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Comment by GuiA | Hacker News Reader

So he's making $10k a month, and his trick, he says, is to have "high-quality, exceptional quality" content. But he does not write this content himself; rather, he pays $700 to "an expert copywriter in my niche [...] (he's a superstar)".

Seems like the real trick is to find someone talented but unaware of how much money they can generate on their own, and use their work to make money.

Now clearly, he's adding value, since that writer alone wouldn't know how to turn their writing into $10k a month. But I wonder if that writer is aware that their work is generating that much, and that they're only seeing 7% of it.

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The core tenant of getting ahead massively in a capitalist society -- arbitrage. Exploitation of inequality of knowledge and/or opportunity is always a faster ticket to success than actually producing anything of value.

Ah yes, but the more arbitrage exists, the higher the incentive for another entity to learn and exploit it. The first guy cuts it in half, the next by a quarter, and so on, until normal profits emerge. Being ahead of the curve has a bonus, but it can't last forever in usual circumstances.

I think the real core tenet of capitalism is specialization - it is impossible for everyone to know everything. Mix multiple services into one, package it in a way that is ideal for a certain consumer, and the "arbitrage" is really just another word for convenience.

> the real core tenet of capitalism is specialization

That sounds like someone living in a world where "capitalism" is the dominant propaganda meme. Capitalism isn't based on specialization, it's based on private ownership of core resources and infrastructure. All other economic systems have specialization. You're just noticing that specialization is key to human prosperity and wording your point within the baseless assumption that capitalism is synonymous with prosperity or something.

While it is true that all economic systems have specialization, so far capitalism seems to be most efficient in self-organizing it. The reason is explained before: wherever specialization yields a high margin, people jump into that gap. As the gap fills, the margin gets lower over time and everybody pays lower prices for the same goods. There might be other economic systems that also foster this kind of self-optimization, and don't have the negative effects caused by capitalism, but we haven't seen them yet.

Capitalism is also good at building the right capital. Capital in this case refers to intellectual and physical goods that produce other goods, such as machine tools, construction equipment, metallurgical processes or freight railroads for example. Building a lot of the wrong capital and using it inefficiently is a problem that has always plagued centrally planned economies.

Capitalism isn't defined as "non-centrally-planned economy", it's specifically privately-owned capital. If that private ownership is concentrated enough, then lots of things are pretty centrally planned. And non-capitalist economies include ones that aren't centrally-planned.

Yes, private property is the foundation of capitalism. In my opinion, freedom is the true benefit of capitalism, and private property is what allows freedom. In a system where one is not allowed to own property (land, assets, capital, etc.), one is not truly free. And the freedom to discover unmet business needs, arbitrage, etc. is not a problem but a feature, as it drives investment and entrepreneurship.

And capitalism is synonymous with prosperity. Capitalism is freedom, and freedom is what propels the world forward.

I'm all for capitalism but that last paragraph was cringey. I think it's a mistake to consider capitalism as this perfect, ideal way of life. A lot of people, too many people, get screwed under capitalism.

You're not free when you're working 2 jobs 6 days a week. Not by my definition of freedom. And this is the reality for a lot of people out there.

I believe there is a better system that we haven't found yet and we should be looking at how we can eventually transcend capitalism when we don't need it anymore. Automation/AI is a step in the right direction.

I think you'd have a hard time finding a political system that hasn't screwed people.

I'm sorry, but earnest question: Do you really believe this in a world that has more than enough resources to take care of its population, however, millions have no access to clean water, basic nutrition or healthcare; even while others control resources sufficient to cover their own needs by several orders of magnitude?

If you choose to redistribute wealth in a way that immediately alleviates all of those issues, you kill the golden goose (private industry). Similarly, if you just give food, shoes, supplies, etc. to poor people everywhere, you screw with the local economy and destroy businesses. For example, if a guy is selling chickens, and all of a sudden a million chickens are donated to everyone, that man can no longer sell chickens.

