The world can't sustain a China middle class the same with similar proportion/consumption as the US (look at per capita oil consumption, fresh water consumpion, CO2 production, et al). That's maybe the bigger story in a bigger sense.
Can you provide any support for this statement? I don't believe population directly correlates with the size of your economy. I only ask because if America is going to remain relevant, its citizens need to stop making shit up as they go.
There is a ratio between them based on how productive your workforce is. German workers, for example, are thought to be very productive. But expressed as a GDP-per-person ratio, not as productive as US workers. China is far behind in productivity, yet their enormous population means they're ahead in total dollars. And as Chinese workers move from low-productivity work such as family farming to industrial farming & factory work, their population will act as a lever and grow their GDP even more so.
China: GDP 16,149 Pop 1,357,380
US: GDP 16,768 Pop 320,206
Germany: GDP 3,512 Pop 80,716
(millions and thousands, respectively)
So the GDP per-person ratio of each country is:
China: $0.01189
US: $0.05236
Germany: $0.04351
Expressed in terms of productivity, China still has a lot of growing room, and I would expect their GDP numbers to continue to grow in the future.
How about India? They will soon be the most populated country in the world? Indonesia has about 250m people? Brazil, Pakistan, and Nigeria? All these countries have large populations. They probably have a lot of "growing room" too.
In short, this claim is meaningless:
"China has 3 times the population of the US. As soon as they started growing a middle class, it was inevitable that this would happen."
That gets into the societal aspects - after working for their basic subsistence, how much time in the day is left for working on other things that they could sell. In the US, the creation of industrial-scale farming meant that food became plentiful and cheap enough so that there was capacity & time left over for work that could then be used to create a profit.
There are other factors at play of course. India has an enormous bureaucracy that soaks up much of their excess capacity and stifles innovation. The remains of the caste system also means that some of their most productive people aren't working effectively. Nigeria is doing much better these days, but still suffers with a large amount of corruption. Pakistan & Brazil - I don't know enough to comment - perhaps you can fill in why they aren't growing as fast as they might.
In other words, stop complaining about unsustainable work habits leading to physical and mental problems among founders, and let venture capitalists turn that hard work into (a) profit for them while (b) keeping you all safe from Chinese Dominance.
I don't understand why Altman doesn't address the underlying arguments against "hard work". The modern workers movement was about receiving more of the profit from business. He seems to want workers to take the pay cut while still providing the same incentives to capital investment.
After listening to a recent episode of Invisibilia, I've become somewhat convinced that one of the root ills of current American society is extremely low expectations.
Whenever I think of countries like China, I think of an entire population driven to be more excellent. I know that's not true in general (people are people everywhere), but I still feel there is a stronger expectation that, as a human, you will do more than just exist and consume junk food and mass media.
America feels sluggish to me... safe and dumb and comfortable but not content. It's like the feeling I get when I spend an entire weekend on the couch binge-watching Netflix.
No. But you always hear in stories about the more disciplined populace and the focus on education standards. It's possible those are overblown, but I would argue that the average American (myself included) definitely gets the impression that we are a bunch of slobs compared to the Chinese.
I have never gotten that impression, and given that 1/3rd of the Chinese population are still in small farming communities, several of which do not have access to things the average American considers basic and fundamental to life, I don't see how anyone would have that impression.
"I think of an entire population driven to be more excellent."
People are driven to excellence, but only because if you aren't, you face a lifetime of working on a farm your entire life or in extreme poverty. It's a good motivator.
Men especially focus on excellence (and making money) because the 1-child rule has pretty much given women the pick of the men with the most money and are the most successful. Another good motivator.
"America feels sluggish to me... safe and dumb and comfortable but not content. It's like the feeling I get when I spend an entire weekend on the couch binge-watching Netflix."
It's only 'sluggish' because most people have a very good standard of living and rather than focusing on their next meal, can actually enjoy some leisure time. If you compare this to some of the wealthier people in Shanghai or Beijing, it's the same.
"I've become somewhat convinced that one of the root ills of current American society is extremely low expectations."
This has been happening for years. Especially to our education system. What do you think happens when kids are taught that "Everybody is a winner" and they are shielded from the realities of competition and life?
I lived in Shanghai and worked at a startup for a year after college. The startup expat and startup local communities are surprisingly developed.
There are a lot of co-working spaces, hacker spaces, and start up events. For anyone interested in China, you can live in Shanghai without speaking Mandarin.
Western training in programing, design and product is highly valued. Salary offerings are lower by a factor of 10. Regardless, its easy to live and identify alternative income sources.
I'd love to answer any questions for people interested in the Chinese startup space.
Exactly. I did oDesk work at 20$ an hour, approached a number of expat entrepreneurs/business people, and eventually started working at Converse Asia Pacific as an agency manager. The opportunities are pretty rich if you know how to find them.
They've also started to block Gmail and seriously block most VPNs. A good number of expats are looking into leaving recently because of the recent restrictions.
That was always the case. Even when I got there, there were "expats looking to leave". Because theres such a heavy influx of people coming in, it doesnt matter.
"Salary offerings are lower by a factor of 10", compared to where? A decent freshly graduated developer in Shanghai can easily make 1.5-2k USD a month. Where you do get 10 times more than that?
> One thing that I’ve found puzzling over the last ten or so years is the anger directed towards people who choose to work hard
That feels somewhat disingenuous. If 'sama is referring to the sentiments expressed on this board, from what I've seen, it's not anger towards people choosing to work hard, but anger towards demands of hard work of others from those who stand to benefit at their expense.
Ie, the anger is towards VCs who talk glowingly of start-up founders working themselves to the bone and, in turn, towards start-up founders who talk glowingly of 0.01% equity-holding employees grinding out hour after overtime hour.
Certainly working really hard without an expectation of being compensated it (either with equity or cash) is dumb. I've argued a lot that startups should give employees more equity, and I think that's shifting. Also, most startups I'm aware of, at least in the bay area, pay large salaries at this point.
I mean we all love large salaries but it's a symptom of something more fundamental namely that there are a lot of people who work hard but don't have the skills the market need and don't have the means to re-educate themselves.
It's not like everyone is getting more, it's that there is a divide where some gets more and a lot gets less.
Thats what this is all about. It's no ones fault but it has nothing to do with who works hard or not.
This is probably the single biggest factor that's keeping me from moving out to CA. There's a lot of great companies out there and I think I could learn a lot but I also don't want to go broke.
Edit: How are people making it without a really high salary or living with three other people?
I call real estate the "evil sponge." As a region becomes more affluent, the price of real estate appreciates at least in step with this. Due to the leveraged debt financing of RE, the reality is often that price appreciation is a multiple of wage appreciation.
This takes pretty much all the surplus capital in a region -- among everyone but the rich -- and locks it up in an inert asset.
Think of it this way: a starter home in the Bay Area is about a million dollars. In SoCal -- not cheap by any means -- it's more like $400k. The average AngelList seed round is $400-$600k. So every single house in the Bay Area locks up the capital required to seed fund at least one new venture.
What could all those smart people in the Bay Area be doing if all their capital were not locked up by an inert asset?
What's worse is that there are idiots who cheer this on because it will supposedly exclude people they don't like (the poor, blacks, etc.) from their neighborhoods. I read a great book called Detroit: A Biography. It explained how RE hustlers used racism to fleece people: first they'd sell a neighborhood to white folks. Then they'd pay black people to walk around in it. Then they'd scare the white folks into selling below market, jack the price back up and sell it to blacks, and meanwhile sell a further-out more expensive neighborhood to those same white folks. Rinse and repeat. I suppose if you harbor these kinds of views it's kind of poetic when they're turned around and used to con you, but it harms everyone else too.
I was hoping the housing bubble crash would bring relief, but it's right back up there. Either the entire economy needs to inflate until RE is reasonable again -- which would give us $8 loaves of bread -- or real estate needs to fall over and burn. We need something like the 2008 housing crash with no recovery-- to unshackle the real economy from the rentier asset economy.
For instance - if I bought a house in the 1990s for 200K and it's now worth a million dollars, it isn't stealing $800K from anywhere. That's new wealth that I have that I can also put to work. (Even if I don't take a mortgage out on the house, I can invest more of my other money more aggressively, if I'm paying less mortgage, or know that I have a high value asset in my home)
I think it's more appropriate to look at the monthly rent differential.
Let's say that a 1BR in Palo Alto costs $2,500, and a similar one in Austin costs $1,000. [0] In that case, there is a $1,500 * 12 = $18,000 differential. Let's double it to include how much you have to make to have that much take-home income, and you have a $36,000 per year difference. If an angel-fed startup has 3 employees, then there is a ~100K per year of effective real estate tax. (Approximately 20-25% rather than 100%[1])
The trade-off is, how much more likely are you to succeed and scale based on being in SF vs Austin?
[0] I'm basing both #s on the very accurate "Approximate the first Google result" method.
[1] One can argue that everything is more expensive in the bay area, but total cost of living comparisons are tough to do. Is it % of spending or absolute dollars? Does it depend on public schools? Quality of goods?
