What happens when a culture is driven by the need for money to make more money

I figured out in 2009, when I was working at a hedge fund trying to bid on the assets of bankrupt banks post financial crisis.

Basically, every branch loses money to gain depositors. All the fees on monthly accounts, safety deposit boxes, ATMs, cashiers checks, etc. do not offset the cost of the office and employees. However, if the loss is small compared to the volume of deposit money the branch attracts, then the bank headquarters has "borrowed" money at a very low cost.

I think a typical suburban Countrywide or Washington Mutual branch was losing about $100K/yr but had deposits of $20M; not bad at all considering Fed Funds had been around 5.25% until fall of 2007, and that having the capital was the life blood necessary to do all the profitable operations (originating mortgages, credit cards, student loans, EDIT: meet regulatory capital requirements, etc). In Midtown, those numbers might be multiplied many fold, so very few retail stores can compete and stay profitable.

    money => more money ------- (1)
    money <=> power ----------- (2)

As someone who has deleted Facebook and moved to our own small homestead, this is totally untrue. On the contrary, I live in a much more vibrant community now, as I barter with the neighbors, trading our eggs, dairy, and honey, for whatever they have/do. I know almost every single person who lives near me. We hire their kids to help in the summers. A few women hang out at our place every Tuesday and knit. We have friends come crash with us for weeks or months at a time, exchanging room and board for helping around the homestead. And I work from home, ironically making more money than I did when working in an office. (Although I actually save less because I keep building chicken coops and solar arrays, etc.).

In any case, I feel far more connected to my local community now than I ever did before we started this lifestyle.

* There are only 250 Duane Reade's total (according to Wikipedia), there can't possibly be 400 in Manhattan.

* Duane Reade as a chain is intricately associated with the city of New York, at least from the point of view of a San Franciscan. It is the local culture.

* What's wrong with not having to walk a mile to go to a drug store? Having more locations helps build smaller neighborhoods.

Nobody grows up wanting to own and operate their own drug store anymore. So chains do it instead.

And I don't see how this is different than 50 people opening their own boutiques and destroying neighborhoods through gentrification. But I'm guessing the author would have a different opinion on that.

also: this is the CEO of kickstarter? Isn't it slightly self-serving for him to say "people should be trying their own crazy things that they could never get money for before kickstarter"?

Take Chicago for example. When I moved to Chicago five years ago, Wicker Park was the "hipster" neighborhood, where many of the exciting cultural events (at least for people in my age group, young 20 somethings) were happening. By the next year, Wicker Park had become too trendy and gentrified, and all the hipsters moved further west to Logan Square. Today Logan Square is too upscale, and the hipsters have moved south into Pilsen, forcing many of the local hispanic families out of the neighborhood because of rising prices. Now there are organic juice bars sprouting up in Pilsen and the gentrification process is starting anew.

This is almost exactly the pattern described in the article, except it's the people who want authentic communities that are causing the problem! It's a catch-22: if you don't like your community you can try to go elsewhere, but a few years after you do you will hate your vapid community again. In this case it's the drive for culture that causes monoculture. Once something is seen as authentic people flock to it and it becomes trite. How can you deal with that?

It causes weird effects. In my area -- and in a number of other more rural communities I've visited over the last year -- there are still tons and tons of empty commercial spaces, staying empty for months (or years), all with "For Lease" signs in the window ... and all of them with absurdly inflated asking rates. For those whose god is "the market", there's a failure happening here that's directly affecting the ability of smaller businesses to start up or grow.

People who will take that advice to heart will just end up not being the extremely rich people, and other people will end up there instead.

It's good to increase the number of CEOs and powerful people who remain committed to values that benefit everyone. Still, without systemic change, the extremely rich and sociopathic will continue doing what they do, and extremely powerful corporations and banks will stay extremely powerful.

There was an article about this in the Wall Street Journal last year[1]. Excerpt:

> But why open a branch on every corner? The blame, it turns out, lies with us. We're asking for it.

