It's Time to Build for Good
palladiummag.com
palladiummag.com
Alas, I think the root of the problem is that companies and people have strong economic/competitive incentives NOT TO INVEST in the kind of expensive, robust (i.e., inefficient/redundant) socially beneficial infrastructure that everyone agrees is necessary but on which the payback is highly uncertain, highly diffuse, or might not be recouped until well after everyone alive today is dead.
No amount of exhortation will change rational behavior.
(Stronger, harsher mechanisms may be necessary.)
--
[a] From the movie "Other People's Money:" When Larry the Liquidator attempts to take over a company, the CEO gives an inspiring speech to shareholders: https://www.youtube.com/watch?v=xJRhrow3Jws -- to which Larry responds: https://www.youtube.com/watch?v=62kxPyNZF3Q
Which, granted, is also probably a pipe dream, the way things have gone lately. But it wasn't always, nor need it always be henceforward.
I'll admit there are many good and bad examples of both, but I think the average company does more good than the average government.
> There is a name for the third position where government works together to guide industry without centralizing everything
SpaceX's customer is NASA.
[1] https://en.wikipedia.org/wiki/List_of_Falcon_9_and_Falcon_He...
Short-term thinking*. Rational behavior would be setting aside personal risks and benefits to do what needs to be done.
We call that altruism or charity.
I will say though: if a person has no idea what they're missing out on, all of this seems very rational. Revolving the world largely around oneself is totally rational if you've never experienced a real community and can't understand how badly you're crippling your own life experience by not investing towards the good in others.
Most of the people I know who do good in the world; it's because they've glimpsed how good life can really be. They've tasted a bit of utopian paradise, and see absolutely no point in sticking around with this. It's not a story worth living through and everything people do to hold onto it just seems oblivious and short-sighted.
Adam Smith wrote: "[m]an naturally desires, not only to be loved, but to be lovely; or to be that thing which is the natural and proper object of love".
Those who say that economics is based on the pocketbook are either posing a straw-man, or are very bad economists.
This is true in traditional for-profit companies where money is the only motive. However, I'd like to add that we're seeing a rise in or organization structures that promote social impact over simple profit. On the more for-profit side there are B-Corps, which have been gaining ground in the past decade or so (at least based on google trends and branding on products).
Right next to B-corps are social enterprises (which have many definitions but we can broadly can think of as basically, social impact as primary goal and at least partially self funded). I don't know if they're really gaining popularity but it brings me hope to see organizations pop up that are trying to fit this bill of doing good first and making money second.
Shameless self plug for those interested in social enterprises. I've recently started collecting resources related to social enterprises (as an org structure, distinct from social entrepreneurship which tends to focus on the individual): https://github.com/RayBB/awesome-social-enterprise/
Opening a CIC also establishes an "asset locked body," which effectively gives part ownership of the assets of the company to the government. There is no way that assets can be moved out of one of these bodies, but only transferred between them, which can include other CICs, non-profits and charities etc. No way of getting your assets back into private hands if you sign up for one and the government decides it doesn't like your plans for instance.
Simply running a private company, and donating some of your profits to charitable causes (with tax reductions) seems like a better way to keep control of your company and assets, and perhaps you could put into the company's bylaws restrictions on what shareholders can take out of the company, and what percentage of profits should be put towards community goals.
"For the purposes of the community interest test the following activities are to be treated as not being activities which a reasonable person might consider are activities carried on for the benefit of the community: the promotion of, or the opposition to, changes in any law applicable in Great Britain or elsewhere; or the policy adopted by any governmental or public authority in relation to any matter ..."
Yikes. I recall reading it when I was considering starting a CIC some years ago, but reading it again now has me cringing at how authoritarian it is.
Just showing up is a smaller dopamine hit, but more sustainable. On your worst day you can think, well, at least I did X. A rising tide lifts all boats. Chasing dopamine hits just gives you bigger mood swings, not better moods over all. It's a trap. Get out.
We have DIY groups, repair culture. We have craftsman trying to start a renaissance in various professions and quite a few hobbies. We have environmental groups, permaculture, people cleaning public spaces and parks. It's all 'out there' figuratively, and sometimes also literally. Just gotta go look for it.