It's not "stealing" 800k. That would be a bit too strong. But the problem is that your 800k comes via the fact that newer entrants to the market must now take out monster mortgages. It's not wealth created, but a draw on future wealth and an increase in the interest payments of younger workers.
It's sort of a generationally regressive tax. I personally suspect that policies that protect and encourage RE hyperinflation have been pursued as a way for the baby boomers to economically eat their children.
Rent prices are also quite tied to real estate prices, so when the latter appreciates rents go up too.
Over the long term, rent usually fixes to a certain % of "All in" housing costs. (Usually close to mortgage payments plus upkeep plus condo fees)
The difference is that rent is a short term costs, so for startups they're not eating the 30 year home ownership cost, just the monthly rental differences.
It is a generationally regressive tax only to the extent that parents die with no assets left. If they die with positive assets, then the value of their homes gets handed to their kids.
The CA system is painful for other reasons. At the outset, it's a tax by people with good credit on people with bad. (You can't get the tax benefits of home ownership unless you have good credit) The bigger issue is the nature of the taxation... Because tax increases on houses can't rise as fast as the homes themselves, new homeowners pay a penalty relative to the value of the house. (If you and I both both buy homes in the same neighborhood. You paid 500K 3 years ago, and I pay 1mm today, my tax burden will be almost double yours)
There is a reason that successful, fast-developing nations such as Singapore have enacted tight controls over the ability of a zero-value-add rentier class to extract all the value from a growing economy.
Have you seen Singapore real estate prices lately? The same 2-br condo (Parc Vista @ Boon Lay, never a particularl desirable location to begin with) I used to rent for $1000/mo back in ~2005 is going for ~$3500/mo now, the building hasn't gotten any newer in the meantime, and this is actually a bit cheaper than it was two years ago.
My company relocated to San Fran a few months ago, I had to quit because moving there from Dallas made no financial sense.
Even with a massive raise my monthly savings would be cut in half (or more), and spending in excess of a million dollars on a home is way too risky (look at all the people who went upside down during the last recession). Barring something incredibly unlikely, such as the equity I own actually being worth something, I would likely have to add an extra 10 years or more to my expected retirement age if I chose to live and work out there.
Everyone is renting. Ok, I have one friend thinking of buying a house in Oakland since he grew up in in NorCal and wants to stay here.
Almost everyone has roommates (if they're single), or lives somewhere less convenient (if they're not).
Some people are skating by on rent control (still jealous of my friend's room in the mission for 1k/month).
Some people are burning through their income to fund a nice place but most people are saving their money.
personally I'm not sure how long I'll stay in the bay, so I'm not looking at buying anything atm since prices do seem insane. Seems reasonable for me to save my money while I'm young and my costs are low, seeing what the future brings.
I suppose the sentiments of people who say "don't work hard" can vary. Many people tie working 'hard' to hours put in. I will say there are many schools of thought on this. If I am super focused and work 'hard' for 30 hours a week and enjoy my life the rest of week, how is my productivity and creativity compared to someone who puts in 70 hours? Are they really out-competing me? What does the research show on this, compared to anecdotally stating "All successful startups that I observe work hard at all hours, therefore this is THE way"? You are one of a small group of people that could make this observation. Just because that is common in successful companies, doesn't mean it is the best way.
Working too much, to the detriment of your health, sleep, family, and friendships, for any amount of money, even if you are the founder, is dumb. Perhaps Steve Jobs would've caught up with science and stopped his cancer earlier if he took a break.
I run a start-up with 100+ people. Vacations, family time, sleep - these are good and ultimately productive things. The normal person works so they can live, be healthy. They don't live so they can work.
citation: Steve Jobs by Walter Isaacson, authorized by Steve Jobs. What political agenda? I run a company and work a lot, but I think working is only one aspect of human existence and we should try to strike some semblance of balance.
I'd have to disagree. At least based on my definition of large and my experience interviewing in the Valley.
For example: If you're making X amount of salary and paying $1500 for a one bedroom in Big City Y, you'd have to make at _least_ $24k more in SV if you wanted a comparable one bedroom apartment. It's probably even more than that as I don't know anyone paying less than $3k for a one bedroom within 10 miles of SF.
For a junior dev making $80k in Austin who is moving to SV, getting that $20k bump is certainly plausible and in the above scenario would work out fine.
But what about a family of 4? They need a 3 bedroom house. How in the world is that family going to make enough to afford a house northing of $1m? How much would that person have to make to even support half the cost of their houehold? $200k? $400k? Those types of salaries just aren't happening at startups.
Not every opportunity is great for everyone; people with families generally don't like to travel, that doesn't mean that a job that entails travel is a bad one.
Having a family is clearly a choice. And having 3 kids is very different from having 1. These people will always have less material goods and have a harder time scraping by than someone with no dependants when the cost of living is high. This is true of any industry in any expensive area, it's what you should be expecting if you have kids.
In any case, the original comment is wrong about housing prices, you get shafted when you try to live right in the heart of SF, pretty much everyone with a family is going to have to commute from somewhere, you can still get comparatively cheap 3 bedroom houses in san jose, and there's still plenty of tech companies with offices in the south bay.
I disagree. I think he is talking about the general 'anti-workaholic' attitude. I see it all the time and have personally been called out for wanting to work too much. I don't know enough about China's culture, but I know in America it is looked down upon to work non stop even if it is just for a few years of a person's life.
For good reason. It is both unhealthy and inefficient to work massive amounts of hours. There are multiple studies that show that overall productivity increases when you don't work over 40 hours a week.
The studies I've seen show productivity falling at 40 hours and dropping off a cliff at 50 for most activities.
I don't think the blame for the workaholic culture lies primarily with VCs, though some do encourage this. I think it's mostly a part of the cult of male ego. "I worked 70 hours last week! How many did you work? 50? Wuss! I'm so much more hard-core than you!"
People also lie about how many hours they worked. In reality they work maybe 20-40 and then do things like... uhh... hang around in here... for the other 20-40. Again part of the macho one-upmanship thing... putting on an act of working ridiculous hours to look hard.
Its a grind game. Obviously my WoW character level 70 is far superior to your WoW character level 50.
Unfortunately companies can be killed by this kind of primitive behavior when the 70 hour/week guy executes less shareholder value add than a 20 hour/week intern.
Give someone a stupid metric to aspire to, they'll max it. Might destroy the company in the process, maybe even themselves or their own careers, but they'll max the metric number, thats for sure.
I've run into this before as well, where guys will brag about how much (unpaid) overtime they put in, how early they get to the office in the morning, etc. I feel pity for them, not respect.
> In reality they work maybe 20-40 and then do things like... uhh... hang around in here... for the other 20-40
So much this.
There's just a huge level of inefficiency with working ridiculous hours on a regular basis. Just because you're engaged in the physical act of coding/designing/writing/etc. does not mean you are producing anything of value. In reality you'll probably do something that needs to be fixed a week or two down the road.
I've watched people who work till 9pm everyday. After 5:30 or 6 they mostly just browse the internet and fiddle around. In reality they should probably work from 8 or 9 - 5 or 6 and take a healthy 3 to 4 hour break and go home. Then after their evening has settled down get back into working on something for another hour or two at the leisure of their own home. This is much more productive than just slugging it out at the office with no work life balance at all.
One thing that I’ve found puzzling over the last ten or
so years is the anger directed towards people who choose
to work hard
I think there is serious merit to that sentiment. Others in this thread have made very keen observations on this all pervasive national attitude that has blanketed America in the past decade or two.
however the biggest issue facing the US is this message that excelling
isn't to aspired too, acceptance of who you are and who someone else
is is all that matters. It is a self defeating mindset. Don't worry if
you fail, you had no choice, you just can't do better. Here let us
take care of you....
And fully expecting to be flamed, I give you perhaps, the most lucid and no-nonsense explanation of how this kind of self-defeatist thinking has come about envelope the national psyche, in the form on a nice quip by none other than, Peter Thiel himself:
The countercultural in the '60s was the hippies. You know, we landed
on the moon in July of 1969. Woodstock started three weeks later, and
with the benefit of hindsight, that’s when progress ended, and the
hippies took over the country.
He adds:
Today the counterculture is to believe in science and technology. You
know, our society, the dominant culture doesn’t like science. It
doesn’t like technology. You just look at the science-fiction movies
that come out of Hollywood — Terminator, Matrix, Avatar, Elysium. I
watched the Gravity movie the other day. It’s like you would never
want to go into outer space. You would just want to be back on some
muddy island. And so I think we’re in a world where actually believing
that a better future is possible that you can have agency and work
towards a better future, that is actually radically countercultural.
> “It’s so stupid that these people play the startup lottery. What idiots. They should just consult.” or “Startups need to stop glorifying young workers that can work all day and night”
No-one quite says that working hard is stupid (well, except the few misguided ones we should all ignore anyway). What people go tsk, tsk, tsk at is working really hard and giving up responsibilities at home, not being with you family, even forgoing the biological imperative to reproduce (or delaying it -- usually not a good idea, again biologically speaking), giving up your mental/physical health for a dream that is realistically very remote, etc.
