding for his perspective. But I think he would benefit greatly from really trying to dig into understanding what it might be like not to share his perspective and vantage point, as well as to do a better job understanding how different the world is for people now than it was in the early 1980's when he began his professional life.
If some unfair system exists, and you didn't do anything to create it (it existed before you were born), and you don't do anything to make it worse (and maybe occasionally try to make it a little better)... and the system massively benefits you... are you at fault? Why?
In two of those three cases, you are at fault (or continually become more at fault, more precisely, as the ratio of "how much it existed before you" shifts).
If you replace the word fault with "responsibility" or even a more neutral "influence" it's much more obvious, I think. You would clearly have less responsibility than the person advocating for said policies, but more than the person fighting them more vigorously or more effectively.
Nobody looks back and says "boy, I'm glad there were all those people who occasionally complained about Windows in the late 90s," they look back and respect and value the people who built alternatives instead.
We punish people who do bad things. We don't punish people who have neither helped nor done anything bad. We might we wish they had done better, but wishing and enforcing are very distinct mechanisms.
https://www.washingtonpost.com/technology/2020/10/22/uber-pr...
I'm sure many would not consider themselves exploited and prefer to be contractors, but I'm personally skeptical that the breakdowns of this opinion are as reported by the companies.
Even the idea that Uber drivers themselves wanted to keep their contractor status is questionable given that they collected those statistics via polls in the driver app. There is/was legitimate concern that Uber et al would collect that info and retaliate. There is no recourse for this on the workers’ behalf because they don’t have a union! This is a TEXTBOOK example of why gig workers need to be given the right to collectively bargain. Now, thanks to prop 22, overturning its provisions needs a 7/8 majority in the state legislature. Aka, not gonna happen, and that’s by the design of some really cynical lawyers.
More generally, the prop 22 campaign is an indictment of the referendum process, and how easily it can be abused in the absence of sensible campaign finance laws.
https://ballotpedia.org/California_Proposition_16,_Repeal_Pr...
Is it possible that maybe the voters actually have their own opinions regarding these ballot propositions? So maybe Californian voters think that drivers should have the right to decide for themselves whether to work with Uber or not?
The choices were 1. the previous system where drivers were purely contractors, 2. the AB5 world where the vast majority of them can't work at all anymore but the ones that remain are full-time employees, without the flexibility that attracted many of them to this work in the first place as opposed to, say, getting a job at a traditional taxi company, or 3. a compromise where the work stays fundamentally the same but pays more in many cases.
Most of the people I saw opposing prop 22, which I'm guessing includes the above commenter, and certainly included the legislator behind AB5, were just bystanders who viewed it as yet another a philosophical showdown of unionized full-time work vs anything goes exploitation. Even though that framework is a poor fit for the details of this particular situation.
The people with skin in the game saw it differently, the details actually mattered to them and they voted accordingly.
> overturning its provisions needs a 7/8 majority in the state legislature.
Given that prop 22 overturns a law that had recently been passed by the current sitting legislature, there wouldn't have been any point to doing it if it could just be immediately repealed by the same people. Prop 22 can be still be overturned with just a >50% vote by a future ballot proposition.
Why do people keep lying that AB5 had a requirement for people to be full-time employees? I know in many office-based work environments, there is a strong preference for all regular (non-contract) employees to be full-time employees, but that’s not true in lots of industries, and there is nothing in AB5 that requires people working in conditions which it defines as employees rather than contractors to be full-time.
The bigger point though is there would still be major limitations on flexibility even if Uber/Lyft was able to offer every driver the option of full or part-time. They still wouldn't be able to set their own hours, only work a few weeks here and there with no predictable schedule, sign up and start working immediately with minimal overhead, etc.
I mean, it's a small sample of course. But the effect size was large.
Only after the ride shares corps spent over two hundred million dollars misrepresenting Prop 22. That's one fifth of a billion dollars... to write themselves a law. [1]
Asking in good faith, do you genuinely believe what you wrote above?
[1] https://www.wired.com/story/200-million-uber-lyft-write-own-...
Taxi drivers have always been undocumented and much poorer than the people they were driving. Uber didn’t change that, and nobody needs permission to boss a poor person around - go to a restaurant, send your kids to school, shop, you will be bossing poor people around. The remedy is immigration and labor law reform, that is something Uber actively worked against - and won! They care because the economic gain they are concentrating comes from people driving below minimum wage because they lack documents or work authorization.
It had nothing to do with lures or whatever, everyone knows what the deal was. Cars could require no maintenance and people would still be screwed. Uber shut down its self driving car unit and none of that shit mattered. Nobody is out there designing cars that are cheaper, we already have $1,000 used cars, in fact all the effort pours into cars that are way more expensive. Uber blew a lot of money on incentives as long as Lyft does and vice versa, and people just drive for both and none of that shit mattered.
The difference I’m trying to illuminate here is, a permanent subclass of undocumented worker is enshrined in the law. The difference between a W2 and 1099 employee is enshrined in the law. Uber spent a fortune maintaining the status quo, not creating a new one, they did not write those laws.
Personally, I believe, like those guys in the 2006 Borat movie who wish they owned slaves, that people like this status quo, and that Uber could have spent 1/10th the money campaigning for Prop 22 and it still would have passed. People like cheap shit. They enshrine the divide in the law. Bernie Sanders was assailed by the NYTimes for his most divisive opinion, that if people are willing to work below minimum wage they will get the job, and that the government has enshrined that arrangement through immigration law - you’re just not seeing how deeply vested the average person is, not just Travis Kalanick is, in an exploitative status quo.
Meanwhile we type this all out on iPhones. Would you rather they cost 5x as much? I don’t know, if phones cost so much more, if you could ban the exploitation of Chinese labor for real, 50% of the ultra high paying jobs of HN readers would cease to exist overnight. It would be like a pandemic hit software, instead of just Main Street.
This shit is complicated, you can certainly point out that billionaires are bad people, but we all benefit from exploiting someone somewhere, and the road to justice will often visit the people who promote it. And maybe that’s why you and I aren’t out there protesting but those other people are.
What you're talking is a much more interesting conversation to be having. How can we tweak the rules to avoid misaligned incentives? And would it actually be better to end the so-called "exploitation" if it would mean killing most of these jobs altogether, when the allegedly exploited people actually have an ok quality of life and are doing this work because they like it better than their alternatives?
In this case, being a good CEO means making decisions that are worse for your workers over time. The world is set up in such a way to bias you towards that conclusion unless you work against it.
Does that mean you’re evil if you don’t? Or if you minimize your responsibility? Perhaps. But it’s still complicated. Thinking of the world as a massive weighted graph of wants, needs, and goals can be a helpful model.
A couple of thoughts...
