
Paul Graham accidentally explained everything wrong with SV world view - makaimc
http://qz.com/586563/paul-graham-just-accidentally-explained-everything-wrong-with-silicon-valleys-world-view/
======
dang
This is a duplicate of
[https://news.ycombinator.com/item?id=10831261](https://news.ycombinator.com/item?id=10831261)
and
[https://news.ycombinator.com/item?id=10833549](https://news.ycombinator.com/item?id=10833549).

~~~
api
HN's mods need to be able to merge the comment sections of dupe articles.

~~~
vayeate
I am sort of surprised this website has so little functionality when it
attracts some of the best programmers in the world by the thousands. I
understand to some extent it's probably to prevent redditification, but mobile
being entirely unreadable (and the "desktop view" on phones is broken now and
does not help) is a bit much.

~~~
DrScump
Not sure what you mean by "mobile being entirely unreadable". HN seems to have
full functionality for me (on Android, using Opera or Dolphin with Desktop
user agent).

------
dasil003
I actually see both sides of this issue and don't think either essay is very
good, both are preaching to the choir and neither will never convert anyone.

PG is arguing against a strawman using a very cold and clinical justification
for his career—the wider social issues are not addressed at all.

Meanwhile this article barely stops to acknowledge that SV is actually
building things as opposed to ripping people off with arbitrage and financial
instruments. Beyond that it is just a frothy rant setting up another strawman
about rich people telling poor people what to do (which is not really what PG
was doing). Never does the author stop to acknowledge that they are probably
fine with small mom-and-pop businesses, just not venture-funded unicorns, and
that if we dislike the machinations of SV there must be some gray line
papering over a pretty wide swath of the continuum between the two.

Personally I think PG would have been better off to just keep his mouth shut,
because when you're rich it just looks like post-hoc rationalization no matter
how you slice it. The social issues are real, and we are going to have to
contend with what the effective replacement of labor with capital means for
our society, but this is a conversation that the SV elite don't have the
political capital to address.

~~~
mempko
The article actually addresses that SV is building things. Wood mentions how
95 percent of start-ups fail. Presumably most of what is being built is crap,
or destroyed.

Would you rate that as building value or ripping people off?

~~~
tolmasky
Not sure what point is being tried to be made here:

1\. A startup that fails doesn't mean it has built crap. Sometimes things fail
for unrelated reasons, whether ahead of their time or because the economy took
a downturn, etc etc. SOMETIMES because they are "ripping us off".

2\. 95% of scientific experiments "fail". Are scientists ripping us off?

The whole idea of the market place IS failure. In fact, if our larger market
was healthier, we'd see MORE failure (and in more established corporations,
such as the "too big to fails"). The fact that 95% of startups fail is one of
the healthiest indicators of SV. Experimentation necessarily means many
failures in search of the one success. Maybe some day we'll have a magical
simulation machine where we can run product ideas ahead of time and know "the
right place" to put our money, but until then, the best system is one that
invests in diverse companies with oftentimes mutually exclusive ideas.

~~~
gooserock
> A startup that fails doesn't mean it has built crap. Sometimes things fail
> for unrelated reasons, whether ahead of their time or because the economy
> took a downturn, etc etc.

Yeah, that's a generous reading. I'm in the startup world and let me tell you,
there are a LOT of clowns running around right now with completely shit ideas,
just trying to grab some of the sweet sweet VC money before the music stops.
It's appalling.

~~~
cellularmitosis
That in no way contradicts what the parent claimed. You can both be right:
Some startups fail for unrelated reasons, and some are full of clowns.

------
dcgudeman
"For him, a better future is one where a team of eight guys makes billions of
dollars with an invention that replaces thousands of people currently earning
livable wages with automation. If those people lose their jobs, they’re just
collateral that got in the way of progress. This is a bizarre way of saying
that the only thing keeping people poor is their inability to capitalize on
their future obsolescence."

This is a completely luddite position.

So if she had it her way we would still have people walking around planting
seeds instead of using modern farming equipment because the people planting
seeds would have lost their jobs, even though history has shown us time and
time again that people retrain and do different work. Not to mention that the
new jobs that replaced the old ones are nearly always safer and more
productive for society. \-------- edited grammar

~~~
asuffield
Agreed. Replacing menial work with automation frees up the people doing the
menial work to learn new skills and do other work. The net result is that more
useful work is done, which equates to wealth created. If some of those people
are incapable of learning new skills, the net surplus of wealth that we have
created should be sufficient for society to cover their basic living expenses.
We do not need those people to continue doing busywork in order to provide for
them.

