Interview with Paul Graham
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YC folks, startups & the people yc startup school attracts that I've personally spoken to in the past few years are more imitator-types.
YC folks & startups of 2009 were more authentic & original types.
Though I suppose it's tough to avoid this deterioration in culture following $-influx & 'success', in any domain.
I was happy to be around, if not involved. Startup School afterparty at Anybots was a dream. Trevor even pinched me with his new robot (at my request).
There were posers even back then, though. I remember one guy getting very drunk, saying “Ok, this is it,” and walking up to pg to pitch his startup. I’m not sure who I felt worse for, him or pg.
Fun times for a 22 year old nerd on his first trip to USA. I grew a thick skin fast.
The fact that a random kid from Europe could even get a chance to show up and speak to all those amazing people ... priceless. Just wish I had had the chops to do more with the opportunity.
> You’re an idiot
That seems awfully rude of them. They don't sound like very pleasant people.
If A being rude to B, there's a good chance B will walk away, even if B could argue their point.
If the situation is such that B can't walk away -- meaning that A has power over B -- then A being rude in that context is not only unpleasant, but possibly also an abuse of power by A.
(Only if it’s true though! A surprising number of founders try to BS their way, which is always a mistake.)
They are not testing for such things. Sometimes over drinks, someone might say something, possibly rude, possibly just perceived as that. I wouldn't perceive it as rude if someone said to me 'Kid, XYZ is dead!'. It's just a statement.
There are not 'introduction of variables' here.
Also, I would perceive it a rude to meet someone in a social situation and have them 'pitch' to me. That part of 'always hustling' in every social setting is one of the reasons I will never move back to the Valley.
It's just not something that people outside the game would handle well.
Jim Morrison.
I always thought that song was prescient, considering the the "waves" of rock and roll in the following decades. Ideas emerged, often from the underground. Some were true, and they upended old, stale ideas that had descended into hack mimicry packaged and sold to the unwashed masses.
Novelty is a quality and it only lasts so long. Johnny Rotten's antics would be trite cliches by the 1980s, just as he himself had been disgusted by the trite homages to Jim Morrison of the last 70s. Authenticity, originality and rebellion don't generally follow clearly signposted roads.
Movements have cycles. In retrospect, Mike Oldfield didn't really suck... but Johnny was right at the time.
So melancholy, a lot of the responses seem to gravity around a general accidentalism. I feel that’s true for a lot of people who have had great success, never really understanding how each of the pieces fit together to make their success and thus never feeling like they’ve owned it.
What I find intriguing is that Peter Thiel has yet to appear on the Joe Rogan podcast while he clearly bankrolled that operation.
The second one is pretty obvious, Three former PayPal employees—Chad Hurley, Steve Chen, and Jawed Karim—created the service in February 2005.
With what we know of Peter Thiel I think the burden of proof is on you that he doesn't make use of the knowledge he has on specific network work effects of youtube.
Just like he installed Donald Trump with Facebook in the White House.
Maybe people are intimidated by his intelligence and contrarian stances?
Thiel's reasoning on one thing or another may be flawed, but he definitely doesn't work this way. And he has a ton of money. So that can make the back-of-bookers both irritated and resentful.
Out of curiosity: any guesses what this company might be?
I fear this prediction won't come true.
There's a great risk that 'health theatre' will join security theatre as a durable if not permanent part of our existence. That years from now, we'll be getting temperatures checked, schools will be shutting down for worse-than-usual influenzas, and so on.
I still can't bring an ordinary-sized yogurt on a plane, and have to remove my belt and shoes. Something made our society irrationally risk-averse, and I glumly suspect that COVID won't be the turning point in that trend.
COVID fear isn't being perpetuated by any government agencies at the national level. If anything, the federal government desperately wants us to forget that COVID exists. Once the actual risks are gone, we're going to go right back to normal, though hopefully we will have learned a lot of lessons about pandemic preparedness.
So yes, I also tend to agree that many people will continue supporting the health theater and fears for the foreseeable future.
Please wash your hands for 20 seconds though, and don't come to the office if you're sick.
Fearing polls, Biden has run away from his position (made multiple times on record) of a national mask requirement. The other day he lied and said he never said it in the first place, claimed he's a constitutionalist and wouldn't seek a mask requirement because of that. This was all on video. So who knows what to believe from these clowns.
India. India is a big country and deaths are going up there.
The US and Europe seem past it to me.
At least in France the situation is clearly being used to control opposition, which was strong before the pandemic since the government tried to push a lot of economic reforms. Now, the economy was purposely destroyed there, so harsher reforms will be imposed and people will be really angry when they’ll discover the lockdown was not needed (for the record, I live in Japan where there was no lockdown and things went totally fine). The sanitary rules will be used to control those revolts too. The fact it is a political only move was made super clear when the government allowed huge demonstrations that mimicried BLM in June.
"You and your children will die soon and there's almost no way to stop it" is the dominating message on the front page of many media organizations.