New, billion-dollar business are, many times, transformational. Amazon, Uber, AirBnb, DropBox and Stripe all transformed the market they profit from. For sure, it is difficult if not impossible to foresee how the business activities will impact the general population et al. Without foreseeing that impact, it's also difficult to mitigate the impact that the billionaire may genuinely have a moral reaction to. Is it not the nature of the beast to grow as fast as possible, damn all torpedoes, while investors and boards of directors push the business leadership forward? Running at an all out sprint means you have no opportunity to identify these moral slights, let alone address them. Perhaps the boards of directors needs a 'Moral Consequence Committee' to keep an eye on it on behalf of the CEO. I am not asking that rhetorically, by the way. Give it some thought.
The second thought is that in order for the business to prevail, it must provide real value to many, many customers and make their world a better place. Uber transformed the taxi experience and yes, may have wound up in the 'vehicular maintenance arbitrage' business for a while, but anyone with faith in market capitalism should believe that this will eventually balance out and Uber and its drivers will reach a mutually acceptable compensation level.
Why is it frustrating? PG discussed an important topic I found to be very relevant in the business world to this day. Being exploitive is praised in most if not all business schools! Cut throat, shark, shrewd, it’s even depicted in movies Wolf of Wall Street, the Founder (McDonald’s), greed is good...
No self made billionaire, at least in the last 100 years, was ever portrayed fairly in movies or history books!
Even Carnegie Mellon!!
Whether existing billionaires exploit is a separate point.
Any pointers or books to read about this topic? Admittedly I haven't looked too hard.
I'm glad people like Elon Musk and Bill Gates have billions of dollars - they're solving some of the world's hardest challenges right now with their wealth.
I have a favorite illustration of what just one billion dollars is: a million dollars per week for almost 20 years.
Bill Gates is giving away the vast majority of his wealth
You don't know what Elon Musk will do with his wealth, but given his track record -- probably something good for humanity
That's a tax-avoidance scheme. Here's a recent (and certainly not the first) article laying it out:
https://www.inc.com/geoffrey-james/bill-gates-promised-to-gi...
> You don't know what Elon Musk will do with his wealth
I think we both know that whatever it is, first and foremost it'll be good for Elon Musk.
> I'm glad people like Elon Musk and Bill Gates have billions of dollars - they're solving some of the world's hardest challenges right now with their wealth.
There's a difference between having billions of dollars and controlling billions of dollars. Having usually implies controlling, but it's not necessary for that.
A hypothetical value system that "demonizes excess accumulation" will can still allow talented people to use massive resources to solve challenging problems. For an actual real-world example: the US didn't have to wait for a SF fan to become a billionaire before it built rockets to travel to the moon. Similarly, billionaires often don't solve any problems with their wealth. Musk spends millions to build rockets and win government contracts, but other purported billionaires spend millions on money-losing golf courses and vanity airlines instead.
The Code of Hammurabi predates it by 1700 years(almost 4000 years ago). Not allowing murder seems good for the survival of any society of humans.
Uh, what? Do you think murder was first outlawed 2000 years ago? I mean "Thou shalt not kill" is one of the Ten Commandments which is part of the Old Testament which predates Christ by at least several hundred years if not over a thousand. Even the Code of Hammurabi references charges of murder and it is closer to 4000 years ago. The idea that murder is bad is probably as old as civilization itself if not older.
If I find a special rock in my back yard that someone would pay me $100,000 for - I get to keep all that money in your system I assume. But if I find a special rock in my back yard that someone would pay me $1,000,000,000 for - I don't get to keep the money, or if I want to hold onto the rock, I need to give part of the rock away?
More concretely - imagine if TSLA has crossed the threshold because of the recent rally, where now Elon "should" be forcibly divested of part of his ownership of the company. Let's say he goes from 20% to 5%.
Later, the stock crashes back down below the threshold. Does Elon get his 15% back?
Startups like Airbnb and Lyft likewise have built amazing things, and would easily make their founders 100' millionaires, but there is a point where to reach a certain level you need to leverage some flawed, unjust legal system at scale (stupid regulations around housing/hospitality/and taxis, in these examples).
None of these founders created these legal systems, but their rapid success and scale I can't see happening without those dumb legal environments they found when they started.
Now, maybe the best method to fix unjust laws is exactly this: when you see a stupid legal system, found a company to exploit it, become a billionaire and then finally society will take notice that the legal system is stupid and will fix it.
So I could see an argument that maybe not only should we not penalize billionaires who built their wealth from scratch, but we should thank them, like we thank white-hats, for identifying inequitable laws that they were able to leverage at scale.
* Tesla
* Twilio
* Stripe
Would you help me see how those 3 leveraged unjust laws? As a software developer, I feel Stripe and Twilio have added a lot of value to me, to small businesses, and the world.
In other words. Lyft is a product of hard work and innovation multiplied by corruption and bad government in the taxi industry. The value created by Lyft comes from the former, but the value captured by Lyft is just as dependent on the latter as well. Nothing wrong with that—it's still a big net win for society, but maybe we could do a better job at refactoring our laws so we can get the value without the unnatural inequities. After all, I know a lot of these people and while they are almost all smarter than me, none of them is 10x smarter than me (well maybe pg).
In response to your 3 examples:
* Tesla
Carbons were subsidized and solar/electric better tech. Automotive industry is highly regulated and innovation was sloooow. Elon and company are the best of the best (a shareholder), but still I'm not going to pretend that the business opportunity would be so great if the governments around the world hadn't been creating corruption after corruption (look at the car dealership stuff with the states as a tiny but egregious example).
* Twilio
Oh man the telecom infra went from magic to just rotten in the past few decades. I don't know enough about government here to comment, but I suspect something bad here.
* Stripe
The amount of protection the finance and banking industry has (and their symbiotic relationship with the government) made me sick so many times. Finally someone had the stamina and determination to solve that. But Stripe isn't hitting $100B if US Government wasn't letting the finance industry sit on its ass for 3 decades with protective legislation.
Bill Gates didn't write Windows 95. Steve Ballmer didn't write Microsoft Office. But they owned stock in a company that employed people that did (and all the various other labor that goes into building software products). Why did they make so much more money from it than the people who were more directly involved?
This dynamic is reducible. If Person A starts a software company, Person B, C and D build the product, and then Person A gets $10,000 while Person B, C and D each get $1, something is off there.
The capitalist defense of this is more or less, "B/C/D agreed to those terms", but this ignores the context. If every B/C/D wanted to be As, there would be no B/C/Ds to build things. And it's not always possible to choose to be an A--it usually requires a fair amount of privilege to start a business. But nonetheless, their work is equally important, and even if it isn't, it's certainly not the case that A's work is 100,000x more important.
We need to recognize this kind of bonkers concentration of wealth is a huge problem, and fix it with profit sharing and taxation.