The other big thing is, alas, it is a lottery. We guide our nephews toward a different direction that has a greater promise of economic security: be a neurosurgeon (and well, even if they don't become neurosurgeons, we hope they'll become at least primary care doctors :)). I mean, What is YC's acceptance rate at this point? Like 10%? And I bet the people applying are more able than other hopeful entrepreneurs who don't happen to apply to YC, so the success rate for the average entrepreneur is pretty bad.
Calling it a lottery is silly. I know some people who would have close to a 100% chance of getting into YC if they applied. I know other people who would have close to a 0% chance.
Even a lottery is not a lottery by that account; statistics professor Joan R. Ginther won four multi-million dollar jackpots in Texas because he found a "pattern" in the lottery numbers, just like how very clever people find patterns in our world and hit the market as a "startup". So generalizing the advice to everyone: "hey! start/join a startup" is bad. Only the smart and well-connected Stanford kids have a realistic chance of getting a return. The rest of us should work hard, just not in starry-eyed startup happenings.
Maybe so but I thought the lottery wasn't getting into YC but working for a start up that becomes successful. In that sense it's very much like a lottery: you have a tiny probability of succeeding, but if you succeed you get an extremely large sum of money.
I'm not entirely sure it's like a lottery in terms of the expected value being negative though (if you consider the opportunity cost as a negative).
Its a lottery if you blind folded yourself and pointed at the startup you work at.
You can always mitigate the risk by researching and making an educated decision about where you work. Different startups have different degrees of risk.
Indeed, but the probabilities are still so low that it's like a lottery. Obviously it's not an actual lottery, just similar to one in the sense of low probability high reward.
It isn't random, but it sure isn't a guarantee that being smart and working hard will pay off either. If it must be compared to some game, I guess poker would be more apt than a lottery.
If you're smart, and work hard you can make the right moves to put yourself in an improved position for possible success, but ultimately you are still playing odds with lots of variables that are completely out of your control and even if you play "perfectly" it is entirely possible you still fail.
In poker you can deal with this variance via bankroll management, for which the startup version would be not to invest too much of yourself (emotionally and/or physically) in any one startup. However, the culture around startups (unlike the culture around smart poker play) does not promote that at all, rather it tends to promote a leave-everything-on-the-floor approach... which, IMO, is the sort of position most people are really complaining about when they say things such as what sama paraphrased in the article.
Just because you have some outliers doesn't mean it isn't random. As long as you're good but not the best of the best of the best, it's random pretty much by definition. An old pg's essay covers it well: http://paulgraham.com/judgement.html.
Should the goal of the US be to emulate happy, stable, wealthy, smaller economies but arguably more egalitarian northern European democracies?
Or rather, should we chase China in a race to the bottom? Lower corporate taxes, longer working hours, reduced environmental protections, with the goal of creating a fabulously wealthy klepto-capitalist ruling class? How dare people criticize kids burning the candle at both ends to make other people billions of dollars, China is beating us!
You can't have endless impressive growth. Once you're developed its going to hit a reasonable cap. China is still developing. You can't compare the most mature economy to one of least developed. The move from back-breaking farm labor all day to manufacturing is MASSIVE growth. The problem with Western democracies is that we moved past that stage over 100 years ago. Now we're in a service based economy. That just doesn't have that wonderful growth curve.
As many democratic and liberal nations have discovered, its a fool's errand to chase growth on that curve and, as you said, the wealth and stability of north Europe is a tempting target to emulate. With recent moves towards proper socialization like Obamacare and focusing on tax cuts for the middle class and raising the minimum wage, I feel like we're on the path to those economies and have long stepped off the path of just beating down workers for tiny gains as we fight the laws of diminishing returns. How much workers unrest does the CCP violently take down per year to keep people in line? How many secret police arrests?
These pro-China pieces are mystifying to me. Geeks always seem to worship autocrats and dictators for whatever reason. I guess they like the idea of a centralized control by elites, but that simply doesn't scale well and it invites corruption and other inefficiencies much faster than a more open political process. I'd rather live in the poorest Western nation than in China or Russia. Its crazy that we're actually seeing their system as superior to ours. Only on HN would this drivel be voted so highly. INTJ social and moral blindness is in full effect here.
I look forward to the scandinaviation of all things. I believe its the best path humanity has.
Completely agreed. Most of China's growth has been from moving people from agriculture to manufacturing. Essentially activating its giant labor force to compete on price. This has lifted millions of people out of poverty. However, it's still not entirely clear if China will be able to avoid the middle income trap that many countries seem to get stuck in as labor becomes more expensive and they aren't able to compete on price anymore.
Excellent points. I live in a community with a fair few retired state officials, and the China fear/admiration is also entrenched amongst folks who are already very wealthy, and have a passing interest in staying on top of international politics. There is something to your observation of wealthy individuals of medium to high intellect falling in love with autocrats, as though if a few smarter people could just control a little more, things would be better/more optimized/grow faster.
The twist of course being the punchline to Zen and the Art of Motorcycle Maintenance. What is better? Why optimize? Growth for what purpose?
> These pro-China pieces are mystifying to me. Geeks always seem to worship autocrats and dictators for whatever reason.
It's because we see the world through the lens of our relationship with our computers, and in that relationship, we are dictators. We tell the computer what to do, and it just does it. It never asks for more vacation time or complains when we push it to its physical limits. In those cases where it doesn't do what we told it, 99% of the time the reason is because we phrased the request wrong. Then we look at democracy and start thinking, man, how inefficient all this taking into account other peoples' needs and principles and desires is!
When you start thinking of the world as a computer, it's not a giant leap to think that the solution to all its problems is just to give someone out there root privileges.
I disagree. I think it's mostly because geeks like effective solutions.
Dictatorships, despite all their scary failure modes, have one very good feature democracies lack - they get things done. When there's a new power plant to be built or transportation project to be realized, they just happen. There's no need to pander to clueless people bitching about things they don't understand. No anti-nuclear movements, no NIMBYsm, etc. No decision-making overheads because various politicians are bribed to support different groups. No pandering to electorate. If it needs to be done, it just gets done. In contrast, western governments are pretty much incapable of any serious action on anything that matters.
I think this is the very reason geeks seem to worship benevolent dictatorships. They're just efficient. It's maintaining the benevolent part that is hard.
>have one very good feature democracies lack - they get things done.
I think this is a misconception. Chaotic system almost exclusively defeat planned systems. A chaotic market will beat communist central planning every time. A chaotic fight for life via evolution will beat robots every time, etc.
Humanity's greatest achievements have been done under largely western, open, and democratic societies (for various definitions of) from ancient Greece to what the US and EU has been able to do. While autocratic systems have their success stories, they're more rare and often hit a wall due to the natural of autocracy (threaten the political order, favor system stopping innovation).
You're using an American OS on an American network stack and American root DNS and American URLs on an American designed CPU in English at an American website to have this conversation for a reason.
I suggest you check out Kelly's Out of Control or Taleb's Anti-Fragile.
While it's true in general that chaotic systems tend to fare better than planned in our world, I think the problem is with limitations of human cognitive capabilities, not with the idea of planned systems per se.
For one, there's a reason that successful designs tend to have one person's vision (even if many are involved in actual construction). We all know "design by committee".
Secondly,
> A chaotic market will beat communist central planning every time.
I am starting to believe that central planning has failed so spectacularly because people can't handle that much complexity in their heads + you actually have a distributed system. If we tried that again, but with computerized economy and a centralized algorithm running global optimization, I think it could fare much better than previously, and much better than distributed market systems we have today. Yes, it will cost us some economic freedom, but this very freedom is what is driving humanity to its grave by destroying the environment and pretending we're not running out of cheap energy.
> A chaotic fight for life via evolution will beat robots every time, etc.
This I strongly disagree with. "Chaotic fight for life" works almost infinitely slower than human mind it crafted. It might have evolved a dog over half a millenium, but Boston Dynamics got halfway there over few years. We can optimize better and iterate faster. Evolution is cool and all, but let's not discount the minds we have and the fact that they, not biological evolution, are now the driving force on the planet.
> Dictatorships, despite all their scary failure modes, have one very good feature democracies lack - they get things done... I think this is the very reason geeks seem to worship benevolent dictatorships. They're just efficient.
Not really -- or at least, not necessarily. Modern scholarship on Nazi Germany, for instance, has found that despite its much-vaunted efficiency it was actually a morass of feuding power centers all fighting each other to get Hitler's ear, which resulted in massive inefficiencies that in the end contributed materially to their loss in World War II. Fascist Italy was much the same way. And even the dictator himself didn't help matters -- look at the story of the revolutionary Me 262 jet fighter (http://en.wikipedia.org/wiki/Messerschmitt_Me_262), which arrived too late to help Germany fend off the Allied bomber offensive because Hitler decided apropos of nothing midway through development that it should be completely retooled to function as a bomber instead.
Dictatorships look efficient, because they tend to focus resources on high-profile prestige projects of the kind that would never get off the ground in a democracy because they make absolutely no economic sense. If you build a pyramid, people are gonna look at it and say "wow, those people sure can get things done." But in their everyday operation they run according to the whims of the dictator, which hurts efficiency rather than helping it.
Thanks for the Messerschmitt story, haven't heard of that before.