EDIT to add: with a link or screenshot.
CNN:
"A whole generation wiped out"
"China still vulnerable to deadly second wave"
"Covid-19 tests could encourage workers to play Russian roulette"
"Stories of discarded bodies reveal a city totally overwhelmed by covid-19"
"Coronavirus may lurk deep in lungs after patients recover"
"Nearly all patients put on ventilators died"
"Welcome to the house of horror"
"Covid-19 causes sudden strokes in young adults"
Occasionally your shoes will be scanned. That's it, at least from my (quite frequent within-EU flying experience) perspective.
There's a large group of people who've become extremely scared as a result of what's going on at the moment. Most of them haven't actually evaluated what the risk for them personally is, yet they've made significant changes to their behaviours in the name of the health theatre.
On the other hand, you've got people who either are in life situations where that isn't an option or people who have actually done risk analysis. These people have not changed their behaviours much (beyond sticking to the random new legal requirements).
Now for the thought: I think that many of these behavioural changes (or lack thereof) will stay, essentially meaning that we've got a group of people who will act as before and a group that will act (and overreact) irrationally from now on. I think this is going to give the people in the first group an advantage for getting things done, which can have interesting long-term implications.
I do believe that the risk is fairly low right now. So low that if I'm only thinking of myself, there's not sufficient justification to change my behaviors.
However, I also believe that if no one changed their behaviors, the risk would be high enough I'd have to (as is the nature of an exponentially spreading thing).
As such, I behave how I need everyone else to: I change my behaviors in the hope everyone behaves similarly to me.
For a very similar analogy, there's no need individually to get vaccinated risk wise. Developed countries have such a high level of vaccination that there's a vanishingly small probability you're exposed in your entire life to the things you're vaccinated against. There's a higher risk of side-effects from being vaccinated.
However, if no one got vaccinated, the math doesn't work out anymore, and it's back to vaccination making sense for you as an individual. As such, most people get vaccinated since it's the socially conscious thing to do, it's what we ourselves need most other people to also do for our own health.
Our brains are finely tuned to detect danger. If there isn't any danger, danger will be exaggerated or simply invented. Our society has been very successful at eliminating all sorts of dangers, hence the irrational view of the remaining risk today.
Citation needed
Interestingly, in an immunology class I just took, the instructor suggested that allergies come from our immune system doing the same thing. If the environment is too sterile, it will come up with things to worry about even if the danger isn't really there.
https://www.pewresearch.org/fact-tank/2016/11/16/voters-perc...
That said, this "hyper sterilization" mindset is not appropriate if we're not in a pandemic. Copious hand sanitizer, social distancing, masks when not sick, limiting crowds, etc. are not needed when we're not in a pandemic and they have huge downsides for society.
It’s essentially a law enforcement problem. I agree liquid rules are ludicrous but the current situation didn’t happen overnight, and also it’s not that similar to an infectious disease threat.
Anyway, I think he's enjoying his well-earned money, life, and wonderful family (which is great), but as far as practical real-life startup advice? Paul Graham isn't that guy anymore.
Perhaps he likes to talk and think about other things these days, but I'm sure he's still an expert in that area. Certainly he knows more about startups than just about any HN commenter.
It's kind of true.
Basically when PG was writing about stuff they considered part of their in-group then it was great and wonderful.
When he writes about stuff that's no longer aligns with their existing political in-group's beliefs (his arguments against the wealth tax [0], his essay about conformism [1], his essay about economic inequality [2]) - suddenly he's 'disconnected' and they're 'disappointed' in the essays.
I thought those essays were great and the points were interesting/well argued. I liked his old essays too.
I find the tribal responses to them (and the comments here) to be lame.
[0]: http://paulgraham.com/wtax.html
I think this is unfair. For example, I don't really relate to building a multi-million-dollar startup in my 20s, so the wealth tax article is simply not relevant. The article on Conformism is just highfalutin pseudo-psychologizing. Compare these to classics like "What We Look for in Founders" or "Ramen Profitable" and we have a pretty clear shift in focus. This takes nothing away from pg being a bonafide genius, it's just that his focus is no longer actionable and insightful advice to founders.
I think it's fair to point out that there are fewer actionable startup advice essays recently, but 'highfalutin pseudo-psychologizing' is just dismissive without talking about any of the ideas, and he did have well-liked essays like What you Can't Say and Why Nerds Are Unpopular that were of a similar type - so that kind of thing was something he's always written about (though he also wrote about more actionable advice alongside it too).
If you went back and reread them, would you say they're "highfalutin pseudo-psychologizing"?
Both you and pg have changed in the intervening decade-and-change; I think you're over-weighting his changes, and under-weighting your own.
Which is natural, but I'm curious what you think of those essays in that light.
[1] http://paulgraham.com/nerds.html [2] http://paulgraham.com/say.html [3] http://paulgraham.com/wealth.html
I think it was harder to narrowly categorize those as in-group vs. out-group than the newer ones though.