And I think if you want it for other people, that you get far more traction working with an existing group to succeed, be it getting more things done, or making it more accommodating to newcomers. I worked with an amazing group that got 100 volunteers every month, probably a dozen new faces every time. Most of the work of the regulars was making sure that everyone else had something to do to feel included.
Basically what is at stake here is trying to get people to have more authentic, real world experiences, and that's not going to happen by using marketing tricks. By trying to sell to people who don't know they're buying. It's going to happen by doing things and helping other people explore doing things themselves.
Who is this Isaac Wilks guy? This appears to be his first post on Palladium. The twitter account that appears to be him is just some kid. What's he doing? What's he built? It looks like he might be into architecture. I hope there's some building going on, but I don't see it.
Humans have not been successful in identifying an explicit objective function for society and then building social, political and economic mechanisms to support/enforce those. We point to the Former Soviet Union, Great Leap forward etc... as failed experiments in authoritarian enforcement of an objective function.
As a result we have defaulted to the random walk and iterative nature of capital markets as the way of communicating, aggregating and forecasting individual objective functions into a collective function.
It's clear however that, for a lot of reasons, this system optimizes for short term rewards and not for long term planning.
That would make sense, since in effect the system is aggregating short time horizons and lack of capacity to plan long term. It's also fairly easy to hack parts of the system (marketing, arbitrage etc) for individual gain.
The fact that health insurance isn’t portable, and is rather tied to employment is a consequence of 1) the WW2 era wage ceilings imposed on private corporations, which resulted in employers competing for labor by providing health benefits, followed by 2) the ability for employers to deduct insurance premiums from payroll taxes (which costs the government $280 billion per year), and finally, 3) the Federal government imposed mandate on employers to provide health insurance. This is in contrast with other countries that employ private insurance, like the Netherlands and Switzerland, where insurance is tied to the individual, not the employer.
The lack of price transparency logically follows from the fact that patients never really care how much their treatments cost, since employer sponsored insurance covers everything anyway. Large corporations are less price sensitive than individuals, which exacerbates the price inflation over decades.
Certificate of need laws, where local hospitals get to decide if a new, competing hospital may open (imagine Uber being able to decide if Lyft may ply), and the residency system requiring 10+ years of schooling to practice has resulted in inevitable supply constraints, further driving up costs[1].
Medicare, which provides healthcare for free for the elderly, removed the most engaged buyers from the market, suffocating price discovery for medical goods and services. Not only that, the elderly tend to be the richest people in the country - those above the age of 55 account for 73% of wealth in America. Boomers are disproportionately rich, and yet they also enjoy some of the most generous welfare on top of that.
The resulting kafkaesque Frankenstein of a system was created through decades of well-intentioned government regulation at all levels of the Government. Healthcare is one of the least free markets in the US.
University education costs as much as it does because the Federal government guarantees any loan for any degree, regardless of the expected ability to pay upon graduation. This causes inevitable inflation in University sticker price, because they're going to be paid the money anyway regardless of a student's financial outcome. The guaranteed loan results in zero skin in the game for Universities.
[1] https://www.politico.com/agenda/story/2017/10/25/doctors-sal...
I see "everything is paid by insurance" argument surprisingly often, but whenever people talk about actual visit to hospital or doctir it turns out expensive despite insurance. Medical debt is primary reason for personal bankruptcy.
Of late, High Deductible Health plans have become more common, but clinics and hospitals still do not post prices like other industries, and surprise billing is still the norm.
In fact, IMO the most low hanging fruit problem is that physicians charge different prices for the same treatment depending on who the insurer is, which makes price transparency extremely difficult, and therefore “shopping around” extremely difficult.
Source: I work in health insurance
What I did write is that many important components of these systems appear to be stuck in lousy Nash equilibria, after decades during which the conventional wisdom in DC became that government should rely on markets to solve problems whenever possible.
