
Exponential growth devours and corrupts - AngeloAnolin
https://m.signalvnoise.com/exponential-growth-devours-and-corrupts-c5562fbf131#.l1ctrlhlr
======
bpolverini
First thing I thought of when I read this was the article by Sam Altman where
he calls businesses valued at $100M "really good airplanes."

[https://blog.ycombinator.com/navigating-mid-
success/](https://blog.ycombinator.com/navigating-mid-success/)

Something is awry in our understanding of moral capitalism at large for
statements like that to be met with anything other than derision, and DHH is
getting at the heart of why: We've all become obsessed with growth. When the
way to get rich in the world is capital gains, as opposed to value creation,
the abnormalities in behavior and ethics, which are glorified elements of
Silicon Valley culture, fall out as a natural consequence. Having real,
powerful values that help evaluate whether something legal is actually ethical
means saying "no" to certain kinds of work. God forbid you do that though,
lest your investors punish you.

Where your treasure is, your heart will be also. It comes as no surprise to
anyone tarrying long over the facts that SV's treasure is gold.

~~~
mikekij
^This. The idea that I'm a failure if my company "only" sells for $100M is a
recipe for perpetual depression and disappointment.

~~~
Retric
Yes, even if you only get 0.3-3% of that 100M exit it's going to completely
change the equation if you ever try again. Or just do something else with the
rest of your life. Further, if you have another exit of that size again your
likely to end up with a much larger chunk of the second company. To the point
where it's possible to be better off with 2 x 100M exits than 1 billion dollar
exit.

~~~
devoply
Most startup fail. So though yes that's true, the chances of it happening
twice are quite small. Even the first chance is quite small, so maybe... dunno
have not seen numbers to back up hypothesizing.

~~~
Retric
The odds are much better that you can repeat after your first success. Most
startups fail before gaining significant funding, if you have enough capital
to skip the seed stage and a good relationship with investors and have
experience with running a startup then you have much higher odds. To use some
famous examples, Apple/Next/Pixar, Paypal/Tesla /Spacex/Solar City they both
had a weaker startup such as Next and Solar City but leveraged past success to
avoid failure.

------
3pt14159
During the dying days of calling myself a libertarian (I think the last
permutation was "realistic geo-libertarian") I read a blog post kinda like
this, but less concrete. It was by a guy who made up a word, something like
"Mazolith", and he was trying to describe how letting these forces unchecked
was this hyper system that we were failing to recognize.

One of the lines was

I got to about there ^ in the comment before I remembered more of the quote.
The article I trying to find was this:

[https://slatestarcodex.com/2014/07/30/meditations-on-
moloch/](https://slatestarcodex.com/2014/07/30/meditations-on-moloch/)

It is extremely good and it plays well after DHH's intro. I know some of the
arguments there against libertarianism are strawman arguments, but overall
it's a great article and about a day after reading it and thinking about it I
started just calling myself a Liberal (it's more complicated than that, but
it's the closest fit).

DHH touches on exponential growth specifically, but more generally what is
needed is to recognize the world as a system of forces and feedback functions,
and to take actions to limit the consequences of those systems.

For example, democracy is a system to establish which people run our country.
If media is allowed to be funded by foreign forces unchecked then it can
subvert our democracy. We must now make a choice, do we do something or allow
it? For a time we allowed it because our propaganda works better than theirs
(mostly because ours is the truth and we live in free societies) but with the
advent of social media we may need to make a different choice or change our
systems to adapt.

It is this type of thinking. It's a superset of what the Canadians and others
call "good government". It's a way of managing systems to enact our ends: a
more peaceful, prosperous, sustainable existence.

Capitalism and growth have a place, but that place needs to be carefully
considered and guarded.