- Your argument could be rephrased as "profit-sharing isn't necessary as long as you pay people enough." This may work at mega-successful businesses like Microsoft, but doesn't work so well at something like a restaurant chain (or Amazon), where income inequality is far more pronounced. And those cases are far more common.
- Concentrations of wealth and capital have a destabilizing effect on society. It leads to political corruption. Further, even if we have a handful of companies where income inequality is relatively low, that's not the case for most Americans, even at those same companies. In other words, sure software engineers are doing fine, but most people aren't, including many people working for the same companies as those software engineers.
Overall I think it would actually be really cool if we could get to where we think we are, where I can essentially pick from a menu of career options based on a risk/reward profile (OK not literally a menu but, yeah). But we're pretty far away from that right now; very few people are making these decisions based on that kind of calculus.
The unfortunate reality is that you will never be able to pick from a menu of all possible career options because you (whoever you are) are not cut out for all possible careers. There are many people in the world who are better suited to doing job X, even if you think you'd like to do job X more.
The numbers are real bad though [1] [2] [3]. White people own 80% of small businesses, and men own 64%. In 2012 (admittedly old but, the Census site is very bad) white men owned 2,933,198 firms with employees on the payroll. Everyone else owned 356,816 firms. Those same white men's firms had sales receipts of $8,221,010,815. Other firms had $88,657,443. That's nuts. Even more so when you consider white men are only ~33% of Americans. My guess is that COVID-19 makes this even worse, but who knows really.
> The unfortunate reality is that you will never be able to pick from a menu of all possible career options because you (whoever you are) are not cut out for all possible careers. There are many people in the world who are better suited to doing job X, even if you think you'd like to do job X more.
I 100% agree but, I wouldn't say it's unfortunate. I just think people should get equal pay for equal work, and CEOs aren't 270x more valuable than average workers. Maybe it's 5x, maybe even 10x, but not 270x. And that's salary difference, we're not even factoring in lifetime earnings.
[1]: https://www.pewresearch.org/fact-tank/2020/04/23/the-financi...
[2]: http://www.experian.com/whitepapers/BOLStudy_Experian.pdf
[3]: https://data.census.gov/cedsci/table?tid=SBOCS2012.SB1200CSA...
But white people are 73% of the US population. Obviously it'd be nice if everything was proportional, but all things considered (how recently black people got fully equal rights, for example), I think 7% over-representation is pretty damn good, not "real bad", and the trend is heading in the right direction. Seems like a gap that is very doable to close with purely "encourage everyone to start a business" policies, and egalitarian policies like those should be the preference when possible. With respect to men vs. women, I think a similar argument should be made. Women were < 30% of the workforce ~70 years ago, and still haven't even made it to 50%. Given the importance and biological realities around childbirth, I'm not sure women ever will be 50% (until we grow babies ex-vivo, that is). But as long as trends are positive, it is better not to use regulation as an attempt to overcompensate for perceived inequalities, as that can (and does) frequently backfire. Even if the number of women-led businesses is not going up, you can't just assume this is because women are actively being prevented/discouraged from doing so, you need to demonstrate that. Because an alternate explanation is that women (for whatever reason, maybe they like healthy work/life balances?) are choosing, very much of their own free will and without undue pressure from society, to not start businesses at a higher rate than men.
> Maybe it's 5x, maybe even 10x, but not 270x
This doesn't seem to be a particularly rational stance. If you don't have a good reason behind why it should be one multiple and not another, I don't think its your place to decide that multiple. This sounds a lot like the oft-repeated "nobody should be a billionaire". Um, why not? A billion dollars is an arbitrary amount of value. For example, a billion Zimbabwean dollars in 2008 wouldn't buy a coke[1]. Obviously in the case of USD right now, $1B is a lot of value. But if I make some useful piece of software (entirely on my own) that I sell to 100,000,000 people for $10 each, why should I not be a billionaire? Again, if you don't have a rational (rather than emotional) underlying argument for why X amount of value is "too much", it is not your place to decide that number.
[1] https://en.wikipedia.org/wiki/Hyperinflation_in_Zimbabwe
> 2,933,198 firms with employees on the payroll. Everyone else owned 356,816 firms. Those same white men's firms had sales receipts of $8,221,010,815. Other firms had $88,657,443. That's nuts. Even more so when you consider white men are only ~33% of Americans. My guess is that COVID-19 makes this even worse, but who knows really.
White people aren't 89% (or 99%, in the case of sales) of the population. And at numbers this big, 7% is 210,000 firms. That's not nothing.
> This doesn't seem to be a particularly rational stance. If you don't have a good reason behind why it should be one multiple and not another, I don't think its your place to decide that multiple.
CEO pay isn't meritocratic and has all kinds of ills besides [1] [2] [3] [4] [5]. I think generally the argument here is something like, "well, CEOs/CTOs/etc. just provide a lot more value than your average white collar worker", but the studies don't show that. Further, data show that (again) high relative CEO pay is bad for the company and bad for society in general.
I'd be remiss if I didn't also say that while we're spending a lot of time on high incomes here, high levels of wealth are far, far worse. We need policies to reign in disproportionate salaries certainly, but we also need a wealth tax. I could cite some more stuff but, frankly the best thing to do here is read Capital by Piketty.
> This sounds a lot like the oft-repeated "nobody should be a billionaire". Um, why not?
Because people are dying from poverty; they're losing their cars and houses; their kids aren't going to college; their parents aren't getting medicine they need to stay healthy and live; etc. etc. Meanwhile Jeff Bezos could give every person in the US restaurant industry $1,000/mo for a year and still have hundreds of millions of dollars.
You might dismiss that as emotional, but I think these are exactly the reasons people have money: to provide shelter for themselves and their loved ones, to get medicine, to get education. That's not emotional stuff, that's like, what are the basic needs of humanity stuff.
[1]: https://www.epi.org/publication/reining-in-ceo-compensation-...
[2]: https://www.researchgate.net/profile/Steve_Werner2/publicati...
[3]: https://www.wsj.com/articles/ceo-pay-and-performance-dont-ma...
[4]: https://d1wqtxts1xzle7.cloudfront.net/46078405/The_effects_o...
[5]: https://hbr.org/1990/05/c...
From there we are on to wealth inequality. Wealth inequality has absolutely nothing to do with poverty. The wealth gap has been growing for the past 50 years while poverty has been going down – not sure how much clearer of a sign is needed. Nobody is starving as a result of Jeff Bezos owning Amazon. And can we please, for the love of god, stop pretending that wealth (especially wealth in the form of owning a significant portion of a very successful business) is liquid? Jeff Bezos absolutely cannot give all those restaurant workers $12k, as the price he would get for selling all of his Amazon shares is nowhere near his current "net worth". The problem with this argument is not that it's "emotional", it is that it is wrong. It is also an emotional appeal, and sometimes those are useful. But only when they are also correct.