> TD, which has more than 1,300 branches in cities up and down the East Coast, conducted a customer survey and discovered that, compared to the rest of the nation, New Yorkers are obsessed with branch convenience. While folks in other towns value frivolities like friendly service, New Yorkers more often rank convenient ATMs and branches a top priority. They want locations near their homes, their offices and the offices of their spouses, says Mr. Giamo. They want to see their bank everywhere they go.

When it comes to the subject of community, a lot of people don't want to accept that communities are dynamic. The ways in which they change are almost always driven by the needs and wants of the people in those communities, even though you will always find vocal people in those communities who swear that can't be the case.

[1] http://www.wsj.com/articles/all-those-banks-in-new-york-city...

There are more banks then ever, because it's more profitable to be a bank than ever before. We have had almost an entire decade of 0% interests rates allowing banks to make incredible sums of money.

Gentrification arguments aside, I'm confused because they don't seem to have customers (and again there are multiple) and certainly that will only be more true as younger people have less and less connection to the physical bank branch.

_For Profit_ doesn't cut it and is buggy. The side-effects are the waste due to consumerism, unsustainability and potential application crash (climate & earth).

The variables in the model needs to be tweaked so a new system evolves.

I think the answer is to really understand how money functions in our society and the parts that work and the parts that don't and come up with an evolution of the concept that incorporates technology into society and works better.

For example: bitcoin, Ethereum, some kind of holistic schema for tracking resources which would make us less dependent upon money and make it easier to plan. Maybe have a few categories of money for different things.

If we can insert better technology (than basic money) to mediate society, maybe we can create an opt-in society that is more fair, efficient, and still evolves freely.

But don't just say "money sucks" and throw it out, and unthinkingly resort to technocommunism.

Its kind of like when people will give up their Christian faith and then decide they should become hedonists. We need to think through things more and really synthesize ideas. Integrating technology into society can make things like universal point systems (money) more practical and more fair.

It's not. Every culture and economic system that has ever been put into practice in all of human history has produced the exact same wealth accumulation dynamic.

The main difference is that in the systems other than free-market capitalism, significant wealth accumulation is not merely "difficult" for ordinary people, but actually "impossible" if you're not a member of the tiny ruling circle.

At least under free market capitalism, as an ordinary person you do have a shot, however unlikely it may be.

I also want to point out that it's a bit irritating to be told to not strive harder by someone who's already got "FU" money.

Here's Ian MacKaye talking about his philosophy w/ a reporter: https://youtu.be/7zc2-T6LbOo?t=25m

If you consider a profit-maximizing corporation a paper-clip maximizing AI, it's a hostile AI that's bad for people.

Then you take a look at Public Benefit Corporation, and what you could say goes on, is that instead of using "profit" as a measurement of success, it's a binary answer to sustainability. If a public benefit operation is profitable, it can continue - but it doesn't matter how profitable it is, because that's not the success criteria.

Another interesting place to think about this is "profit as A/B testing metric". Are user signups really what you want, or do you simply require user signups to sustain, but what you want are, say, user-submitted content?

All this talk of altruism, Zuckerberg and Gates too, is trivial when you have it all.

The true measure is when you, like most people, behave when you have nothing to lose and nobody is watching.

Yup, love that he included this tidbit. A little dramatic, but practical. They figured out the formula, so they're a sound investment. Even Adele has a track with Max Martin on her new album.

If there's a really cogent indicator of 'wealth disparity' there's nothing quite like looking into the "Top 1%" of music acts versus the rest. Not that music has, you know, traditionally been a great way to make a living, but the numbers are really exploitative in a lot of ways. It's quite indicative of the money first mentality I think, for music (and venues) to be consolidated (or allowed to do so) in such a racketeering fashion.

Number 1: Don’t sell out...Do something because you believe it’s wonderful and beneficial, not to get rich.

Oh, wow. I needed this. Mostly because it's such a futile thing to try and be independent as a musician and make a living...or really any money...but it's a personal decision, one based on principles. Glad he at least mentioned this concept for consideration.

A minority of customers chooses local/eclectic/independent: not sure whether this minority is growing or shrinking.

I've been to many countries. If you go to China, Vietnam, Colombia, Eastern Europe, you can find plenty of places without mainstream chains and lots of local shops.

You know what? Most of them suck.

