Silicon Valley’s Ultimate Exit (2013) | Hacker News Reader

Silicon Valley’s Ultimate Exit (2013)

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87 pointsnkurz47 comments

> Build an opt-in society, ultimately outside the US, run by technology.

Balaji Srinivasan is being considered to run the FDA. If chosen, he is expected to radically weaken its regulatory power, purportedly in the interests of promoting innovation in the pharma space. He's described it as the big enemy for any biotech innovator to overcome.

When we have an opt-in healthcare system, people who are in perfectly good health will opt into favorable plans only they qualify for. Those born with expensive conditions or who develop a chronic illness won't be able to opt in, and will find themselves in a high risk pool paying hardship-tier premiums.

When we have pharmaceutical companies opting into less stringent regulatory structures, even the most dangerous drugs will make it to clinical trials - to be tested by people who lack the ability to choose any other way of making a living. Pharma manufacturers will then base their prices on what they believe the highest tier of wealth will bear, ignoring the long tail of underinsured Americans.

The problem with an opt-in society is that only some people get the privilege of opting in. It's an almost self-contradicting concept. Societies only hold together if their members don't favor exit. Members collectively recognize they're all on the same side, by way of the social contract they've entered into, and they know the rules need to be the same for everyone. A modicum of loyalty - in Hirschman's sense - is an absolute prerequisite for a group to be called a society.

When it comes to our health, let's show some loyalty to our fellow Americans and use our voices, instead of fleeing the inconveniently poor and sick. The veil of ignorance hasn't come off yet, after all: if you get cancer tomorrow, you might well become one of them.

But what if America health system has terminal cancer? What if it's already beyond repair because the ones in charge are already fused into the system?

About the opt-in society, I think it can create rules to prevent the disadvantages you mention; for example by paying a percentage of your salary/profits instead of a fixed amount; or perhaps by taking -free of charge- one sick poor person for every 10 healthy ones that enter the system.

> taking -free of charge- one sick poor person for every 10 healthy ones that enter the system.

This is a very rough way to put it, but it's a fantastic idea. Policymakers call this universal healthcare.

Certainly not what Americans currently call "universal healthcare"; if the system needs to pay $600 for a simple epi-pen is certain that such system would not work. It must be managed by people strongly against inflated prices (due economic incentives or otherwise)

Fortunately, the same elected legislators who have the ability to pass universal healthcare also get to make changes to patent regulation. If they want to be fiscally responsible, and notice their budgets are losing tons of money to the EpiPens of the world, they'll suddenly be very interested in patent reform.

These people need our votes, though.

If you reform patents in that way, you get cheaper EpiPens, it's true. But if you reformed it that way a while ago, you would have no EpiPens, because the maker wouldn't have gone to the expense of developing and testing them without the protection of patents (and the hope of profit they bring). Without patents, you only make thin margins; that's not enough to pay for developing something like the EpiPen.

Banning patents sounds good; it sounds like freeing technology from greedy capitalists. But in practice, it means freezing (or at least dramatically slowing) the development of new medical technology.

Why not allow patents to last 5 years, or 10? So the economic incentive remains while it becomes affordable soon enough; the Epipen was created in the mid 70s, it makes no sense for it to still have an enforceable patent.

> the Epipen was created in the mid 70s, it makes no sense for it to still have an enforceable patent.

The Epipen does not "still have an enforceable patent" because there is not an Epipen; there is a series of them. The original design is not encumbered by a patent.

The specific problem with patents and drugs or medical devices is the FDA decisions on what products are interchangeable. The reason drug companies get away with these "minor tweak" patents is that the FDA doesn't see the changes as minor, and so will not permit a prescription written for a new patented version to be filled with a generic based on the old unpatented version.

You can make the argument in this case that the problem is not patents per se, but the interaction of patents with prescription drug regulations. These sorts of "tweak patents" are useless outside the world of prescription drugs.

> purportedly in the interests of promoting innovation in the pharma space

Why the purportedly? Do you have reason to believe he has any ulterior motives?

I didn't know anything about this guy before this so I googled him.

http://online.stanford.edu/instructors/balaji-s-srinivasan

"the co-founder and CTO of Counsyl, a genomics startup"

Ok, so he clearly has some experience as a biotech innovator.

> He's described it as the big enemy for any biotech innovator to overcome.

Seems reasonable.

The current market in biotech and rate of innovation seems underwhelming. Would you agree?

The current level of legislation in biotech seems to favor too-big-to-fail type companies? They sure seem to get away with egregious crimes. Eg: bribery [1] , knowingly selling HIV contaminated blood products , even moving such sales to Asia and Africa after it became public in the US [2] , numerous other ethical issues [3]

[1] https://www.bloomberg.com/news/articles/2016-09-30/glaxo-to-...

