
The Knives of Class Warfare Turn Towards Tech’s Plutocrats - adampludwig70
http://techonomy.com/2013/05/the-knives-of-class-warfare-turn-towards-techs-plutocrats/
======
gyardley
The 'knives of class warfare' aren't coming out because FWD.us supports a
certain variety of immigration reform or because technology disappears jobs.
The knives are coming out because as part of its lobbying, FWD.us supported
some more traditionally conservative causes through two subsidiaries,
Americans for Conservative Action and the Council for American Job Growth.
Through these subsidiaries they did some television advertising criticizing
Obama's health policy and supporting the Keystone XL oil pipeline. (I assume
this political advertising was part of some sort of quid pro quo.)

You can be rich as you like as long as you don't go off the ideological
reservation - for example, look at the entertainment industry, which
outsources overseas as much as it can but consistently supports the right
causes and donates to the right people. But support a conservative cause, for
whatever the reason, and a lot of the press will try to make you as hated as
Donald Trump or the Koch brothers.

The Daily Beast article was just a warning shot - I'm sure FWD.us got the
message and won't do it again. If not, there's almost certainly more to come.

~~~
Zimahl
Donald Trump is hated because he's a pompous ass. He's got a loud mouth and is
just about as crazy as Michelle Bachmann. Now, if he'd let his businesses do
the talking for him he would simply be another conservative rich guy.

The liberal media hates the Koch brothers not the masses. If you said 'Koch'
to the masses they'd say they preferred 'Classic' over 'Diet'.

~~~
rhizome
The media conspires to take attention off the electeds who execute the
Koch/Soros/untouchable's strategies.

------
dasil003
Ever since the Jaron Lanier interview the other day, I can't get this idea of
tech destroying jobs out of my head. The comparison between the relative value
and number of employees between Kodak and Instagram was a stark (if cherry-
picked) example of how the new tech economy concentrates wealth to an almost
monarchic extreme.

Now obviously efficiency should on balance be good—automation should free
people for higher pursuits—but when you look at the objective reality of what
the democratization of distribution has really done for people, you see that
despite being free from greedy middle-men sucking up all the value, it's
tremendously difficult to actually make a living from the easy distribution we
enjoy in the YouTube era. Technologists can still become millionaires
relatively easily, but only by aggregating the effort of literally millions.
The most elite social media celebrities are earning low six figures and there
aren't very many of them.

I still believe in the idea that value is not necessarily always reflected in
cash money, and that a lot of the automation that computers produce can help
everyone, but as the privileged few I think we owe it the world to give some
consideration to destitute and unemployable. Moving towards in the direction
of socialist policy where a minimum standard of living is guaranteed is
probably the right thing to do if automation is driving the economy, but at
the same time I don't think it's a panacea, because people _want_ to work and
feel useful, and even if the minimum standard of living is acceptable, the
poor will still be resentful if their is an intellectual thought-worker class
above them.

All of this has me really questioning how and where I want to apply my skills
for the remainder of my career.

~~~
nazgulnarsil
Markets discover correct prices. Technology drives up the value of some humans
and drives down the value of others. We are already seeing entities fight to
prevent the market from discovering the correct price for many sorts of labor.
Expect this to increase. The resources being expended on this doomed to fail
enterprise should instead be focused on turning the sorts of people whose
value gets driven down by tech into the sorts of people whose value gets
driven up by tech.

In other words: it is the industrial revolution and the price of crops is
dropping rapidly. Do you institute price controls or figure out how to retrain
farmers? It is worth noting that we STILL have price controls on crops left
over from the last paradigm shift. I'm not optimistic about our ability to
meet this one.

~~~
Steko
The problem has nothing to do with preventing the market from pricing labor
correctly. The problem is that the very nature of web services and scale
creates huge lottery winners. The Instagram founders weren't 1,000 times
better than other programmers. The market didn't price their labor there. They
were at the right place at the right time and were a tiny bit better or more
connected or whatever than their competitors. And because of that they
effectively won a huge lottery. Everyone else was lucky if they got rent
money.

~~~
BrianEatWorld
The market did though. Ignore the raw values and consider the amounts taken
into consideration by the economic actors, expected returns, which have a
probability component. As the chance of payoff for startups is low, a high
payoff may actually be required to accurately price the market to draw the
requisite amount of labor.