It's that or we perish in a nuclear holocaust or melted, polluted planet.

~~~
patcon
> if everyone hates the current system, who perpetuates it?

I have a pet theory that is slowly becoming a personal religion of sorts.
(Disclaimer: only accreditations are a biochem degree over a decade ago, and
this armchair.) It involves a belief that at each level of organization --
atomic, cellular, organismal, societal (which in itself has something of an
interesting fractalness) structures try to arrange themselves such that they
have "access to the maximum possible future opportunity space"[1][2]. When
each structure at every level is operating in such a way, structures tend
toward centralization as some parts of the whole become more powerful, and the
whole at the next higher level of organization becomes more effective. And so
we tend to create hierarchy and oppress our fellow man, for the same reason
that our brain cell oppresses and rends subordinate the skin cell of the
finger. And so oppression is systemic, almost a law of nature.
Decentralization and equality is not what the universe tends toward.

But we can perhaps be clever, and create the society we want and value. It
would be a rare organism, in many ways crippled, like a slime-mold among
eukaryotes.

So if perhaps centralization and growth (ie control of largest possible future
opportunity space) is expected as a physical law of sorts, then the trick
would be to create a niche that preserves our value system -- we'd need to
engage in systems design that allowed our society to exist is a "test
harness", where we get to /feel/ like we're fulfilling desires for these
things, but are somehow prevented from engaging in the behaviour that we have
subjectively decided (at a societal level) will lead to bad outcomes. I dunno,
just riffing here ;)

[1]:
[https://www.ted.com/talks/alex_wissner_gross_a_new_equation_...](https://www.ted.com/talks/alex_wissner_gross_a_new_equation_for_intelligence)

[2]: [https://www.quantamagazine.org/20170126-information-
theory-a...](https://www.quantamagazine.org/20170126-information-theory-and-
the-foundation-of-life/)

~~~
pacificleo11
Interesting hypothesis . As far as maximization of opportunity space is
concerned its not very different from selfish gene theory suggested by Dawkins
. But I guess you are wrong about need to centralized being inbuilt in nature
. You are confusing unification / alignment with centralization . If you look
outside of any abstraction level ( molecular ,cellular ,organismal ) its hard
to tell if the underlying harmony is attained by centralization or
coordination of independent autonomous entities. thats why a lot of well
meaning people tilt toward the intelligent design and can’t bring themselves
to believe that Evolution was self organized .

------
eevilspock
_" It is difficult to get a man to understand something, when his salary
depends upon his not understanding it!"_ \- Upton Sinclair

Selling advertising space rather than selling one's purported product is the
epitome of the dark forces and banal moral failure that DHH talks about. But
most YC and SV startups owe their existance to advertising, and they are
psychologically resistant to admit such moral failure, no matter how obvious
the costs to society.

More detailed arguments against the ad-supported "business model":
[https://news.ycombinator.com/item?id=7485773](https://news.ycombinator.com/item?id=7485773)

Also:
[https://news.ycombinator.com/item?id=8510227](https://news.ycombinator.com/item?id=8510227)

~~~
Gibbon1
I think the idea is to use advertising and finance to capture all the profits
from brick and mortar corporations. Similar to a comment I saw from someone
that worked at a stodgy old fabric manufacturer. They paid Oracle more in the
last ten years for licensing than profits in the last 100.

------
gkop
"Growth for the sake of growth is the ideology of the cancer cell"

\- Edward Abbey

------
zeteo
>And this new world order is being driven by a tiny cabal of monopolies. So
commercial dissent is near impossible. Do you want to be the weirdo without a
Facebook account?

The obvious solution is antitrust law. Why is Microsoft no longer the
competitive boogeyman of the 90s? Because it was prosecuted under section 2 of
the Sherman Act in 1998 [1]. Everyone would be using Bing, Zune and Internet
Explorer otherwise.

But the last two administrations haven't prosecuted anyone under section 2.
Just imagine spinning off Gmail, Google Maps, Chrome etc. and letting them
survive on their own merits.

[1]
[https://en.wikipedia.org/wiki/United_States_v._Microsoft_Cor...](https://en.wikipedia.org/wiki/United_States_v._Microsoft_Corp.#Settlement)

~~~
lcw
How would you go about applying antitrust laws to companies like facebook,
google, uber, and airbnb?

I think this would be a difficult fight because they all can claim serious
competition. For instance, probably your best case could be against Google and
their search engine advertising, but they could easily say that they are
competing against all advertising mediums in the world. Airbnb could say they
are competing against hotel chains. Uber says they are competing against
taxi's. Facebook is competing against 100's of social networks. While I agree
something should be done to help business compete in these new mediums they
are not defined enough to draw a line in the sand.

