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Comment by msy | Hacker News Reader

The UK has a long intellectual tradition which creates a steady stream of creative and capable engineers. Capital however is predominately held via inherited wealth and its controllers want rentier incomes with low risk. As a consequence there is low appetite for risky new ventures and those that want to undertake them mostly migrate elsewhere. What's left is a stock market dominated by octogenarian+ dianosaurs, a decaying rump of manufacturing, a finance sector that mostly makes its bread laundering the capital of the world's corrupt and corruptors and a tiny creative industry that clings on despite suffering through waves of either government neglect, or worse yet, government interest.

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> want rentier incomes with low risk.

I don't know if I buy your point about inherited wealth but there is what I'd describe as a stifling culture of rentseeking that, if not actively encouraged is certainly tolerated and overlooked, at many levels of society, and across both businesses and public organisations. And once you become aware of it you start to realise how obnoxious and oppressive it is.

We certainly don't lack for talent, but we're very good at suppressing or wasting it.

You don't buy the point about a country with royal family that owns vast swathes of land?

No such point was made (regarding a royal family).

Incidentally, the Royal Family themselves privately own 1/250th of the UK's land, and it is mostly not particularly valuable. Only about £15bn.

As a proportion this is only four times what the richest private landowner (the Emmersons) in the USA owns of the USA. And the Emmersons have come by their share pretty quickly by comparison, wouldn't you say?

The Duke of Westminster (not a member of the royal family) has a physically much smaller (private) estate that is worth more than half of the royal estate.

What the royal family own privately should not be confused with what the "Crown" owns. The Crown estate is basically owned and operated by the state.

> As a proportion this is only four times what the richest private landowner (the Emmersons) in the USA owns of the USA. And the Emmersons have come by their share pretty quickly by comparison, wouldn't you say?

If anything, I feel like the speed (or how recently the land was acquired) is actually in the Emmersons favour here. A generation or two ago somebody got wildly successful, vs. land being inherited because your 30x great-grandfather was Henry VIII.

Yeah. Swings and roundabouts though; most of the truly long-held property of the royal family has become the Crown estate, and over time the family has had to make much more of its income from that wealth due to the contraction of the Civil List.

Charles himself will only have income from his estate (whereas his mother had income from the Civil List)

What I meant to say is that in the blink of an eye, realistically -- in a couple of generations -- you could and probably will have a situation where a single land-owning family in the USA could end up with a very similar proportion of a _vastly_ larger country.

It's probably in the nature of land-owning for this to happen: someone ends up with all of it, then can't maintain it, and it ends up being sold off or dispensed to the state, then sold off, reaccumulated, and the circle continues.

And I think it's a mistake to see the royal family's land ownership as a source of power and influence. Unfortunately we give them the power and influence for no really good reason; the land is a side thing.

"It's probably in the nature of land-owning for this to happen: someone ends up with all of it, then can't maintain it, and it ends up being sold off or dispensed to the state, then sold off, reaccumulated, and the circle continues."

Realistically, once someone owns everything, they'd never ever have to sell. Because they could just rent it out temporarily for the same price. Demand isn't that flexible and in absence of other sellers, where else would a would-be buyer take their money?

Excellent comments both yours and the one you replied to. Once you see it you really can’t unsee it.

The UK is a marvel that it manages to cultivate such an incredible creative scene in the shadow of the rent seeking mediocrity.

From my continental Europe perspective I suspect that Americans will inevitably look at those inherited wealth structures through their assumptions of unbounded rent maximization, oblivious to a certain element of responsibility that will be far more present in Europeans, continental or not. "Only because you can squeeze out that penny doesn't necessarily mean that you should" is something that exists in most places that aren't the US. American wealth seems to have that siloed off into charity completely separate from how the money is made than others, "exploit hard/donate hard". I'm certainly not suggesting that everything is fine in the UK, but I do think that certain assumptions that are true in American will tint the picture quite considerably.