> projects of the kind that would never get off the ground in a democracy because they make absolutely no economic sense.
I think here's the crux of the problem. Not everything that makes economic sense is good, especially if we're talking about current, greedy (as in, locally optimizing) economy. Sticking to fossil fuels until very end makes economic sense. Not investing in basic research makes economic sense. Slave labour makes economic sense. Stupid resource-wasting zero-sum games like political campaigns or advertising make economic sense.
Among all the good things it does, following the economy also leads to completely batshit insane decisions. This is, I think, what many geeks have problem with. They seek solutions that are powerful enough to get us out of the holes we're in despite the economy.
> And even the dictator himself didn't help matters
An even better example would be the ongoing investment in prestige battleships when it was the U-boat fleet that brought Britain to within a fortnight of surrender.
"Geeks always seem to worship autocrats and dictators for whatever reason."
I do not think this is entirely correct. You don't see widespread support for the majority of the world's autocrats. I think geeks want technocrats, not simply autocrats. In that sense, it is important to distinguish between different types of autocrats. There is a reason you see more pro-China pieces than pro-Russia, pro-Syria, pro-Cuba, or pro-Saudi pieces for example.
What people see in China is a society which has faced many challenges - demographic challenges, economic challenges, environmental challenges, stability challenges. They are not a democracy, and yet they perform much better on many issues than the vast majority of autocracies out there - as Syria falls to pieces, Russia's economy falters, and Egypt regresses from revolution, states like China are actually making some progress, however slight, in meeting needs of their populations.
China as a system that is superior to ours? I do not think sama and others are actually arguing this. However, I think that a state like China, while being an autocracy, does not make mistakes only - occasionally it does something right. And when a state occasionally does something right, there is a lesson to be learned.
>There is a reason you see more pro-China pieces than pro-Russia, pro-Syria, pro-Cuba, or pro-Saudi pieces for example.
I'm fairly political so I imagine I pay attention to this stuff more than most, but you bet your bottom dollar people here and on reddit and slashdot sing the praises of Cuba, Syria, and Russia. Usuallly the sentiment come from Europeans and others with an anti-US bone to pick. As someone who has done business with both the Chinese and the Russians, its incredible how shitty and dishonest their business culture is. I don't think a lot of the people cheerleading them have any idea what they are talking about.
> but you bet your bottom dollar people here and on reddit and slashdot sing the praises of Cuba, Syria, and Russia. Usuallly the sentiment come from Europeans and others with an anti-US bone to pick
I think its a lot more common that American Exceptionalists mistake arguments of the form that, e.g., Cuba does better on some narrow measure than the US despite its much poorer, economy, so one might want to consider how the US could do better, or that abuses being complained about in Russia have parallels in the US, or that US government (or popular media) complaints about Syria are hypocritical in light of the same sources defense of regimes with the same features, in greater degree, than Syria shows as "singing the praises of" Cuba, Russia, or Syria.
I wish I could upvote this more than once. American insecurities about China seem to come from people who don't understand how unenviable China's position is. The country is authoritarian, polluted, crowded, and corrupt. People in China work hard because living in China really, really sucks if you are poor. Members of the wealthy ruling class all own property overseas and send their kids to university overseas. They made their money from owning manufacturing companies that sell goods to American brands. There isn't much of a middle class because white-collar jobs in China are so limited and pay so poorly because so many college graduates are competing for them.
There is literally nothing about China's economic system that would be appropriate for the US to try to emulate. We need to look to Northern Europe if we're looking for an example to model our system after.
I think you are hitting the right point, that China's system has a lot of flaws that we don't want to pick up. However, you are casting this in absolutist terms, "NOTHING about China's economic system would be appropriate," and I do not think that is correct either. Just because China has some flaws, such as its inability to handle environmental and social problems, it is a fallacy to then say that every thing about it is flawed. I think a more reasonable response is to say, "we should look to Northern Europe, but we should also look to China, and be wary of making the same mistakes found in any given system, whether in China or in Northern Europe."
Lately I have been trying to avoid using weasel words. I'd rather err on the side of painting with too broad a brush than weaken my statements with a bunch of qualifiers that add no meaning.
Having said that, I really can't think of one aspect of China's economic system that would be appropriate for the US to emulate. We're envious of their growth rate and insecure that their GDP will surpass ours, but that doesn't mean any of their actual policies are appropriate for the US economy.
We've already chosen the race to the bottom, friend.
The Chinese have a head start, but don't worry, we're following as closely as we can manage and as our nation-specific bonus we already have the klepto-capitalist class in place.
> People generally have to buy energy (oil) in our currency, which adds a great deal of support (though we’ve already seen the very beginnings of the PetroYuan).
Can someone explain why using USD as a medium of exchange supports the USD? I can see this effect insofar as central banks will hold a trade-weighted basket of currencies and having more trade in USD will increase that share of the basket. Other than this effect, is there (an) other(s)?
I understand that products and services sold by US companies boost USD (vis-a-vis buying iPhones in your example), but why would, say, a Brit buying a Xiaomi phone using USD boost the USD? The USD holding time would be rather short, I would imagine.
Speaking from personal experience, the atmosphere in the U.S. is a lot better than in China, in terms of the recognition of importance and respect to science and technology fields as well as scientists and engineers. I feel an implicit discrimination towards engineers in Chinese culture in the sense that "you are regarded successful if you hold a management position and live a (perceived) decent lifestyle, but not if you get your hands dirty, tinkering around stuff and being managed." when I worked in China. In Chinese college, the "elite majors" including cooperation and government management usually have the highest bar of admission.
All of that also seems true of the US. Everyone wants a "leadership" role, either in government or in the private sector as CEOs or management in general, and even schools nurture students into "leadership" more than "science". Even in Silicon Valley, engineers and scientists don't enjoy the highest status (founders are above them, and VCs above that).
Arguably, the only place in the US where scientists are on the top of the food chain (or close to) is academia.
"whether or not it’s possible for one country to remain as powerful as another with four times as many people"
I don't understand why one country whether it's the US, china or otherwise has to dominate the world.Assuming that shitty tradeoffs are made to get there, I wish there was a world country of some sort that dominated in the near future. Otherwise it seems to me like there are going to be many sony like episodes that just do more harm than good.
This post isn't particularly well thought out or argued, but special mention must go to footnote [2] for being self serving nonsense. While those complainers do exist and are wrong about some aspects of the situation they are quite right to criticise the exploitative start up ecosystem.
The main fallacy in that article is that USA is important because innovation. The conservative solution proposed by the author is to go back to an hypothetical golden age "that encourages investment, welcomes immigrants, rewards risk-taking, hard work, and radical thinking, and minimizes impediments to doing new things", like the good old times before.
My question is: what are you talking about? The "social" America of the '50s and '60s? The America of the technological boom of the 90s?
America is even more innovative today than decades before. More risks are taken today than before (the crisis of 2008 is also proof of that).
Are you sure that lack of innovation is the problem? Do you think that china is getting bigger and bolder because more risk taking? LOL no. They are conservative and fatalistic and hierarchical as ever.
I think that the American disease should be explained in another way.
It sounds like we need a new metric. Something like "military purchasing power parity" (MPPP). A conversion factor C would be determined for each country based on how expensive it is to locally produce tanks, aircraft, etc., train and maintain troops, etc. Then their nominal GDP would be multiplied by C to get MPPP GDP.
For example, just looking at troops, if it costs $100,000 per year in overhead-included costs to maintain one US soldier but only $10,000 to maintain a Chinese soldier, then that would help their MPPP. Large defense contractors with cost-plus contracts would influence the US's MPPP, but so would corruption in China.
An even better metric might be WMPPP (wartime military purchasing power parity), which is probably the real metric that counts and determines which country is a superpower. This is what the MPPP would be in wartime. For example, the US spends a lot on troops and equipment in peacetime, but in wartime it could operate much more efficiently. See World War II.
Another interesting metric would be how quickly a country could ramp up its military production within 1-2 years assuming a major war broke out, because a war against another superpower probably wouldn't last very long.
The US could easily remain the world's only superpower if it was ruthlessly focused on doing that. Actually it would have been easier 40-50 years ago. The opportunity is fading away.
Interestingly, the US often behaves as if it wants to control the world. So either this is a misperception, and the leaders of the US don't want to control the world (and they're spectacularly bad at public relations), or they're spectacularly bad at implementing their plan.
With all the advantages the US enjoyed last century it would have been possible. Maybe actual control of the world territorially is unnecessary, and some group is content to control the world financially. Or maybe the people implementing whatever plan have some perspective that make whatever they're doing make sense to them.
I wonder if that perspective is actually good for the US (it probably is not meant to be, other than for the elite). Perhaps they're using a flawed model that will seem painfully obvious later. I'm guessing it is something like the banking crisis. Some guys are following a flawed model that they think should work, and other guys are looking out for themselves, and eventually the whole thing will fall apart.
>My explanation is that this is simply what happens in a low-growth, zero-sum environment.
Or perhaps it's due to globalization. There are other cultures in the world that don't value working very hard at the expense of other things in life. Perhaps it's sometimes good to listen to the arguments at look at values from other cultures. For example, working hard might not maximize the well-being of a person.