To your point though you look at a situation where a single company, Google,
could shutter a businesses website on a whim... that seems like a valid
antitrust case. I'm just not sure how you would make the case though.

~~~
zeteo
>How would you go about applying antitrust laws to companies like facebook,
google, uber, and airbnb? I think this would be a difficult fight because they
all can claim serious competition.

It depends how you define the market, right? If we allow substitutes then
Standard Oil was not a monopolist because it was competing against the
electric utilities for illumination etc. If we define it by "similar business
model" it's hard to see how Google doesn't dominate search engine advertising,
Facebook social network advertising, Uber the space of apps used to call
transportation etc. Doctrines such as product tying [1] and essential
facilities [2] seem ready-made for Google and Facebook respectively.

[1]
[https://en.wikipedia.org/wiki/Tying_(commerce)#Tying_of_Micr...](https://en.wikipedia.org/wiki/Tying_\(commerce\)#Tying_of_Microsoft_products)

[2]
[https://en.wikipedia.org/wiki/Essential_facilities_doctrine](https://en.wikipedia.org/wiki/Essential_facilities_doctrine)

~~~
lcw
The EU case that's spinning up seems interesting in relation to product tying.
It seems like they are going to get them for some minor stuff around email
installation on Android and some pretty egregious advertising decisions. If
Google loses I think it will still have little affect on it's monopoly.

While Google's products do work together I would argue they also work with
competitors. Google is pretty open in this way. If you want to move over to MS
Office you can export all your stuff to office files. That's unlike what
Microsoft was doing. They were making it difficult for competitors. I think
Google was very purposeful in this strategy to at least seem open to
competition.

~~~
zeteo
> While Google's products do work together I would argue they also work with
> competitors.

I think there are two ways in which it can be argued that Google's auxiliary
products destroy competition. On the one hand Google uses its domination in
one market (search engines) to subsidize products that end up dominating other
markets (online maps, web email etc.). On the other hand these auxiliary
products are making it difficult for other search engines to compete with
Google. If your search engine has similar (or even slightly better) results to
Google, you still have to break into its being the default search engine on
the most used web browser and mobile OS, and integrated with maps and other
products. If Altavista had been similarly entrenched in 2000, Page and Brin
would have likely hit a brick wall despite having a better algorithm. Even
Microsoft with all its resources has failed to make a dent in the search space
now.

------
josho
I'm not sure if the tax rate is the root cause, but they certainly came close
to hitting the nail on the head saying "What sucker wants to earn $10
million/year at a 52.5% tax rate when you can get away with hundreds of
millions in one take at just 15%?"

For decades we've valued the growth of capital over salaries, we are living
the results of this policy, and need to see a reverse to a position where the
result of salaries grow faster than capital.

------
jonmc12
Where do benefit corporations and b corps ([https://www.bcorporation.net/what-
are-b-corps](https://www.bcorporation.net/what-are-b-corps)) miss the mark?

Benefit corps have the specific purpose to increase prosperity for all
stakeholders - not just shareholders. They are indeed a proposal for a "new
operating system" for companies, and it is adopted by many companies (some
very well-known) already.

The basic idea is to put a statement of public benefit in corporate bylaws,
then sign up for an assessment that audits that your company actions are
indeed aligned with public benefit.

This effort, nominally, would seem to address many of the problems laid out in
the post, but benefit corps are not mentioned once. I'm not saying its _the_
answer, but seems like a more collaborative, concrete starting point for a
solution than "some mass infusion of the 1960s spirit."

~~~
Nomentatus
Private companies without investors also elude the problems in the post, of
course. (Though in both cases you may have to deal with an Uber-type
competitor willing to subsidize its operations for long periods - something of
dubious legality, but it still happens.)

Note that if you begin as a public benefit corporation, raising funds will be
obstacle number one, since you must compete not just in your market with
current-model companies, but also compete with them for funds. So no wonder
it's more common for successful private companies to pay back their investors
and then transform themselves into public benefit companies. This is still
useful as an option, but hardly more than a start at a solution. Unless laws
are changed, of course. If the law allowed public companies to change to a
public benefit corporation without warning regardless of investor's opinion
that would be a huge change - but might thoroughly discourage investment, of
course.

