
Paul Graham Is Still Asking to Be Eaten - saidajigumi
https://medium.com/@girlziplocked/paul-graham-is-still-asking-to-be-eaten-5f021c0c0650#.alwvxftxo
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greenyoda
Extensive discussion a few hours ago:
[https://news.ycombinator.com/item?id=10831261](https://news.ycombinator.com/item?id=10831261)

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geofft
> Graham never addresses how a startup economy would put men like Paul Graham
> in positions of plutocractic authority, since the majority of us are
> deprived of startup capital without first submitting ourselves to the
> judgment of people like Paul Graham. It might not be overtly rent-seeking,
> but it’s definitely not democratic.

Yeah, a similar thought occurred to me last night a little after I'd stepped
away from HN. By making startups the normal thing to do, venture capitalists
get between otherwise-qualified employees and jobs that actually suit them.
"You're in your 20s, do a startup." "Why stay in school? Do a startup." "You
have your whole life to work at big companies, do a startup." And on the
hiring side: "This kid didn't work at any startups during college, how about
this other kid?" "Let's hire this person who was previously a CTO."

It's not _quite_ rent-seeking, because it's not quite as bad as I described
it, but the normalization of either founding or working for a startup is
directly profitable for people who make money on the startup economy, without
clearly providing one cent of value for all those future-big-company-employees
who don't manage to found/work for one of the few successes.

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tempestn
In aggregate, startups certainly do create wealth. (So do other types of
companies.) Certainly not every startup creates value. Perhaps even most
don't.[1] But some startups generate a _massive_ amount of wealth. (Apple for
instance, or Google, or Tesla, to give a few hopefully non-controversial
examples. We are better off as a society for these companies having been
started.) And the ones that don't create wealth don't tend to destroy much
either. It's not like investment funds are just torched. They go to purchasing
materials, paying employees, etc. For the most part these actions simply
redistribute wealth, rather than destroying it. Therefore it seems clear that,
in aggregate, startups create wealth.

I suppose one could argue that _more_ wealth would be created if everyone went
to work for large, established companies, or started lifestyle businesses,
rather than starting startups. At the very least it would be more difficult to
disprove that assertion, but using the same logic as above it seems unlikely
to be true. For all we're immersed in startup culture here, the number and
people and amount of capital focused on startups is still small relative to
the rest of the economy, and yet the benefits we've seen from just a few high-
profile ones, let alone the smaller benefits accrued by many others, are very
significant.

[1] Although, just because a startup "fails" does not mean that it has not
created wealth during its existence. Obviously any time two people voluntarily
make some sort of exchange (absent mistakes), wealth is created. IE, both
people are necessarily better off than they would have been otherwise, else
they would not have made the exchange. So it is very possible for a startup to
create wealth on the way to shutting down.

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vezzy-fnord
_Wall Street is full of dirty rent-seekers whose recklessness has destroyed
the American economy over and over again ever since Reagan deregulated Wall
Street. The comic wealth that came as a result of that deregulation has
allowed Wall Street to chokehold politicians in campaign finance and squeeze
out from them financial policies that can only be fairly be described as
federal handjobs._

Such shameless and misguided populism. Ostensibly, "Wall Street" are an evil
cabal and not at all subservient to incentives granted by the state?
Interesting. You could certainly critique the financial sector on basis of
Hyman Minsky or even on basis of credit-driven boom-bust cycles, but this
simplistic narrative of deregulation is insulting.

 _What actually happens is wealthy people like Paul Graham fund startups
because they think these things are valuable. Through venture funding, rich
people legitimate startups. Thus, they confer value upon the startup._

No shit. Value is subjective. Or perhaps you're still stuck in the political
economy of Ricardo, I take it?

 _We, as a people, determine what is and is not of value mostly through what
we believe to be legitimate and worthy of significance. And in late
capitalism, we have all basically agreed to allow the market to dictate what
is and is not of legitimate value. (This is what social critics recognize as
Neoliberalism.)

