The Knives of Class Warfare Turn Towards Tech’s Plutocrats(techonomy.com)
techonomy.com
The Knives of Class Warfare Turn Towards Tech’s Plutocrats
http://techonomy.com/2013/05/the-knives-of-class-warfare-turn-towards-techs-plutocrats/
9 comments
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'.
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'.
[deleted]
The media conspires to take attention off the electeds who execute the Koch/Soros/untouchable's strategies.
> FWD.us supported some more traditionally conservative causes through two subsidiaries...
Traditionally conservative? Try corruption-mongering and off-message. If someone supports immigration reform, why should that money be used to fund support of an Oil pipeline?
There's no way this looks good for FWD.us. It's not a warning shot, FWD.us shot itself in the foot, and is currently bleeding to death.
Traditionally conservative? Try corruption-mongering and off-message. If someone supports immigration reform, why should that money be used to fund support of an Oil pipeline?
There's no way this looks good for FWD.us. It's not a warning shot, FWD.us shot itself in the foot, and is currently bleeding to death.
I think you could argue that both initiatives will lead to job creation. But since this link wasn't at all mentioned in any of the advertisements I saw, I agree - it felt odd. That's why I can only make sense of them as a quid pro quo.
However, I don't think the attacks on FWD.us are because they were simply 'off-message' - I think it's because of the content of that message. A different, less-objectionable 'off-message' would've passed by comparatively unremarked.
However, I don't think the attacks on FWD.us are because they were simply 'off-message' - I think it's because of the content of that message. A different, less-objectionable 'off-message' would've passed by comparatively unremarked.
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.
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.
> I can't get this idea of tech destroying jobs out of my head.
You may enjoy reading "Capital, vol 1"[1] by Karl Marx, specifically, chapter 15: Machinery and Modern Industry. Sections five and six discuss this in great detail.
1: http://www.marxists.org/archive/marx/works/1867-c1/
You may enjoy reading "Capital, vol 1"[1] by Karl Marx, specifically, chapter 15: Machinery and Modern Industry. Sections five and six discuss this in great detail.
1: http://www.marxists.org/archive/marx/works/1867-c1/
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.
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.
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.
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.
Isn't that then a really good argument that relying on markets is decidedly not the way to go, and that socialism, for example, is more fair and just than capitalism?
In the end, we all want a society that's "fair" to the largest amount of people, where each person gets about as much as they toil for. It seems the market is apparently doing a pretty lousy job, if we've come to a reality where two lucky dudes who were well connected could sell their photo-sharing app for a billion all the while a good half of the country risks getting financially decimated come an unforeseen disease or bad accident somewhere.
In the end, we all want a society that's "fair" to the largest amount of people, where each person gets about as much as they toil for. It seems the market is apparently doing a pretty lousy job, if we've come to a reality where two lucky dudes who were well connected could sell their photo-sharing app for a billion all the while a good half of the country risks getting financially decimated come an unforeseen disease or bad accident somewhere.
"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.
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.
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?
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?
Uh yeah, people working on tech startups don't deserve to win with huge risks on creating yet another photo sharing app. Taking risks is a choice, and using hindsight to criticize the windfall of the winners is silly.
> All of this has me really questioning how and where I want to apply my skills for the remainder of my career.
It's entirely possible to create technology that works the other way, such as inventing the power-loom that replaced expensive hand-weavers with larger numbers of cheap migrant laborers, spawning the Luddite movement to smash the machines to protect "good jobs".
There are surely lots of modern equivalents that replace the expensive few with larger numbers of cheap workers, simultaneously creating value and spreading wealth out. It could be something like software usability, or a process that lets locals produce something easily that they used to have to go to a central supplier for.
It's entirely possible to create technology that works the other way, such as inventing the power-loom that replaced expensive hand-weavers with larger numbers of cheap migrant laborers, spawning the Luddite movement to smash the machines to protect "good jobs".
There are surely lots of modern equivalents that replace the expensive few with larger numbers of cheap workers, simultaneously creating value and spreading wealth out. It could be something like software usability, or a process that lets locals produce something easily that they used to have to go to a central supplier for.
Of course, the Instagram vs. Kodak comparison leaves out the actual network-connected cameras built into smartphones that Instagram leverages.
