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1. (2018)

2. Previous: https://news.ycombinator.com/item?id=16788996

3. This is a self-published thing by a blogger. It's doesn't even seem to be available as a book.

The author argues that there is a sufficiency of capital. He's a VC in San Francisco. From that perspective, there is more than enough capital, in that there's more money available than there are profitable investments to fund. This is an aspect of the webcrap/appcrap ecosystem - even the marginal niches have been filled.

The other side is the lack of a capability to do some obvious things and make money doing them. Such as building affordable houses. That's not about attention.

This guy may be in a bubble.

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This comment is top rated yet misconstrues – in order to advance the author's values – both the argument and the context. Topically, Wenger is a partner at USV (Manhattan) and _The World After Capital_ was published as a Gitbook in order to be open source.

It is not intended to describe nor comment, politically, on the day to day of capital flows. Attacking it as such is a straw man argument at best and intellectually lazy at worst.

(If I have an economic position, it's perhaps close to Piketty. Although he draws on pre-industrial age statistics too much.)

My main criticism of this revolves around the question "what are we out of that limits society?". The author argues that capital is not scarce, which seems to be true for the US. He argues that attention is scarce, which is reasonable.

He then takes the big jump. He argues that attention is the primary limiting factor on, in some sense, "progress". That's where his argument goes bad. That limiting factor applies to a small part of the economy, but it's the part that gets much VC attention.

So what are we out of? This is a crucial question. I'm not going to try to propose an answer. But it's the right question to ask.

When something other than capital limits output, capital markets don't send the right signals to direct effort in useful directions. This leads to somewhat strange investments chewing up large amounts of capital. HN readers don't need examples of this.

I'd like to repeat someone's HN comment: what limits the (Western) civilization is the power of the collective intellect, the amount of effective thinking per day.

Attention is a proxy to it, rather imprecise but easy to measure.

A lot of our problems stem from the fact that we don't know how to tackle them. We have the money and the resources money can buy, but we don't have a clear idea. We keep thinking and trying stuff, but apparently not very efficiently, because practical results are few; often we don't even seriously do that. This applies to everything, from curing common cold to solving global warming. Profitable investment of any kind is among these problems.

I'd argue that for most of the "Big" problems (world peace, nuclear proliferation, pollution, climate change and providing food/education/healthcare to all) the problem can be summarized as "lack of collective will to make the changes required". It is pretty clear what we would need to do to drastically reduce carbon emissions for example, but almost nobody is willing to make the economic sacrifices required.

I would also argue that ideological entrenchment because of stifling debate (or vice versa) is a big problem. Lots of problems have solutions but are ideologically entrenched.

I think "collective will" is a red herring. Humans are what they have always been - gradient descent optimizers on a good day. Understanding of morality, a culture, the law - those are tricks we've developed over time to, sometimes, break us out of situations in which our natural behavior threatens our communities (and so is self-destructive on aggregate).

No, I think the common aspect of all Big Problems is that available solutions don't create equilibria. They're not stable. And we know they're not stable - most people do, if only on an instinctive level (our "social sense" is good at navigating these things).

That encompasses all the "lack of collective will" cases: people are aware that they're being asked to make an immediate and concrete sacrifice, in exchange for uncertain and abstract long-term gains - gains that won't accrue unless almost everyone makes that same sacrifice. Our gradient-descending minds rightfully figure there's no point. See [0] for a much longer discussion of this topic.

The point I'm making is that we should stop thinking about this as a moral failure, in the sense of "if only we had the collective will", as if almost everyone was lazy or heartless or stupid. On the contrary - the Big Problems persist because we know of no solution for them that can be implemented in context of our civilization - societies, cultures and laws[1].

The way I see it, we have following ways forward:

- Figure out different solutions, ones that form stable equilibria within our current social framework. This is the part where technology plays critical role - new technologies are a way to create new options.