Now that the internet is widely used more and more people in the United States are exposed to other cultures around the world. Especially Europe, which includes many countries that have a reasonable standard of living, yet work slightly less.
I look forward to the day where nationalism is seen as an anachronism. I know this probably wasn't the primary message of this post and that YC has funded a number of non US startups but if you swap US and China in this post, I wonder what kind of reception it would get.
OK, I'm fed up. China is really dangerous and way too aggressive. Obviously, its political system is on an imperialist ego-superpower course.
It's spending on its military like crazy. The navy strives to reach a size and power never seen since the demobilisations after the Second World War. Its navy patrols aggressively in foreign waters, often provoking fights and shooting up foreign boats even though China didn't declare war. It's only a matter of time till the aggressive behaviour hits some wrong ships, boats - or maybe an airliner mistaken for a fighter.
Plenty invasions of sovereign countries in the last 35 years alone prove it's unfit for lasting peace, an imperialist hyper-aggressive power. This aggressiveness is underpinned by intense propaganda and myth-building at home, with entire service industries inflaming the population against countries they cannot even point at on a map. Racism plays into this as well, with lots of derogatory names for foreigners of exotic looks.
China's gunboat and cruise missile diplomacy with occasional and nowadays frequent bombing of neutral countries is out of control, but a United Nations Security Council veto power protects them against formal repercussions. They even bombed an American embassy 15 years ago and nothing happened!
I'm especially concerned about how they now discuss how to wage a future war against the United States. All the public discussions are solely about how to defeat American land-based defences so Chinese naval battlegroups can close with the American coasts and bomb military and strategic targets at will. Unmanned combat drones are an especially favoured tool for this; many Chinese appear to have high hopes for these. The range and stealthiness is apparently at the centre of their hopes.
We shouldn't stand by this and pretend we aren't involved.
China's aggressiveness needs to be contained now!
That'd also be an interesting thought experiment. The modern nation-state as a concept is barely a century old; before WW1, a number of prominent countries (Russia, China, Austria-Hungary, much of Africa) thought of themselves as empires or kingdoms, and people's daily allegiance was more toward local municipalities and neighborhoods than the abstract concept of a nation.
I wonder if at some point in the future we'll see pseudo-corporatism as a social organizing principle, much like in Neal Stephenson's books.
> We’ve had an environment that encourages investment, welcomes immigrants, rewards risk-taking, hard work [2], and radical thinking, and minimizes impediments to doing new things.
I think a major reason the middle class was able to live a fairly cushy lifestyle without doing much real work was some combination of:
- A massive supply of overseas slave labor, coupled with a complete lack of environmental regulations both domestically and abroad.
- Being able to tax people overseas by deflating the dollar.
- Heavy investment in infrastructure.
- A large population boom.
In other words about 20% sound policy, and 80% finding ways to steal money from other people and future generations. Since we're no longer investing in infrastructure or doing much in the way sound policy, and we're also losing our ability to steal money from others, I don't really see how the U.S. is going to sustain itself regardless of hard work, innovative thinking, immigration policies, etc.
the US's government is finally becoming too burdensome to do business under. The taxation of American business is one of the larger handicaps they operate under.
however the biggest issue facing the US is this message that excelling isn't to aspired too, acceptance of who you are and who someone else is is all that matters. It is a self defeating mindset. Don't worry if you fail, you had no choice, you just can't do better. Here let us take care of you....
With regards to China, what percentage of their population is experiencing this boon? I was always under the impression (don't know the truth) that quite a bit of their population really doesn't matter to their economic output.
How do you square this self-defeating mindset against the described millennial sensitivity where everybody expects a trophy and considers themselves special? Seems like you might be referring to older works who are already jaded by the system and not the new class of workers who will be taking over their jobs.
Regarding exceptionalism, I had a course in law school taught by Justice Scalia. His first words were, "I believe in American exceptionalism and if you don't, you can find the door." His intentions were to provoke us and he was baiting a brave law student to disagree with him.
Required reading for the course included De Tocqueville's - Democracy in America - as to "leave it to a Frenchman to explain America to Americans." In summary, it was a hell of a course!
Nope, not on that gem. But they tried later to answer some of the others. For example, a historically relevant case was being discussed, where SCOTUS found a rather significant law passed by Congress as unconstitutional (effective immediately). A student said "isn't the idea to gradually change a major law, to do minimal damage, like bringing a ship into port." He retorted with, "Heaven forbid we actually held Congress accountable for doing their job and passing good laws. There are many bad laws that are constitutional and good laws that are not. They have the ability to revisit and modify existing law, but they never do and choose to leave it to the Court to decide its constitutionality."
That's really interesting. Did he expound on why he thought this was the case? I agree; as sama said, the volume of inventions made here are highly disproportionate to the population share. Laser, semiconductor, airplane, assembly line, nuclear power, etc. I think two of the key drivers were the form of government (a republic "by and for the people") and a demographic boon of immigrants willing to work themselves to the bone for a better life, because they believed in equality of opportunity.
Ironically, I think he has had a big hand in the decline of the former with the Citizens United decision. And the equality of opportunity has been in decline for decades.
Yes, his focus was on the "separation of powers." He said the Soviet Union had more guarantees than our Constitution, however without separation of powers they were "mere parchment guarantees." He also touched on innovation and industriousness being in our DNA. Which all tied back into individual liberty and the role of government (to protect individual autonomy, as the people don't exist to serve govt).
However, most everything circled back to the separation of powers.
Is American exceptionalism a glorified term for "we're special just cuz?" Isn't every country special by virtue of its individuality? Or is America thought to be exceptional because it excels on generally accepted criteria (wealth and military power.) Criteria whose importance, funny enough, was determined in the first place by...America. Like being both judge and participant in a beauty contest.
1. US GDP per capita is still almost 8x that of China: $53,042 US vs. $6,807 China (http://data.worldbank.org/indicator/NY.GDP.PCAP.CD). While there are other ways to measure this (such as the PPP Sam cites), the magnitude of difference remains large. So even if China's economy in the aggregate is larger than the US's, the US is still much richer per capita.
2. As China grows richer, I expect the US will too. In modern inter-connected economies with few trade barriers growth in one generally benefits the other too. One example would be as one country's citizens gain greater purchasing power, they become bigger consumers of the other country's goods and services.
US GDP per capita is still almost 8x that of China
One reason this might not be the right metric is because absolute power of a country matters more than power per citizen. Imagine a country with only one citizen, but a trillion dollars. The country wouldn't be very relevant. Even if the citizen tried to hire a military and use it, they wouldn't get very far. They wouldn't exert much influence economically either, in the sense of causing other countries to become dependent.
Also, total number of citizens is an important metric in itself. People in both the US and China will pretty much do whatever their power structures tell them to do. If that means beating a war drum, there are going to be a lot of people agreeing with war on both sides, but far more in China. Overwhelming forces can be stopped with tactics and technology, but when technology is comparable the casualties are usually comparable. And China has been gathering our technology for a long time.
War isn't the concern right now, though. The example was just meant to illustrate that China seems to have more options than the US.
As China grows richer, I expect the US will too. In modern inter-connected economies with few trade barriers growth in one generally benefits the other too.
History seems to disagree. As one country grows richer, other countries tend to become subservient. There's no such thing as modern human nature.
I think it's important to make a distinction between working hard for work's sake and working hard because you really believe in what you're doing. The concept of hard work that most people who frown upon it in the US have is likely the former and I would tend to agree with them. Mindlessly doing menial tasks but putting in "18 hour days" is not something to be admired.
That being said, a culture that encourages people to dedicate a lot of time to a company, a cause, or an idea if they like it or believe in it is certainly worth fostering. If this is the kind of hard work that Sam talks about as being looked down upon in the US, then that is indeed troubling and we should try to correct that perception.
316 comments
[ 5.6 ms ] story [ 409 ms ] threadSidenote: interesting to see that YC has a BBerg terminal (and careful with the RMB claim in the near-term)
http://en.m.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP...
In short, this claim is meaningless:
"China has 3 times the population of the US. As soon as they started growing a middle class, it was inevitable that this would happen."
There are other factors at play of course. India has an enormous bureaucracy that soaks up much of their excess capacity and stifles innovation. The remains of the caste system also means that some of their most productive people aren't working effectively. Nigeria is doing much better these days, but still suffers with a large amount of corruption. Pakistan & Brazil - I don't know enough to comment - perhaps you can fill in why they aren't growing as fast as they might.
Whenever I think of countries like China, I think of an entire population driven to be more excellent. I know that's not true in general (people are people everywhere), but I still feel there is a stronger expectation that, as a human, you will do more than just exist and consume junk food and mass media.
America feels sluggish to me... safe and dumb and comfortable but not content. It's like the feeling I get when I spend an entire weekend on the couch binge-watching Netflix.
People are driven to excellence, but only because if you aren't, you face a lifetime of working on a farm your entire life or in extreme poverty. It's a good motivator.
Men especially focus on excellence (and making money) because the 1-child rule has pretty much given women the pick of the men with the most money and are the most successful. Another good motivator.