Bad selections, overpriced, trying to cheat you on change, rat droppings or layers of dust on top of a variety of food products...

... I know if I go to Duane Reade or Chipotle, the food or medicine I buy will be legit, unexpired, and without any egregious violation.

If I buy a pair of jeans at Walmart or Target and they rip in the first week I own them, I can take them back.

Chain banks mostly suck, and credit unions or online banks are far better. But for food, clothing, and medicine, chains are a godsend. You don't get cheated, everything is decent quality, and clean. If you buy something and it's broken, you can take it back. Not so in most of the world.

(And also, many of the small shops locally owned aren't owned by local people just getting by -- they're owned by local bosses, who are just as callous as the archetypical big corporation, but much less effective at delivering to customers and much less accountable.)

Liked the rest of the article, and do admire companies that operate differently like REI. But lionizing small disorganized ineffective dirty shops is a miss; Chipotle and Duane Reade are godsends compared to what you'd get otherwise. If you don't believe it, check out any developing country before chain stores move in. It's not a better state of affairs.

There's a fundamental unsolved (or, poorly solved, or, we don't like the solution enough) civilizational problem: I have a new society. Where do I put it?

And a longer comment:

I read at thing that suggested that companies with "noble purpose" make hand over fist more money than companies with a sole profit motive.

One way to take this is that, by operating under different goals, you become unpredictable to the established power, and the "OODA loop" concept teaches us that's a solid way to win. Arguably, against a better positioned opponent who can absorb you, playing by different rules is the only way to win.

Another way to take this is to pull the idea that "money" is only a measurement of "debt", and is thus inherently unsustainable because it measures a non-finite thing in a world of finite things. And so if you make decisions by maximizing an unsustainable sense of depletion, it stands to reason you'll end up making a depleted place.

---

Of course, you can also read all this as "convincing you not to play our game, so we don't have to compete with you"... akin to "stability is good because I'm on top!"... but that just goes back to "need to play by different rules if I'm to win".

* The classical Greek had their notions of temperance

* Romans had the notion that a proper aristocrat needs to own an agricultural estate, idea of civil virtues (these cost a lot of money) and that one has to spend the money on a huge estate with a court of slaves (familia urbana)

* China had their Imperial bureaucracy

* the European middle ages had corporatism/guilds in the cities

Once these restraints were gone we entered modernity.

(here is an article why China didn't do modernity, despite having had all the big inventions that supposedly brought us capitalism - like the printing press, gun powder, paper money, big advances in materials, a fleet that discovered America. The authors say the structure of institutions was restraining entrepreneurship and progress :

http://www.amphilsoc.org/sites/default/files/proceedings/157...

In the meantime, though, just try to be happy (as the article suggests).

That's capitalism, what's the fuss about it? It's not possible to have only the good of capitalism and the good of communism. The bad parts will come in soon or later.

The "don't be evil" approach has already proved to be BS so we must choose what do we really want.

An interesting experiment is East Europe, a capitalist society that uses some good communist laws. E.g. Student used to have a large discount everywhere, allowing everybody to study. Discounts are getting smaller and smaller till the day that they will disapeer. Or people that couldn't be fired after some age. Even if people don't want to loose these policies, it's a matter of time. It's very hard to have the best of both worlds.

1. http://www.amazon.com/Not-Bread-Alone-Konosuke-Matsushita/dp...

Today, it seems, that many people just have one principle that holds above anything else: Money. I think, this way, we ultimately sell out humanity.

This might be a trivial and stupid example, but when everything is optimized for revenues and profits it really is demoralizing.

Homo-economicus is a psychopath. He values profit over people, uses people as resources, measures his own worth in money, harms the environment, has no deeper values, and so on. Insofar as our (capitalist) society rewards homo-economicus instead of shunning this miserable being, we are going to be ruled by a pathocracy.

It's sort of like when Stanford/Harvard graduates say that we should abolish elite universities and that the degrees are worthless. Easy to say for the guy who already graduated from there. I totally agree, as soon as I graduate from Stanford, I will go around saying how it's not worth much. But until then, I'll try like crazy to get in.

Thoughts?