The more that we can do this, the more surplus wealth we create. This is
clearly working by reference to history: this is the best time _ever_ to be
poor, compared to all points in history before it.

This isn't quite so obviously true, but it's likely also the case that an
unemployed person today has significantly better life outcomes than a menial
worker 100 years ago (which means mines or factories). That's what improved
automation buys us.

~~~
shmageggy
> If some of those people are incapable of learning new skills, the net
> surplus of wealth that we have created should be sufficient for society to
> cover their basic living expenses.

The problem is that roughly half the population is fighting against this kind
of social welfare system and they would only be encouraged by PG's blog post.

------
droopybuns
That was an awful read.

“It is not the critic who counts; not the man who points out how the strong
man stumbles, or where the doer of deeds could have done them better. The
credit belongs to the man who is actually in the arena, whose face is marred
by dust and sweat and blood; who strives valiantly; who errs, who comes short
again and again, because there is no effort without error and shortcoming; but
who does actually strive to do the deeds; who knows great enthusiasms, the
great devotions; who spends himself in a worthy cause; who at the best knows
in the end the triumph of high achievement, and who at the worst, if he fails,
at least fails while daring greatly, so that his place shall never be with
those cold and timid souls who neither know victory nor defeat.”

I found PG's opinion interesting, regardless of whether I agree with him.

Author seems to have unleashed a hateful screed, which optimally includes a
world where opinions like PG's are silenced.

I guess the only thing she inspired is my distaste for her creative output.

~~~
PhasmaFelis
> _The credit belongs to the man who is actually in the arena, whose face is
> marred by dust and sweat and blood_

It is ironic how often this gets quoted, patronizingly, at people whose faces
are _literally_ marred by dust and sweat, by people who work in air-
conditioned offices.

~~~
droopybuns
Empathy for people you have never met will help you find success & happiness
in life.

Bigotry, arrogance and prejudice will not.

~~~
meanduck
(Personal observation) One has finite amount of empathy. Use it wisely.

------
staunch
PG is having a semantic debate with himself about "income inequality" when the
world is using this term to refer to the raging class struggle in America.

The startup world is 100% class-based, worse than anything, and yet PG
actually seems to believe that it's a meritocracy. He thinks Stanford PhDs
like Larry Page (whose father was a professor) had about the same chance as
anyone of getting funding.

He completely ignores the fact that startup funding and elite credentials are
_extremely_ limited pies. Harvard only admits a certain number of people. YC
only funds a certain number of people. Sequoia only funds as many people as
they can sit on the boards of. So who do these people always choose? Other
members of their class.

See:
[https://www.ycombinator.com/people/](https://www.ycombinator.com/people/)

He seems to have no awareness of what it's like to live outside the elite
bubble he was born into. And how could he...

~~~
AnimalMuppet
Um, you _do_ realize that PG (through YC) is trying very hard to fund people
from other backgrounds?

More: You seem to think that VCs decide who to fund based on class. What VCs
actually look for is companies that they think will make money.

~~~
staunch
1\. YC doesn't publish numbers on economic diversity and I'm not aware of any
special attempts at funding people from poor backgrounds.