Maybe it's because people are more polarized now and there's less room for talking about interesting points that don't clearly fit into an existing political group? Maybe if those were written today people would find them similarly 'disconnected'?
I don't know, but I agree his new stuff isn't that different from the kinds of topics he's historically written about.
Those who don’t have a knee-jerk reaction to the politics they seem to imply, aren’t as loud as those who have to disagree.
It's just that based on current political climate, I think it's hard to keep politics aside.
My thoughts about pg have essentially gone through this flow: - Start reading some of the old essays in college, agree with most of the points - Start working, the essays slowed down. I read old ones once in a while, still mostly agree - Start following pg on twitter. There's some stuff I don't agree with but it's alright. - See a lot of stuff that I don't agree with [1]
(in between somewhere, I got convinced that keeping politics on sidelines is not an options)
Then I see the essay on wealth tax. My read is that main argument is that the tax compounds. But I don't see any alternative arguments. So I see his position as against the transfer of wealth and societal equality and I don't agree with that.
Maybe I'm being too opinionated or not reading deep enough, but that was my line of thought.
There aren't any arguments in that essay at all. It just describes, with numbers, the consequences of a wealth tax for startup founders.
> I see his position as against the transfer of wealth and societal equality
The essay states no position whatever. Not every essay has to state a position. Some essays are just about stating some facts.
That would be consistent with his previous writings on the topic. He doesn't necessarily seem to be against all taxation that results in some transfer of wealth away from the rich, especially, I suspect through inheritance. Someone who believes founding startups are an important way humanity's wealth increases is likely to be hesitant about anything that might put the brakes on that process; a wealth tax would diminish the incentive for smart people to go all-in on high-risk high-reward ideas.
Before YC, there was no real playbook about how to start a startup. Now there is one (startup school). That's one reason why sama switched gears towards openAI. Starting up is now kind of a solved problem, conceptually
But on top of that playbook, there is tons of advice available from countless people in any kind of niche imaginable, state of the art, updated almost every week. SaaS, e-commerce, platforms, engineering, marketing, you name it.
But this very differentiated professionalism was a direct result of the success of YC, among a bunch of other players. Starting up in your early 20s in your doorm was a niche itself before YC, now it's very much mainstream (thanks as well to cloud and mobile).
PG never was a 'startup expert' it seems to me. He always has been and still is a hacker that enjoys building things that are interesting. It just so happened that between 1995-ish and 2015-ish that very niche-y hobby turned out to be extremely valuable for (more or less accidentally) building the foundation of one of the most lucrative global commercial and societal transformations in history.
The period between 2000 and 2010 laid the foundation. But not because it was intended, but because in hindsight, the right people with the right mindset turned out to build the right tool set that paved the way.
And once this way was paved, the 'army' marched in with trillions of dollars and a global flocking of talent and ambition.
Job done, it seems.
That's why he lives in England now, writes, codes and checks out interesting stuff built at Demo Day. Like it has always been, but in a completely different world, in which building tech became the most valuable thing.
Then I saw his recent tweets and especially the essay about wealth tax, I was a bit disappointed. But as you said, his position is well earned. But I don’t see any useful real life advice from him anymore.
Yes, let's just assume this is true. Please!
Why? He points out [the non obvious to many fact] that wealth tax kills compounding.
And this is something to seriously consider.
And that's a rather misleading way to characterize the effects of wealth tax. When you think of compounding you think of compound interest, where compounding means the actual interest ends up being MORE than what you might expect (numYears * annualInteredtRate * baseAmount) because baseAmount grows every year due to compounding.
On the other hand, the wealth tax "compounding" works in the opposite direction, because baseAmount is reduced, not increased, by the tax over time, so the "compounding" aspect of the tax actually REDUCES the amount of tax you pay compared to a baseline where you didn't consider this effect, i.e. (numYears * annualTaxRate * baseAmount)
I don't think this choice of words was accidental on PG's part, as he chooses his words very carefully. He just chose to weaponize his words this time to push his political opinion, to make wealth tax seem worse than it is, which is something I've sadly come to expect from his twitter, but never noticed leaking into his essays before.
That floor is pretty high depending on the proposal ($30-50 million), but that doesn't stop the problem of equity ownership being eaten away over time when a lot of your worth is tied up into a successful company (like Bezos).
You also get other incentive problems with things like angel investing. If someone is at the wealth cap they're less incentivized to risk money when they'll either lose it because the investment fails, or lose it because it gets eaten by the wealth tax.
Other proposals have low floors where you just have the problem of a lot of wealth getting taken.
In general it's good for a society to incentivize wealth creation/growth and still protect the lower bound of society. A wealth tax dis-incentivizes wealth creation - and for what? It just comes across to me as a 'hate the rich' policy that creates perverse incentives.
Disclosures so people don't think there's hidden motivated reasoning here:
- I'm nowhere near the wealth cap and probably never will be
- I think trump is an idiot and the republican party is a disaster
- I voted for Hillary and will vote for Biden.