"America feels sluggish to me... safe and dumb and comfortable but not content. It's like the feeling I get when I spend an entire weekend on the couch binge-watching Netflix."
It's only 'sluggish' because most people have a very good standard of living and rather than focusing on their next meal, can actually enjoy some leisure time. If you compare this to some of the wealthier people in Shanghai or Beijing, it's the same.
"I've become somewhat convinced that one of the root ills of current American society is extremely low expectations."
This has been happening for years. Especially to our education system. What do you think happens when kids are taught that "Everybody is a winner" and they are shielded from the realities of competition and life?
There are a lot of co-working spaces, hacker spaces, and start up events. For anyone interested in China, you can live in Shanghai without speaking Mandarin.
Western training in programing, design and product is highly valued. Salary offerings are lower by a factor of 10. Regardless, its easy to live and identify alternative income sources.
I'd love to answer any questions for people interested in the Chinese startup space.
I lived in Shanghai for a period and would love to move back there, but I'm worried about salary.
That was always the case. Even when I got there, there were "expats looking to leave". Because theres such a heavy influx of people coming in, it doesnt matter.
That feels somewhat disingenuous. If 'sama is referring to the sentiments expressed on this board, from what I've seen, it's not anger towards people choosing to work hard, but anger towards demands of hard work of others from those who stand to benefit at their expense.
Ie, the anger is towards VCs who talk glowingly of start-up founders working themselves to the bone and, in turn, towards start-up founders who talk glowingly of 0.01% equity-holding employees grinding out hour after overtime hour.
Reel 'em in.
I mean we all love large salaries but it's a symptom of something more fundamental namely that there are a lot of people who work hard but don't have the skills the market need and don't have the means to re-educate themselves.
It's not like everyone is getting more, it's that there is a divide where some gets more and a lot gets less.
Thats what this is all about. It's no ones fault but it has nothing to do with who works hard or not.
... which is all soaked up by real estate hyperinflation.
Edit: How are people making it without a really high salary or living with three other people?
This takes pretty much all the surplus capital in a region -- among everyone but the rich -- and locks it up in an inert asset.
Think of it this way: a starter home in the Bay Area is about a million dollars. In SoCal -- not cheap by any means -- it's more like $400k. The average AngelList seed round is $400-$600k. So every single house in the Bay Area locks up the capital required to seed fund at least one new venture.
What could all those smart people in the Bay Area be doing if all their capital were not locked up by an inert asset?
What's worse is that there are idiots who cheer this on because it will supposedly exclude people they don't like (the poor, blacks, etc.) from their neighborhoods. I read a great book called Detroit: A Biography. It explained how RE hustlers used racism to fleece people: first they'd sell a neighborhood to white folks. Then they'd pay black people to walk around in it. Then they'd scare the white folks into selling below market, jack the price back up and sell it to blacks, and meanwhile sell a further-out more expensive neighborhood to those same white folks. Rinse and repeat. I suppose if you harbor these kinds of views it's kind of poetic when they're turned around and used to con you, but it harms everyone else too.
I was hoping the housing bubble crash would bring relief, but it's right back up there. Either the entire economy needs to inflate until RE is reasonable again -- which would give us $8 loaves of bread -- or real estate needs to fall over and burn. We need something like the 2008 housing crash with no recovery-- to unshackle the real economy from the rentier asset economy.
For instance - if I bought a house in the 1990s for 200K and it's now worth a million dollars, it isn't stealing $800K from anywhere. That's new wealth that I have that I can also put to work. (Even if I don't take a mortgage out on the house, I can invest more of my other money more aggressively, if I'm paying less mortgage, or know that I have a high value asset in my home)
I think it's more appropriate to look at the monthly rent differential.
Let's say that a 1BR in Palo Alto costs $2,500, and a similar one in Austin costs $1,000. [0] In that case, there is a $1,500 * 12 = $18,000 differential. Let's double it to include how much you have to make to have that much take-home income, and you have a $36,000 per year difference. If an angel-fed startup has 3 employees, then there is a ~100K per year of effective real estate tax. (Approximately 20-25% rather than 100%[1])
The trade-off is, how much more likely are you to succeed and scale based on being in SF vs Austin?
[0] I'm basing both #s on the very accurate "Approximate the first Google result" method.
[1] One can argue that everything is more expensive in the bay area, but total cost of living comparisons are tough to do. Is it % of spending or absolute dollars? Does it depend on public schools? Quality of goods?
It's sort of a generationally regressive tax. I personally suspect that policies that protect and encourage RE hyperinflation have been pursued as a way for the baby boomers to economically eat their children.
Rent prices are also quite tied to real estate prices, so when the latter appreciates rents go up too.
Over the long term, rent usually fixes to a certain % of "All in" housing costs. (Usually close to mortgage payments plus upkeep plus condo fees)
The difference is that rent is a short term costs, so for startups they're not eating the 30 year home ownership cost, just the monthly rental differences.
It is a generationally regressive tax only to the extent that parents die with no assets left. If they die with positive assets, then the value of their homes gets handed to their kids.
The CA system is painful for other reasons. At the outset, it's a tax by people with good credit on people with bad. (You can't get the tax benefits of home ownership unless you have good credit) The bigger issue is the nature of the taxation... Because tax increases on houses can't rise as fast as the homes themselves, new homeowners pay a penalty relative to the value of the house. (If you and I both both buy homes in the same neighborhood. You paid 500K 3 years ago, and I pay 1mm today, my tax burden will be almost double yours)
There is a reason that successful, fast-developing nations such as Singapore have enacted tight controls over the ability of a zero-value-add rentier class to extract all the value from a growing economy.
Even with a massive raise my monthly savings would be cut in half (or more), and spending in excess of a million dollars on a home is way too risky (look at all the people who went upside down during the last recession). Barring something incredibly unlikely, such as the equity I own actually being worth something, I would likely have to add an extra 10 years or more to my expected retirement age if I chose to live and work out there.
Everyone is renting. Ok, I have one friend thinking of buying a house in Oakland since he grew up in in NorCal and wants to stay here.
Almost everyone has roommates (if they're single), or lives somewhere less convenient (if they're not).
Some people are skating by on rent control (still jealous of my friend's room in the mission for 1k/month).
Some people are burning through their income to fund a nice place but most people are saving their money.
personally I'm not sure how long I'll stay in the bay, so I'm not looking at buying anything atm since prices do seem insane. Seems reasonable for me to save my money while I'm young and my costs are low, seeing what the future brings.
I run a start-up with 100+ people. Vacations, family time, sleep - these are good and ultimately productive things. The normal person works so they can live, be healthy. They don't live so they can work.
I'd have to disagree. At least based on my definition of large and my experience interviewing in the Valley.
For example: If you're making X amount of salary and paying $1500 for a one bedroom in Big City Y, you'd have to make at _least_ $24k more in SV if you wanted a comparable one bedroom apartment. It's probably even more than that as I don't know anyone paying less than $3k for a one bedroom within 10 miles of SF.
For a junior dev making $80k in Austin who is moving to SV, getting that $20k bump is certainly plausible and in the above scenario would work out fine.
But what about a family of 4? They need a 3 bedroom house. How in the world is that family going to make enough to afford a house northing of $1m? How much would that person have to make to even support half the cost of their houehold? $200k? $400k? Those types of salaries just aren't happening at startups.
Having a family is clearly a choice. And having 3 kids is very different from having 1. These people will always have less material goods and have a harder time scraping by than someone with no dependants when the cost of living is high. This is true of any industry in any expensive area, it's what you should be expecting if you have kids.
In any case, the original comment is wrong about housing prices, you get shafted when you try to live right in the heart of SF, pretty much everyone with a family is going to have to commute from somewhere, you can still get comparatively cheap 3 bedroom houses in san jose, and there's still plenty of tech companies with offices in the south bay.
I don't think the blame for the workaholic culture lies primarily with VCs, though some do encourage this. I think it's mostly a part of the cult of male ego. "I worked 70 hours last week! How many did you work? 50? Wuss! I'm so much more hard-core than you!"
People also lie about how many hours they worked. In reality they work maybe 20-40 and then do things like... uhh... hang around in here... for the other 20-40. Again part of the macho one-upmanship thing... putting on an act of working ridiculous hours to look hard.
Its a grind game. Obviously my WoW character level 70 is far superior to your WoW character level 50.
Unfortunately companies can be killed by this kind of primitive behavior when the 70 hour/week guy executes less shareholder value add than a 20 hour/week intern.
Give someone a stupid metric to aspire to, they'll max it. Might destroy the company in the process, maybe even themselves or their own careers, but they'll max the metric number, thats for sure.
If one programmer does in 50 lines what takes another programmer 5000, should that programmer make less?
So much this.
There's just a huge level of inefficiency with working ridiculous hours on a regular basis. Just because you're engaged in the physical act of coding/designing/writing/etc. does not mean you are producing anything of value. In reality you'll probably do something that needs to be fixed a week or two down the road.