"there is a culture of rent seeking" must be the understatement of the year. What the UK understands as "entrepreneurship" is buying property to rent. This is everyone from your grandma to the shiniest MBAs.

Aye. Nothing against housing associations that provide much needed social housing but the vast majority of private landlords[0], including AirBnB owners, are absolute parasites that have an entirely corrosive effect on communities and society as a whole. Indolent freeloading bloodsuckers.

[0] I'm sure there are exceptions: in fact I know there are. There are always exceptions. 20-odd years ago for a while I shared a flat with a couple of guys where the private landlord deliberately charged far below market rent in order to be able to offer affordable accommodation to people who weren't well off. Good people, the family that owned that place.

Canada has many similarities. The inherited wealth is essentially banks and oligarchs. You pretty much have to be risk free to get any funding. Lots of window dressing and marketing to make Canada look good. If it were not for US companies (Cisco, Google, etc) the Canadian tech salary would be closer to Europe. Once you start living here you realize the truth about how much they value tech, protectionism, the incompetence of the telecom sector, stodgy banking and finance, poor education, unaffordable housing, and declining access to health (Ontario and stories from the Maritimes since health is provincial - cannot speak of Alberta/BC/etc).

All subpar but the marketing and virtue signaling is great. A lot of 'make Canada look good' comes at the expense of Canadians.

Quebec has had a few wins over the years with massive indirect subsidies toward strategic industries, notably gaming and AI. Public money is spent to attract big players which hire a critical mass of talent which leads to more players moving in and eventually some private risk capital becoming available for startups pending to the needs of the big guys. Nothing comparable to the American VC system though.

I live in Quebec. It's all for show to prop Quebec up as a place to even do business in.

There's nothing in the tech space that is worth even looking at twice in this province that isn't headquartered elsewhere. Most larger companies open up here just to tap into the potential talent that don't want to leave their home province and a lot of companies aren't willing to put in the effort of dealing with Quebec being the exception to everything.

If you want to understand Quebec it really boils down to three points:

- Protect French language - Protect culture - Have more children. This achieves 1 & 2 in a cycle.

Things that are going well for the province, cheaper car insurance, cheaper housing, cheaper electricity, and subsidize daycare. Oh! This all ties back into our 3 rules.

All these advantages come at the cost of higher taxes, but that is apart of the strategy. Don't build wealth, but just provide enough for hope, dreams of having a family and rope as many into this to fulfil the 3 points.

> Quebec has had a few wins over the years with massive indirect subsidies toward strategic industries, notably gaming and AI

And aviation. The Bombardier C-Series is a very advanced plane, and the first modern plane developed outside of Boeing or Airbus (outside of the smaller regional Embraer). Sadly American protectionism was the final nail in the coffin for the programme, but Airbus is comitted to the Mirabel site and assembly line, so Quebec still is one of the top aviation hubs in the world.

> Capital however is predominately held via inherited wealth

Curious to see you prove that beyond an imagined stereotype. It's not as though we are in the first generation of US entrepreneurship and there is not a huge quantity of US inherited wealth in those VC funds. The founders of Intel, Apple, Walmart, Standard Oil etc. have all passed on. And on the other side, it's not like there haven't been a dozen generations since Norman lords chopping up all the land wealth. I think only one British billionaire is an aristo, the rest are business folk.

People underestimate the effect of how wealth attracts wealth in terms of commercial hubs - money chases opportunity and opportunities chase money and they end up in the same place for all sorts of reasons. It's just a system effect rather than a consequence of higher virtues that some love grant themselves.

I cannot prove it, and this is entirely anecdotal, but my friends and I have observed it first-hand from VC dealings and friends in the right UK circles. Inherited generational wealth and class in my experience powers UK investment, particularly in the start-up scene, much more than in the USA. Of course, there are some exceptions I can think of in the UK but it is very much tied up with the class system there and understanding this makes life easier. The same situation affects other European countries to some degree, and many people I know have had to go to US VC firms to get funding. I have spent a lot of time working in all of these countries to some extent and the UK class system seems to be increasingly stifling. YMMV though.