2\. VCs make money and raise funds by getting higher valuations. VCs in later
rounds will value companies with elite founders at higher numbers, and are
more likely to fund them in the first place. VCs also can't be as easily
blamed when elite founders fail, so they're a safer bet, etc.

~~~
vayeate
They recently started having office hours specifically for minority groups,
and they seem pretty attentive to stuff like this, but I haven't really seen
money-where-your-mouth-is action either.

------
aunty_helen
PG is copping a lot of flack for his essay. This is fine, people are allowed
to disagree in a free society.

But please, if you're going to respond or comment on any of these articles,
keep things civil and pointed at their arguments. Instead of this is a stupid
opinion, say why you think their opinion is incorrect.

Also, a (perhaps) less formal article along the same lines was flagged
yesterday and it sunk from the front page within minutes. It was rather harsh
in its wording but the act of flagging it let no one from the community talk
about the opinions expressed or why they were wrong.

------
FreedomToCreate
PGs argument unfortunately ignores that its the majority that makes it
possible for the few to create things. He doesn't seem to understand that
instead of being bolstered by the success of the few, the opposite is
happening and the majority is being left behind. Its sad to say, but his
current social position is definitely influencing his thought process.

The author of this essay does the opposite. He ridicules the advancements that
start ups have created by focusing on things like Candy Crush. What about
Dropbox and Uber. Those have had a profound impact for the positive.

What we should be saying is that income inequality is occurring because there
is a skew in the system. The growth we are creating isn't being equally
distributed back to the growth generators. We make Candy Crush worth billions,
but that billions doesn't do anything for the majority. Nurses and janitors
are vital jobs, no arguing that, but we need growth generators as well. It sad
that no ones sees this to be the issue and instead we all pick our extreme
corner and then drive points to bolster ourselves.

~~~
maxsilver
Yes, exactly!

No one is arguing against technology or progress. But there is a legitimate
issue here; our economic system currently punishes society for progress when
it should reward it.

For instance, If automated driving becomes a viable technology, we have just
eliminated most of the labour force in the trucking industry. This _should_ be
a good thing for society (we've freed up lots of time and labour, likely
reduced error, increased efficiency, potentially even eliminated some
accidents and saved lives, etc).

But in practice, self-driving trucks would be devastating to the nation.
There's close to 1 million people in the US who drive trucks for a living --
it's literally the most common job in nearly every state.
([http://www.npr.org/sections/money/2015/02/05/382664837/map-t...](http://www.npr.org/sections/money/2015/02/05/382664837/map-
the-most-common-job-in-every-state)). All of these people would be unemployed.
Many would likely be shunted into minimum wage, poverty-level employment for
the rest of their lives (whatever poverty-level employment is left by then --
those jobs are rapidly disappearing to automation too).

If we continue on our current course without changing something, it will
eventually be impossible for companies to create value at all -- so many
people will be so poor, that it will be impossible to sell anything to them.
How highly can Candy Crush be valued in the future, when 99% of it's ad
viewers have zero spending money? How much value can AirBnB capture if 99% of
the population is too poor to travel?

The reply that "these people should all just start highly successful
businesses" is a cop-out, in much the same way that telling a poor person to
"just become a movie star" or "just become a pro basketball player" is. It's
simply not possible for most people to do that, regardless of how hard they
try. (Startups already have a 90%+ failure rate today. Adding 1 million
otherwise untrained individuals won't help that figure). And it's grossly
irresponsible of us as a society to shove people into poverty for failing to
meet this wildly-unrealistic expectation.

~~~
ericd
And I don't think anyone is arguing that the poor should all go out and try to
start businesses once they're automated out of their current job, that would
be a very naive viewpoint. PGs essay is saying that society should be
discussing how to solve poverty, rather than how to solve economic inequality.

I'm strongly in favor of things like basic income, extensive free retraining
programs, and a lot of social support to make sure that every citizen can be
free of the desperation of true poverty, and we can maintain social and
economic mobility, but there are a lot of ways that attempting to stamp out
economic inequality could go really horribly wrong.

~~~
FreedomToCreate
Out of curiosity, what could go wrong by attempting to stamp out economic
inequality. The argument that the top job creators and innovators would leave
because they don't have massive income incentives is an extreme in case that
is an example.

~~~
ericd
Becoming an unattractive place to come for ambitious people. Becoming an
unattractive place for ambitious/wealthy people to stay. Causing inequality to
take subtler forms, like power, political influence, personal connections.
Civil unrest, as the social contract between people and between government and
the people to be radically altered. There are a lot of potentially very severe
problems, and it's dangerously naive to think that true equality between all
people is something actually achievable unless humanity and human nature
undergoes some fundamental changes.

We should be trying to fix poverty, and giving more people an opportunity to
be ambitious and take risks without risking ruin, we shouldn't be making it
unattractive to be ambitious.

