Paul Graham Is Still Asking to Be Eaten
medium.com
medium.com
I think funding, management and outreach all depend on human resources behind the product, most importantly, the team of founders. They have to get the funding, manage the company and communicate well to customers. If the founders are "high value", they can imbibe the product with some of this "value".
A system of computing values, which includes this "human value" is problematic. In this system, the value of the Nazi philosophy, let's say, would depend on the person propagating it. A charismatic leader like Hitler brainwashed a lot of people into believing its legitimacy, thereby increasing the value of the philosophy. The same philosophy, in the hands of someone else, might not have gained any foothold.
When we talk about equal opportunity, we talk about resources like money. But human resource can also play a huge impact in determining the value of a product. I do not know what the definition of equal opportunity in the context of "human value" should be. It is clear that a certain class of people possess more "human value" than others, and there is an inequality because of this. The question is : where does this value/inequality arise from? And should society continue including this in the computation of value, or should we construct rules where this value is suppressed?
In summary, the market is not a detached entity judging value, but it can be influenced by "high value" people to go in a certain direction.
But a few of the main points are correct - for example, the way that silicon value measures value doesn't have a lot to do with social value.
But that's a distraction. The broader point is that these views aren't mutually incompatible. In the essay PG says it's fine to combat poverty at the expense of wealth - aka higher taxation and de facto wealth redistribution - but attacking income inequality is impossible in a society that allows people to create solutions to problems that lots of people have, because that transfer of value, again by definition, will create income inequality.
If you don't have anything to contribute beyond an angry critique of the author's writing style, then maybe you should sit the discussion out.
However, I have trouble engaging with the arguments when I can't even read far enough to figure out what they are. The article starts out by calling PG names and then throwing up straw men. It almost seems designed to piss me off enough to stop reading . . . and that was my point.
This is part of the thesis, the manner in which capital forwarded by VCs into startups, shape this dysfunction.
Yes, how strange it is that when PG posts a particularly inflammatory piece about income inequality people might want to respond to it.
I think the submission is worded like the "everyman" talking, but it makes all the right counter-points.
* venture capitalism != democracy
* venture capitalism = the few get to decide what is valuable
* venture capitalism does not create wealth because existing wealth is used to legitimize "new wealth"
* venture capitalism cannot be used as the solution for everything, because in its existing form, it already undervalues things we would all care for (teachers, nurses, etc.) and overvalues things we all understand as entertainment (Candy Crush Saga)
* Paul Graham has written some very weird things -- his article then, taken holistically with the background of his other opinions, is scary
Pretty well written, I'd say. I am curious to know what words were stuffed into PG's golden mouth.
EDIT: Here's the false "distillation" of PG's essay put into quotes (i.e. stuffed into PG's mouth): "I can distill the essence of the entire argument to: “Don’t hate the player, but don’t hate the game either. Hate yourselves, stupid poors, for not getting VC funding to start a company.”"
EDIT 2: To reply more fully, point-by-point:
* There may be some kind of actual point there in that one needs to have currency in order to 'vote' for startups. I think the point of calling it democratic is that people choose what they want rather than having it chosen for them.
* The few are becoming many with things like Kickstarter allowing just anyone to help bring things to reality, though you may have some point in that the amount of money you can bring to bear on the problem is at issue.
* "venture capitalism does not create wealth because existing wealth is used to legitimize "new wealth"" - I don't even know what you think "wealth" is, but I'm guessing your idea of it is tied up in currency (dollars, Euros, whatever). If we didn't have, say, a cure for Malaria and a startup brings us that, it's new wealth. This is separate from the amount of currency that may exist in the world or how it may flow as a result of this.
If we give everyone $1,000,000 in currency, it doesn't change the amount of actual things we have that could be buyable like, say, cars, though people might be less willing to sell them for particular amounts of currency due to inflation. So this point is completely incoherent as the two sides of it are causally unrelated and it seems not to understand the use of 'wealth' as an economic term.
* "venture capitalism cannot be used as the solution for everything" - A strawman, as nothing is given to show that PG has actually claimed that. Instead it gives us this: "The solution to poverty is as transparent as starting Google, you stupid poors. Come on! Figure Google 2 out already, you idiots."
* "Paul Graham has written some very weird things -- his article then, taken holistically with the background of his other opinions, is scary" - Fear is the "mind killer" and its effects can be seen in this piece.
Getting back to the article's main attack- It does so by making a logical, if emotion filled, attack. Venture capitalism is still capitalism. Participants work to, primarily, their own economic benefit rather than the benefit of society. (Yes, it's the worst system except for all the rest, but it still doesn't make the most long term beneficial allocations. See: poor funding for fundamental science research.)
Moreover the article criticizes PG (citing his lack of perspective) for promoting a "bootstraps" ideology. It tries to illustrate that the ideology is flawed in two ways: 1. The people who could most benefit don't necessarily have the personal capital (time, knowledge, etc.) to effectively run a startup. 2. It implies that there is only so much problem space that can be effectively addressed at any given time.