The systems we've ended up are best described as hodgepodges -- e.g., in healthcare: many insurers are for-profit but two (Medicare and Medicaid) are not; many hospitals are now part of for-profit chains but others are non-profit; most medical research is done by for-profit entities like pharmaceutical companies but a lot is also done by government-funded organizations like NIH. On and on it goes.
BTW, while we're on the subject of healthcare, you might find the following article by Atul Gawande thought-provoking: https://www.newyorker.com/magazine/2009/06/01/the-cost-conun...
Some things aren't ever going to be profitable if built and managed for the long run. These are things that should be government services.
Other things can be profitable but need to be those doing them need to be persuaded to do them in a prosocial fashion. This is can be done by internalizing externalities. Negative externalities appear as taxes or fees, and positive ones as subsidies. Particularly harmful actions may be flat out forbidden, with stronger disincentives attached.
The problem with this approach is that any significant regulatory system will have such a large economic impact that for many players, the most cost effective approach to regulation is cooption of the regulatory system.
One example is ITER. Fusion power would be a fantastic low-pollution energy source. It is something that seemed achievable with a long-term commitment to research and development. Governments have been doing that for 50 years, and appear to be getting nowhere.
Perhaps it is simply very difficult, or even impossible.
Mostly, governments optimize for things to look good on the next election day. With 4 year terms, that's an average 2 years planning horizon.
How many public companies have needed bailouts after spending most of their profits on stock buybacks, again?
> Mostly, governments optimize for things to look good on the next election day. With 4 year terms, that's an average 2 years planning horizon.
As opposed to public companies and the quarterly earnings cycle?
If the government bails out idiots, what's the point in being smart?
If government doesn't bailout idiots like e.g. private banks, their entire economy can collapse. That means no pensions, no jobs, and destroyed economy.
Easier because you don't have to see who had which plan and how to bail out each person on it.
Plus banks are both more powerful and easier to return the favor than the victims.
While we're at it, let's work on toning down the greed part, which as it is was already destroying society even before this crisis.
Edit: I should be clear. Yes they're idiots. There is no reward without risk. Stock buybacks make businesses fragile. They're functionally equivalent to selling insurance. They provide predictable returns with high probability and absolute ruin with low probability. They've been playing Russian Roulette for years and it turned out a bullet was in the chamber this time.
Setting aside for the moment the general agreement that bailouts are bad, and a policy failure rather than a market failure...maybe another question to ask is: what percentage of the GDP comprises public companies that needed bailouts after spending most of their profits on stock buybacks? One of the advantages of decentralized planning is that there is no single point of failure — some subset of corporations are always efficiently providing for consumers. Governments that are large and centralized enough are single points of failure, and it's really hard to correct that once such failures occur.
> As opposed to public companies and the quarterly earnings cycle?
But Value Investing is a big part of the market, and it's fundamentally a long-run investment strategy. Some of the most successful and impactful companies don't pay dividends, or operate on losses with the expectation of profits at some time in the distant future.
Even the argument that Governments are good at doing big things without the expectation of profit seems to be under scrutiny. NASA's planned SLS moon mission is a bit of a disaster — way over budget and way behind schedule. Because the boosters aren't reusable, each launch is expected to cost $1B (with a B) dollars — EACH launch! Meanwhile SpaceX's target cost-per-launch is $50M. SLS is unlikely to fly until at least 2021[1]. Meanwhile, SpaceX is building a factory that will manufacture 1 Starship (capable of going to the Moon), every 72 hours[2].
I don't even need to go down the F-35 rabbit hole.
[1] https://arstechnica.com/science/2019/07/nasas-large-sls-rock...
[2] https://arstechnica.com/science/2020/03/inside-elon-musks-pl...
The best way to improve any group of people is by being an example.
Thank you for your exemplary insight.
China seems to have a decent strategy going.
Ignorance followed by suppression and deceit is definitely a course of action, though I don't agree that it's a great strategy.
I think you might be on a bit of a different tangent that the context of the comment I'm replying to though.
The planning usually benefits the ruling elite more than the people, but it's still a real point.
The astonishing rise of China last 30 years has made me accept that it can actually work out occasionally!
This system optimizes for the aggregate weighted time preference of its participants.