Also, you can't simply give billions of dollars to foreign governments and have them build infrastructure, provide clean water, etc. They will squander and steal a large amount of it, as has happened repeatedly.

So yes, I agree that it's sad that in a world of abundance, people are starving and dying. But you need to give it time, align incentives, and let prosperity continue to raise the world out of poverty, as it has done in so many countries that are adopting market-based systems. China and India, despite their faults, have adopted systems that embrace the market more than their socialist / communist pasts, and have raised hundreds of millions out of poverty.

It's a utopian belief that if we could just get everyone on board, we could instantly solve everyone's problems. The correct solution is to remove barriers to free enterprise, allow people to gain and re-invest their wealth, and over time people will be raised out of poverty world-wide.

You're correct that amassing all the wealth in the world, divvying it up equally, and passing it out to everyone won't work.

But I think your view of letting free enterprise run rampant is the exact opposite of that idea, and will work just as well at "lifting" those who are in a more desperate situation. Not only does free enterprise destroy cultures and local economies just as badly as your example, it tends to poison the planet we live on at a rate we just can't ignore anymore.

Not to mention, our economy is growth-based. Most of our growth comes from exploitation of other countries...pumping our wealth into their country (arbitrage, as another comment put it). Eventually, when those countries are no longer third-world, and a hamburger there costs $10 like it does here, the companies exploiting the cheap labor there move to the next third-world shithole.

What happens when all the third-world shitholes are gone, though? Our growth economy runs out of fuel to grow. On top of this, as populations find equilibrium with our amount of resources (and resource distribution mechanisms) there will be even less people to exploit at our current rate of growth.

I believe, in the next 50-100 years, our growth economy will collapse because the people driving it believe that growth is infinite, and the resources that drive it (developing nations/growing populations and all the resources that they require) are also infinite.

The entire thing is based on an equation that doesn't balance. We're scrambling to get to the top of a mountain that will crumble. Free enterprise won't solve this, in fact, it's only accelerating the need to find an economic system based on equilibrium, not growth. Whether that means private/public/mixed ownership, socialism/UBI/etc, we need to start thinking now about how to fix this.

Pretty much all of this. And I'd add that we not forget about sovereign debt, which is another lever for exploiting poor nations (think World Bank and IMF). So, we're not just pumping wealth into poor nations to extract more wealth; we're billing them for the privilege. That is, we're really pumping debt into these countries.

It's a racket. And it is not a flaw in the machinations of the free market; it is the definition of our current free market.

>you kill the golden goose (private industry)

This is the fallacy of all fallacies and is purely circular. It is the golden goose only in a system that makes it so; the reasonableness of which is the very point we're discussing. If I were arguing in favor of communism, I would say that the state or the people are the golden goose. And, like you, I will have proved nothing.

>if you just give food, shoes, supplies, etc. to poor people everywhere, you screw with the local economy and destroy businesses

Again, you are begging the question. This problem only exists in your vaunted free market system. In fact, you are arguing against yourself and acknowledging that the system you favor creates a resource distribution model that is unjust and untenable.

>all of a sudden a million chickens are donated to everyone, that man can no longer sell chickens

Yes, another problem created by the artificial scarcity intrinsic to your beloved model. And, what if the resource is water or another essential resource that has been commoditized and made profitable? Do we withhold water and let people die to protect the free market? If so, then we have placed an ideology above human life itself, the absurdity and futility of which should require no explanation. You talk of freedom, but the most fundamental right a person has is the right to live. Starving to death is not freedom.

But, if you say that we should be humane and intervene in any way, then you have exposed a massive chink in the armor of your perfect market. Either the market itself must neccesarily be purposely impacted, or you are expecting NGOs or the state or others to marshal resources in order to mitigate the externalities created by the "free market". In so doing, you are subsidizing said market and it is no longer free. Its profit takers are indebted, but will never repay. Whether via taxation sheer lack, or otherwise, someone is counter-party to that debt but will never be made whole. So much for their freedom.