[2] https://www.ncbi.nlm.nih.gov/pubmed/24785997

[3] http://ethics.harvard.edu/pharmaceutical-industry-institutio...

Seems to me the current system isn't working properly. Is there reason to believe a guy like Baraji shouldn't be allowed to try to reform it?

You write as if Srinivasan is being considered to run HHS/Obamacare. He's not. The FDA has nothing to do with health insurance.

I get the impression you want to remove this option from people, thereby giving them exactly zero ways to make a living. Is that correct?

Pharma manufacturers will then base their prices on what they believe the highest tier of wealth will bear, ignoring the long tail of underinsured Americans.

You seem very confused. The FDA does not currently regulate prices. However, FDA regulations do drive prices up and create a lot of monopolies in the pharmaceutical space.

If you want to learn what Srinivasan might actually mean for the FDA, I strongly recommend reading this blog post (written by a Trump hater, FYI): http://slatestarcodex.com/2017/01/18/watch-new-health-picks/

Looking at this point and one of the ones below, I think there's a bit of a misunderstanding as to why drugs are expensive and why they take so long to get to market.

The hypothesis Balaji and others here suggest is that the FDA requires drugmakers to pass useless onerous regulations and expensive studies before it'll approve a drug. In so doing, the drugs become more expensive to market.

Having worked a little in the drug discovery area, I'd advance a different hypothesis: the low hanging fruit are gone.

Balaji in his post explicitly mentions insulin coming to market in 2 years. That's a pretty easy thing to approve: you have a molecule that is identical to one produced by your own body, that has known or easily understood physiology and pharmacokinetics. All you have to show is that your preparation isn't toxic, so of course it's going to take nearly no time to get approved.

Contrast with a cancer drug. There you have a really complicated disease, not very good model systems before you get to test the molecule in a human subject, and when you get there most of your patients die anyway because diseases are hard/they're too sick/it doesn't work well enough.

I think the information/silicon technology side of silicon valley doesn't quite understand how hard biochemistry and biotech actually is. In traditional engineering you know a lot about the inputs to your system (code, silicon, plastic, etc.) and you know a lot about how they work. In Biology/Biochemistry/Physiology none of that is true. Your inputs, underlying system and outputs are hugely complex and in many ways completely non-understood.

That's why it takes so long to "innovate" or develop new drugs. Bureaucracy may not help, but it's not the main cause either.

An essential blog to read if interested in drug discovery:

http://blogs.sciencemag.org/pipeline/

topic relevant post:

http://blogs.sciencemag.org/pipeline/archives/2015/08/07/on-...

Full disclosure: I once met with Balaji for an informal job interview/get to know the company at Counsyl

I agree that low hanging fruit being gone is an issue.

However, that doesn't mean bad FDA rules are not also an issue. From the blog post I linked to:

Any pharma company that wants their medication approved in both the US and Europe has to spend a billion or so dollars getting it approved by the FDA, and then another billion or so dollars getting it approved by the Europeans. A lot of pharma companies don’t want to bother, with the end result that Europe has many good medications that America doesn’t, and vice versa. Just in my own field, amisulpride, one of the antipsychotics with the best safety/efficacy balance, has been used successfully in Europe for twenty years and is totally unavailable here despite a real need for better antipsychotic drugs.

Here's a fun data point: people in the drug discovery business do not see the FDA as an obstacle to doing business. It's the financing model that's commonly seen as troublesome, with the low-hanging fruit gone coming distant second.

For genuine public health emergencies (anyone remember AIDS?) there's fast-track approval, the first antiretrovirals were at market remarkably quickly.

>> "...people in the drug discovery business do not see the FDA as an obstacle to doing business."

Let me play devil's advocate here and suggest that entrenched market participants love high-barrier-to-entry regulatory regimes. The FDA is "people in the drug discovery business'" moat.

When you do drug discovery and development safety and efficacy is your concern. Your aims and the FDA's coincide. It's Pharma-Bro Shkreli who uses the FDA as a moat, but I think the general public sees him as an aberration and pharma wishes he would just go away because he draws the wrong kind of attention.

When cost comes down, financing becomes simpler, right?

It's the risk that kills it. If your compound fails at late Stage 2 or early Stage 3 you just did 7 years for nothing. Also: the penguin effect. A first-in-class compound requires target validation, which adds another few years plus you can't patent that effort, and then the stuff arrives at market and physicians don't know why they should prescribe it. Just compare profit from the first statin to current 5th-generation profits from that same class. Silicon Valley is so much more predictable and offers returns in a shorter timeframe.