~~~
FreedomToCreate
I am not advocating for true equality. I am saying that we can distribute
wealth to better represent how people contribute to the system. No one is at
the top without the support of the millions who pushed them there. Everyone is
not ambitious in the business sense. Everyone can't be Michael Jordan, but
Michael Jordan wouldn't be with everyone.

------
Mikeb85
Yeah this response isn't that great... While I'm not in PG or Thiel's camp (I
think inequality is bad for the economy, bad for small business, and bad for
quality of life), this author pretty much embodies all the stereotypes that
people have about sociologists.

~~~
ericd
If I recall correctly, PG says that it isn't inequality that's bad, but
poverty, and that it's poverty we should be focused on eliminating.

Do you disagree with that viewpoint? If so, why?

~~~
Mikeb85
Yes, because the mechanisms which create inequality are the same which allow
for poverty.

Targeting poverty alone ignores the root causes, and thus never solves the
problem.

You can see this in Africa and third world countries everywhere. Poverty has
been reduced by access to capital and markets, investment, education, etc...
Not by charity.

~~~
ericd
You don't believe that one can eliminate poverty without eliminating upside
for people to reach for? I'm not talking about handouts, necessarily, as a
solution to poverty. Education/training, things to provide opportunities to
help with economic mobility, and other programs would be applicable.

~~~
Mikeb85
The economic system needs to change to provide economic mobility. As long as
capital and the ability to make capital is out of reach of the poorer classes,
then economic mobility really isn't possible.

Expanding education and training will bring us to a higher technological
level, and provide prosperity for society, however that won't ensure the
working classes will have a 'fair' share. If everyone's income is increased,
but the distribution of resources stays the same, the poor will still be poor
because costs will simply climb as their income does. Furthermore, every job
can be commoditized. When 7/11 jobs are automated, then the next lowest class
could be programmers. If there are too many programmers, wages will be run
down to the level of today's 7/11 workers. Society as a whole may be more
advanced, but that won't prevent people from becoming indentured workers. Just
as today we are more advanced than 1960, but it's harder for the lower classes
to get by.

The distribution is the problem, poverty is a symptom.

~~~
ericd
I don't think you have your economic mental model quite right - costs don't
increase like that unless the cost of production increases to match, which
only really happens with goods manufactured domestically where labor accounts
for most of the cost. Since we have a global trade system, it is possible to
have a very skewed distribution and have even the poorest be quite comfortably
well off, if the country is very rich. As the third world gets wealthier,
though, that might cause rising goods prices, as they demand higher wages. But
that's not related to the distribution of wealth within one country.

And you don't really need your own monetary capital to have economic mobility
- for the poor, time and expertise is the capital. Good public education
increases that expertise, and is one of the best ways to provide economic
mobility. Also, if more money is necessary than one can save up, there are
always small business loans from banks.

~~~
Mikeb85
> costs don't increase like that unless the cost of production increases to
> match, which only really happens with goods manufactured domestically where
> labor accounts for most of the cost.

Don't forget about transportation costs, retailing costs, etc... Most of the
'poor' are working poor, working in warehouses, restaurants, retail stores,
and other minimum wage jobs. If you bring up the wage floor, everything gets
more expensive (even stuff bought at Walmart) and that hits the poor, reducing
their gains (however if it's enough to reduce inequality, they'll gain
something, however small).

> And you don't really need your own monetary capital to have economic
> mobility - for the poor, time and expertise is the capital. Good public
> education increases that expertise, and is one of the best ways to provide
> economic mobility. Also, if more money is necessary than one can save up,
> there are always small business loans from banks.

Economic mobility only exists as long as higher quality jobs remain unfilled.
The US is more educated than ever before, yet inequality has increased since
the 1950's. Education certainly brings society to a higher technological level
over time, but it's not a given that it reduces poverty or inequality.

This phenomenon has been well documented and can be seen in many developing
countries where people are actually over-educated relative to the types of
work demanded for economic growth. For example, if a country has no roads or
electric grid, many industries cannot develop until that infrastructure is
built, meaning there's more demand for construction workers than university
graduates.

And of course, the missing piece between education and work that doesn't yet
exist is capital. Without capital to develop new industries, you're limited to
only the amount of work that is currently demanded, so education will never
bring you to a higher equilibrium, it'll simply make the educated person more
competitive within the market.