To whatever extent its imputed time preference might be too high, this is almost entirely due to inefficiencies introduced by fiat money and loose monetary policy. If your annualized discount rate is 3% and the fed offers you a loan for 0.25%, you're going to take it and consume now. This increases the effective societal time preference.
Also, most people are probably a lot higher-time-preference than you are (inferring from the fact that you're on HN), so a lot of this is probably just you (and me) disagreeing with them.
As long as its participants have money or other kind of power. Vast swaths of the population lack both so are excluded from that "optimization" , an optimization which of course it is not weighted per capita but per money/influence.
No - it's because we live in an anti-natalist neoliberal-progressive society and not a capitalist society. Capitalism would perform better on all axes you describe for the reasons I describe. Even Soviet communism would probably perform better than what we have now on many of those axes.
Both the author of this article and Andreessen know too little about the alternatives to our current mode of production to really diagnose the problem, let alone offer solutions. The economic problems facing the US lie outside of their vocabulary, so the best they can really imagine are vague ideas to "build", though I appreciate that Isaac Wilks at least understands that building with a kind of conscientious intention can never be divorced from politics.
Andreessen's original article comes across as almost laughably naive.
> I’m with Nicholas Stern when he says that capitalism is how we take care of people we don’t know — all of these fields are highly lucrative already and should be prime stomping grounds for capitalist investment, good both for the investor and the customers who are served.
For some reason I always imagine people with Horowitz's level of wealth and influence as being smarter and more knowledgeable than they are. Anyone who dismisses possible solutions derived from criticism of capitalism so easily is not really serious about finding a solution and should be dismissed, no matter how much money and influence they may have.
San Francisco's subway extension.
https://en.wikipedia.org/wiki/Central_Subway
3 years behind schedule, with work starting in 2012 and a cost of 1.6 billion dollars for 1.7 miles of rail.
The same story repeats itself all over the country. https://www.nytimes.com/2017/12/28/nyregion/new-york-subway-... New York clocking in at 2.7 billion per mile for a 6 billion dollar extension.
AFAIK, examples are: 1) The east bay bridge ramp repair after that tanker fire 2) The Culver CIty <-> Santa Monica portion of the LA Expo Line
AFAIK, both of these finished early and the first one "under budget".
An oil truck tipped over, lit on fire, melted the steel in the overpasses (same level, above, and below). Bids were put out; you got a bonus if you got it done in under a month, and then for every day before that, further bonus. One bid came in both super low on "cost", and in time (like a week or something), and they'd make all their money on the bonus structure. Firm succeeded (lost like a day to a flat tire on a shipment, too), and AFAIK they were the firm selected for the Yerba Buena changeover. No quality issues either, although I don't know details.
For LA...
LA expo line was originally not going to reach the beach until... nowish? But something happened, and it got done years early. AFAIK, that schedule increase didn't come with a cost increase. Literally right now, my understanding is that the Beverly Hills line is getting accelerated, since there's no traffic to interrupt / work around.
Edit:
Has any government project been on time and overbudget, or are they always both over time and over budget?
As soon as you start digging underground you find a whole litany of old pipes, wires, mains, etc that do not appear on any drawing. You're unsure if they're in use or not, and some of them are so old that just pulling the earth away from them causes them to fail.
There's more to it other than politics. These things are hard to do in established cities, especially at the shallow depths that muni operates at.
More context: https://www.citylab.com/transportation/2018/01/why-its-so-ex...
At some point we need to understand the trade offs that come with regulations and either redesign them to enable large scale infrastructure projects or accept the fact that such projects are just not possible in the current framework.
So for eg environmental regulations to deter coal plants are fantastic because they encourage the alternatives. But regulations that prohibit anything seem as useless as no regulations: we need to generate power somehow.
The resulting built thing is a distant afterthought.
My personal hypothesis is that Americans get very defensive about this because there's a cultural resistance to being the guy who got fooled, so many of us will invent reasons that fall down really fast like "SF is an old city with lots of underground things." or "SF is in an earthquake zone" or (my new favourite) "Liquefaction", etc. etc.