I'll agree with that, EU approval should prompt accelerated review. That said, thalidomide was far less bad in the US because the FDA was a little more conservative.

Still, I'd be willing to say EU approval should drop the cost in some way by reusing studies or other things.

I post this now because the author (Balaji Srinivasan) has recently been named as a contender for heading the FDA: https://www.statnews.com/2017/01/12/fda-trump-oneil-srinivas...

Note that "exit" here is not synonymous with "secession", but instead refers to Albert Hirschman's contrast of "exit" and "voice" as two complementary approaches that individuals can use to influence the society around them: http://peterlevine.ws/?p=11887.

In this context, the option of "voice" includes the approach of reforming institutions from within, while "exit" leaves them broken and bypasses them with new alternatives. Given Srinivasan's embrace of "exit", this makes him an intriguing candidate for overhauling a massive federal bureaucracy.

Amazing read, thank you! I have no idea what this next government will look like for the US...

Interestingly, the kind of "exit" he's talking about sounds an awful lot like Timothy Leary's "Turn on, tune in, drop out": https://en.wikipedia.org/wiki/Turn_on,_tune_in,_drop_out

Amazing read. Such thoughtful Writing.

I find it interesting that he would even consider the job.

One thing a lot of people don't realize about the modern concept of the "social contract" is that it depends on the capacity to exit, which requires the existence of the frontier. John Locke's idea of government wasn't just influential to the development of the United States, it was openly influenced by the existence of America; he wrote a lot about how the "state of nature" that exists independent of government was the American frontier (he didn't care much for/about Native Americans.) Now, the idea that a government is a social contract between citizens and rulers is universal, but we've eliminated its original foundation: an empty space citizens can settle when they decide their government is worse than nothing.

There's no easy solution to this problem. We're out of unclaimed land (seasteading and Mars colonization wouldn't really resolve it, even if they were more plausible.) I don't think Srinivasan has a great concept of why nations work; the problem with a Silicon Valley exit is less that Silicon Valley doesn't have aircraft carriers, and more that it doesn't have, you know, farmland, and I don't think the opt-in society would be allowed: Silicon Valley is rich and prosperous because of the large pool of mainly American consumers it sells to, and it is protected by the auspices of the US government. If they really wanted to leave, they wouldn't be able to take the money-making with them, as the US has no incentive to protect the businesses of a foreign power. I actually think that instead of getting more and more small countries as time goes on, we'll get increasing large blocs caring for things like defense and very general welfare, and increasingly small, atomized communities, either geographically or online, caring for other needs. If we have a large United States government that takes care of the nuclear weapons stockpile, coordinates response to natural disasters, and makes sure people don't die for arbitrary reasons, smaller communities can tax, spend, negotiate as they will. And I expect these communities will increasingly go online; online, Locke's dream can be realized, as there really is infinite space to colonize (if you don't like your current forum, go found a new one.) As long as people have a basic level of security, they'll be free to self-organize and explore new models of society in a virtual world. I can't tell if this vision of the future is utopian or dystopian.

In the Second Treatise, or somewhere else? I don't recall Locke mentioning any requirement for wild frontier to prop up the legitimacy of government. I do remember his "state of nature" as a kind of fable, presented as if it were or had been a real thing in some meaningful sense, propping up his premises. But his Second Treatise is the only document of his I've read.

Locke's concept of the requirements for social contract are not the original ones; while he was an influential early social contract theorists, he was not the first, and his ideas (in general or on that point specifically) were not universally accepted among social contract theorists, so describing Locke's idea of the requirements as the "original foundation" of the idea of a social contract is historically false.

This is an interesting claim but I'm not qualified to evaluate its truth or falsehood. Can you link us to the "original foundation?"

There's not one "original foundation", but there were a number of earlier social contract theorists than Locke with different ideas, like Hobbes, as well as contemporary and later theorists whose work wasn't grounded entirely in Locke's.

Locke was an early and important writer in social contract theory, but not the original source in which all social contract theory is grounded.

> You don’t have to actually go and get your own island; you can do the equivalent of dual-booting or telecommuting. You can opt out, exit at whatever level you prefer.

And the government will be there to kindly remind us that: "Democracy is asset insurance for the rich"[0] and we may not skimp on the payments.

[0] Austerity: The History of a Dangerous Idea by Mark Blyth

You are likely referring to Blyth's book by this title[1], but for those desiring a softer introduction, the author also made an excellent 5 minute introductory video: https://www.youtube.com/watch?v=go2bVGi0ReE

[1] http://centredelangues.ens-lyon.fr/anglais/espace-etudiants/...