I still think the wealth tax is a bad idea and bad policy.
There's a compelling argument that growth (that accounts for human rights and protecting the environment) is the best way to help the most people the fastest: https://press.stripe.com/#stubborn-attachments.
Policy that dis-incentivizes wealth creation creates perverse incentives that limit growth.
We're better off with policy that limits how wealth can be leveraged into political power, and policy that helps protect and improve the lower bound of society. That said, I think it's likely reasonable to limit how wealth can be passed down generations (to prevent things like dynastic wealth, but that's a separate issue and I don't know enough to really comment on it).
Wealth creation isn't zero-sum, just because someone builds a business and creates wealth doesn't mean they're taking it from others. We want a society where people are incentivized to create and grow wealth as much as they can (within bounds for environment protection and human rights), not just to some arbitrary cap before it gets taken by the government.
All of the above ignores real modern examples that directly leverage their wealth to do things that would not be done otherwise (Elon Musk: SpaceX, Tesla, Neuralink, Boring # Bezos: Amazon and Blue Origin # Gates: Health and Public Policy). I think the general argument in favor of growth is better than these specific examples though because it's a more systemic argument about incentives for the structure of a society rather than relying on individuals and their choices.
There's also the implementation issues (which are real), but I'm not going to argue that bit just because a lot of good ideas are hard to implement but still worthwhile. The wealth tax though I think is both a bad idea and hard to implement. The bad idea bit is more important.
> Wealth creation isn't zero-sum, just because someone builds a business and creates wealth doesn't mean they're taking it from others.
I'd say that's exactly the model that some of the startups are taking. Uber and Lyft come to mind. A part of their wealth is coming from the pockets of workers who have to work for lower wages than before and get hit by depreciation that they didn't account for when earning.
By wealth creation I mean something like this: you buy parts to build a house on land you've purchased. After you're done building the value of that house is worth more than the sum of its parts. The time you invested created something more valuable without taking anything from someone else (you now have more 'wealth' than you had when you had some land and a pile of house parts). This doesn't take wealth away from anyone else, but if you were to sell someone may choose to buy your newly created house when they might have otherwise chosen the neighbors house which is slightly older. That's a bit of a different thing.
There are definitely some industries where a lot of the cut-throat nature is a result of stagnation and groups fighting each other over what profit is available via competition. (Thiel talks about this in Zero to One and why businesses in competitive markets are a bad idea).
That said, the uber/lyft example is interesting.
Some points:
- Prior to uber and lyft a lot more people would just drive drunk, taxis were unreliable and expensive - if you had to take a taxi somewhere people would just opt not to go.
- Taxi companies were pretty corrupt and (at least in NYC) relied on a medallion model that expressly limited growth and empowered organized crime groups. This led to a worse experience for everyone except the medallion holders who could extort drivers and riders (while providing bad service).
- A lot of people that drive for uber and lyft were not driving for taxis before, the market maker effect of uber/lyft and people that need a ride created a much larger market for people hiring taxis. This creates wealth - both for the drivers that did not have that ability before and for the riders that would not have previously bothered to call a taxi (and clearly all the people that work at uber/lyft generally). It might also have knock on effects where people go out more which might benefit local businesses more, but that's fairly speculative.
Are there people that get screwed in this? Probably - taxi companies that provided bad/expensive service are not competitive with uber/lyft. A smaller amount of people at those companies that were making more are probably making less. Is that worse for society generally? My personal view is that it's not.
Anyway - on a meta note, I also appreciate the back and forth and engaging with me. I'm open to being persuaded otherwise. I've read a lot about this stuff and have tried really hard to understand the underlying truth away from politics. This is where I've currently landed.
Well-intentioned bad policies usually just fail to account for unexpected outcomes, or they create perverse incentives that quickly overshadow the original goals and make things worse. In particularly nasty cases the reasonable sounding justification was never the goal (or even initially well-intentioned) and it's just a cover for the some other motive.
I'm not sure which was the case for medallions originally, maybe it's what you suggest - or maybe some people were just trying to lock in a monopoly they could exploit. The number of cars on the road would likely have been moderated by what the market could support without them. The creation of monopolies locked in place via legislation was not a good outcome and created lots of problems.
Now with Uber/Lyft operating, suddenly the taxi service in NYC has improved (they'll actually take you where you need to go, the credit cards machines are no longer mysteriously broken).
I'm pretty sure that the large majority of uber/lyft drivers never worked as taxi/limo drivers, so not sure how we can compare their earnings to "before". The cost of the vehicle has always been an import part of the economics of the taxi/limo business. In the old days, you would either have to be an employee, with lower hourly rate, lots of mandated hours, but with employee benefits, or you would have to pay rent for the use of someone else's vehicle, which would come out of your earnings if you were working for yourself. At least when people buy their own vehicles for ride-sharing, they are getting the vehicle at cost, not cost + profit margin, and they get to use the vehicle for personal use, meaning they don't need to spend money on a separate vehicle for personal use. For a lot of potential uber/lyft drivers, the additional flexibility of working or not working whenever you like is better for them than being an employee. Seems unclear to me how taking that choice away from them would improve their lives somehow?