- Transform our social framework into a one in which existing unstable solutions are stable. This is slow and hard work, involving changing laws and ultimately cultural norms. It ultimately means fighting our biology - not all social frameworks can be implemented on top of humans, and even for those that can be, there may not be a possible path from "here" to "there".

[0] - https://slatestarcodex.com/2014/07/30/meditations-on-moloch/

[1] - A good thought exercise to get a feel for it: imagine that we somehow found the "collective will" to solve one of the Big Problems. What mechanisms are there that protect people from being exploited at scale using the same collective-will-generating circumstances?

I mean sure, the root cause of "lack of collective will" is human nature. I was pointing out the cause, not bringing up a solution. I also don't blame people for being the way they are so I don't think a judgment about "moral failure" is in order.

I didn't mean to pass judgement on you, I apologize if it came across like this.

I just keep seeing laments about "lack of collective will" in many discussions about important problems, and those mentions tend to be thought-terminating in the sense they feel like discharging responsibility. And my point is - we'll never have "collective will". The big problems, the persisting problems, are such because their very nature prevents spontaneous coordination. If we could just find the will to tackle them, we would have already. So there's no point in even talking about "collective will" - we need to focus on solutions that don't need it.

(Or, we can just give up, enjoy what little time we have, and then watch the fireworks. They'll at least be interesting. I'm pretty sure many people think like that[0]. I myself thought like that in a darker period of my life, when I was deprogramming myself from the thought patterns instilled in me by an apocalyptic religion I grew up in - so I'm familiar both with how to blame the world's problems on "those masses of imperfect people" and how to protect your mind from going haywire over the belief that the world is in deep shit and you likely won't make it to the other end.)

[0] - If we only had the collective will to work on solutions not requiring collective will...

I tend to categorize this as a combination of three problems:

1. We don't have a single defining policy platform for our society. If the CCP puts out a detailed timeline to a zero-carbon China, they have all the economic and political levers they need to pull in one place. No person or group in the US has any comparable authority.

2. Because of this, western countries tend to be limited to piecemeal solutions that can fit into smaller scale budgets and timelines. We can sell one power plant at a time, rather than a clearly strategized 50 year rundown to zero emissions. That means a lot of either-or decisions (Solar or traditional nuclear or Thorium, not funding all three) and a lot of people who are fundamentally on the same side get caught in infighting and bikeshedding trying to compete for limited opportunities.

3. You're often dealing with a problem where the solution is "yeet the entrenched counterinterest."

The counter-interest group in 3) really just has to prevent you from doing anything to win, so it tends to encourage 2) as a cheap way to keep the opposition fractured.

> So what are we out of?

Cures for diseases and cancers, people being not-poor, cities being clean and beautiful, a sustainable climate, equal opportunity for everyone, justice, kindness, not-having-war, not needing to work, etc...

Why can we only be "out of" toasters and toilets and not "everyone having an easily imaginable higher quality life"?

I get it that the Federal Reserve lowering interest rates is unlikely to give everyone a better life. That takes hard work and progress, something which cannot simply be bought by changing numbers on a spreadsheet.

But these could things could - theoretically - be financed! Most, probably not with VC.

I know very little about economics particularly the academic / theoretical side of it. You and Wenger here both seem to agree there is an abundance of capital (money?) and that's not the "limiting factor" at least in the US.

He writes

> When we were foragers, food was scarce. During the agrarian age, it was land. Following the industrial revolution, capital became scarce.

I don't really see how they are equivalent. Or actually I do they how they are equivalent but not in the way he writes.

For tribal chiefs, food probably wasn't scarce. For kings and lords, land was not scarce. For industrialists, capital was not scarce.

Wealthy people haven't just started doing strange things with capital as though they hadn't in the past with capital or land or food. Food wastage was a point of pride in elite society of the past, locking away vast amounts of productive land for private game parks, and investing wealth in all sorts of foolish ventures has been pretty common throughout history.