This is written in the style of a qualitative sociology monograph. I find it quite compelling, however, I'm not surprised that the crowd here doesn't share my view.
"First of all, over 95% of startups fail. Every venture capitalist knows this. Those pesky things, for the most part, just eat money and more often than not actually destroy wealth. But the second reason why you should not allow yourself to think that startups create wealth is because of how they are funded."
This is nonsense that displays utter lack of understanding of startups, venture capital, economics, finance. To refute it, I would have to start with an Econ 101 lecture, followed by a lecture on basic statistics and probability distributions. In short, it's just incoherent nonsense
Moreover, I'd be interested if anyone has actually done a comprehensive study on total value (long-term economic and short term investor profits) added/lost from startups. I wouldn't be surprised if we found something that looks net/net negative or even pretty small.[1] (That is startups globally, not just VC funded or SV startups.)
If startups are engines of wealth re-allocations rather than drivers of long term economic benefit. Well, then silicon valley is just as bad as Wall Street.
[1] We're quick to count the successes, but struggle to count the failures. More than that, many startups, as the author points out, are entertainment companies that don't add much economically. Finally, how much money is churned out of investable capital into acqui-hires? How much of that delivers a meaningful return vs. defending a market position?
I claimed my point and my evidence centers on failure rate and personal observation. You can disagree or choose to maintain your own anecdotal/limited evidence. Neither hypothesis is proven invalid until clear high quality evidence is provided.
I find your strawman distasteful bordering on offensive.
Your point about drug discovery helps illustrate the second item. If most of the drugs being pursued were cosmetic in nature, we could challenge the long term benefit of drug discovery.
I appreciate the apology, but that's part of my frustration. My claims do have some grounds for validity and consideration. They have a rational basis.
In fact, simple economics teaches us that a high failure rate is a good thing. Low failure rate would be consistent with very low risk projects that tend to be about some form of rent seeking or regulatory arbitrage. High failure rate means people are actually working on things that are hard to do. That's very valuable
This is completely independent of what other people are doing, or whether other people have, say, failed music startups / failed websites that fail at whatever rate.
I'd say that startups can create wealth though, as 'value' is either tied to currency or not objective at all, and funny business with numbers isn't the most important thing in life.
If you add that into the calculation, it could be that the total value of all internet startups, Paul Graham's specialty , is greatly negative, and they're not just silly entertainment.
[1]https://www.psychologytoday.com/blog/born-love/201005/shocke...
Face to face time is where you learn emotional intelligence and empathy. A simple example: usually in real life , when you hurt someone , you see him getting hurt and you might feel ashamed. Social media lacks that.
http://www.csudh.edu/psych/Virtual_empathy_-_Positive_and_ne...
It says "little negative effects for online usage, except for gaming both for males and females", but the other thing it says - "little decrease in face to face time" contradicts other research that talks about greatly decreased face-to-face time :
http://www.studentpulse.com/articles/1137/the-effect-of-tech...
So it does require more research.
As for changing to video chat - i'm sure that would help(to some extent, and depending on video chat quality [things like eye contact]) but the weird question is - how do you make face to face chat as addictive as facebook/reddit/HN ?
Your response does, however, nicely illustrate the problem: if someone went around telling kids that they should quit school, put everything into becoming NBA stars, hit musicians, etc. they'd rightly be mocked. When similar claims are made by Silicon Valley VCs, however, they're taken far more seriously despite not being much more realistic in practice.
Similarly, there are the costs to others from startup-style churn: people losing jobs due to VC-mandated unsound business plans or replacing many jobs with automation. To be clear, that isn't automatically wrong but definitely has a real measurable cost to society which many people prefer not to take seriously. Holly Wood might not have captured every detail of that debate but she's doing a great job of reminding us that we shouldn't forget it exists.
"The 1920s were the last decade in American history during which one could be genuinely optimistic about politics. Since 1920, the vast increase in welfare beneficiaries and the extension of the franchise to women - two constituencies that are notoriously tough for libertarians - have rendered the notion of "capitalist democracy" into an oxymoron."
http://www.cato-unbound.org/2009/04/13/peter-thiel/education...
Also, many people, even startup founders see VCs as somewhat predatory, even founders that are very fondly though in the HN community.
moreover, i think a lot of the people that disagree do not have the time to fully research the issue that some people do or the platform to be heard that pg has.
finally, i would point out that pg's argument is not entirely based on logic. using phrases like "shooting at poverty" and "pie in the sky thinking" mark the original text as what it is: an opinion piece, not a research paper.
EDIT: there are citations. to make a (probably) logically true statement given assumptions that a large percentage of people can agree with, it's not a peer-reviewed research paper, except whatever measure of peer-review posts on medium, here, and elsewhere provide.
for all i know, some economists proof-read the thing, and if so, i'd like to know which ones.
However, I was surprised that the author was offered $500 from a friend to write a post on Medium. Is writing-as-a-career back in style? I'm all for that.