That reads like a right-wing version of Barlow's Cyberspace Manifesto:[1] "Governments of the Industrial World, you weary giants of flesh and steel, I come from Cyberspace, the new home of Mind. On behalf of the future, I ask you of the past to leave us alone. You are not welcome among us. You have no sovereignty where we gather."

Boy, was he wrong.

[1] https://www.eff.org/cyberspace-independence

If the USA is the Microsoft of nations, as the article says.

Then would some current or future president be the Ballmer of the US?

The analogy is flawed at the CEO<->President level, obviously. 3 CEOs vs. 44 Presidents?

There've been numerous Presidents who are akin to Ballmer though, having presided upon times where things were pretty good for the fortunate segment of society but doing nothing about looming catastrophes which could be seen but weren't critical problems. I'm thinking of Fillmore/Pierce/Buchanan in the run-up to the Civil War and Harding/Coolidge/Hoover in the run-up to the Great Depression. It's fairly likely that historians will view Dubya/Obama/Trump in the same way in reference to some future crisis around the national debt, global warming, or rising inequality.

Microsoft was founded in 1975. So, 40 years instead of 220?

I mean, yes, Microsoft CEOs serve longer, on average, than US Presidents do, but it's not nearly as stark as you make it sound.

That’s how we got cell phones from a toy for Wall Street to something that’s helping the poorest of the poor all over the world

I just don't see it, after spending time in third world countries I believe this is a false statement. It's not free to use a cell phone in the third world, the poorest of the poor can't afford "credit" nor phones, nor have anywhere to charge them. If anything I've seen cell phones usually being used by shady characters using them for nefarious purposes, they're often the only "poor" who can afford cell phones in third world.

Let's also not forget who actually produced the cheap cell phones that made them affordable.

God bless this article.

I agree with this article on many points. I wish GitHub had a way to remove the "forked from" link in order to give more freedom to developers that want to take a project in a different direction, and properly "exit"

    git clone ....

Create new repo in github.

    git push ....

The governments will sooner outlaw job automation or implement basic income than allow chaos to take hold.

Also, our standards are pretty high right now, so I think chaos would ensue before our quality of living fell too much.

Does anybody have a link to Balaji's MOOC? I've heard great reviews about it, and I have an enormous amount of respect for Balaji, but I haven't been able to find it - I can only find his MOOC about Bitcoin. Or is that the MOOC he was referring to?

It's been removed from coursera. I completed and it isn't available to me either. This is the stanford link (http://online.stanford.edu/course/startup-engineering) but it just points to coursera as well.

It was called called "Startup Engineering" [1]. This course doesn't exist on coursera anymore, there's a similar syllabus on Stanford's website [2]. The project was something about building a small web app with node.js and accepting enabling donations via bitcoin payment.

I was trying to find the course in the archive.org's backup of coursera [3] but it doesn't appear to be searchable.

[1] https://news.ycombinator.com/item?id=5089487

[2] http://startup.stanford.edu/

[3] https://archive.org/details/archiveteam_coursera

I like the way he's thinking and core argument is a good one. But there's one reason it won't work: Taxes. You can't have a new country when every single economic transaction is subject to an extremely onerous 35% income tax - you still have to pay this tax even if you live in another country.

There's probably still a lot of good stuff you can do though: low cost housing and transportation, just for starters.

Why are SV "big shots" so obsessed with making their own little la-la land fiefdoms (Who actually wants AI/tech to run their country? Like, that is literally an apocalyptic nightmare of mine) instead of contributing positively to the country that helped foster their fortunes?

This is some of the most myopic, ego-stroking bullshit I think I've ever read on this site.

Also the sooner ridiculous "code=law" analogy goes away the better. It's clear this person has very little understanding how affairs of state actually work.

Did you read the article? It explicitly discusses using 'voice' or 'contributing positively to the country' as option #1, and 'exit' as the backup in case the former is ineffective.

If you think their vision of the future is nightmarish, you don't have to do anything. Just stay where you are.

TLDR: 25k Govts is better than 25 Govts.

And I absolutely agree. Its obvious that noone is going to happy with their Mega Govt all the time. We should work on mechanism that allows creating new, smaller Govts out of a Mega Govt as easy as possible. Let the market innovation/compitition advance Governence too.

Yes many people won’t understand this article it but there is a strong and subtle point that Balaji makes. It is the power that technology brings to the common people. Technology will one day make food shelter healthcare clothing ie all the basic necessities so automated and so cheap that everyone can be guranteed free access to these basic needs. Already certain countries have started experimenting with annual basic income. This does not stop people from excelling or working hard to do better but will help us to stop worrying about going homeless or going broke just because one loses ones job. This is where technology can take us and this is what we dream about. Thank you.

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