I've watched people who work till 9pm everyday. After 5:30 or 6 they mostly just browse the internet and fiddle around. In reality they should probably work from 8 or 9 - 5 or 6 and take a healthy 3 to 4 hour break and go home. Then after their evening has settled down get back into working on something for another hour or two at the leisure of their own home. This is much more productive than just slugging it out at the office with no work life balance at all.
[2] http://www.youtube.com/watch?v=IER50pX-FuM&t=3m22s
[3] Technology Stalled in 1970
http://web.mit.edu/krugman/www/seignor.html
No-one quite says that working hard is stupid (well, except the few misguided ones we should all ignore anyway). What people go tsk, tsk, tsk at is working really hard and giving up responsibilities at home, not being with you family, even forgoing the biological imperative to reproduce (or delaying it -- usually not a good idea, again biologically speaking), giving up your mental/physical health for a dream that is realistically very remote, etc.
The other big thing is, alas, it is a lottery. We guide our nephews toward a different direction that has a greater promise of economic security: be a neurosurgeon (and well, even if they don't become neurosurgeons, we hope they'll become at least primary care doctors :)). I mean, What is YC's acceptance rate at this point? Like 10%? And I bet the people applying are more able than other hopeful entrepreneurs who don't happen to apply to YC, so the success rate for the average entrepreneur is pretty bad.
It's not random.
I'm not entirely sure it's like a lottery in terms of the expected value being negative though (if you consider the opportunity cost as a negative).
You can always mitigate the risk by researching and making an educated decision about where you work. Different startups have different degrees of risk.
If you're smart, and work hard you can make the right moves to put yourself in an improved position for possible success, but ultimately you are still playing odds with lots of variables that are completely out of your control and even if you play "perfectly" it is entirely possible you still fail.
In poker you can deal with this variance via bankroll management, for which the startup version would be not to invest too much of yourself (emotionally and/or physically) in any one startup. However, the culture around startups (unlike the culture around smart poker play) does not promote that at all, rather it tends to promote a leave-everything-on-the-floor approach... which, IMO, is the sort of position most people are really complaining about when they say things such as what sama paraphrased in the article.
Or rather, should we chase China in a race to the bottom? Lower corporate taxes, longer working hours, reduced environmental protections, with the goal of creating a fabulously wealthy klepto-capitalist ruling class? How dare people criticize kids burning the candle at both ends to make other people billions of dollars, China is beating us!
As many democratic and liberal nations have discovered, its a fool's errand to chase growth on that curve and, as you said, the wealth and stability of north Europe is a tempting target to emulate. With recent moves towards proper socialization like Obamacare and focusing on tax cuts for the middle class and raising the minimum wage, I feel like we're on the path to those economies and have long stepped off the path of just beating down workers for tiny gains as we fight the laws of diminishing returns. How much workers unrest does the CCP violently take down per year to keep people in line? How many secret police arrests?
These pro-China pieces are mystifying to me. Geeks always seem to worship autocrats and dictators for whatever reason. I guess they like the idea of a centralized control by elites, but that simply doesn't scale well and it invites corruption and other inefficiencies much faster than a more open political process. I'd rather live in the poorest Western nation than in China or Russia. Its crazy that we're actually seeing their system as superior to ours. Only on HN would this drivel be voted so highly. INTJ social and moral blindness is in full effect here.
I look forward to the scandinaviation of all things. I believe its the best path humanity has.
The twist of course being the punchline to Zen and the Art of Motorcycle Maintenance. What is better? Why optimize? Growth for what purpose?
It's because we see the world through the lens of our relationship with our computers, and in that relationship, we are dictators. We tell the computer what to do, and it just does it. It never asks for more vacation time or complains when we push it to its physical limits. In those cases where it doesn't do what we told it, 99% of the time the reason is because we phrased the request wrong. Then we look at democracy and start thinking, man, how inefficient all this taking into account other peoples' needs and principles and desires is!
When you start thinking of the world as a computer, it's not a giant leap to think that the solution to all its problems is just to give someone out there root privileges.
Dictatorships, despite all their scary failure modes, have one very good feature democracies lack - they get things done. When there's a new power plant to be built or transportation project to be realized, they just happen. There's no need to pander to clueless people bitching about things they don't understand. No anti-nuclear movements, no NIMBYsm, etc. No decision-making overheads because various politicians are bribed to support different groups. No pandering to electorate. If it needs to be done, it just gets done. In contrast, western governments are pretty much incapable of any serious action on anything that matters.
I think this is the very reason geeks seem to worship benevolent dictatorships. They're just efficient. It's maintaining the benevolent part that is hard.
I think this is a misconception. Chaotic system almost exclusively defeat planned systems. A chaotic market will beat communist central planning every time. A chaotic fight for life via evolution will beat robots every time, etc.
Humanity's greatest achievements have been done under largely western, open, and democratic societies (for various definitions of) from ancient Greece to what the US and EU has been able to do. While autocratic systems have their success stories, they're more rare and often hit a wall due to the natural of autocracy (threaten the political order, favor system stopping innovation).
You're using an American OS on an American network stack and American root DNS and American URLs on an American designed CPU in English at an American website to have this conversation for a reason.
I suggest you check out Kelly's Out of Control or Taleb's Anti-Fragile.
For one, there's a reason that successful designs tend to have one person's vision (even if many are involved in actual construction). We all know "design by committee".
Secondly,
> A chaotic market will beat communist central planning every time.
I am starting to believe that central planning has failed so spectacularly because people can't handle that much complexity in their heads + you actually have a distributed system. If we tried that again, but with computerized economy and a centralized algorithm running global optimization, I think it could fare much better than previously, and much better than distributed market systems we have today. Yes, it will cost us some economic freedom, but this very freedom is what is driving humanity to its grave by destroying the environment and pretending we're not running out of cheap energy.
> A chaotic fight for life via evolution will beat robots every time, etc.
This I strongly disagree with. "Chaotic fight for life" works almost infinitely slower than human mind it crafted. It might have evolved a dog over half a millenium, but Boston Dynamics got halfway there over few years. We can optimize better and iterate faster. Evolution is cool and all, but let's not discount the minds we have and the fact that they, not biological evolution, are now the driving force on the planet.
Not really -- or at least, not necessarily. Modern scholarship on Nazi Germany, for instance, has found that despite its much-vaunted efficiency it was actually a morass of feuding power centers all fighting each other to get Hitler's ear, which resulted in massive inefficiencies that in the end contributed materially to their loss in World War II. Fascist Italy was much the same way. And even the dictator himself didn't help matters -- look at the story of the revolutionary Me 262 jet fighter (http://en.wikipedia.org/wiki/Messerschmitt_Me_262), which arrived too late to help Germany fend off the Allied bomber offensive because Hitler decided apropos of nothing midway through development that it should be completely retooled to function as a bomber instead.
Dictatorships look efficient, because they tend to focus resources on high-profile prestige projects of the kind that would never get off the ground in a democracy because they make absolutely no economic sense. If you build a pyramid, people are gonna look at it and say "wow, those people sure can get things done." But in their everyday operation they run according to the whims of the dictator, which hurts efficiency rather than helping it.
> projects of the kind that would never get off the ground in a democracy because they make absolutely no economic sense.
I think here's the crux of the problem. Not everything that makes economic sense is good, especially if we're talking about current, greedy (as in, locally optimizing) economy. Sticking to fossil fuels until very end makes economic sense. Not investing in basic research makes economic sense. Slave labour makes economic sense. Stupid resource-wasting zero-sum games like political campaigns or advertising make economic sense.
Among all the good things it does, following the economy also leads to completely batshit insane decisions. This is, I think, what many geeks have problem with. They seek solutions that are powerful enough to get us out of the holes we're in despite the economy.
An even better example would be the ongoing investment in prestige battleships when it was the U-boat fleet that brought Britain to within a fortnight of surrender.
I do not think this is entirely correct. You don't see widespread support for the majority of the world's autocrats. I think geeks want technocrats, not simply autocrats. In that sense, it is important to distinguish between different types of autocrats. There is a reason you see more pro-China pieces than pro-Russia, pro-Syria, pro-Cuba, or pro-Saudi pieces for example.
What people see in China is a society which has faced many challenges - demographic challenges, economic challenges, environmental challenges, stability challenges. They are not a democracy, and yet they perform much better on many issues than the vast majority of autocracies out there - as Syria falls to pieces, Russia's economy falters, and Egypt regresses from revolution, states like China are actually making some progress, however slight, in meeting needs of their populations.
China as a system that is superior to ours? I do not think sama and others are actually arguing this. However, I think that a state like China, while being an autocracy, does not make mistakes only - occasionally it does something right. And when a state occasionally does something right, there is a lesson to be learned.
I'm fairly political so I imagine I pay attention to this stuff more than most, but you bet your bottom dollar people here and on reddit and slashdot sing the praises of Cuba, Syria, and Russia. Usuallly the sentiment come from Europeans and others with an anti-US bone to pick. As someone who has done business with both the Chinese and the Russians, its incredible how shitty and dishonest their business culture is. I don't think a lot of the people cheerleading them have any idea what they are talking about.