[1] https://www.inc.com/amy-nelson/women-drive-majority-of-consu...
Race-conscious (and gender-conscious etc.) policies like affirmative action are effective because they directly address the systemic and institutional discrimination these groups face. If you're not a cis straight white man of a certain height and background, you aren't starting with the same advantages as those who are. Therefore, if we adopt policies that don't take those disadvantages into account--i.e. they benefit everyone equally--we don't solve anything. We simply magnify the existing inequality.
And it's important that we do solve this. White men hold a disproportionate amount of power in American society because it's easier for them to make more money, own more things, run for office, buy houses in neighborhoods where housing value increases at high rates, start businesses, invest in stocks, network with others who are able to do these things, send their kids to prestigious schools, avoid crime-ridden neighborhoods and food deserts, etc. etc.
> Rather than begrudging the success of white men, how about we encourage non-whites and/or non-men to participate in that success.
Can I ask you where it seems like I was begrudging the success of white men? I think you're reading a lot into what I'm writing. I certainly don't feel that way. I'm not saying we should tax white male owners of SBs and redistribute the wealth to others; I'm saying we should tax Jeff Bezos et al down to $50 million and remake US society.
Further, what are your ideas for encouraging minorities to participate in that success? Is it something other than adopt policies that directly benefit them?
> But nobody wins when you tear the successful people down because you are jealous of their success. It didn't work in Nazi Germany with the Jews and it didn't work in the USSR with Kulak farmers, and it's not a good idea here either.
That's a little hyperbolic. I don't find it productive when you impugn my motives as "jealousy" and compare my tax prescriptions to the holocaust.
> Wealth inequality has absolutely nothing to do with poverty. The wealth gap has been growing for the past 50 years while poverty has been going down
I think it depends on how you look at it [1], but broadly yeah, I would agree wealth inequality isn't related to poverty. But I'm saying we take money away from billionaires and give it to those in poverty. I think that would have a direct effect on their poverty status. Maybe I wasn't explicit enough about this, I don't always make all the connections clear.
> Nobody is starving as a result of Jeff Bezos owning Amazon.
Not by virtue of owning Amazon, but quite literally because he didn't spend the money to feed them, yes they are. It's also the same for you and me, FWIW, it's just that I could maybe do it for 1-2 people and he can do it for millions.
Maybe that's what we're dancing around here, maybe you're a taxation is theft person and I'm a property is theft person.
> And can we please, for the love of god, stop pretending that wealth (especially wealth in the form of owning a significant portion of a very successful business) is liquid?
It actually seems like it's pretty easy for him to do this [2], and his ex-wife is proving it also [3]. Selling stock is pretty easy. I don't super care about the exact numbers, and I would prefer a better policy framework that prevented him from amassing so much wealth in the first place. But again I think that's profit sharing, taxing inordinately high comp, worker membership on corporate boards, etc.
[1]: https:&#x...
- At best there's no behavior to encourage, person A just got lucky. At worst, person A cheated and by making cheaters super rich, we give them outsized influence on our society
- creating billionaires creates bonkers, destabilizing income inequality, for which we rarely get anything in return (not everyone starts the Bill and Melinda Gates Foundation)
- relying on this dynamic entrenches privilege, because it's much harder for women and people of color to become the next Steve Jobs (which is a weirdly super rare case to structure a society/economy/labor theory on, stipulating you think Steve Jobs was actually good at anything substantial).
quite confused at this one, what studies? as an example, surely the fact that page and brin created PageRank for web searches led to google being so successful https://www.theverge.com/2019/12/4/20994361/google-alphabet-...
> best there's no behavior to encourage, person A just got lucky
the behavior of ... understanding and creating a useful service like pagerank? or amazon?
> relying on this dynamic entrenches privilege
this is quite ridiculous, this is only believable if you consider having 3-4/5 quintile parents as 'privileged' as having ten billion net worth. equally so when you look at where their parents came from (quite often, poor farmers who immigrated) or their history (jews who had to leave poland or germany due to the nazis js)
> because it's much harder for women and people of color to become the next Steve Jobs
so? heard of 'lisa su'?
I would recommend reading Success and Luck [1]; it's well-researched.
>> relying on this dynamic entrenches privilege
> this is quite ridiculous, this is only believable if you consider...
There are pretty good [2] papers [3] about it, which convinced me and might convince you.
> so? heard of 'lisa su'?
Your post uses a lot of anecdotal evidence, which is a fallacy [4]. I encourage you to build up a habit of diving deeper. Oftentimes our intuitions are wrong because they're influenced by our local experiences, which are very rarely representative. It's why we do things like run studies and experiments, because we've learned we can't trust our experiences and intuitions. This pattern is, unfortunately, widespread and leads to a lot of problems.
This is actually a great little microcosm of one such problem: income inequality is a huge problem in the US; societies with dramatic income inequality are historically corrupt and unstable. However, it's counter to a lot of people's intuitions and experiences. So whenever someone tries to rally people to address it, people like you toss out lots of unrepresentative anecdotes (and employ other common fallacies) to try and convince people either it's not a problem, or that it's a feature and not a bug. And it works, because these fallacies are common bugs in the way people think about things.
It's up to us to recognize these patterns in ourselves and others and work against them.
[1]: https://press.princeton.edu/books/hardcover/9780691167404/su...
[2]: https://www.nber.org/papers/w23733
[3]: http://www.equality-of-opportunity.org/assets/documents/race...
[4]: https://en.wikipedia.org/wiki/Anecdotal_evidence
> income inequality is a huge problem in the US; societies with dramatic income inequality are historically corrupt and unstable.
This seems ... less than proof of anything. Past societies were highly unequal due to 'half the population gotta farm' at the very least, so comparing them to modern societies seems like a mistake, and at any rate the 'successful' integrating empires were, well, integrating empires. Modern society hasn't existed for that long, and the US (land of inequality!) is quite a bit more stable than many poorer and more income equal (or ... poorer and less income equal!) countries. Historically, societies in europe were much more successful than ones outside europe, yet you wouldn't take that correlation as a causation, so i won't take yours either.
Anyway, you cant just throw a book at me and expect me to read it for a HN comment without laying out its argument at all lol
Your second paper says that 'racial discrimination exists'. The idea that asians somehow derive most of their success from systemic racism and entrenchment - "Overall, these results paint a picture of a rigid income structure by race and ethnicity over time" - seems absurd. Your second paper doesn't say anything about meritocracy though.
Your third study is also just 'black people are poorer'. That doesn't mean understanding of an opportunity (not 'general skill', but local, specific skill) doesn't lead to success. So i'm left with a book (i don't have time to read it, it's midnight) and two papers that don't relate to your point. Maybe asians are just really smart? Maybe they work really hard as kids while the whites play tennis or soccer, which explains why despite being 13% of the population they're 52% of the coders?