There is a separate issue about whether adults should have the right to make their own decisions, even if they may turn out to be harmful to them. But it's not clear to me whether making the choice to be a taxi/limo driver 20 years ago was very different in that regard to becoming an Uber/lyft driver today?
Fyi had a family member in the taxi/limo business in NYC for many years. They started as a paid driver, then managed to find someone to rent them a limo so they could work for themselves, then saved up enough to get their own limo, then eventually gave up driving and just rented their limo to other drivers. Both parties at each stage were consenting adults.
I disagree with their point of view because:
1. My neighbour having enough food to eat and a warm house is a form of wealth FOR ME.
2. If wealth that is generated is taxed, this means that it is harder to accumulate wealth, this means that the people that do manage to accumulate wealth have better qualities than the people that do so in a tax free environment. And thus they make better decisions about how to allocate their money.
3. Billionaires are not accountable to anyone for how they spend their wealth. This is fine if they are all like Musk. But they are not. Of the countless number, only two are trying to build rockets to Mars. Counter examples are Osama Bin Laden and the guys who funded the NRA. If the wealth is taxed then it is fought over in a shared space in which we all have a say, no matter how small.
I like the argument that Rawls made in "A theory of Justice", where he said that when you are deciding how to make a fair society you should think from a perspective in which you do not know what role you will have in that society.
Well, it is their money.
I do wonder if you could make something like the wealth tax work in the United States.
I'm willing to be educated.
> Net wealth taxes are far less widespread than they used to be in the OECD but there has recently been a renewed interest in wealth taxation. While 12 countries had net wealth taxes in 1990, there were only four OECD countries that still levied recurrent taxes on individuals’ net wealth in 2017. Decisions to repeal net wealth taxes have often been justified by efficiency and administrative concerns and by the observation that net wealth taxes have frequently failed to meet their redistributive goals. The revenues collected from net wealth taxes have also, with a few exceptions, been very low.
http://www.oecd.org/tax/tax-policy/role-and-design-of-net-we...
What parts of Africa? Liberal democracy and capitalism are prerequisites before you can make a wealth-tax no wealth-tax comparison.
People in this thread are also confusing protecting the lower bound in society with taxing wealth. This confusion only makes sense when you think wealth creation is zero-sum (it's not). You can protect the lower bound of society (Europe does a better job of this than the US generally) and incentivize growth/wealth creation.
You don't have to choose one, you can choose both.
I suspect the average poor person in much of Europe is much better off than the average poor person in America. Yet Europe incentives wealth creation a lot less than America.
I want that too, but it's unrelated to a wealth tax or the existence of billionaires. I'd argue the wealth tax dis-incentivizes growth and makes it less likely your neighbor could have enough to eat and a warm house. We can and should improve the lower bound of society, but you don't do this by taxing wealth and dis-incentivizing growth.
> 2. If wealth that is generated is taxed, this means that it is harder to accumulate wealth, this means that the people that do manage to accumulate wealth have better qualities than the people that do so in a tax free environment. And thus they make better decisions about how to allocate their money.
I don't think this follows. Maybe it's harder so only the nastiest people attempt to do it and fight more with each other since their wealth decays over time? I don't have strong opinions on this, it's just not very compelling.
> 3. Billionaires are not accountable to anyone for how they spend their wealth. This is fine if they are all like Musk. But they are not. Of the countless number, only two are trying to build rockets to Mars. Counter examples are Osama Bin Laden and the guys who funded the NRA. If the wealth is taxed then it is fought over in a shared space in which we all have a say, no matter how small.
Yeah - on this we agree, there should be restrictions (there actually are some on political contributions and obviously things that are illegal/sanctioned). Limits on how wealth translates into political power should exist and probably need to be better. This is a different issue than a wealth tax and dis-incentivizing growth.
Has there ever been a case in history where a society has successfully limited the political impact with those of disproportionately immense wealth?
edit: >There's a compelling argument that growth (that accounts for human rights and protecting the environment) is the best way to help the most people the fastest:
I'd prefer to be an average or below person in most of Europe (free healthcare, free education, 6 weeks of paid vacation, various other benefits, low crime, etc.) rather than America. Yet America values growth a lot more than Europe.
>>Has there ever been a case in history where a society has successfully limited the political impact with those of disproportionately immense wealth?
there's more ways w/ tech to covertly do such than ever.
You're right that wealth creation isn't zero sum, but studies make this point a bit more nuanced than your argument would suggest.
Historical analysis of growth appears to indicate that equality and growth in America have been largely correlated on a decade by decade basis until the last 20-30 years. It was only in the most recent cycle of international growth that this link appears to have been broken.
So it's not simple enough to pretend that pro-wealth and pro-growth policies are one and the same; the opposite appears to have been the case until very recently.