So I need the correct "old boys" school tie and a pair of red trousers to get funded by UK investors? :^)

Make that knee-high grey shorts, a graze on your knee, and a Prefect following closely behind you with some implement of abuse.

And find a pig that catches your eye

Nah, the OP is talking bollocks. The angels I know are all middle/working-class entrepreneurs. There is no upper-class conspiracy holding people back, there just isn't much money. Non-Brits don't really understand that class is not money. Red trousers are closer to farmers than businessmen. If you are British and want to be a tech investor, you go to the US too.

Thanks for the kind words. I actually agree a lot with what you say, and would just add my personal experiences, and be interested in learning more, but I don't think you established the tone for further conversation here.

> There is no upper-class conspiracy holding people back, there just isn't much money.

I think the argument is that there _is_ plenty of money, it's just parked safely and quietly in property rather than investing in production or R&D. And not a "conspiracy" as much as the blank look the property investor class give you when you can't promise risk free leveraged 7% forever.

I don't see how that is anyone holding anyone back?

Why would you want to take funding from someone expecting no stress or hassle?

> Why would you want to take funding from someone expecting no stress or hassle?

The important word here is "money". There isn't a surfeit of money available from more suitable investors.

Most folks I know and have read about didn't go to the loan shark or local mafia for 'money' even though that is even more readily accessible and with zero paperwork.

It's obviously not just about 'money'.

Absolutely. As others have alluded to: angels abound, but look at the pedigree of the associates and partners at VC funds based in London and it all falls into place. I assume it’s because it’s a relatively easy job that you don’t need much talent for. Perfect for an intelligent but bored dauphin.

Hmm, maybe it will be fun to go through https://en.wikipedia.org/wiki/List_of_British_billionaires_b...

- Dyson: actually an innovator! Made many of the same criticisms of the UK lack of tech strategy. Promoted Brexit, which has made the situation worse by erecting barriers to a key UK market.

- Ratcliffe: owns INEOS: oil refineries. Old school engineering? Or just provision of capital?

- Hinduja: purchaser of Ashok Leyland, which became a huge success once unshackled from disastrous management of British Leyland. Counts as "engineering" but not "tech"?

- Grosvenor, 7th Duke of Westminster: classic aristo landlord. Owns large areas of London.

- Platt: hedge funds.

""The reality is that there is no willingness within the Eurozone to share wealth," he said. "In the United States, if California is having a really difficult time, the rest of the United States will send money to California. This is not the case in Europe." -- https://en.wikipedia.org/wiki/Michael_Platt_(financier) , perhaps a surprising advocate of redistribution

- Coates: gambling. Counts as "tech startup" (bet365)

- Bamford: heir to JCB, the excavator company. "Engineering". Brexiter, as a result of being sued for antitrust by EU

- Branson: definitely self-made, across a large number of different companies. Space billionaire, closest figure to British Musk.

- Currie: also INEOS. Almost no wp bio.

- Reece: also INEOS. Almost no wp bio.

- Cadogan, 8th Earl Cadogan: aristo. Dead.

- Lewis: trader. Like Soros, profited from Black Wednesday. Under arrest in Manhattan.

- Reuben: metals. Seem to have made a killing from 90s Russia.

- Graff: diamonds. Looks like classic self-made from nothing story?

- Calder: Jive records.

- Morris: Home Bargains. Wildly successful discount shopkeeper.

(you know who's NOT on this list? Anyone to do with ARM. Even Hermann Hauser appears to have only £150m net worth)

> you know who's NOT on this list? Anyone to do with ARM. Even Hermann Hauser appears to have only £150m net worth)

I wonder if ARM's success, or rather, popularity and market dominanance, is because they (intentionally or otherwise) devalued themselves enough.