>The correct solution is to remove barriers to free enterprise, allow people to gain and re-invest their wealth

Always the fall-back: "we're just not doing it enough". It's not enough that massive deregulation has led us to the brink of disaster on more than one ocassion. It's not enough that even as corporate profits reached record-highs, wealth disparity grew and more people fell into poverty. It's not enough that automation has devalued the one commodity that the majority have to sell into the "free market" (their time). No, we simply need to make the market "more free" and that will fix everything.

This argument can be made ad nauseum by those who promote unfettered markets as the solution to all, because they know it is unreasonable that totally free markets will ever exist, owed to the tremendous human costs that would follow. Thus, there will never be (nor should there be) the political will to remove all restraints or stop subsidizing people who will die without those subsidies. So, the argument can ever be made that the problem is that markets are not free enough.

any king or pauper from the year zero could tell you that private property predated capitalism and is a totally independent concept.

Private property is not the point of what defines capitalism. Private ownership of core resources and means-of-production are. https://en.wikipedia.org/wiki/Capitalism

> but it can't last forever in usual circumstances.

I don't think that's true. Imho this would be more correctly stated as "it can't last forever in theory".

It can't last forever where there is perfect information, or perhaps equal opportunity. But as you say it is "impossible for everyone to know everything" so this is never the case in the real world.

Thus the need for interventions (i.e. by the state) to correct asymmetries such as institutional inequality. These are failures of "pure capitalism" that need to be corrected by other means.

A less cynical (and less condescending) view is that both parties come out ahead due to comparative advantage.

>tenant

tenet

A true capitalist would make them pay rent!

Correct you are. Cheers.

You're going to get downvoted, but not by me. This one drives me crazy.

Not really, he is paying for good quality content. But the content itself is not what is making the money. The traffic reading the content is where the revenue is generated. His trick to generating traffic is to pay for high-quality content, and then he executes an SEO link building campaign, and pay for some advertising. Unless the writer also wants to do the SEO part, and also pay for ads, his writing is kind of worthless.

If you've ever tried to execute a link building campaign, you'd quickly realize it's VERY difficult.

My company makes a profit because it pays me less than the value my labor creates.

Is that a one person company?

It is every non-employee-owned company.

Your labor doesn't create any value without your company

The trick usually can't be told. I used to make money with adsense writing "high quality blog posts". The trick was to pingback Google own blogs, and when I do, they add a link to my blog post just right below their blog post. This would drive high quality traffic (probably because these users are already signed up to google and get targeted ads).

The trick now is no longer of use, and I did this like 6 or 7 years ago. So now I'm sharing it. I've been involved in the SEO industry from when it was young, and I'd make a 9.5/10 bet that this guy is doing something grey/black hat to generate that kind of volume/conversion/money.

Those who doesn't use grey/black hat tricks have probably built a page rank valuable enough. You can't rebuild that virtual SEO estate in a couple days, maybe a few 3 or 4 years of hard work and maintenance. So you are back at square one when you need money today.

This is called information asymmetry [1], in the general case when one party to a transaction knows more than the other participants.

[1] https://en.wikipedia.org/wiki/Information_asymmetry

I'm one of those schmucks hired to generate content for $600/pop. My thing is React Native. (http://reactnative.school)

But it's fun and it helps my own brand too. Plus it's an excuse to learn cool shit. Building a new app every 2 weeks is fun :)

This is like, make the product and they will come. Making the product is only a small part of the equation. The other aspects (promotion, choosing right niche etc) are most overlooked...

Classic Jobs/Woz relationship.

Isn't that how everything works? For each employee, my company makes x10 the average salary.

> Seems like the real trick is to find someone talented but unaware of how much money they can generate on their own, and use their work to make money.

That's the basis of capitalism in a nutshell.

Could you elaborate ?

Im guessing, its probably a Filipino copywriter and $700 is worth a lot in pesos. Its a high-end rate for copywriters. Win win for both of them.

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