My suspicion is that SF these days is more like an oil emirate. It can pump all this free tech money, and doesn't need to worry about having a functioning society around it.
Just an unfinished thought.
Seems like corruption is potentially the only big differentiating factor here.
Another plausible factor is the push to privatization and contracting in the US public sector removing effective management from the picture, so that the public sector is no longer capable of cost control. For example, by realizing when bidders on contracts are bullshitting too high or too low, or by pushing people to suggest cheaper designs.
A corollary to the previous point is that the US generally seems unwilling to look at foreign countries (especially countries not named Canada or the UK) for insights into what can be done better. This can result in people not adopting newer, cheaper technologies in a kind of NIH syndrome.
Another possible factor is that, for several kinds of projects, the US's diverging rules (e.g., FRA regulations basically banning all European rolling stock until they were revised a year or two ago) combined with a relatively low install base could be preventing economies of scale to make things cheaper.
There's lots of plausible factors. Actually digging into what makes them so expensive is very time-consuming, and I suspect there is very little pressure (let alone ability!) from anyone on any side of the political spectrum to actually make it happen. It's much easier to pick the factor you personally believe in and say it's so without any evidence to back it up.
This seems to be a big factor also in companies. My company’s IT department has outsourced a lot and so a lot of projects are managed by people who can’t judge if something is good or not. I have heard the same about government agencies. They have no experts left.
If you want to build for good, we need alternatives such as worker owned business where insentives align with the interests of the communities they are from.
1) I recently learned from a friend about Manly P. Hall's[1] 1928 book "The Secret Teachings of All Ages" which delves a bit into people like Ernest Holmes, Emma Curtis Hopkins about doing things around a framing of doing "for good".
2) Venkatesh Rao recently wrote[1] about Andreesen's "It's time to build" piece and tried to explain what he think it really meant as now being a time for a "Macro Rebuild" and foundational changes to happen after earlier phases of tool-making, alternative-building, and disruption.
[1] https://en.wikipedia.org/wiki/Manly_P._Hall
[2] https://breakingsmart.substack.com/p/how-what-and-where-to-b...
The ePacket program forces the USPS to subsidize shipping from the PRC to the US. End this immediately and let's start analyzing the forces behind this abusive practice.
The masters aren't dead yet and neither are their apprentices. There are still quite a few old timers around that have retreated or retired to running small shops doing a greatly scaled down version of their trade. We could get a lot of them back in business if we made them competitive with overseas manufacturing. The word tariff is suspiciously absent from this discussion though.
"American manufacturing output is larger than ever"
Which is it?
We've lost zero manufacturing capability.
We just need a fraction of the people that used to be involved - they've been replaced by robots.
"The job at the plant" died, not the manufacturing sector.
People with direct experience of the manufacturing sector in the US and abroad (including me) will certainly tell you that America's capabilities have deteriorated, at least relative to other countries. The machine tool industry is considered a good bellwether for industrial capacity and there's been some good research on this topic if you're interested: http://www.bismarckanalysis.com/Machine_Tools_Case_Study.pdf
Edit -- by comparison, when I lived in Japan I found it extraordinarily easy to buy locally made products of all sorts; pots and pans, coffee mugs, water bottles, stationery, clothes, shoes, electronics, tools, injection molded plastic items, paper products, everything. Even in their equivalent of dollar stores. Sometimes they were a bit more expensive than those produced in China/Vietnam/Indonesia, but often they were price competitive. It was weird coming back to North America and adapting to not being able to find anything locally made.
We don't build low margin anything because nobody would buy it if it costs more.
Japan is a good example - they setup all their car factories in the US in the South specifically to avoid union labor costs! Many Japanese cars, for our market, are made... Right here! Because the shipping and labor overhead would make them uncompetitive.
Fighter jets are almost a cost-is-no-object project, so to me at least, it isn't a good proxy for a country's manufacturing prowess.
Your ability to build something is measured by how cheaply you can build that thing. This means that if I can make something more cheaply than you can, I'm actually better at making it than you are, assuming the end product is the same. (You can also cheapen something by cutting corners on the design or materials, but then you're making a different thing).