If B, C, and D chose to strike for a higher wage then they could but there might be an E, F, and G which could take over for them at their previous rates.
Anybody can make a giant sized, billion dollar company. Those workers chose to work as employees under standard labor terms.
The early Microsoft employees that made lots of money from their stock options probably aren't bitter about their compensation.
The labor market doesn't set prices based on value to society and scarcity. If it did, nurses and teachers would be millionaires (there's a shortage of both and they provide high value to society) and middle managers would make very little (there's a glut and they provide very little value to society). It assigns value based on prestige. Capitalist labor market folks would argue strongly otherwise, but the evidence is very clear.
The law of supply and demand also doesn't explain or account for things like race/gender pay gaps, monopsonies, and collusion. And generally this doesn't pass the sniff test--if the labor market shifts and suddenly people in your profession are in higher demand, it's extremely rare that companies offer pay raises to keep their employees. That's because they know that while theoretically their employees can reenter the labor market to negotiate a higher salary with a different employer, in practice employment is very sticky and employees tend not to--for lots of rational reasons (some of which are "oh you're a job hopper, declined").
> There was nothing stopping persons B, C, or D from being person A and founding a company for that idea.
This is generally untrue. Companies build moats with patents, litigation, monopolistic business practices, and corrupt, ladder pulling litigation. I think a lot of committed capitalists believe the market will sort this out, but it clearly doesn't. How many upstart chip design houses are there? How many upstart medical device companies are there? Etc. Etc.
Furthermore and again, not everyone has the privilege required to be A. Being A takes more risk, and you have to have more resources to reasonably take that risk. It's also been shown that it's far harder for women, recent immigrants, and people of color to become As.
> Anybody can make a giant sized, billion dollar company.
What?
> Those workers chose to work as employees under standard labor terms.
Often people don't have the resources to start businesses (let alone billion dollar businesses). It requires a lot of privilege, and it's even harder for women and people of color. It's not at all a simple choice.
> The early Microsoft employees that made lots of money from their stock options probably aren't bitter about their compensation.
While being pretty tough to prove, I would say a couple things here:
- Microsoft continues to post multi-billion dollar profits, and people still work there. I don't understand why early employees are valued more than current employees here.
- It's conceivable that even if you made a few million dollars, you might be bitter if the person next to you who didn't work appreciably harder than you made a billion. Everyone's different but, that seems possible.
- Even if these effects are less pronounced or acceptable at a place like Microsoft, concentrations of wealth and capital have destabilizing, corrupting effects on society and governments. Taking a per-company view is short sighted. It's also worth saying that most companies aren't made up of relatively wealth software engineers, and income inequality will be more pronounced.
I know the situation in Germany will be quite different to that in the US, but the reason we have a shortage of nurses is that the pay is not decided on supply and demand in order to have enough of them, but rather as a political decision.
> The law of supply and demand also doesn't explain or account for things like race/gender pay gaps, monopsonies, and collusion.
I'll mostly (but not completely) agree here. Humans are never fully rational, and that irrationality is certainly a relevant element.
> employment is very sticky
Of course it is. Teaching an employee on your systems/way of working costs money and is an element in the decision of whether or not to hire an employee. This decision affects demand and therefore price/wages.
Totally and this is the danger of state-controlled markets. Capitalists have a point here. I tend to argue that at least in democratic societies people have some control over it, whereas in a free labor market they don't. But in practice, like so many things democracy is supposed to fix, people largely aren't concerned with it.
> Of course it is. Teaching an employee on your systems/way of working costs money and is an element in the decision of whether or not to hire an employee. This decision affects demand and therefore price/wages.
Definitely, stickiness works both ways. We've all probably encountered situations where someone's made themselves virtually unfireable because no one can do the things they can. I think generally people characterize that as some kind of selfishness or at least a labor antipattern, but I tend to view it as a rational response to a lack of financial stability: if your employer can completely destabilize you financially, it's pretty rational to take drastic steps to guard against that.
Suffice to say it's complicated; far more complicated than the supply/demand curves charts you get in econ 101.
---
I'll add that my prescription generally is:
- Enshrine the right to organize
- Require equal profit sharing across all employees
- Require significant worker representation on corporate boards
- Heavily tax relatively high salaries, e.g. if everyone makes $1m then 0 tax. If one person makes $100k and 99 others make $1, insane super tax them down to $100 (include tricky stuff like bonuses or whatever)
- Heavily tax nationally high salaries with a progressive income tax
- Heavily punish tax dodging
- Set the minimum wage to a living wage and pin it to the CPI
- Abolish "right to work"
[1]: http://www.oecd.org/employment/emp/2409883.pdf
> Enshrine the right to organize
As in with a constitutional amendment? Because the NRLA already guarantees this.
> Require equal profit sharing across all employees
Germany does not do this and neither should the US.
> Require significant worker representation on corporate boards
Germany does not do this and neither should the US.
> Heavily tax relatively high salaries, e.g. if everyone makes $1m then 0 tax. If one person makes $100k and 99 others make $1, insane super tax them down to $100 (include tricky stuff like bonuses or whatever)
Germany doesn't do this and neither should the US.
> Heavily tax nationally high salaries with a progressive income tax.
The US already does this, as the US does not have a flat tax rate for income tax.
> Heavily punish tax dodging
Addressing symptoms not causes. Reduce tax avoidance by simplifying the tax code. It's that simple.
> Set the minimum wage to a living wage and pin it to the CPI
Probably a good idea.
> Abolish "right to work"
Terrible idea.
Here's an example where you could have done even a little token searching; the title of this article is "Workers on Corporate Boards? Germany’s Had Them for Decades" [1].
Another example is when you write:
> Addressing symptoms not causes. Reduce tax avoidance by simplifying the tax code. It's that simple.
It truly is not that simple. There's a reason tax codes are complicated and broadly speaking, it's that you have to choose winners and losers to simplify them and that's politically and policy-wise very, very difficult.
I'm sure you'd like to dispute that, but the way you'll dispute it is with normative, opaque statements like "it's that simple" or "terrible idea" which will take you 8 minutes. The way I'll engage is by searching the internet and citing a post, and asking good questions to keep the conversation going. That will take an hour.
I'm not gonna do that, and I think this breakdown makes it clear why. I think you should keep in mind what you're asking of people you're having a discussion with, either implicitly or explicitly, and how your responses indicate what you're expecting to get out of a discussion. From where I sit, you're not looking to learn anything or to inform me of something, you're looking to win an argument. Sometimes that's productive but it's surprisingly rare, and besides that, I'm not interested. I haven't learned anything from you over the 3-4 threads you've chased me down on, but I do feel a little worse about humanity, and I get enough of that already.