Yet all of those things were (and many still are) scarce for many people including in the US. So why do you say it's not, and what do you mean by "limits" of society exactly?

If a person can't buy a car or an education or a computer or tools or time to practice a new skill, then they can't work (or have less opportunity to) or they can't increase their productivity as much. Or they can't afford to have or put as much time and money into their children, which further limits society in the longer term.

I'm no collectivist, anti-capitalist, or social justice activist, I think inequality will always be here and it's our curse and our blessing. But surely we can't say capital is not scarce or doesn't matter so long as a significant number of people are limited by their own lack of it. Limited not just in entertainment and frivolous things but constructive wealth creating activities. Have I completely misunderstood the whole thing?

> For tribal chiefs, food probably wasn't scarce. For kings and lords, land was not scarce. For industrialists, capital was not scarce.

On the contrary, kings and lords were acutely aware of how much land they had and devoted much of their energy to amassing more. Likewise for tribal chiefs and food, and presumably likewise for industrial. They had more of it than others, sure, but it was scarce for them: it was the limiting factor on what they were doing.

> If a person can't buy a car or an education or a computer or tools or time to practice a new skill, then they can't work (or have less opportunity to) or they can't increase their productivity as much. Or they can't afford to have or put as much time and money into their children, which further limits society in the longer term.

Right, but at that individual level too, capital isn't really the issue these days. You can get a loan for anything, anyone can get a credit card. If someone wants to improve themselves, it's rarely capital that's the limiting factor - it's more likely to either be time, or something a bit more complicated.

lmm 1 hour ago | parent [–] | on: The World After Capital (2018)

>> For tribal chiefs, food probably wasn't scarce. For kings and lords, land was not scarce. For industrialists, capital was not scarce.

>On the contrary, kings and lords were acutely aware of how much land they had and devoted much of their energy to amassing more. Likewise for tribal chiefs and food, and presumably likewise for industrial. They had more of it than others, sure, but it was scarce for them: it was the limiting factor on what they were doing.

I'm sure that Bezos or Musk are also acutely aware of their capital, that does not mean that they have any scarcity.

>Right, but at that individual level too, capital isn't really the issue these days. You can get a loan for anything, anyone can get a credit card. If someone wants to improve themselves, it's rarely capital that's the limiting factor - it's more likely to either be time, or something a bit more complicated.

I think you seriously underestimate the difficulties that come with being poor. There are lots of studies that show that the primary problem with poverty is actually lack of funds. There have been many projects that showed that giving poor people money with no strings attached has higher success rates than anything else. Also your advice of getting loans or credit cards is quite unrealistic and shows you the cost of being poor. The loans that a poor person will get are essentially so expensive that the only thing they do is making them poorer.

> The loans that a poor person will get are essentially so expensive that the only thing they do is making them poorer.

One thing I haven't understood is the idea of charging high interest on poor debtors.

Conceptually the problem is simple. The debtor must repay the entire sum. What if the debtor is unable to do so? It would imply that the debtor is only able to repay the sum partially. But here is the problem. How does charging high interest help the debtor repay the loan? It doesn't. The only difference is that the bank gets the money sooner rather than later. You borrow $1000 and repay $800 and then default. -20% interest for one year. Clearly a bad loan.

The bank charges 30% interest on your credit card. You still only repay $800. The bank got your money sooner. So the only explanation for this is that the high interest rate discourages bad debtors (it clearly doesn't otherwise people would have stopped borrowing at a much lower rate like 10%) or there are people who can repay the debt even at excessive interest rates. They ask family or friends to chip in and a lower interest rate would not put enough pressure on people to take money from someone else.

Debtors aren't just divided into "can pay" and "can't pay", there's a huge category in there of "can meet the minimum payment required to avoid default (and potential legal problems) for a very long time".

There's other categories, but high interest debt (e.g payday loans) is targeted at that one: it locks them into a situation where they will nearly perpetually have to pay a small amount to the debt issuer, while their total debt rises.