Anyhow, many economists have written entire books ( _cough_ Piketty) and
papers about inequality and economic growth. In the developing world there are
plenty of examples of economies that are stagnant because of inequality. Even
within the US' own history, you have examples of high and low inequality, and
the resulting economic growth.

------
nowarninglabel
This critique seems to focus on startups as something specific to the tech
scene as opposed to the wider picture of small business startups across the
U.S. I suppose though that Graham also is focusing specifically on that
category as well.

There's approximately half a million businesses being created each year in the
U.S. (that number used to be higher) [1], the vast majority of which are not
tech focused. They are getting credit to do this from a variety of different
ways, but not normally from investors. It's mostly the credit card companies
profiting off of these ventures as many small businesses self-fund through
personal credit cards.

We (Kiva) have a fair amount of data on this as our focus is on interest free
loans for startups for poverty alleviation, though we are increasingly also
funding social impact small businesses in the U.S. I do wonder if our model of
charitable crowd-funding small businesses [2] will have a dent on the overall
way startups are funded in the U.S., there's a lot of other folks doing it now
asides us but probably too early to tell. I guess point is that both parties
here seem to be discussing a broader set (all startups) when really actually
just focusing on the minority of tech startups in the bay area and it'd be
worthwhile to consider the broader U.S. picture and/or the global numbers.

[1]
[https://www.sba.gov/sites/default/files/Startup%20Rates.pdf](https://www.sba.gov/sites/default/files/Startup%20Rates.pdf)
[2] [https://zip.kiva.org](https://zip.kiva.org)

------
brandonmenc
The article kicks off with a trying-to-be-snarky intro:

>> penned by self-described “essayist” Paul Graham

Well, he writes a lot of essays that are read by a lot of people. Seems apt.

------
adnam
Holly Wood - her real name, it seems - is just a talentless troll trying to
get a PhD in gender studies and realising she's hurtling into her mid-20s with
no nogotiable skills and a bitter hatred of the world.

[http://sociology.fas.harvard.edu/people/holly-
wood](http://sociology.fas.harvard.edu/people/holly-wood)

~~~
GoodJokes
Proving her point nicely here I see.

------
vezzy-fnord
I posted a criticism here:
[https://news.ycombinator.com/item?id=10833663](https://news.ycombinator.com/item?id=10833663)

It's indeed a lazy article.

~~~
AnimalMuppet
I recommend that people follow vezzy-fnord's link. It's worth reading.

------
aelaguiz
It's like someone from a future in which they can perfectly model the human
brain and predict it's reactions wrote an article designed to perfectly
stimulate all of the anger centers of my brain.

(I'm referring to the qz article, not pg's essay)

------
euske
I think I'm very late at the party, but anyway I'm hoping that someone educate
me.

I still can't agree with PG in that wealth is something that can be created.
When a woodworker makes a chair to get money, he's merely trading his skill
and time with money. The net wealth of the world hasn't increased. The
perceived "win-win" situation only exists because there's a partiality in
different types of resources: some people only have time, some people only
have food, and some others only have iron, etc. If the world gets truly
homogeneous, there's no way to create value. In reality, people are not
homogeneous, so they keep trading, but still the total wealth isn't
increasing. i.e. the economy is almost always a zero-sum game.

It's not a zero-sum game only in two cases: 1. When we take resources from the
outside world. This typically happens when we mine a natural resource. Or 2.
When we do unfair trading with people who somehow we don't deem as proper
"human". This is pretty much a form of slavery or extortion. i.e. the economy
is not a zero-sum game when exploitation happens.

I don't think PG is advocating the second type of the economy, so I don't
understand how he can think we're still creating wealth.

~~~
towlejunior
What if you're better at making chairs, and I'm better at making shoes? As you
say, partiality of resources, but how is that trade zero-sum? You benefit, I
benefit. To be zero-sum, one of us would need to lose.

~~~
euske
So you're saying wealth is actually something like happiness? Then I can see
it can be created, but I thought he was talking about something materialistic.

~~~
towlejunior
Kind of. I'm not sure how I would categorize it, really. "Wealth" is abstract,
but shoes are not.

------
ccarter84
Agreed with this part at least:

"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."

Negative externalities that harm the public good aren't factored into markets
until a price is put on the value of public goods. When no enforcement
mechanism is present, or at least decent incentives properly aligned, then the
public good keeps getting screwed and we end up with climate change.