And overall, I'd urge you to take a moment to consider the damage you do by logging onto public forums and spreading your ill-informed, normative opinions around. It greatly reduces the signal to noise ratio, and because it takes a lot of time to respond to things like this, it effectively DoS's productive conversations. I love a good internet argument as much as the next mega-arrogant software engineer but, we need to keep in mind the effect that has.
[1]: https://www.nytimes.com/2019/01/06/opinion/warren-workers-bo...
I have no interest in winning the argument, I have an interest in the truth and sound fiscal and social policies that result in a good balance of strong economy + innovation + lack of exploitation.
For all the things in the discussion that you claim Germany does that make its economy stronger, you need to demonstrate that. For all the things in the discussion that Germany is not doing, you need to justify why they are good, as the one making the claim that they are good ideas. You have not done so. You made a list, and are now claiming everyone else is arguing in bad faith when they ask you to justify that list. My response was not very high effort because I was not actually responded to a thoroughly sourced list. It was just a list.
You accurately stated that I was incorrect about co-determination in Germany. I read your point as "majority representation on boards", when what you actually said was "significant" – an error on my part. Germany does indeed do that, and as such the policy would indeed fall under "Germany+". However, I maintain that amongst all your other bullet points, the only other point that 1. Germany does 2. US does not is living wage. And one (good) argument for why the federal minimum wage is not particularly looked after / updated is because the US is a federation of strong states, so minimum wage is better handled by states individually (which they currently do). Cost of living in Montana is very different from NYC.
> You've made claims like "this is Germany+" without actually supporting that claim.
I wasn't like, making a legal statement or whatever. You're arguing "this is communism with extra steps" and my point generally is that these prescriptions largely exist in democratically socialist, productive, EU countries. There are actually not that many communist countries that aren't also authoritarian so, I don't think the "communist" characterization is super useful. But, either way I'll expound.
- Enshrine the right to organize
You wrote that the NLRA already created this "right", but it's been hobbled by the Taft-Hartley act [1] and subsequent legislation in multiple states [2].
On the other hand, Germany (like many other EU countries but unlike the US) has ratified the "Right to Organise and Collective Bargaining Convention", which, well it's in the name [3].
- Require equal profit sharing across all employees
Profit sharing is pretty common across EU countries, but it takes different forms and certainly isn't equal. The coop corporate structure is closer to my thinking here but, admittedly it's not mainstream yet.
- Require significant worker representation on corporate boards
We covered this one but, yeah generally the idea here is for workers to have a big say in how their company is run. Definitely not the majority though; my personal preference would be that there were no majority and representation would be equally divided between workers, c-suite/owners, and shareholders, but baby steps.
- Heavily tax relatively high salaries, e.g. if everyone makes $1m then 0 tax. If one person makes $100k and 99 others make $1, insane super tax them down to $100 (include tricky stuff like bonuses or whatever)
High CEO pay is (variously) subject to tax penalties in Germany [4] [5]. And it seems to be working; their ratio of CEO pay to average worker pay is 136x, just over half the US' at 265x [6]. That's not wonderful and I'm sure there are other factors but, these problems are tricky and one policy probably won't fix it all in one fell swoop.
It's also worth saying CEO pay is generally bad and not meritocratic [7].
- Heavily tax nationally high salaries with a progressive income tax
Germany's 3rd tax bracket is higher than anything in the US and kicks in around $69k (USD) [8].
- Heavily punish tax dodging
Germany does this a little [9] [10] but, obviously not enough. Re: simplify the US tax code, no administration since Reagan has done this, for reasons outlined here [11] [12]. TLDR tax prep is big business, and--like I said before--our tax code does a lot, and changing it creates winners and losers.
- Set the minimum wage to a living wage and pin it to the CPI
Germany has a comparatively high minimum wage of €9.35 ($11.33), but I don't know enough to say if that's a living wage or not. Something that's nice about their (relatively new, 2015) law is they have to update it at least every 2 years [13].
- Abolish "right to work"
I've been wrong about what this is called my whole life. Apparently what I mean is "at-will employment". Mea culpa. But, still the US has it and Germany doesn't. We should get rid of it.
---
OK that's my prescriptions. I do feel like what I've described is the natural evolution of democratic socialist policies in the EU, exemplified not just by Germany but other big EU countries as well and definitely don't qualify as communism. But I think a lot of people think democratic socialism is communism so, maybe we just have a definitions problem.
I'll quickly respond to your minimum wage point and say that you can peg minimum wage to a State's CPI, and cities can create their own minimum wages. New York/New York City do this, for example. I wouldn't say that States are handling this ...
-- re: unions
Right to organize is not the same as "right to force people to join a union". That is what right to work laws prevent. Anyone should be able to join a union. Any group of workers in any industry should be able to form a union. Unions should not be able to force people to join their union. This is a gross violation of individual liberty.
Right to organize and right to work are not conflicting goals. If unions need to force workers to join them, they're arguably not good unions.
I agree that unions are important. But unions are not universally good – they sometimes have serious downsides. Any push for unions need to be met with a measured understanding of this. Do you have a solution for the problem that unions with too much power are actually bad for the economy in that they stifle competition and decrease efficiency? Monopolies in general are bad, and that includes monopolies on labour.
-- re: profit sharing
You can start a coop in the US today. But a coop is not the end-all-be-all of business structures. I'm fine with people starting coops. In fact I think that's great. But requiring it has the potential to stifle innovation / (constructive) risk-taking while fixing a problem that doesn't need solving (because labour can already join coops if they want). There are many companies that want to re-invest profits into CapEx or similar, which becomes more difficult with a profit-sharing structure.
-- re: co-determination
Probably don't have a problem with this as long as it is not majority. Haven't thought enough about possible negative ramifications of such policies though. Want to steel man the counter?
-- re: CEO pay
I agree that executive compensation seems out of wack, but my real issue is that I don't understand how the problem exists, and am wholeheartedly against slapping band-aids on things until I understand the underlying cause. You seem to be taking the stance that wildly different pay is always bad, which I cannot agree with. Fair pay is pay which is proportional to the value delivered. If you are delivering 100x the value than the average worker, you should get paid 100x more. To be completely frank, I don't even think it is a requirement that people should be paid the same rate for the same work, but that is an argument we don't need to get into, as the aforementioned idea of "fair" comes before that anyway.
What I mean to say here is: assuming a free and competitive market, you'd think disproportionate executive pay (disproportionate not to other employees but to the value being delivered by the executive, as to my mind this is what fairness is about in business) would result in a company that is less competitive than one which is not overpaying its executives. So how did this come to pass? To my mind the only options are: 1. markets aren't actually competitive 2. American CEOs actually are delivering 256x the value of their average worker.