>Investors make money, franchises notch a new location, and the neighborhood suffers a significant death.

What are these businesses that are so great to the community yet don't make any money? If everyone's taking their business to franchises it's because they (the customers) prefer them and franchises provider a better service.

Seems like the author just longs for independent stores and the like simply because he dislikes corporate culture, and would rather pay more to avoid it.

"When we made the investment, it was decided that we'd keep it quiet for a while." [1]

[1] https://www.usv.com/blog/kickstarter

Also interesting: https://www.crunchbase.com/organization/union-square-venture...

In 2011, they've raised 10 million dollars. They should thank the Fed and abundance of capital.

"At some point in the past ten years, selling out lost its stigma. I come from the Kurt Cobain/“corporate rock still sucks” school where selling out was the worst thing you could ever do. We should return to that. Don’t sell out your values, don’t sell out your community, don’t sell out the long term for the short term. Do something because you believe it’s wonderful and beneficial, not to get rich."

In the past ten years, the tension between "not selling out" and "feeding myself and paying my student loans" has reached a breaking point where increasingly few people can maintain an acceptable standard of living and not take lucrative opportunities. In other words: the opportunity cost of "not selling out" has skyrocketed to unsustainable levels. This is caused by many factors, and will not reverse itself until we have some form of major scale resource redistribution. The realistic summary is that doing wonderful and beneficial things leads to the poorhouse, and "selling out" for most people leads to a middling barely-financially-secure existence that falls far short of getting rich and still doesn't have enough resources to plan for the long term.

"Don’t sink into the morass of “industry standards.” Don’t succumb to the inertia of the status quo. Don’t stop exploring new ideas. A small number of people can change how society works. It’s happened before and it will happen again."

I doubt that many of us want to sink to the median, but the status quo has a way of smashing down people who try to explore new perspectives, and the economics of this fact are especially fierce right now. This is part of the problem, of course: the accumulated capital has an overwhelming interest to maintain the status quo of their wealth, and has many resources to kneecap change. Then (because this is related to Kickstarter, I am obligated to write this) there's the fallacy that inventing a new toy or app will change society-- sometimes it's possible, but on average it doesn't happen. I'd like an app for social change, but even something as simple as an app which lists what companies to boycott on a given day would probably run into legal trouble very quickly.

"Look at the language on that cover: “be paranoid,” “go to war.” Its violence suggests that being ruthless is the only way to survive. We all hear this tone all around us."

Yes, I have noticed the terms of violence / natural selection being pushed in order to make people more vicious toward each other in their pursuit of making a living. Largely, this language-shifting effort has worked, and people view each other as competitors for resources rather than potential allies to increase the wealth of the community. I will state that this kind of anarchistic worldview benefits employers and corporations a tremendous amount, and benefits the public not at all. I suspect this is one of the contributing factors to reduced mental health in the US, and also one of the contributing factors toward people shunning union work. And yes, the prioritization of money above all other considerations is one of the major problems that has almost always existed in America. The people with the most money have lived here through the modern era, and have shaped the USA to funnel money into their coffers. Rather than lament about how we can't kill these people and take their cash, I think it's more productive to think about the policies we can specifically ask for which would prevent radical wealth accumulation in the first place.

Right now I think the best path forward is to come up with a scheme which redistributes capital downward and breaks up the largest clumps of stagnant money. I have no idea how the math on this is going to work out, but the sooner we get the political wheels in motion (Bernie Sanders is a good start, but we need about 300 more of his type before we can make headway) the sooner we can start to undo the damage caused by the crony-capitalism economic policy of the last 40 years. Rather than prioritizing the ability for people to make vast sums of money (and make no mistake, we have prioritized this), we should prioritize raising the standard of living of the median citizen and ensuring equality of opportunity. I guess this means either a negative income tax or UBI.

7000 taxi medallions.

8 Major Film Studio Companies. (‘The Majors’)

15 Large Banks.

3 Major Radio Stations.

3 Major Labels.

2 Major Ticketing companies.

2 Major broadband providers.

2 Major telcos.

~150 MVNOs. (Mobile Virtual Network Operators)

10 Major Movie Theater Chains.

4 Big Accounting Companies. (“The Big 4.”)

10 Major Grocery Companies

7 Major Financial Analytics Companies – Terminal

5 Credit Card Companies(Visa, MC, Mastercard, Amex, Discover)

Thus more companies/people will have a chance at being successful and more people will profit from their success.