It absolutely is zero sum - but not from the point of money, but from the point of view of another finite resource; human labour and talent.
The fact that someone has more wealth than someone else means that the market will value their time/spend more than someone who is poor.
Think about it this way, if you see money as a way for society to allocate resources - is the fact that you own more wealth than someone else mean that you can should be able to direct more of where the resource spend of human labour is?
How many talented engineers work at Rolls Royce to create £250,000 cars which would be better put to use elsewhere? How many software engineers work at startups funded as a moonshot for the wealth of the founders work on CRUD apps where they could be working on something like scientific or educational tech? How much chemical engineering talent do we sink into cosmetics?
Your cited examples prove the point above - the only reason why those examples exist is at the whim of those who have wealth. What about less savoury examples of the use of wealth such as Academi or Palantir?
I think your point is less about wealth creation, and more about access to capital and how that influences who can fund what work. It's a subtle distinction, but I think an important one - and yes you're right access to capital and how capital is allocated is zero sum and this influences what work is done.
I don't think this is entirely a bad thing though because in a society with an effective market what makes money should be related to what people want. The incentive alignment that comes from this (and capitalism generally) has allowed the largest creation of wealth in human history (of which everyone benefits when you look at things like infant mortality, public health generally, standard of living, etc.).
This doesn't mean there aren't places to improve in terms of equality of opportunity for access to capital or that there shouldn't be rules to prevent incentives that can lead to outcomes worse for individuals and the group (see the fish farming story in this: https://slatestarcodex.com/2014/07/30/meditations-on-moloch/), but it also doesn't mean that the wealth tax or dis-incentivizing wealth creation is a good idea. Venture Capital is important here because it gives access to money to people and ideas that would have a hard time getting it otherwise (on bets that only occasionally pay off huge).
We want people to be incentivized to take risks and start companies that can create massive amounts of wealth and entire new industries. If you have a wealth tax, someone making a couple million a year as an investment banker will be less likely to leave and risk that money to create something since they'll probably get to the cap without doing that anyway.
Starting a company is already a pretty hard/risky decision to make, we don't want to make it harder.
> How many talented engineers work at Rolls Royce to create £250,000 cars which would be better put to use elsewhere? How many software engineers work at startups funded as a moonshot for the wealth of the founders work on CRUD apps where they could be working on something like scientific or educational tech? How much chemical engineering talent do we sink into cosmetics?
The way to fix this is with incentives that encourage people to go into areas society thinks are more worthwhile, but I think you're too dismissive of things like CRUD apps. Those things provide enormous value for the companies that need them (I think even cosmetics research has led to new medical knowledge).
That said, I agree with the spirit of your questions - I wish humanity was better at coordinating. There's so much we could do if we were better at coordinating. I think capitalism and incentivizing for wealth creation (with controls for human rights/environment) is the best we've got to make the most progress the fastest. It aligns human nature and rewards people that make things that people value.
There's a risk of a corrupting influence on liberal democracy that needs to be controlled (https://www.ted.com/talks/lawrence_lessig_we_the_people_and_...), but I think this is best structure for society to efficiently allocate resources/capital in a way that encourages the most wealth creation and growth.
Does this mean you end up with things like Las Vegas where human investment would be better off elsewhere? Yes, but I think that's an acceptable trade-off for everything else you get (and people like Las Vegas).
Attempts to remove the capitalist incentive structure and dictate what's important for people to do (or worse control how money is allocated to people) seems to lead to massive corruption and people doing what's necessary to get the money (which is often unrelated to actual success).
As far as Academi - I'm not arguing for unregulated, no-government, capitalism. Companies should provide value within society and society should enact legislation via elected representatives in some form of liberal democracy (and companies should operate within those laws). I may not agree with every action that happens here, but nobody will - and that's why we have liberal democracy to sort it out.
I agree; I'm talking about the allocation of capital in a capitalist society; I'm effectively arguing that inequality and wealth distorts the markets such that capital is allocated to be invested in products which those who are richer care more about - to put it in a more reductive way the fitness function is a simple maximum rather than, for example, having a scaling factor per person.
A liberal democracy is intended to be the latter, but as we've seen, enough wealth and lobbying implies that you can indeed, influence enough of your fellow populace to vote how you want them to.
> I think this is best structure for society to efficiently allocate resources/capital in a way that encourages the most wealth creation and growth
With all due respect, this is similar to the argument laid out by Leibniz when asked about the existence of God; that is that "We live in the best of all possible worlds" - and in that case the rebuttal is the same, given that the proposition is such a strong one the burden of proof is on the proposer. After all, Mercantilism was thought to be the best system during the Rennaisance and Feudalism in the Middle ages to give two examples of economic systems which were later discarded.