Untold thousands of people are employed designing smartphone chips and the phones themselves, building smartphone operating systems and app platforms, manufacturing the smartphones, selling the phones and service, and maintaining the cellular network not to mention the rest of the internet, many also at middle class wages though not all in the US. Of course, in the heyday of film, many cameras were made in Japan or elsewhere. The few Instagram employees are just a small part of the puzzle that allows Instagram to be a successful company.
Untold thousands of people are employed designing smartphone chips and the phones themselves, building smartphone operating systems and app platforms, manufacturing the smartphones, selling the phones and service, and maintaining the cellular network not to mention the rest of the internet, many also at middle class wages though not all in the US. Of course, in the heyday of film, many cameras were made in Japan or elsewhere. The few Instagram employees are just a small part of the puzzle that allows Instagram to be a successful company.
> All of this has me really questioning how and where I want to apply my skills for the remainder of my career.
Come work in healthcare.
Come work in healthcare.
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.
..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.
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.
Quality dropped then due to manual workbenches. Why was this operation shipped overseas?
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.
Quality only matters after the cost accounting is done. It's kind of a Maslow Hierarchy for large corporations.
Maybe, maybe not. There are many variables: cycle time of each step, cost of raw material, cost of labor, cost of real estate, turnover of labor, etc.
In the end you can dial in your desired quality at the expense of your yield. We tended to view high yield at a given quality level as the main goal but if you can afford to throw away 1% more parts at final inspection and still save money you'll be forced to do that.
In the end you can dial in your desired quality at the expense of your yield. We tended to view high yield at a given quality level as the main goal but if you can afford to throw away 1% more parts at final inspection and still save money you'll be forced to do that.
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.
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.
> 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.)
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.)
I'm probably more of a social anarchist than anything, but I think labels are often unhelpful. The beauty of our current situation is that we can build it on top of America as it exists today. No need to label it-- just build it. :)
I switch between autonomous Marxism, anarcho-communism, or post-{anarchy, communism} depending on how I'm feeling and who I talk to, so I know that feeling.
Labels are useful, but your emphasis on building is absolutely accurate.
Labels are useful, but your emphasis on building is absolutely accurate.
I think labels can be useful when they are used to facilitate communication and understanding. But they can also be used as weapons and to manipulate people who have trouble communicating and understanding. I suspect we're on the same page. :)
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.
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.
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.
The strategies are to bring about the abolishment of the Law of Value, but they're talking about after that.
(And Marxism is specifically a critique of Utopianism...)
(And Marxism is specifically a critique of Utopianism...)
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...
America’s New Oligarchs—Fwd.us and Silicon Valley’s Shady 1 Percenters: http://www.thedailybeast.com/articles/2013/05/14/america-s-n...
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...
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...
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.
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...
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...
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.
"...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.
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.
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.
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... ). 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"
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... ). 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"
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.
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.
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.
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.
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.
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.
[deleted]
There is a useful distinction to be found between creation and enabling: permitting someone to toil your field is significantly different than actually doing the toiling.
Capital infrastructure is one input among many to any industrial process. I place about the same value upon it as the electrical and sewage infrastructure we build our businesses upon. No reason to revere it more than our other infrastructures.
I would deny both the sewage system and the capital system the verb "create" in this context.
Capital infrastructure is one input among many to any industrial process. I place about the same value upon it as the electrical and sewage infrastructure we build our businesses upon. No reason to revere it more than our other infrastructures.
I would deny both the sewage system and the capital system the verb "create" in this context.
"build...data centers...millons of dollars of inventory"
All of which are irrelevant in this case, of course. Which just means the case of Tumblr provides more clarity into the reality of these processes. The case holds for the data centers along Kifer Road as well.
And of course, this required capital is only the expropriated wealth from workers that have gone before. The old rip-off money to pay for the new rip-off. Which will go to future ripoffs. What does the marco.org link on the front page say? "I look back on Tumblr's crunch times with mixed feelings...I won't make yacht-and-helicopter money". This is the guy who hit the jackpot of his startup job.
Plus where are these SV offices located? On the old hunting grounds of the Ohlone. Now owned by landlords talking about how they're giving their land as input to this ecosystem.