The high rate is there to increase the probability that the debt will "lock on", even for small sums. This way, even if they manage to land a windfall someday, it often won't pay back the full interest owed, so they remain in debt and, crucially, making regular small payments upon which the debt issuer relies -- it's basically a SaaS model.

In this way, a person who just needed $200 once can end up paying $2500 over a multi-year period before somehow escaping or defaulting -- and that's why the bank does it, to maximize return.

The person who borrows $1000 but can only get back $800 ever is rare -- the person who can only get $1000 back over the course of 16 weekly payments of ~$60, and can somehow then go on to keep paying $60/week for another full year, is common.

They're not making money from the person who defaults (well, maybe if they default after a long series of payments). They're making money on average by lending to a lot of people, of which only a subset default. If you look like a bad risk, you pay more to subsidize all the people who also look like bad risks and will actually default.

> I'm sure that Bezos or Musk are also acutely aware of their capital

I'm not. I suspect they're paying a lot more attention to who they have working for them, their regulatory situation, particular projects....

Put it this way: when Rockefeller decided to build a new factory, his first question would've been "where's the capital coming from". When Bezos or Musk decide to build a new factory, what do you think is the first question they ask?

> There have been many projects that showed that giving poor people money with no strings attached has higher success rates than anything else. Also your advice of getting loans or credit cards is quite unrealistic and shows you the cost of being poor. The loans that a poor person will get are essentially so expensive that the only thing they do is making them poorer.

I wasn't giving advice. But I think your studies are taking a naïve approach - that kind of program inherently selects for the kind of person who gets access to that kind of program, which is immensely class-loaded.

> On the contrary, kings and lords were acutely aware of how much land they had and devoted much of their energy to amassing more. Likewise for tribal chiefs and food, and presumably likewise for industrial. They had more of it than others, sure, but it was scarce for them: it was the limiting factor on what they were doing.

So it's exactly the same as today's capitalists who have more than enough capital but keep amassing it.

> Right, but at that individual level too, capital isn't really the issue these days. You can get a loan for anything, anyone can get a credit card. If someone wants to improve themselves, it's rarely capital that's the limiting factor - it's more likely to either be time, or something a bit more complicated.

I find this could be a bit more credible than the "bay area venture capitalists blowing money on idiotic things therefore capital is post-scarcity" line of argument. Is it really true though? The median net worth of a person under 35 in USA the internet says is $14,000. How much of a loan is that kind of collateral going to get me if I'm clearly already living pretty much hand to mouth? Can I reduce my working hours, take the loan, and go to school? Or to start my own small business? What is the risk I'm taking on?

> So it's exactly the same as today's capitalists who have more than enough capital but keep amassing it.

Today's capitalists aren't focused so much on capital though. Stock buybacks are bigger than ever. Founders are happy to sell off huge portions of their ownership as long as they can keep control with super-voting shares, where the previous generation of industrialists would be happy to accept outside board members but wanted to make sure they kept all the profits. A decade ago the goal was to be a "serial entrepreneur" who would use their huge exit from one company (as it matured) to fund another, even more profitable one; now keeping control of a big company is a much bigger deal.

> Is it really true though? The median net worth of a person under 35 in USA the internet says is $14,000. How big of a loan is that kind of collateral going to get me if I'm clearly already living pretty much hand to mouth? Can I reduce my working hours, take the loan, and go to school? Or to start my own small business?

My sense (and I don't have evidence) is that getting a loan for study or business is easier than ever before (though reducing your working hours might not be).

> What is the risk I'm taking on?

Being trapped in debt you can't repay is always possible, but it feels to me like the biggest risk would be derailing your career and not being able to get back into it. A side effect of the disappearance of middle class jobs is that there's no way to work your way up from the mailroom any more, so if you do have a stable career-track job then there's a strong argument for clinging onto it as hard as you can. For those who are already on the wrong side of the line that's a much weaker argument though.