~~~
Steko
"Ignore the raw values"

You can't ignore the raw values and just look at means, aggregates and
weighted probability functions when the problem we're talking about is
inequality.

"chance of payoff for startups is low ..."

What you're describing is entrepreneurial risk, not the price of labor.

~~~
BrianEatWorld
You have to though, because when people are considering what career path to
pursue, they aren't looking at one scenario, they are looking at the expected
scenario. For a start-up this means lots of long hours at low pay with a slim
chance at making it big.

If you lower that big payoff, start-up employment then becomes long hours at
low pay for a slim chance at making very little. If this were the case, no on
would work in start-ups. You can't affect the "slim chance" part of the
equation because no one knows what ideas will be successful.

I am talking about the price of labor, but in aggregate not an individual.
This is what sets the incentives for the labor and incentives, not any set
nominal value that may be decreed objectively "correct", are what the market
sets.

Both responses also seem to object along the lines of the Labor Theory of
Value. Do you truly believe that the price of a product (wages or otherwise)
should be directly tied to the amount of labor going into said product?

------
rayiner
The author's central point of tech leaders needing to be sensitive to the
overriding social issue of the time (jobs) is an extremely important one. You
can wax philosophical about "disruption" all you want, but keep in mind that
in the common parlance, "disruption" is a negative word. People don't want
their lives and livelihoods "disrupted" and to the extent that such disruption
is inevitable, they need to feel like there is a clear path from there to
stability. This is a central point of conservatism that seems to be lost on
both sides of the political aisle today: to a point, stability is a good and
desirable thing.

------
zwieback
_..because the main reason it’s [jobs leaving US] happening is a radical
increase in automation and robotics driven by the very set of technologies so
fabulously enriching Silicon Valley’s .01%_

Not so sure, I was involuntarily involved in shipping my own manufacturing
engineering job along with many of our production staff's jobs overseas and it
was not due to robotics and automation. We had a lot of automation in our US
manufacturing but when production went overseas the robots went away and were
replaced with manual labor. Most of our US jobs were higher qualified with
operators and engineers working alongside automated equipment but our partners
in Asia found that the robots were more expensive than manual workbenches and
that it was hard to find operators and technicians that could keep up with
automated manufacturing.

~~~
pnathan
Quality dropped then due to manual workbenches. Why was this operation shipped
overseas?

~~~
kiba
Presumably, due to cheaper cost of manual labor versus robots. However, that
will change as manual labors demand higher wages, making robotic manufacturing
much more feasible again.

------
mdakin
We're moving towards a future in which "working" will be an optional activity.

If you can get enough farms/factories producing the widgets of everyday life
essentially for the sum of the input commodity costs, energy costs, and some
small overhead (and the free market/technology relentlessly drives overhead
towards 0), you wind up being able to take care of everyone-- but you don't
take care of everyone with jobs. You take care of the people by enabling them
to not worry about the basics of life. You remove the survival problem from
the game, and allow people to choose between living little or thriving through
voluntary creative pursuits. Some people will certainly focus on the creative
pursuits, and generate wealth that enables them to thrive instead of merely
survive. But I have a feeling that a bunch of people will focus on their
tennis game instead (which is fine with me).

I don't think most people yet realize that this sort of model is coming into
humanity's reach. Most people are looking for ways to recreate the solutions
of the past. But that's a horrible idea-- the past had problems because the
solutions of the past create problems. We're almost on the verge of a
technological/humanistic revolution in which everything will be changeable.
But things won't change if we keep recreating the past (or, more accurately,
if our ancient social structures keep trying to maintain control of the
population by merely tweaking what are actually completely obsolete
mechanisms).

I hope we can overcome the status quo and turn this world into a true utopia,
instead of letting it continue to become yet another of the countless possible
dystopias that are outlined by science fiction and other speculative fiction,
and which have constituted the dystopian reality that most people ever born
here have had to live through.

I'm very optimistic-- I think the hard part is mostly behind us. The social
power structures (the institutions that use money, violence, and killing to
control people) have not routinely killed scientist and engineer society-
changers for probably several hundred years, at least in the West. Money is
still used to this day-- e.g. the VCs (and other financial industry and
government people) hold the capital-- not some science/engineering/humanist
foundation headed by scientists/engineers/humanists. I think it's possible to
work within these constraints though, and to have a significant impact.