------
darod
“Growth for the sake of growth is the ideology of the cancer cell.” -Abbey

------
mark_l_watson
Really a nice article and I especially liked the finish when he mentions
Douglas Rushkoff's latest book 'Throwing Rocks at the Google Bus' that is
largely a prescription for building new types of companies and organizations
with more stability and robustness - similar to advice offered up in Nassim
Taleb's book 'Antifragile'

Edit: a short video where Rushkoff summarizes the big ideas in his new book:
[https://www.youtube.com/watch?v=mAOyOULWKUo](https://www.youtube.com/watch?v=mAOyOULWKUo)
\- recommended!

------
AstralStorm
Exponential growth is a joke, you hit the first limiting factor and you end up
at best on a sigmoid. Or probably nowhere.

Running Twitter on Wikipedia budget is trivial, we have IRC networks that
handle similar volume of traffic on volunteer budget. Distributed open
equivalents of Facebook and Google also exist. The problem they face is always
marketing. On a shoestring budget you cannot afford that.

~~~
omgwtfpmr
What's the best open competitor to Google?

------
mwcampbell
When he brought up Uber, I naturally wondered if I should stop using it (and
not start using Lyft or anything similar). But perhaps that's a bit like
wondering if we should stop using Google, or Facebook.

On further reflection, I think we passengers might be able to make things less
bad for the Uber drivers. DHH mentioned putting on headphones and not
interacting with the driver at all when he uses Uber. I've never done that.
More often than not, I chat with the driver at least a little during the ride.
Once or twice, I used the ability of the Uber app to put my choice of music
from Spotify on the car stereo. But then I felt uncomfortable doing that,
because I was imposing my choice of music on the driver. So now, I'm happy to
let the driver play whatever music he or she wants, or none at all. And I've
never rated a driver anything other than five stars, since I know their
ability to continue getting work depends on ratings.

So we need to remember that our Uber drivers, AIrbnb hosts, etc. are humans,
not machines.

~~~
bantunes
That still doesn't help as much as not using Uber at all.

~~~
mwcampbell
But would an individual's choice to not use Uber actually help anyone? Or is
it just a knee-jerk over-reaction? If my choice to not use Uber wouldn't
actually help anyone, and it would limit me quite a bit (I'm visually impaired
and can't drive), then the correct moral choice (at least according to
utilitarianism) would be for me to keep using Uber but go out of my way to be
nice to the drivers.

------
bambax
This is weak and inconsistent. You can't blame _growth at all costs_ \-- costs
including postponing profits indefinitely, and _milking customers_ via in-app
purchases, in the same sentence. It's one or the other.

If you dislike the former you should kind of like, or at least respect, the
latter.

Or you're just rambling.

~~~
AnimalMuppet
Not really. Milking customers is exactly "growth at all costs", only they're
working on growing income or profits rather than growing number of customers
or some other metric.

------
xchaotic
The problem is that I can't use the 'nice' app in every city I visit that has
Uber. It's the aggressive growth and VC that allows it to be everywhere. And
at least where I travel, the existing taxi corporations are far worse than
Uber. So yes, in an ideal world, I'd rather use open-source app to hail my
sustainable eco taxi, but such an app does not have the funding to upend the
existing taxi rackets.

~~~
msoad
Travelers are not a big chunk of ride-sharing company user base.

------
youdontknowtho
I dont know how you build a startup that "leaves money on the table". Maybe as
a coop?

The infinite growth trap is what leads to Marx's critique of capitalism. Since
that is on the list of verboten ideas we need to come up with a new language
that says the same thing so that people can hear it without freaking out.

------
ktRolster
Silicon Valley is awful, of course, but my company is different. It actually
provides value.

------
yanilkr
This reminds me of a scene from the popular TV show Silicon valley.

[https://www.youtube.com/watch?v=BzAdXyPYKQo](https://www.youtube.com/watch?v=BzAdXyPYKQo)

Smartphones, youtube, facebook and many other success stories had exponential
growth. Once a product/idea goes big, there will always be people who do not
like something about it. Thats the cost of making a product that everyone can
use. A better example is the idea of money itself. Its an invention used by
almost everyone in the world, We still have people who absolutely hate money
with passion based on their own principles that are right for them. Overall it
did more good to humanity.

We have created an economic world, where good ideas travel faster and share
the rewards with everyone. Its a good thing. The alternative would be a
hierarchical society where some other parts of the society will always be left
behind.