> Today's capitalists aren't focused so much on capital though. Stock buybacks are bigger than ever. Founders are happy to sell off huge portions of their ownership as long as they can keep control with super-voting shares, where the previous generation of industrialists would be happy to accept outside board members but wanted to make sure they kept all the profits. A decade ago the goal was to be a "serial entrepreneur" who would use their huge exit from one company (as it matured) to fund another, even more profitable one; now keeping control of a big company is a much bigger deal.

Seems like a lot of handwaving and arbitrarily picking parameters to fine tune your proposition. Let's step back and look at the big scheme of things.

Food has always been scarce for some and plentiful for others. Same as land. Same as capital. And there have always been some people who have enough or more than they need who have a drive to amass even more, but that does not mean they have a shortage of it. And inversely if they don't try to horde more of a particular resource or asset that doesn't mean that asset is post-scarce for society as a whole.

I'll put it a different way, are you just trying to create such a specific definition that you can manage to fit it into? Then what's the point? it doesn't usefully say anything as far as I can see.

If you can support an argument which says practically everyone has plentiful cheap and easy access to capital via loans then that would be saying something. And if you can do that then you don't need these flimsy examples of food in prehistoric times or the behavior of wealthy elites to prop up your argument at all, do you?

> My sense (and I don't have evidence) is that getting a loan for study or business is easier than ever before (though reducing your working hours might not be).

Quite a journey remaining to get from there to "capital is not scarce or limiting for society", though.

Less than 20 years ago we had the credit markets almost cease functioning, major banks collapsed almost taking the banking sector with them, hundreds of thousands of home owners being unable to service their loans and were foreclosed. In my layman's understanding a major cause of this was undervaluing the cost of loans. Things have changed since then of course, but these industries and environments are very cyclical. Similarly, just because you kill a woolly mammoth or have a bumper harvest does not mean your society has been liberated from food scarcity problems.

But even ignoring recent massive failures of capital markets and just looking at the situation now, I'm still pretty skeptical of the assertion that anybody can get easy plentiful access to bank loans. People without much collateral or high incomes or steady work history get hit with extreme costs and harsh terms on loans if they can get them.

> Food has always been scarce for some and plentiful for others. Same as land. Same as capital. And there have always been some people who have enough or more than they need who have a drive to amass even more, but that does not mean they have a shortage of it. And inversely if they don't try to horde more of a particular resource or asset that doesn't mean that asset is post-scarce for society as a whole.

Sure, so you can say that everything is scarce - because for any given thing there will surely be one person for whom that thing is scarce. But that has no explanatory power. If we want to talk about what's scarce for society as a whole, looking at what most elites and most everyday people focus most of their attention on takes sense.

> Less than 20 years ago we had the credit markets almost cease functioning, major banks collapsed almost taking the banking sector with them, hundreds of thousands of home owners being unable to service their loans and were foreclosed. In my layman's understanding a major cause of this was undervaluing the cost of loans. Things have changed since then of course, but these industries and environments are very cyclical.

I completely agree with this, but it's worse (or better) than cyclical - the 2008 financial crisis was a small bump in the road that we've kept travelling down. Mortgages, subprime mortgages, subprime debt, indebtedness... take any measure you like, there's now more of it than in 2008. There's just so much capital sloshing around the system looking for anywhere to go.

> On the contrary, kings and lords were acutely aware of how much land they had and devoted much of their energy to amassing more.

Just because I want more of something, it doesn't mean that something is scarce, human desire is infinite.

There was this crazy Elon Musk of dark projects of the Cold War, can't remember his name, that collected his piss in jars, it doesn't mean piss is scarce.

If it's only one guy doing it then it doesn't mean much. If all the top people were doing it, then it might indicate something real.

"Land" means different things to peasants or lords, just like capital does today.

Land for common folks was scarce -- and it meant that thing that can produce food for you -- the lord did not have any problems with food.