But what the market deems valuable is not necessarily aligned with what is
ultimately good for us as a society or even what we want. Because under
conditions of extreme inequality, the market is biased towards people who have
lots of money, at the expense of virtually everyone else._

What does this person think "the market" is? Some being existing independently
of humans? Markets consist of exchanges, valuations and schedules of human
participants, constrained by the institutional framework of governance in a
particular jurisdiction.

That's not what "neoliberalism" is, either. Neoliberalism has two different
meanings in the field of international relations, and in political economy.
Neither of them have to do with the fallacious reasoning expressed above.

And just what, pray tell, is this mystical "social utility," some objectively
measurable quantity of what is "good for society"? Demagogues always love to
speak of it, and almost always it is a coded phrase for making humans
subservient to whatever state policies they envision. There might be "social
utility" in some theoretical metaphysical sense. In practice, one _cannot_ do
interpersonal comparisons of utility, hence the famous "utility monster"
paradox illustrated by Nozick. Thus to speak of any greater societal good
without taking into account that every individual has preferences that they
reveal, is a folly.

Now, the question of money. What is money? It can be many things, most notably
a medium of exchange. But it's also an accounting device for settling debt
obligations and coordinating exchanges through time. One of the key insights
of the mutualists and later heterodox monetary reformers like E.C. Riegel is
that there is no reason for the latter accounting function to be monopolized
by a state. Having groups of people issue their own debt instruments to
intertemporally coordinate their consumption and production on coarse-grained
collective levels, perhaps through a mutual credit bank, would be a great boon
on many. This is not the fault of capitalism that it's so rare. It is the
monetary monopoly of the state doing this. It is an unrelated issue.

 _That is not the future I want so I really have no choice but to insist that
we resist and come to terms with the fact that the Market we call god is a
sick and twisted god, indeed._

The market is not our god. Not even close.

 _People like Paul Graham need to write essays like this so you don’t question
how undemocratic a market system is under conditions of extreme wealth
inequality._

"Undemocratic". Another baseless buzzword. The market is not undemocratic. Its
democracy operates on a more fine-grained level, and moreover for market
participants to form a collective body of action to pool resources (like a
corporation) requires unanimous approval on part of these people. A state only
needs a thin majority (if at all).

~~~
geofft
Hm. What's your position on the article's claim that it is intutively absurd
for schoolteachers and nurses to be valued millions of times less than Candy
Crush Saga?

I think you can argue (and I think this is where she's going) that the
schoolteachers and nurses are being fairly priced by the market, sad as it may
be, but rhetoric about the tech industry is overvaluing Candy Crush Saga.

~~~
vezzy-fnord
If by "intuitively absurd", you mean "counterintuitive", sure. Many things
are.

Firstly, when you speculate on something like Candy Crush Saga, you're really
speculating on what the brand and assets can yield you in terms of the rent
gained from its unit services stretching out through the future. The risk is
high, yet so is the anticipation of high yield. It might seem so stupid and
trivial when seen superficially (it's "just" Candy Crush Saga), but what a
brand like that can mean in a modern economy is surprisingly far-going.

Human labor is different because you can't reliably account for an individual
productive laborer being there over some prolonged period of time without
turnover. Otherwise, you'd be a slave owner, essentially. So, _ceteris
paribus_ , some estimate of a worker's marginal value product (marginal
physical productivity discounted by the rate of interest) has to be made,
which in a real-world economy is of course difficult and never really
converging. This provides ample opportunity for bargaining.

Of course, this is all a _ceteris paribus_ condition. State policies,
institutional factors and unionization all severely complicate things.

~~~
geofft
Thanks, I did not expect this response and I'm thinking through it. I suppose
Candy Crush Saga being valued at $X quite literally means that (some people
believe that) if one were to purchase all of Candy Crush Saga, it would be
able to generate about $X in value, either by collecting revenue or by
reselling it or whatever. And at that point you could spend the resulting $X
on nurses or schoolteachers or whatever.

I think my reservations with that are largely about how that interacts with
"created" wealth, and whether created wealth is fungible for nurses and
schoolteachers, but I don't think I have a well-formed response here yet.