~~~
vezzy-fnord
No. You're still stuck in a 1950s Samuelson-Hicks framework that's wide open
for naive market failure theory. This is before the Coasian and public choice
revolutions. Negative externalities _are_ factored as considerations in the
legal institutions of property, tort and contract law that lead to resolving,
among other things, environmental disputes.

You're also using "public good" incorrectly. You mean "social utility", I
think. But social utility is not quantifiable for the simple reason that it's
not possible to perform interpersonal comparison of utility.

For the record, you can simultaneously be laissez-faire and an
environmentalist. See the Property and Environment Research Center:
[http://www.perc.org/](http://www.perc.org/)

~~~
pdkl95
> social utility is not quantifiable

That's generally true, but that doesn't mean it doesn't have a value. Social
utility shouldn't be ignored simply because it cannot be assigned a convenient
numeric value.

~~~
vezzy-fnord
I'm making a more subtle point than that. It's that the social utility is
determined by people revealing their preferences and participating in an
institutional framework of voluntary and mutual exchange (whether you want to
call this a "market" or not - markets don't have to be capitalistic contrary
to popular belief, see Proudhon and other thinkers). One cannot speculate what
these preferences will be _ex ante_. Else you would be imposing an unjustified
upper bound on the heterogeneity of them.

The trick is creating an arrangement such that people can settle grievances
_endogenously_. An exogenous body can't determine social utility since its
actions change the expectations of its constituents, perhaps creating perverse
incentives. It has also no way of determining what constitutes a welfare gain
or welfare loss. Actually the rather special role of the state in being the
arbiter of law makes it rather biased towards generating welfare losses via
cronyism.

~~~
pdkl95
> markets don't have to be capitalistic

Ok, if you're using such a broad definition of "market", then I probably agree
with most of what you just said. The big problem I see is:

> creating an arrangement such that people can settle grievances endogenously

That is great if it actually happens. I personally believe a lot the current
political situation was caused by a total lack of these endogenous corrective
forces. When people observe that no such arrangement actually exists and
grievances are not actually settled, operant conditioning takes over and we
end up with people who think they are somehow smarter/better than other
people.

Arranging everything so incentives are properly aligned would be great. In
practice, we don't actually know how to make that happen reliably, so
recognizing all of the needs and desires of society is important, even when we
don't know how to evaluate something other than "we consider it good" or "I
just want that my future". Yes, this could end up causing problems - humans
are fallible and sometimes we don;'t know how to explain something other than
"my intuition says so".

Note that I'm suggesting that non-quantifiable criteria should be _considered_
, not that they should be given any special weight.

> It's actions change the expectations of its constituents, perhaps creating
> perverse incentives.

For this, I'm going with Mark Blyth's response[1] to a similar statement about
modern economic thought.

[1]
[https://www.youtube.com/watch?v=iJCcoF5K0SM#t=1437](https://www.youtube.com/watch?v=iJCcoF5K0SM#t=1437)

~~~
vezzy-fnord
_Ok, if you 're using such a broad definition of "market", then I probably
agree with most of what you just said._

It's not broad. It's that most people conflate various discrete ideas.

 _I personally believe a lot the current political situation was caused by a
total lack of these endogenous corrective forces._

You're right, and my position is that much of this is because of exogenous
interference. For example, people like to talk about the post-WWII "Golden Age
of Capitalism" that involved Keynesian stimulus policies to one degree or
another (though there were exceptions, like Eisenhower's response to the 1958
recession). What people often conveniently omit is that the Federal Register
was only a seventh the size of what it is today:
[https://www.federalregister.gov/uploads/2015/05/Federal-
Regi...](https://www.federalregister.gov/uploads/2015/05/Federal-Register-
Pages-Published-1936-2014.pdf)

 _For this, I 'm going with Mark Blyth's response to a similar statement about
modern economic thought._

You seem to think I subscribe to rational expectations or something. No, it's
a basic public choice and regime uncertainty point. If anything, Blyth's
comment is overly myopic and his complete dismissal of "time inconsistencies"
is unjustified. The Cantillon effects of monetary policy alone are well-
acknowledged across the political spectrum, and that's a straightforward
example of temporal disequilibrium.