I think its a lot more common that American Exceptionalists mistake arguments of the form that, e.g., Cuba does better on some narrow measure than the US despite its much poorer, economy, so one might want to consider how the US could do better, or that abuses being complained about in Russia have parallels in the US, or that US government (or popular media) complaints about Syria are hypocritical in light of the same sources defense of regimes with the same features, in greater degree, than Syria shows as "singing the praises of" Cuba, Russia, or Syria.
That's not entirely true, there are also plenty of libertarian geeks (including here on HN).
There is literally nothing about China's economic system that would be appropriate for the US to try to emulate. We need to look to Northern Europe if we're looking for an example to model our system after.
Having said that, I really can't think of one aspect of China's economic system that would be appropriate for the US to emulate. We're envious of their growth rate and insecure that their GDP will surpass ours, but that doesn't mean any of their actual policies are appropriate for the US economy.
The Chinese have a head start, but don't worry, we're following as closely as we can manage and as our nation-specific bonus we already have the klepto-capitalist class in place.
And almost double Chinas. Even after you take out the military there is no basis in saying that the US has raced to the bottom.
Can someone explain why using USD as a medium of exchange supports the USD? I can see this effect insofar as central banks will hold a trade-weighted basket of currencies and having more trade in USD will increase that share of the basket. Other than this effect, is there (an) other(s)?
Demand for iPhones supports the dollar in the same way, though in a less directly obvious manner.
Some of his early ones felt like they were searching for a voice and/or trying to force the essay before it was fully incubated.
This one feels like a breakthrough. Well written, interesting premise, explores the topic in a meandering but targeted way.
Never. There is discrimination on social status in China, which is determined by wealth.
> In Chinese college, the "elite majors" including cooperation and government management usually have the highest bar of admission.
This is not true anymore.
Arguably, the only place in the US where scientists are on the top of the food chain (or close to) is academia.
I don't understand why one country whether it's the US, china or otherwise has to dominate the world.Assuming that shitty tradeoffs are made to get there, I wish there was a world country of some sort that dominated in the near future. Otherwise it seems to me like there are going to be many sony like episodes that just do more harm than good.
My question is: what are you talking about? The "social" America of the '50s and '60s? The America of the technological boom of the 90s?
America is even more innovative today than decades before. More risks are taken today than before (the crisis of 2008 is also proof of that).
Are you sure that lack of innovation is the problem? Do you think that china is getting bigger and bolder because more risk taking? LOL no. They are conservative and fatalistic and hierarchical as ever.
I think that the American disease should be explained in another way.
For example, just looking at troops, if it costs $100,000 per year in overhead-included costs to maintain one US soldier but only $10,000 to maintain a Chinese soldier, then that would help their MPPP. Large defense contractors with cost-plus contracts would influence the US's MPPP, but so would corruption in China.
An even better metric might be WMPPP (wartime military purchasing power parity), which is probably the real metric that counts and determines which country is a superpower. This is what the MPPP would be in wartime. For example, the US spends a lot on troops and equipment in peacetime, but in wartime it could operate much more efficiently. See World War II.
Another interesting metric would be how quickly a country could ramp up its military production within 1-2 years assuming a major war broke out, because a war against another superpower probably wouldn't last very long.
Interestingly, the US often behaves as if it wants to control the world. So either this is a misperception, and the leaders of the US don't want to control the world (and they're spectacularly bad at public relations), or they're spectacularly bad at implementing their plan.
With all the advantages the US enjoyed last century it would have been possible. Maybe actual control of the world territorially is unnecessary, and some group is content to control the world financially. Or maybe the people implementing whatever plan have some perspective that make whatever they're doing make sense to them.
I wonder if that perspective is actually good for the US (it probably is not meant to be, other than for the elite). Perhaps they're using a flawed model that will seem painfully obvious later. I'm guessing it is something like the banking crisis. Some guys are following a flawed model that they think should work, and other guys are looking out for themselves, and eventually the whole thing will fall apart.
Or perhaps it's due to globalization. There are other cultures in the world that don't value working very hard at the expense of other things in life. Perhaps it's sometimes good to listen to the arguments at look at values from other cultures. For example, working hard might not maximize the well-being of a person.
Now that the internet is widely used more and more people in the United States are exposed to other cultures around the world. Especially Europe, which includes many countries that have a reasonable standard of living, yet work slightly less.
It's spending on its military like crazy. The navy strives to reach a size and power never seen since the demobilisations after the Second World War. Its navy patrols aggressively in foreign waters, often provoking fights and shooting up foreign boats even though China didn't declare war. It's only a matter of time till the aggressive behaviour hits some wrong ships, boats - or maybe an airliner mistaken for a fighter. Plenty invasions of sovereign countries in the last 35 years alone prove it's unfit for lasting peace, an imperialist hyper-aggressive power. This aggressiveness is underpinned by intense propaganda and myth-building at home, with entire service industries inflaming the population against countries they cannot even point at on a map. Racism plays into this as well, with lots of derogatory names for foreigners of exotic looks.
China's gunboat and cruise missile diplomacy with occasional and nowadays frequent bombing of neutral countries is out of control, but a United Nations Security Council veto power protects them against formal repercussions. They even bombed an American embassy 15 years ago and nothing happened! I'm especially concerned about how they now discuss how to wage a future war against the United States. All the public discussions are solely about how to defeat American land-based defences so Chinese naval battlegroups can close with the American coasts and bomb military and strategic targets at will. Unmanned combat drones are an especially favoured tool for this; many Chinese appear to have high hopes for these. The range and stealthiness is apparently at the centre of their hopes.
We shouldn't stand by this and pretend we aren't involved. China's aggressiveness needs to be contained now!
Oh, wait.
Borrowed from: http://defense-and-freedom.blogspot.ca/2014/11/its-about-tim...
I wonder if at some point in the future we'll see pseudo-corporatism as a social organizing principle, much like in Neal Stephenson's books.
I think a major reason the middle class was able to live a fairly cushy lifestyle without doing much real work was some combination of:
- A massive supply of overseas slave labor, coupled with a complete lack of environmental regulations both domestically and abroad.
- Being able to tax people overseas by deflating the dollar.
- Heavy investment in infrastructure.
- A large population boom.
In other words about 20% sound policy, and 80% finding ways to steal money from other people and future generations. Since we're no longer investing in infrastructure or doing much in the way sound policy, and we're also losing our ability to steal money from others, I don't really see how the U.S. is going to sustain itself regardless of hard work, innovative thinking, immigration policies, etc.
however the biggest issue facing the US is this message that excelling isn't to aspired too, acceptance of who you are and who someone else is is all that matters. It is a self defeating mindset. Don't worry if you fail, you had no choice, you just can't do better. Here let us take care of you....
With regards to China, what percentage of their population is experiencing this boon? I was always under the impression (don't know the truth) that quite a bit of their population really doesn't matter to their economic output.
Required reading for the course included De Tocqueville's - Democracy in America - as to "leave it to a Frenchman to explain America to Americans." In summary, it was a hell of a course!
Ironically, I think he has had a big hand in the decline of the former with the Citizens United decision. And the equality of opportunity has been in decline for decades.
However, most everything circled back to the separation of powers.
1. US GDP per capita is still almost 8x that of China: $53,042 US vs. $6,807 China (http://data.worldbank.org/indicator/NY.GDP.PCAP.CD). While there are other ways to measure this (such as the PPP Sam cites), the magnitude of difference remains large. So even if China's economy in the aggregate is larger than the US's, the US is still much richer per capita.
2. As China grows richer, I expect the US will too. In modern inter-connected economies with few trade barriers growth in one generally benefits the other too. One example would be as one country's citizens gain greater purchasing power, they become bigger consumers of the other country's goods and services.
One reason this might not be the right metric is because absolute power of a country matters more than power per citizen. Imagine a country with only one citizen, but a trillion dollars. The country wouldn't be very relevant. Even if the citizen tried to hire a military and use it, they wouldn't get very far. They wouldn't exert much influence economically either, in the sense of causing other countries to become dependent.
Also, total number of citizens is an important metric in itself. People in both the US and China will pretty much do whatever their power structures tell them to do. If that means beating a war drum, there are going to be a lot of people agreeing with war on both sides, but far more in China. Overwhelming forces can be stopped with tactics and technology, but when technology is comparable the casualties are usually comparable. And China has been gathering our technology for a long time.
War isn't the concern right now, though. The example was just meant to illustrate that China seems to have more options than the US.
As China grows richer, I expect the US will too. In modern inter-connected economies with few trade barriers growth in one generally benefits the other too.
History seems to disagree. As one country grows richer, other countries tend to become subservient. There's no such thing as modern human nature.
A real world example (not that extreme) would be the Sultanate of Brunei:
http://en.wikipedia.org/wiki/Brunei
It's " the fifth-richest nation out of 182, based on its petroleum and natural gas fields", yet it's hardly ever mentioned.
The Sultan, Hassanal Bolkiah, has an inmense fortune: "Forbes for example estimated the Sultan's total peak net worth at US$20 billion in 2008"
That being said, a culture that encourages people to dedicate a lot of time to a company, a cause, or an idea if they like it or believe in it is certainly worth fostering. If this is the kind of hard work that Sam talks about as being looked down upon in the US, then that is indeed troubling and we should try to correct that perception.