If 1, my preference would be to find ways to solve the underlying problem and make the market more competitive rather than this band-aid solution. If 2, then again I don't think there is a problem that needs solving.
There is a 3rd option that ...
I was responding to your assertion which was "It very much does not sound like Germany+." Further, the EPI article says right up top:
> Why it matters: CEO pay is not just a symbolic issue. High CEO pay spills over into the rest of the economy and helps pull up pay for privileged managers in the corporate and even nonprofit spheres. Because pay for top managers—CEOs and others—is not driven by their contributions to economic growth, this pay can be reduced and others’ incomes boosted if we can figure out a way to restrain CEOs’ market power. Importantly, the most direct damage done by excess CEO pay is to shareholders. Since shareholders are a relatively privileged group themselves (if not as privileged as CEOs), they could potentially wield power in this situation; policymakers should try to figure out how to enlist shareholders in the fight to restrain excess managerial pay.
> Right to organize is not the same as "right to force people to join a union".
I'll try and skip to the end here and say that the union system isn't optimal. It would be a lot better if we had a solid social welfare state and, coop-style profit sharing and worker representation on corporate boards, and better laws protecting workers. But here we are. All of this stuff is to enhance the financial and collective bargaining power of unions so they can effectively advocate for workers (note I specifically didn't say "their members", as unions represent everyone, members or otherwise).
Right to work laws are meant to undermine unions' collective bargaining leverage, and they've worked [1] (those WSJ studies are real bad, anything could've caused those effects). But besides that, you can also choose to just pay agency fees, not contribute to the union's political activities, and not become a member, even without right to work laws.
> re: profit sharing
Can you cite some things here? You write "a coop is not the end-all-be-all of business structures" and "requiring it has the potential to stifle innovation" without any kind of backing. Plus, I'm not at all saying cooperatives are perfect. I think they're a good way to achieve profit sharing, but there may be other models that are better. I'd caution against the stock comp idea though; that turns into short-termism really quickly.
> co-determination
I can imagine some pitfalls a-la term limits in governments, where when they're so short you don't allow anyone time to build experience. I think compared with the management or investment classes workers have less experience making company-level decisions, and that could have some weird effects. Boards also aren't perfect, you can bribe and blackmail people. But I think in the aggregate that probably doesn't have a big effect. I'm just spitballing, I haven't read anything.
> re: taxes
Haha I haven't been called an idealist in a long time, thank you :) I don't think the US will do even a single thing on this list and is doomed in probably a dozen ways. Maybe that's why my list comes off as idealism: if you're sure you won't get anything on it, it doesn't matter what you put on it.
But re: taxes, Paul Ryan tried his whole career to simplify the tax code. Libertarians have been pushing a flat tax for a generation or more. People come out of the woodwork when things like happen [2] [3] [4] and are generally (and understandably) a little flighty at "various" winners and losers [5].
Re: tax evasion/dodging/etc., I mostly mean it all but, in particular corporate tax avoidance should be fixed [6].
Re: progressive income taxes, as you point out the US tax system is really complex. Our income taxes are progressive. But many of the tax...
1. Person A can be the person that actually builds the product (and often is).
2. It is always possible to be person A.
But it is N and N^N
I believe in perspective too, and agree that perspective matters.
But I also believe their is a common perspective (very hard to get at, that is the journey of scientists), and so at some point when you have enough data you can say "well there really is a black and white here".
My second thought is that it wasn't a mistake.
Usually, HN is the space where his essays are most heavily defended.
I am not sure where the bitterness comes, and to be honest, I would like to know. We are reading the same essays.
More and more I am starting to think that people who are decrying pg's writing should come clean and say whether or not they've started a business, and if so, what was the outcome. The outcome isn't as relevant, but I bet there are very few people out there who have reached, lets call it "Fuck You" money through running their own business who would read this essay and go "Hah he's so out of touch he doesn't even see it anymore" and toss some link about Dunning-Kruger or whatever.
For people who are in the business of making money through getting shit built, I think what he's saying will resonate just fine. But then again it's one of those things where the people who need it the most are the least likely ones to take it, and vice versa. It's akin to the "It's a good problem to have" crowd when you say how you're sick of dealing with clients on the phone even though you have a 200-person company, and they look at you sideways because they have no idea why you are complaining.
He's talking about billionaires and interviews in this one, and he starts off saying how the two threads are connected. But what he's really talking about is building-a-business-by-convincing-people-you're-not-full-of-hot-air.
And unfortunately, when I see people tearing his essays apart, their ramblings strike me as nothing but hot air.
I think it's HN who is out of touch more than pg is, because I don't think the vast majority are here to build businesses whatsoever.
Would be easier to just talk about what he's actually talking about, then.
That's mostly what tipped me off to not take his words at face value but to interpret them through his lens as a VC and someone who is trying to communicate business ideas (ideals?) to people who, I would at least hope, aspire to create a business of their own. Whether it's a million or a billion, it doesn't matter. Nearly everything he talks about applies to "lifestyle businesses," which is I think partly why YC offers some small bit of money to get the ball rolling rather than go gung-ho and throw massive amounts of money at people. I don't know if this has changed, I don't think it has. Obviously it doesn't hurt to get a leg-up from the counsellors and whatnot that YC provides through their alumni program.
I am not sure if he's spoken about it but I wouldn't doubt that one of his philosophies is that a diverse number of businesses can grow to a reasonable revenue (where the founders are happy and working away at it) with a bit of money to start with, and that way YC doesn't have to spend a fortune early on and everyone walks away happy even if YC doesn't turn a sizable profit. Some kind of a threshold where YC feels anything above that means they're pissing money in the wind and their ROI isn't any better, but at the same time they're helping the founders as best as they can.
So you have to take the times he talks about being Ramen Profitable and talks about building a Billion Dollar Business and find the underlying threads tying it all together.
pg can't tell you exactly what, how, when, where, why you should be doing the thing you need to be doing to build a business. His words sound like platitudes most of the time to me personally, which is why I take the side of "the people who need this the most won't take it, and vice versa", because the person who started a business and is profitable didn't have anyone like pg telling them this sort of stuff. Would someone read his words before starting anything and be inspired to? Perhaps, but it's a long journey and counting on such flimsy motivation to keep you going is to me silly.
For some, certain things might be common sense. For others, not so much. Plenty of founders, even those with serious business experience, still have it ingrained in them that "if you build it, they will come", and they neglect every other aspect of business. Yes, I'm talking primarily about engineering types. This essay is to remind you to focus on the users, and the rest will follow.
Aside: I'm grateful for the Startup School library. I think it's a great resource. It's got a nice mix of obvious and non-obvious advice in there. When people disparage pg's writing, they should take a moment and see what his company has built for people who wish to create a business before declaring him out of touch.