~~~
steveklabnik
> If you can get enough farms/factories producing the widgets of everyday life
> essentially for the sum of the input commodity costs, energy costs, and some
> small overhead (and the free market/technology relentlessly drives overhead
> towards 0), you wind up being able to take care of everyone-- but you don't
> take care of everyone with jobs.

Congratulations, you're a communist! (This is basically the communist
manifesto, if you squint.)

(So am I, this is not sarcastic. Always good to find more here on HN.)

~~~
RickHull
I'd say that quote means he is a utopian. Communism describes a particular
methodology (e.g. abolition of private property) that is theorized to lead to
said utopia. I'm not so certain he is a proponent of Communist methods.

~~~
mdakin
Yeah, I think the "Communist methods" that were tried in Eastern Europe and
Asia are generally horrible ideas. And those methods are now tied up with the
philosophy for better or worse. I def. don't think those methods work.

America provides a stable foundation upon which new experiments may be
conducted. I know it's critical to take care of and fix America within the
system as much as possible so that it can maintain its stability. But I think
the real value of America involves it being that stable foundation upon which
different people can try different ideas. America is not as wed-to/obsessed-
with the past as much as many parts of the world-- thankfully. As breaking
away from the past is critical to the advancement of humanity.

------
hkmurakami
For those of us who haven't done so yet, reading the original report that this
post is responding to will be informative.

America’s New Oligarchs—Fwd.us and Silicon Valley’s Shady 1 Percenters:
[http://www.thedailybeast.com/articles/2013/05/14/america-
s-n...](http://www.thedailybeast.com/articles/2013/05/14/america-s-new-
oligarchs-fwd-us-and-silicon-valley-s-shady-1-percenters.html)

------
kiba
What America, and the world needs, is not jobs, but the ability to be free of
the constraint of needing to finding a mean to live. One way to reduce the
constraint is to reduce the cost.

Some of the biggest cost for the average American household is housing(34.1%),
food(12.4%), and transportation(17.6%).
[http://visualeconomics.creditloan.com/how-the-average-us-
con...](http://visualeconomics.creditloan.com/how-the-average-us-consumer-
spends-their-paycheck/)

Housing is mostly a regulatory or social issue. People do not need lawns or
lot of space. There is a tendency for people to buy the biggest house they can
afford. It's also because of zoning restrictions that prevent high density
construction, and developer's disinterest in cheap housing. High standard
building code obviously contributes to the cost of engineering and developing
housing, but they are solvable through technological development. There's also
the problem of the network effect and the economy of scale of high density
constructions leading to more people emigrating to the city, increasing the
demand for housing.

Food, on the other hand, are easily leveraged with technological development,
especially with GM crops. Growing meat in factories will be much more
efficient and ethical than growing complete organisms like cows or chickens.
Food wastage is a major problem. In the US, half of the food is wasted. If
somebody could solve the problem of food wastage, that mean a corresponding
reduction in the food budget of the average American and perhaps the world.
[http://www.foodproductiondaily.com/Supply-Chain/Half-of-
US-f...](http://www.foodproductiondaily.com/Supply-Chain/Half-of-US-food-goes-
to-waste)

In the future of transportation, electric will be the primary mean of
transportation except rockets as they are much more efficient than ICE and
have a lower total cost of ownership. The question is merely about how fast
can we diffuse the technology. Governments around the world can help by taxing
carbon emitting transportations as opposed to subsidizing the electric
startups, which could be seen as political favoritism. We could also drive the
cost down by making public transportation better and widespread, accelerating
the development of self driving cars, and reduce traffic rush hours by
implementing congestion charges.