Can we make an iPhone? Yeah, we design not only the chips here but the circuit boards. They're prototyped here!
Can we increase our margins by throwing the chemicals into the local river and having people manually stand there for 12 hour shifts breathing in toxic chemicals to manually polish them? Yup.
in all seriousness, decent take, but it doesn't seem to add that much to Andreesen's essay. e.g. the whole bit about how building a new world is inherently political... yes, in a more philosophical sense. But when Andreesen writes "we need to separate the imperative to build these things from ideology and politics. Both sides need to contribute to building," he clearly is referring to America's dysfunctional political climate, not "living together" / some conception you'd be considering in political philosophy.
fwiw, I do think Andreesen's essay could have more explicity (as Isaac's is) criticized out how creative/productive effort has been spent in recent times. I remember reading a quote about how crazy it is that the nation's (and globe's) top talent is being brought to Silicon Valley to, in large part, figure out how to more effectively addict young people to their apps (rather than, as it were, "build for good").
I think many of us would of loved to work in pure physics, mech eng spaceX type stuff too.
> Beauty is not simply some pleasant thing to be considered once we smash the zoning codes. It is the aesthetic force necessary to reach deep into our subconscious and activate our will to live in a new world (which, yes, includes new zoning codes).
or the "proven to be insufficient" category: > Reconstructing the better part of an industrial society will take decades; and with our present white-collar workforce left utterly directionless, inflated by elite overproduction, and medicated at world-historic levels, sending a million students to Harvard will not, as Andreessen suggests, help spur technological progress. Rather, it is the regeneration of practically-grounded trade schools and state-backed coordination that is needed to retrain a productive workforce.
Trade schools are great and all - but retraining efforts consistently fail when the jobs do not line up with an individual's self-image. Truckers will not line up to be trained as CNAs, no matter how many training programs or jobs are offered and jobs are demanded. Likewise, most white collar workers will not line up to be factory workers.
The essential thing he's missing is that the reason many Americans didn't freak out when Bill Clinton signed the bills which caused these jobs to overseas is the first place - is because the reality of factory jobs is at odds with the American dream of self-determination. Many humans don't like being a cog in the machine, even if it's a steady income. Many children of these manufacturing workers saw the harmful side of those types of jobs, and instead opted for college or service-industry jobs where they focus on developing soft skills and relationships with people. Yes they want good jobs and to not get abused by the gig job industry, but many Americans don't want to go back to being treated as human machinery in factories either. The real thing Americans want is better opportunity to use those skills to start their own businesses, to put their skills and creativity to use. That's part of the reason craft brewing took off so intensely - it's one of the only fields that young people can still break into and differentiate themselves even with limited starting resources.
All that said, I do admit that I was surprised when I saw that the author is just an undergraduate. His naivete is a bit less concerning with that in mind.
I Googled this phrase and your comment right at the top, so can you explain it further?
Yes, it is an extension of Bauhaus, with exposed fixtures and minimalist, functional designs. Yes, in the hands of a hack, this yields ugliness. Buildings like Habitat 67 in Montreal, Vancouver BC's central library, and UC San Diego's Giesel Library are works of art.
To say there was no thought of form or beauty is patently a calumny.
Strip-mall architecture is the fast food of architecture. Quick, cheap, and, at best, lacking in nutritional value.
None of the brutalist buildings I've actually been in suffered from confusing floorplans or lack of storage. The tendency is more for big, striking open spaces and wide walkways.
In the Pacific Northwest there's a recent trend to build a lot of ugly boxy townhomes and small apartment buildings in a neo-brutalist style. One notable features of these buildings is big, smooth rectangular panels in their outer cladding. They often look like the builder just got a bunch of OSB sheets, painted them dark brown and tacked them up as siding. Add thoughtless placement of conduit and vents and the interaction between window locations and the lazy siding, and you have a sloppy mess of unintentional asymmetry and unevenness.
If you are going to have your conduit hanging out as an architectural feature, you have to treat it like an architectural feature and think about how its placement and routing impacts visual balance and rhythm as well as the functional issues of delivering power, water, and ventilation. It's not just a license to nail something up and omit the trim.