EDIT: Another contradiction is the Greenspan put.

~~~
pdkl95
I think you're missing the point re: Blyth's comment. (I probably should have
explained more about my reason for in for including it)

It doesn't matter if a theory is _correct_ when "nobody knows what that
sentence means!"

Blyth isn't dismissing the concept of time inconsistency - he's pointing out
that models that rely on people making "rational" decisions are total junk if
nobody actually understands the required concepts. Models that assume people
would change their behavior because of time inconsistency should never have
been considered in the first place because most people don't know what the
term even means.

In a similar manner, I'm suggesting that while it would be _nice_ if we could
set up "markets" that self correct or allow problems to be handled locally,
this might not be possible in practice.

~~~
vezzy-fnord
Oh, a basic criticism of modeling assumptions is orderly. Though, your
particular example of people not changing their behavior because they're
unfamiliar with a specific terminology is absolutely baffling. The phenomenon
exists regardless of whether people are familiar with the lexicon.

Whether or not it's possible to set up markets that self-correct is a
different matter. They already do to various degrees even in current hampered
regimes, modulo business cycles. Though, we must extend the same skepticism
towards state attempts at equilibration if we are to be consistent. But far
too much doubt becomes an analytical nihilism.

------
lifeisstillgood
Aargh! the top comment here is miles better at (re)presenting the arguments of
both articles than this rubbish - which seems at best to be an inarticulate
rage against the idea that wealth creation should lead to rich people.

PG's original argument seems to be - We like wealth creation. We pay the price
of rich people, in order to get that. Wealth creation, as well as wealth
_release_ is happening in this generation on vast scales, mediated by
technology, software and startups.

Pg concludes there is not much we can do to fix the wealth inequality gap from
being created in the first place. And he fails to point out there are second
order fixes that can alleviate inequality if that is our goal. In other words
politics has created the SV milieu over forty years, and will be instrumental
in handling the Pikkety fallout.

This article seems to claim that because Candy Crush makers made hundreds of
millions of dollars, that is exemplary and desirable, and the intention of pg
and his Silicon Valley cabal. none of which is bourne out by the original
article.

Billionaires are a symptom of the failing of a market. No one should be able
to capture that much value themselves. More Startups should create more
wealth, yes, but they should also prevent monopolies from other startups.

We need more "startups" in all walks of life, started by people from all walks
of life (not just MIT). Because, and this is an important point briskly
touched on, the ideal size of the firm is shrinking, and the traditional jobs
will not be there.

PS Has anyone else noticed that PG's essays are more and more like listening
in to one half of a Socratic phone call, where the pupils questions are
inferred from the half you can hear?

------
AstroChimpHam
She's a great writer, but wow is she wrong about everything. In her head, the
market decides Candy Crush is $7b because a few VCs decided so. That's not how
this works. The market is willing to pay $7b for Candy Crush because millions
upon millions of people download it, enjoy it, and look at ads on it, which
generate revenue. At the same time, those users' enjoyment is the value it
created.

Holly doesn't think that's real value. She thinks she's a better judge of what
value is and isn't. And that's where this becomes hilarious. Because Paul
Graham respects "the poors" to spend their money and time on what they think
is worthwhile. But not Holly Wood. She thinks that millions of people
downloading and using and enjoying Candy Crush isn't valuable because she
personally thinks Candy Crush is a stupid waste of time. She knows what's
really good for people. Those people themselves, they have no idea.

No wonder she hates libertarians. She's a totalitarian. And the funniest part
for the rest of us is she doesn't know it.

------
ikeboy
If someone is motivated by altruistic reasons, then they'll be willing to do
the same work for less than someone doing it for profit reasons. That creates
inequality, but it's inequality that the "loser" _wants_ , because they're
altruistic.

It seems weird to choose a job for altruistic reasons, then turn around and
complain you aren't making as much as people who don't have a strong desire to
do something even without compensation.

~~~
kamaal
Which brings us to the question, are they truly altruistic?

I haven't seen Gandhi, Mandela or Teresa complain that they didn't make
millions out of their work.

Which finally brings us to the answer, these people aren't altruistic, they
seem to latch on to whatever job they get, get stuck there, and then try to
paint the altruism color to make them feel good. Deep down knowing very well
that its the money they desire.