Overall, the toughest challenge is definitely housing, because housing appears
to be least amicable to technological leverage. However, if you can make
headway into the biggest cost to the average household, our need to work in
order to live will be drastically reduced.

~~~
pchristensen
"...developer's disinterest in cheap housing"

Developers want to build profitable housing. Housing that is currently legal
to build is less expensive and less risky than pursuing zoning changes. In any
expensive metro, developers build exactly as much as legal to build, and use
excess capital to pursue speculative re-/up-zonings of unbuildable land. That
option is only available to the biggest homebuilders.

Developers were happy to build NYCs slum tenements when they weren't quantity-
constrained.

------
greghinch
What technology is enabling/causing when it comes to jobs is removing the
place in society for uneducated/unintelligent people. So the solution would be
to start ensuring proper education, aimed at primarily at science and
engineering, for future generations. Unfortunately, even if that were broadly
applied, the effects wouldn't be seen by and large until the better part of a
generation had passed.

------
CleanedStar
The truth is that the VCs have created absolutely none, zero of the wealth in
Silicon Valley. _All_ of the wealth was created by the workers who built these
companies. If there is anyone other than workers at these companies who create
wealth nowadays, it is the users. The users of Facebook are creating the
content of Facebook for free. The people working on Facebook are the ones who
create the platform allowing them to do this. You can say the same with Google
and web content. Google found a way to take the decentralized web, with
contentual links thought of by humans, and centralize it in one place. People
thinking how to contextually connect millions of web pages do the work, and
Google crawls and amalgamates that.

And as is said here, and is true, it costs almost nothing in capital costs to
start a startup nowadays, create an app, get a cloud presence etc. Wages are
the main cost. The people doing the work create the wealth, either paid
(infrastructure) or even unpaid (free content, free contextual links etc.)

jwz is someone who "hit the jackpot" with his options, yet even he saw up
close what happens ( [http://www.jwz.org/blog/2011/11/watch-a-vc-use-my-name-
to-se...](http://www.jwz.org/blog/2011/11/watch-a-vc-use-my-name-to-sell-a-
con) ). I would quote the relevant part of his blog post here, but all nine
paragraphs could be quoted, really.

The main point is, the programmers create the wealth making the platform, and
perhaps the people working for free uploading content like pictures, or
getting their web sites crawled. The money goes to the VCs, and a little bit
of it to the CEO and top execs. Even those that hit the jackpot at a Netscape
don't really hit the jackpot. And these are the programmers who slept under
their desks and made the killer product. What about the guy in the Midwest?

Organized labor allowed an equitable distribution of wealth. VCs are leeching
off the US government, the universities of China and India, the high tech
workers here etc. How is some heir putting his millions in some fund creating
wealth? We create the wealth. The heir is a leech. Like the kids in the "Born
Rich" documentary.

New technology can mean less hours for workers, more pay for workers etc.
Instead it goes to the aristocracy.

Modes of production change and so does the organization of labor. Workers in
Ancient Rome went on strike, and I remember the strike waves in the US in the
1970s. Things change over the millenia, but these notions labor will stop
organizing circa now are silly. It hasn't stopped after all these millenia. We
are the programmers, system/network/database admins etc. creating this wealth
of all the people in the world, and as jwz points out, even when we hit the
jackpot we get screwed. Production is changing but there will be a revival of
organization, education and then agitation. What happened before in history
will happen again. It's to the oligarchs advantage to tell us all these
millenia of struggle have finally stopped in the past few years. It hasn't.
And we are the ones in the most key positions to do something. I will quote
one sentence from that link. "When a VC tells you what's good for you, check
your wallet, then count your fingers"

~~~
tptacek
If the wealth generated by the workers in Silicon Valley required capital as
an input, for instance to pay Silicon Valley workers (who are among the
highest compensated in the world), or to build the world's largest data
centers, or to maintain millions of dollars of inventory for the COGS of
hardware projects, then it's not accurate or even particularly meaningful to
point out that investors haven't created value.

~~~
ryguytilidie
I don't think the OP doesn't understand this, I think hes simply arguing that
the person putting up the money to do amazing things should get less of a
return than the person DOING amazing things. Unfortunately that is not the
case at the moment.

~~~
kkowalczyk
Unfortunately how?

Amazing person doing amazing things has an option to not take the money and
have 100% of the upside of his amazingness.

What people seem to forget is that it's about risk.

VC investing is high risk. For every 10 investments, 1 is wildly profitable
and the other 9 are failures or low returns.

For that reason the ROI for that 1 out of 10 success cannot be "fair" by your
metric - VC has to make enough to cover the 9 losses and some profit.

What the amazing person gets from the deal is knowing that even in the likely
90% case of failure, he won't sink in debt to fund his work.

~~~
legutierr
Venture capital investing is not the only method by which to mitigate the
risks inherent to innovation. The university system, via tenure and grants,
does a good job of facilitating innovation by mitigating the risks that
individual researchers take--even when big capital expenditures are required.

Other systems can be envisioned: for instance, a basic income or a negative
income tax would remove much of the risk that individual programmers,
inventors and tinkerers face when trying to pursue their visions.