I'm concerned with the facts of the past, not whatever sappy liberal sentiment might be attached to these facts.
I know you're probably happy with your, Dave and Jeremy's big payout recently, but at the end of the day, whether it's OK with your or not - you were all still on some level ripped off.
All of which are irrelevant in this case, of course. Which just means the case of Tumblr provides more clarity into the reality of these processes. The case holds for the data centers along Kifer Road as well.
And of course, this required capital is only the expropriated wealth from workers that have gone before. The old rip-off money to pay for the new rip-off. Which will go to future ripoffs. What does the marco.org link on the front page say? "I look back on Tumblr's crunch times with mixed feelings...I won't make yacht-and-helicopter money". This is the guy who hit the jackpot of his startup job.
Plus where are these SV offices located? On the old hunting grounds of the Ohlone. Now owned by landlords talking about how they're giving their land as input to this ecosystem.
I'm concerned with the facts of the past, not whatever sappy liberal sentiment might be attached to these facts.
I know you're probably happy with your, Dave and Jeremy's big payout recently, but at the end of the day, whether it's OK with your or not - you were all still on some level ripped off.
We didn't take a dollar of external funding.
If Tumblr didn't have a way to put capital to use, why did they take almost $100MM in funding? What do you allege they did with it?
You've put a glossy veneer on your argument to be sure, but when I dig into it even a little bit, it seems like there's nothing inside it. That's too bad, because I don't like the venture funded startup ecosystem, and I wish people mounted more effective arguments against it.
If Tumblr didn't have a way to put capital to use, why did they take almost $100MM in funding? What do you allege they did with it?
You've put a glossy veneer on your argument to be sure, but when I dig into it even a little bit, it seems like there's nothing inside it. That's too bad, because I don't like the venture funded startup ecosystem, and I wish people mounted more effective arguments against it.
Wealth is created in ecosystems. You recognize that.
VCs are part of the tech ecosystem. They have their own incentives, just like any entity a complex system.
VCs are part of the tech ecosystem. They have their own incentives, just like any entity a complex system.
>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.
You sound too emotionally invested [1] in a world view and that is clouding your judgement and understanding of the situation.
Peter Thiel, Marc Andreesen, Paul Graham, and countless other VC's were once "workers" who produced a great deal of the wealth of SV, and are now reinvesting it into the ecosystem's next generation.
Logically speaking, no amount of confirming examples can prove your assertion true, but one single refuting example can completely disprove it. I believe I just did that.
You can't tar everyone with the same brush, and doing so only takes you, and all of us, further from the reality and truth of the situation, not closer.
[1]: http://www.metafilter.com/125555/The-Psychology-of-Human-Mis...
You sound too emotionally invested [1] in a world view and that is clouding your judgement and understanding of the situation.
Peter Thiel, Marc Andreesen, Paul Graham, and countless other VC's were once "workers" who produced a great deal of the wealth of SV, and are now reinvesting it into the ecosystem's next generation.
Logically speaking, no amount of confirming examples can prove your assertion true, but one single refuting example can completely disprove it. I believe I just did that.
You can't tar everyone with the same brush, and doing so only takes you, and all of us, further from the reality and truth of the situation, not closer.
[1]: http://www.metafilter.com/125555/The-Psychology-of-Human-Mis...
Did Bill Gates rip-off Tim Patterson ? Paying him $50,000 for MS-DOS. Jim Clark was able to buy a helicopter but he complained about this too.
http://www.pehub.com/45502/billionaire-jim-clark-vcs-take-to...
I think you are arguing for a more progressive tax so the top is paying their fair share.
http://www.pehub.com/45502/billionaire-jim-clark-vcs-take-to...
I think you are arguing for a more progressive tax so the top is paying their fair share.
There are two types of people under the current system. The creators of wealth vs the accumulators of wealth.
One might suggest other names, let's see...
How about "the proletariat" and "the bourgeois?"
(I will point out that while the position of Marx in his time was simply this, you only have to advance as far as Lenin to see that it's a bit more complex than that.)
How about "the proletariat" and "the bourgeois?"
(I will point out that while the position of Marx in his time was simply this, you only have to advance as far as Lenin to see that it's a bit more complex than that.)
The more things change, the more things stay the same.
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.