~~~
ikeboy
Someone can want multiple things. But all else being equal, the one who only
wants money has an advantage over the one who wants money and feel-goodies, an
honorable job, etc.

(Incidentally, it's not always the people complaining, it's activists on their
behalf. Also, even if you would continue to work for a low amount because of
altruistic reasons, there's still rational value in complaining insofar as you
expect the complaining to result in a higher salary. But the rational sell-
interest in asking for more money doesn't have any bearing on the ethical
question of "should they get more money", and for that, we should remember
that they _chose_ the lower money position because of fringe benefits that
higher paid positions didn't have.

Note further that this only applies to the reference class of "teachers,
nurses, academia, science, childcare etc" that can plausibly be said to forgo
greater value jobs for altruistic reasons. For someone that can't land a well-
paying job because they aren't skilled enough, we need a separate analysis.
But the argument OP tries to make that what they produce is still valuable to
society wouldn't go through as easily; you could still say "everyone is
valuable" or some such thing, but it has less power.)

~~~
kamaal
This extends beyond this altruism argument.

>>But all else being equal, the one who only wants money has an advantage over
the one who wants money and feel-goodies

A guy 'X' who is frugal, saves and invests is going to be richer than a guy
'Y' who might be earning the same(but making financial decisions), in the same
job, after a few years.

Priorities matter. At the end one must learn to be happy with their decisions.

~~~
ikeboy
That's what I was going for, yes.

------
dinkumthinkum
I don't agree with the author at all, there are some interesting points buried
under an over abundance of ranting and vitriol waged at one person. It also, I
think, attacks Paul Graham for points he is not even making in the original
article. However, those tweets she brought up are very dismaying and show a
very odd attitude, that I don't think was found in the original essay.

------
leereeves
To sum up, with less vitriol:

Paul Graham:

> Variation in productivity is far from the only source of economic
> inequality, but it is the irreducible core of it

Holly Wood:

> [Paul Graham] assumes people who are not rich are not driven, and so he
> ignores...the probability that the poors are poor because they are busy
> being driven at enterprises that people like Paul Graham think are
> valueless. Like childcare. Or science. Or academia. Or education.

------
cwalv

        They might believe market success is a fairly
        ridiculous barometer for measuring societal value.
    

I'm not sure what a better measure would be. People will pay for things that
add value, and getting a bunch of people to pay you is the definition of
"market success". Conversely, if people won't pay, it's because you're not
adding value.

------
known
[https://en.wikipedia.org/wiki/Economic_mobility](https://en.wikipedia.org/wiki/Economic_mobility)
and
[https://en.wikipedia.org/wiki/Social_mobility](https://en.wikipedia.org/wiki/Social_mobility)
are mutually exclusive in real world;

------
davemel37
I will never understand why Authors let their bias and vitriol ruin their
essays when they are trying to make a legitimate point. I simply cannot take
an essay at face value when it is riddled with anger and emotion.

Not to say emotion isn't a valid point, and doesn't make for a good read, but
it completely undermines the objectivity of the author and defeats the point.

~~~
towlejunior
When you can't attack the argument, attack the man.

------
stuaxo
Those tweets by PG are pretty embarrassing, if I was told they were a parody
of SV culture, I'd think it was going too far.

------
tmaly
the author must not have heard of the broken window fallacy.

Economics in One Lesson by Henry Hazlitt explains it. Available free online

------
cryoshon
So uh... the author claims he got paid $500 for this extended ad hominem
attack.

How do I get someone to pay me that much for better quality content?

------
GoodJokes
Oh look. The people beholden to the people the author is ragging on dismiss
the article without engaging the points by and large.

------
GoodJokes
In which a bunch of men can't deal with a woman dissing their style.

------
la6470
yayyyyy really great counter arguments..how can something like candy crush
saga be more valuable than a teacher? SV economy will head down in a couple of
years.

------
la6470
yayyy. .. how can candy crush saga be valued more than an elementary school
teacher? Something is very wrong and anyone sensible can see it.