> The way to fix this is with incentives that encourage people to go into areas society thinks are more worthwhile
Capitalism only has a single answer to this question; the areas which have more capital are by definition the areas which society thinks are more worthwhile! Which, is why it is an incredible system - it manages to make people who by and large are self-interested and self-organize and as you say has been the biggest driver for human wealth and prosperity for over a century without the need for some benevolent dictator.
To my mind, there are several really big problems which we have to face in the coming years. You alluded to it here tangentially;
> people like Las Vegas
I think with adtech industry and social media, it's incredibly easy to influence what people desire and want - if you can control what people want; can we still really say that capitalism makes people more prosperous, if the very reason that they were poor because we induced artificial needs and desires in them?
On a more practical level, I agree with you; people should be incentivised to start companies because it's good for society. But where we disagree, possibly, is that money is the only driver which causes people to start companies. The IBD banker in your example, would start the company regardless of whether the payout was lower, but by implementing a wealth tax, maybe the we could give the opportunity to the teacher with the great idea about educational technology to create _their_ business and enrich society.
> "...given that the proposition is such a strong one the burden of proof is on the proposer"
I should clarify that I'm not arguing so much that capitalism is the best possible system that could exist and it's always worth thinking about ways things than can be better. There is a lot of evidence in favor of capitalism though compared to other systems that have existed, mostly in the amount of created wealth it has enabled via growth and the speed at which that improvement happened. Then looking at all of the societal metrics that have improved in that context (infant deaths, violent crime reduction, poverty, etc.)
It's the best structure I'm aware of and a lot of idealized proposals of alternatives fall flat.
The Stubborn Attachments book makes this argument in a way I found pretty convincing.
> "But where we disagree, possibly, is that money is the only driver which causes people to start companies. The IBD banker in your example, would start the company regardless of whether the payout was lower, but by implementing a wealth tax, maybe the we could give the opportunity to the teacher with the great idea about educational technology to create _their_ business and enrich society."
I think you can give this opportunity without a wealth tax and its associated negative incentives (I think these issues are unrelated). I also don't think money is the only driver, but you don't want to dis-incentivize growth when you don't have to.
So the humanity's wealth is the same as a million years ago? There seems to be more stuff now.
First, we're talking about capitalism as a economic system which has only been in place for ~200 years. I think you'd be hard pressed to find any capitalist which would give credit to capitalism before the birth of capitalism. If your critique is based on the fact that capitalism is a successful economic system and better than what came before it, I fail to see where I suggest the opposite view. To suggest it's the _best_ possible system is rather more difficult.
Second, wealth has no definition without some form of economic system. Is wealth the free time that someone has, the trinkets or baubles that someone owns or their lifespan? By all accounts capitalism has done wonders for the second and third measures of wealth (arguments that technology and scientific progress which capitalism doesn't tend to fund notwithstanding). The first I'm unsure about; census data only shows since the 1970's and of course we have the massive bump due to a doubling of the demographic who are working.
Indeed, wealth tax sounds good because there are problems with income inequality and it's currently fashionable to hate the rich. But that's about where it ends, while second-order effects are ignored or at least not taken seriously.
Andrew Yang was one of the few high-profile Democrats brave enough to push back on it.
"I think the wealth tax is an idea, in spirit, that makes sense, given the wealth distribution. But in practice it would have massive implementation problems. There would be capital flight, wealthy people would renounce their citizenship. And the bigger problem isn’t even the money. It’s the annual inventorying of their assets. The truly wealthy in this country have zero interest in submitting to an annual audit of all of their assets. They barely know what all their assets are. And the last thing they’re going to do is report them every year and then pay a toll. So you would have massive compliance problems. And to me there are better ways to make this economy fair, though I understand the spirit of it and the intent of it. But I agree that it would be somewhere between problematic and a disaster in practice."
https://www.cnbc.com/2019/10/02/andrew-yang-wealth-tax-plans...
They built the wealth on the back of their nation, on the back of the infrastructure, education, laws and blood of their ancestors, no good reason they should keep it when they choose to leave.
It's the fundamental basis behind tax. 95% tax on any wealth over, say, $500k on renouncing citizenship, total forfeit if found to be hiding assets, done.
If you have to come up with ways to stop people from fleeing your country instead of too many people wanting to enter your country then you probably have a problem. And no, I don't think it is as easy as you say. Simple sounding solutions like this can have huge disastrous consequences.
My socialist country didn't even allow people to travel - to prevent capital flight and brain drain - and now you are proposing to basically close borders to some people until you buy your own freedom.
That's scary as hell and a return back to 1920s.
America is one of the only countries to tax their citizens income abroad.
This would affect 0.001% of people who had managed to capture a huge amount of wealth and were attempting to avoid taxes.
Wealth in the hands of a few becomes static. Jeff Bezos can only buy so many jets. When you leave it there, the entire economy stagnates.
As for an "argument" it's really no different than any other political position in that it boils down mainly to what you personally value.
I've observed at least two distinct value systems which can both lead to supporting a wealth tax.