This is just generic "appeal to nostalgia", romanticizing a bygone era that probably never existed "as such" in the first place, and desperately scraping for a way to attack modern capitalism.

When chains displace "local businesses" they do so for a reason: they offer a combination of price/service/value/whatever, that the residents of the region favor to an extent that it makes the other businesses no longer viable. If people want "friendly neighborhood druggist who has lived and worked in the same spot for 70 years" they don't appear to be willing to pay for that.

As for "the need for money to make more money"... yes, that's a real phenomenon, no doubt. There's a reason Pareto distributions occur and it probably has to do with "preferential attachment" and path dependence. And to be fair, pretty much nobody wants a world of deep economic inequality. BUT... you have to look at the flip-side... in many ways, it is easier and cheaper today to start a new enterprise and begin the path of "making more money" than it's ever been. It's been cheap to start a web-based SaaS offering for a while, and even though enterprises making physical goods are still expensive, the emergence of things like Kickstarter, Indie-go-go, etc. have made that world more accessible as well.

If you want to argue that it's unfair that Joe Random Guy can't start a new oil refinery or steel mill or a nuclear power plant, then OK... you have a point. But has it ever been the case that just anybody could start something like that? And is it necessary for that to be the case?

A diverse universe of record labels is steadily consolidating down. A shocking percentage of Top 40 hits are written by four Scandinavian men.

And yet the universe of music that I have access to has been constantly expanding, thanks to the Internet, open source software, and advances in technology which make powerful tools for creating and recording music cheaper and cheaper.

Don’t sell out your values, don’t sell out your community, don’t sell out the long term for the short term. Do something because you believe it’s wonderful and beneficial, not to get rich.

Now this we can agree on. This is one reason we haven't tried to raise outside capital at Fogbeam. We want to build the kind of company we want to build, not necessarily the kind of company that VC's want to build.

Always act with integrity. Really be clear about the things that drive you. Remember the lessons your parents and grandparents taught you about how to treat people and make sure your business lives up to that.

Agreed.

Earlier this year we became a Public Benefit Corporation. This means we are legally obligated to consider the impact of our decisions on society, not just our shareholders. It’s very different from the expectation that for profit companies maximize shareholder value above all. It acknowledges and embraces that you are a part of a larger community.

Benefit Corporations are a great idea, and I hope North Carolina adopts a "B Corp" law eventually. We don't have the notion here currently, not as a legal form acknowledged by the State anyway. If any fellow North Carolinians are reading and want to work together on B corp advocacy here, ping me and let's get started.

Enter the state.

There are guys like Sartre and Camous or even Henry V. Miller and his immitators, who have wrote volumes on this timeless theme - how the world is dominated by money-chasing mediocrity and absolute futility of this endless struggling and caused by it suffering. A few very good books has been written about realization of this futility and suffering.

So called social responsibility is also as old as humanity. Big Tibetan sects, which in fact were feudal landlords, used a concept of socially oriented Bodhisattvas, invented by pundits in Nalanda, in order to justify why every village should feed them, so they exist to benefit the whole society, which is just another Utopia, because each member of society is optimizing for very selfish, biological goals of survival and reproduction and protection of progeny.

In the context of a CEO blog post such populism is just the same kind of hypocrisy - socially responsible money making is no different from socially responsible authoritarian regime.

There is no need to protect or nurse a society. Just following of some evolved social laws, which could be found in the basis of every religion, and not intervening or abusing free (self-balancing) markets, which is, by the way, is idea as old as kicking speculators and money lenders out of the church, is enough. Society would take care of itself, as most of rural societies still do.

The 'cure' for society, as it have been found millenia ago, is to behave yourself according to the natural laws, and everything else would follow. No amount of governing or policing will help. Behavior of each actor is what society is.

This, BTW, is exactly what America before corporations and big government used to be - a self-balancing society of free people with Constitution as the definition of its structure.