Indeed - they appear to be great engineers and terrible business-people.

They have collected very little profit from their market-dominating IP.

They aren't terrible business people at all!

If they collected much more profit from each device sale then they wouldn't have market-dominating IP. Because they'd have competitors who could undercut them.

As it is, a tiny firm of people make an extremely good living off a margin that nobody in the business can really quibble with, and it has without conflict sustained them to do greater and greater work that has changed the world.

You watch: ARM post-IPO will inevitably have to start squeezing more juice out of the market to give to greedier, more transactional, more activist shareholders, and this will fuck up the balance entirely.

An ARM IPO isn't really going to be good for anyone, I think.

Indeed. You can see in some of the comments here the American mentality simply could not have made ARM successful because they would have been too busy competing with their own customers. For ARM to take off and be trusted they had to knowingly leave valuable profit margins around for their customers to be able to take advantage of.

The defining question is if the world is better off by having people play that game or the one where everyone tries to takeover everything all the time.

Microsoft minted many fortunes by leaving valuable profit margins around for third party developers.

It's a longer game, so hopefully ARM employees still own some equity.

Where are these third party developers that made decent money and Microsoft didn’t subsequently try to eat their piece of the pie?

It is a repeated pattern and people are not stupid. (See also the Sherlock phenomenon with Apple). Valve, for example, have to invest in proton as the ultimate back up plan. For me personally that has proven quite helpful, but your initial business has to be wildly successful for you to be able to play defensive moves like that.

This leads to a situation where mid sized companies are few in number and unstable.

> and Microsoft didn’t subsequently try to eat their piece of the pie?

That second part wasn't in the original claim, though. The parent comment is right. Sure, 21st century Microsoft has come for the utilities market, for the Lotus-to-Evernote market, etc., etc., but an entire software industry really did spring up in the eighties through to the early 2000s filling gaps in Microsoft software.

Oracle, SAP, Adobe, VMware, Intuit, AutoDesk, Activision Blizzard, Epic Games, Electronic Arts, just to list a few still surviving companies.

Microsoft absolutely expands into areas it considers strategic profit or capability centers. E.g. office productivity, web browser, database, gaming, etc.

But they, and especially early/smaller Microsoft (90s-00s), left a ton of money on the table for the good of the platform. Because they realized they couldn't do it all and be best-of-everything.

The fact that Microsoft can deploy its level of resources (e.g. crush Lotus) when they decide to doesn't mean that they always decide to.

> Oracle, SAP, Adobe, VMware, Intuit, AutoDesk, Activision Blizzard, Epic Games, Electronic Arts

SQL Server, Dynamics, TrueType/Silverlight, Hyper-V, Microsoft Money, Softimage was owned by MS, Activision are in the process of being bought by MS, Epic and EA both compete with MS.

In the case of the above Microsoft has tried to compete with, kill, or acquire all of them. That's using others to do the hard work of market discovery.

Indeed, Microsoft has offerings in many of these categories, one reason I specifically mentioned databases.

And yet, these companies are all extremely large and healthy.

Microsoft acquiring Activision Blizzard is a great example, because it speaks to the modern competitive landscape.

Microsoft isn't "using others to do the hard work of market discovery." Activision Blizzard has a USD$72b market cap.

That's a hyperscaled conglomerate attempting to buy a still-huge company.

And if you want to suggest Microsoft's behavior is unique in that... I'd suggest we start with redressing the lax competitive laws that (a) make Microsoft feel it needs to do that to compete with its rivals & (b) allow Microsoft to buy Activision Blizzard.

Those companies are only that big because of profit on non-Microsoft platforms, including these days the web and mobile. For example, Activision (founded to make Atari 2600 games) are being acquired because of their console and mobile properties - the value derived from the PC is there but relatively small and historic. The amounts Microsoft have burned trying to make money from gaming defy belief, instead they seem determined to destroy the viability of the market for everyone.