1) Maybe you believe in helping the marginalized and creating a more equitable society. Perhaps you believe it is insane and obscene that multi-millionaires and billionaires walk past tent cities of homeless people every day in the streets of San Francisco. Maybe you care about the well-being of other people and recognize that what is good for them is usually good for yourself.
2) Or maybe you believe that tax policy should optimize efficiency as a facilitator of economic growth. You recognize that the diminishing marginal utility of wealth and the runaway inequality in America presents a problem of inadequate aggregate demand and threatens the entire economy. Maybe you've done the math and realize that the US government must raise revenues to have any hope of staving off an eventual sovereign debt crisis.
From what I've seen, the people opposed to a wealth tax usually believe something else.
But if CA wants to work on fixing its social ills, they could start by implementing the basics, like a functioning property tax system, and reducing the tremendous amount of spending on things like pension abuse, before moving on to more exotic and invasive solutions like wealth taxes.
So many of their issues stem from the ridiculous housing and other property development situation. It's not the fault of the ultrawealthy so much as the moderately wealthy NIMBY homeowner. But it's less popular to blame them, because for many of us, they are ourselves.
His analysis was deeply flawed to the point of being disingenuous. For one, it assumed that your wealth never grows once you get it. And for two, it completely forgot that there is a baseline on the wealth tax (the current proposal is at $50M).
So no, it doesn't kill compounding, it just shrinks it a bit.
That doesn’t take away from any of his success, which has been immense (anybody who has made over a billion is obviously amazing and had the ultimate life) but he has become too much of a cult figure in comparison to others in that stratosphere
I didn't know who PG was until recently. I knew he was well respected on HN but I've never found that much value in his blog posts either. Maybe people like his writings in the light of his achievements, rather than for their intrinsic values.
But I’ve learnt a lot more from others, who are not nearly as successful.
This sort of interesting writing seems to have stopped in general. Spolsky and Yegge are other positive examples from that era, which of course is just 10 years ago.
What they, and you, fail to realize, is that after the copycats have come in, the pioneer looks outdated. But they are the ones standing on his shoulders, even if, with the benefit of hindsight, they've found more effective ways to spread the same message.
This was a liberal-arts school and the professor had no particular technology or business background; I’m still not sure how she came across them.
Unpopular would be the better word. We were nerds. Revenge of the Nerds was about people like us: https://www.imdb.com/title/tt0088000/
I know that when I came across an article where Wil Wheaton was complaining about CUPS and how bad printer drivers were in linux I was tickled pink.
Over time, as society became more aware of the value this industry brings, it's brought it more mainstream and also brought a lot more people into it (different types of people). But at the time I think the other posters assessment was spot on.
Like you, I never cared either, but I also think what they said is true.
I don't place any blame on him personally, it's just that his day-to-day is so removed from anything close to ours that his musings are... irrelevant for the vast majority.
[0] I guess? Is there an Absurdly Lucky DotCom Success Bias?
I’ve heard great things about On Lisp, so will read it when I get to a more advanced level. But honestly I feel like I could write a better ANSI Common Lisp book, it has so many convoluted parts. That said, it was written in the mid 90s so it isn’t correct to judge a book after 20+ years.
I do recommend On Lisp for people who want to understand and get a feel for lispy ways to solve problems... but, fair warning: I did already have a very solid grasp of programming in general via C, C++, Python, O'Caml, a little bit of Haskell (at the time) when I read it. So... YMMV.
If you want a good book on paradigms in general, I'd recommend something else.
As another comment pointed out, concerning his writing about the wealth tax, I think he's lost sight of the fact that's there's more wealth to be created that's outside the scope of what the wealth advisors for the uber-wealthy are familiar with.
His objection wasn't about taxation as a concept, it was about a wealth tax on stock assets, which definitionally requires founders to give up control of their company as they liquidate shares to pay taxes.
Not really sure how you extrapolate "there's more wealth to be created that's outside the scope of what the wealth advisors..." from that. His opinion is that it would sabatoge the wealth-creation mechanism he knows and has built.
I'm new to HN and was interested to read PG's answer, because I like the civility and on-pointedness of HN, which I think is a result of its rules of engagement. So, first I looked at Substack, which I hadn't heard of before.
PG's answer suggests he values journalism, but I was surprised that Substack doesn't address the main problem of journalism, which is not a lack of "individual domain experts" - it's a lack of a viable business model to support people who practice journalism.
Advertising is what used to pay for journalism when journalism was published on newsprint. Since advertising went to online, journalism has been decoupled from the business model. Now less than half the number of journalists are employed in USA and Australia than at the peak, less than 20 years ago.
Can anyone point me towards attempts to find a new business model to sustain journalism?
It... does, though? Substack is a way for writers to offer subscriptions for their content. Two friends of mine are benefiting from this, one has managed to pay her bills this way and the other is well on his way.
I don't consider it a magic bullet, but it's clearly a step in the right direction.
I'm looking for ways to repopulate newsrooms that send journalists out into the field to cover breaking news. That's a different set of logistics, scale, and costs.