Elaborate on it then.
Look, not even 'prole defenders' agree with this. You don't have to be exploitative to be a billionaire, it's simply a byproduct. There are only several thousand billionaires on earth and you'd be hard pressed to find any one of them without some sort of scandal involving their workers or consumers.
Pinpointing what is 'objectively' wrong with a subjective essay is hard, which is why most people are attacking the subjectivity itself, and I think that's healthy to do.
If you're going to build a business and you hope to make money, you're going to have to EXPLOIT inefficiencies in markets, competitors, customers, processes, conventional modes of thinking, and so on. Doesn't matter if the business is making you a dollar or a million or a billion.
And also, this whole "scandal involving workers or consumers". YC's portfolio has plenty of companies who are making a killing with revenue who haven't had to do this.
Patrick Collison is a regular poster on here. Go ahead and tell him he's exploiting people and he's scandalous with workers and consumers. I'd like to see someone go to one of the successful YC alumni and say directly at them half the shit you people spout out into the nether.
As I have mentioned in a comment to the throwaway account in this thread - I sincerely think a lot of commenters on here either have no experience or no ambition in starting a business, never mind getting a healthy revenue stream. Hell, I wonder what the percentage here is who got as far to having to talk to clients.
I have a dim recollection of an article many years ago that Y Combinator asked applicants a time when they gamed the system and the answer to that was on of the most correlated to success. Like saying you knew some technology that you didn't on a resume or selling some product that you hadn't built yet. They framed it as a positive. Finding opportunities and using them to your advantage. But a negative framing would be that they were looking for people that exploited whatever advantage they oculd find.
Are you sure you didn't just come up with that example yourself to suit the narrative? Until you know what all selected companies chose as an answer for that, aren't we just guessing as to what quality they were looking for?
To be clear, I'm not accusing you of making it up, as my memory of it is dim too, I just can't remember examples being given like lying on a resume.
https://news.ycombinator.com/item?id=1197674
There was also a quote from someone in yc saying that the question wasn't really that important (probably why it got removed).
I guess ‘hacks’ are what we call as ‘loopholes’ in tax audits. This is how I understand hacking. Every system has its strength/weaknesses and boundaries. As long as we can rearrange the system from within the boundaries by exploiting the available strengths/weaknesses to create an entirely different model/system/agenda qualifies as a ‘hack’.
I don’t expect anyone to answer that truthfully, but the ability to come up with a convincing and impressive response would score major points for creativity.
In many ways that could be seen as how you can exploit people
Making snap judgments about people seems to be one of his major personality flaws. Steve Jobs had the same flaw, so it's clearly not professionally debilitating, but it is reprehensible nonetheless.
2. YC could make the process less fickle and far more objective by having each startup get interviewed for 10 minutes by each partner, rather than in a high pressure groupthink session. It would cost no more of their time.
And of course, they could also just increase the time and interview just as many startups as they want. YC partners could treat it like a real job with hard work, rather than act like lazy VCs.
Anyone who has interviewed people knows that first impressions are often wrong, and yet YC bases their decisions entirely on first impressions, which is both funny and sad.
3. It's likely that YC's success is based on their much-more objective application process, and the interview is random noise in the process. It is probably even worse than random noise and YC might be 2-10x more successful just by eliminating the interview stage.
4. PG has no true idea how other YC partners make their decisions, it's likely to be very far from his own process, making his advice inaccurate and harmful to founders.
In a way all the YC interview prep stuff is written for the wrong people (for YC, and this is obviously a little wrong) but also the right people (who will chase prestige to read the article about interviewing at YC).
I'd say it's like writing an argument to decrease penalties for shoplifting and titling it "Don't Punish Thieves". It's not wrong, but it's certainly not a productive way to frame the discussion.
Here, I guess I'm of the belief that there's nothing wrong with billionaires; the wrong thing is how little there is for a billion people in the world.
To me, clickbait means that I'm luring you into reading an article by using a catchy title, but the content of the article doesn't exactly match what I expected; or that I use human psychology to trick you into opening a new web page (e.g. "you will never guess what happened next").
I instead find the title refreshingly nice and simple, and reading the article fully matched my expectations. Great "marketing" (the ability to pick a catchy title is good marketing) shouldn't be confused with being clickbaity.
Marc Andreesen published an essay "It's Time to Build" [0]. He claims that ostensibly, COVID-19 inflicted acute trauma on the U.S. economy. But it merely excaberated the symptoms of a deeper dysfuntion. The root problem is the cultural decay of "a will to build". The solution is to rekindle this norm.
Several have published their own takes [1]. pg must have figured "What you can Learn from How to Ace a YC Interview" conveniently dovetails into the larger debate. Had he written the essay in a vacuum, I suspect he'd have emphasized "sell users what they want". Rather than the grand narrative "civilization is built by founders" which might increase exposure but possibly dilute the original intent.
[0] https://a16z.com/2020/04/18/its-time-to-build/
[1] https://scholars-stage.blogspot.com/2020/06/on-cultures-that...
People who have become billionaires from the companies YC has helped launch have that in common.
I guess DoorDash and Instacart are accused of participating in the exploitative gig economy. Airbnb is accused of circumventing hotel laws (is that exploitation?)
The other 7 on my list are pretty okay though, right?
But if you actually scroll through the list of them, https://www.ycombinator.com/topcompanies/, most seem beneficial to society
Reddit's incentives are aligned towards a similar addictive loop as Facebook.
Stripe, Cruise, Dropbox, Gusto, and Gitlab are pretty unassaible IMO, though.
Stripe = Eat the gift economy and replace it with monetized capitalism.
Cruise = Mass unemployment for truckdrivers, plus inevitable computer-controlled accidents.
DropBox = Oh noes, your files belong to a company and you don't have physical possession of them anymore.
Gusto = [...I'm having a hard time here, people still need to get paid and ADP sucks.] Maybe "encouraging people to start businesses who would be better off in stable employment".
Gitlab = Think of all the potential copyright infringement!
The question is - which negative things do you want to believe? And how do they compare to the positive things the company does? It takes a minimum amount of effort to dream up something bad about a company's core value proposition, but that's not the whole company, unless you put blinders on.
These are terrible examples in the context of the article.
Apple's computers, originally, led them to the brink of bankruptcy, and it wasn't until 20 years later when they started selling consumer electronics that they blew up, and Wozniak had little to do with it at that point.
The other two don't actually make money from the products mentioned, but by flat out exploiting people's ignorance regarding online tracking and advertising.
Woz's designs were very much a huge part of that.
That's quite the healthy ego.
No. You will try to explain it, it doesn't mean you will succeed.
I'm ready for the downvotes.
If the other comments put you off, read it anyway and skip the billionaire bits.