The lord did not want more land because he was hungry, but because it meant more wealth and people, making him more likely to be able to defend himself against other lords.

The same with capital today. Capital might be plentiful for some people who are closer to the printing press, but not for others.

> I think inequality will always be here and it's our curse and our blessing.

...say people who are on the blessing side of inequality.

Note: I am on the blessing side as well. I have no experience whatsoever about what it means to suffer from inequality.

> ...say people who are on the blessing side of inequality.

This isn't an argument I'm afraid.

> Note: I am on the blessing side as well. I have no experience whatsoever about what it means to suffer from inequality.

Yes you do.

Not everybody who is less well off than you live a life of misery and unhappiness and desperation. There would even be many very poor people who have happier and more fulfilling lives than you do I would wager.

There are always fields with too much money. Moneyed interests decide they will spend N Billions on area X, N is decoupled from any technical assessment of X’s ability to absorb N. In such a case the productive assets will become exceptionally valuable, but an on the ground observer might notice that the money isn’t going to come back.

He’s in NYC. I know him. He raised a climate fund for USV recently

https://www.usv.com/writing/2021/01/usv-climate-fund/

Thanks for the summary. I think it's a bizarre position to be in yet recall around 2018 there were a numerous people waxing post-scarcity optimism, such as James Burke (of the tv series Connections): https://www.bbc.co.uk/programmes/b09jvfc4 .

Affordable housing is a jobs problem. If you could take your job anywhere then the idea of "unaffordable" housing wouldn't even make sense. Location is a monopoly and it derives its powers from many things, for most people it is simply the availability of jobs.

Affordable housing is a jobs problem when there is enough land or enough movement in the market of existing housing. In the Netherlands it a space issue (build on farmland or build in Nature?) and an environmental issue (we need to reduce nitrogen emissions and it's blocking new developments).

I was thinking of urbanization. Everyone is moving where the jobs are. If there are good jobs in your home town you wouldn't have to move in the first place. What we get is huge mega cities and empty towns.

Here we see prices shooting up for rural towns as well. Covid re-introduced people to their homes, and some liked more space. Combine that with only having to be in the office 1-2 days a week and the commute is much less important.

Rural in the Netherlands means a commute of 1+ hr. by car instead of 20 min by bike, perhaps important for the perspective.

With all the quantitative easing, most of the Western world is in a similar bubble.

I read the first few sections, and I'm not a fan. In the author's defense however, he defines capital to mean only physical capital. It doesn't make sense why he'd pick that definition, but there it is.

The present inflation suggests that we do not actually have an abundance of capital.

I'm not an economics expert, but I suspect this is because "existence of capital" and "access to capital" are quite different.

Put another way, abundant capital exists, but sadly it is disproportionately concentrated and not that readily available to the masses, so demand-pull inflation inevitably kicks in.

I haven’t read the whole thing but the premise and how its summarized by you is something Marx predicted and observed thoroughly hundreds of years ago.

Demonstrate.

What? Capital vol 1 and 2 establish how the industrial revolutions lead to post scarcity. That’s what most of his work was about.

> What?

I'm certain nowhere in Marx is the term "post scarcity". If that's what he really meant, then it should be easy to demonstrate that with a paragraph or so. Otherwise one could take any good outcome and insist that Marx already predicted it.

It’s honestly really hard to tell if you’re engaging in good faith here. If you really are, I’d direct you to the Grundrisse. Marx specifically explains that as industrialization continues more and more parts of the economy become automated which (should) free up labor to pursue other things like art and science.

Yes it is true that he didn’t literally use the phrase “post-scarcity” but there has been 200 years of academic development on these works since then and I don’t regard this simpler way of discussing the concept as controversial, especially since this is a social media thread and not an academic paper.

> It’s honestly really hard to tell if you’re engaging in good faith here.

I can see why. I am, though.

The first paragraph is a good demonstration. It's falsifiable. I can look it up myself and agree or disagree. Either way, good. Thanks.

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