One reason I am pessimistic about Arm's future is they will struggle to balance raising money for future needed R&D without creating the appearance of being too lucrative a target for a nVidia or SoftBank wanting to play monopoly. That is going to push people to RISC-V. I hope they manage to do something, but they're in for a rough time.

> For ARM to take off and be trusted they had to knowingly leave valuable profit margins around for their customers to be able to take advantage of.

Exactly this.

I would be surprised if many Brits know of ARM as a British success story. Ditto for Raspberry Pi or Deepmind. These things are just not celebrated, it seems.

If you ask people in the street to name a famous living British technologist, they might come up with Tim Berners-Lee or James Dyson, but they are never going to name Sophie Wilson.

(I wonder what answers you would get?)

Alan Turing (on the £5 note) and Isambard Kingdom Brunel maybe?

Yes - hence the more interesting qualifier "living"

Alas pjc50 specified living British technologists.

I mean, Britain has many great technologists if you're willing to count the likes of Arkwright (died 1792), Babbage (died 1871), Watt (died 1819), Faraday (died 1867), Randall (died 1984), Bell (died 1922), Harrison (died 1776), Logie Baird (died 1946), Stephenson (died 1848) etc

But some would say if a country's list of technology greats has so many dead people on it, perhaps that country's glory days are over.

£50 pound note, william churchill is the one on the £5 note.

This is burned into my brain. because I heard a joke when the redesign came out about him going from not being accepted by his country to not being accepted in Lidl. (£50 notes are often refused in the UK for fear of counterfeit.)

It is upsetting to me but you are right, they'd know Dyson. (I wish they would instead know the name Chris Duncan, the inventor of the Henry vacuum cleaner and while still a Brexiteer, a man who hasn't subsequently kicked dirt in the eye of the UK).

They wouldn't remember Tim Berners-Lee's actual name but they would be able to say, the web guy. (Which is probably better for him when he goes shopping).

TBL was in the 2012 Olympic opening ceremony!

But yes, few people who actually _build_ things, get to be famous public figures. Possibly due to being too busy to engage with the media nonsense or even worse social media nonsense.

He was indeed :-) But I suspect more people could recognise his charming unassuming face than remember his actual name.

A decent number of Brits know about the Raspberry Pi, but it is true to say that a hell of a lot more know what the BBC micro:bit is.

None of them would recognise Eben Upton (except as Jason Statham)

> a stock market dominated by octogenarian+ dinosaurs, a decaying rump of manufacturing, a finance sector that mostly makes its bread laundering the capital of the world's corrupt and corruptors

Ah! Now I get it. That rhymes with companies like Shell and Unilever leaving the EU in favour of UK after brexit.

(Not that Frankfurt, Milan, Amsterdam or Paris are known to be heavy investors in tech innovation, btw.)

Well Shell (and BP) are really likely to get sweetheart deals on North Sea oil from Rishi Sunak which might have swayed them.

Now, I know what you're thinking, that that's just because both firms coincidentally signed multi-billion dollar deals coincidentally with Sunak's family business, Infosys, to coincidentally outsource all their IT jobs but I assure you that's a mere coincidence.... probably. :P

> Capital however is predominately held via inherited wealth and its controllers want rentier incomes with low risk

You just described the capital markets in the entire western Europe, not just the brits.

But also the USA, probably.

If you look past the tech bubble economies where the "new money" owners are, and into the world of physical assets, what you find is a constellation of families concentrating wealth, swirling around the central families of the 21st Century -- the Waltons, the Mars family, the Kochs, and so on down -- a power series of family wealth that has ordinary investors in the long tail.

The USA is easily distracted by the vibrancy of the market-driven tech economy, and hoodwinked into ignoring the astonishing growth of private equity controlled by inherited wealth.

Though even the rent-seekers ought to see some value in ARM.

But then they did Brexit and the island has to work again.

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