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Comment by paul | Hacker News Reader

It's sad to see so much misplaced cynicism here. If the partners had decided to keep 100% of their carry (as is typical) and used it to buy a bigger house or jet or something, nobody would comment or care. Instead, they've pledged to give half to some of their favorite charities, and some of you are acting as if it's a crime against humanity. Put away your Ayn Rand books (or whatever it is that drives you to such opinions) and go make some money of your own. Perhaps you'll discover that Andreessen and friends aren't as foolish as you imagine.

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I think some of this is a result of the startup rhetoric about all the companies trying "change the world".

If that were actually true, that all the effort and money going into startups was actually focused on changing the world, then wouldn't it naturally be better to reinvest the money into that system?

Of course the reality, as we all know, is that it's only sometimes about changing the world, and sometimes it's a game to see if you can do it and win.

And since that's the case, it probably is better to channel some of the money to people actually trying to change the world, assuming those organizations are as carefully selected as the startups that generated the money are.

First, thanks everyone for a fascinating debate on a complex set of topics!

I thought I'd see if I can add some context to some of the questions particularly about our own commitment.

I don't have a view that there's an either-or here on how money can be productively deployed. We have committed to contribute at least half of lifetime earnings from venture capital, in our lifetimes. This is similar to the Giving Pledge that Warren Buffett and others have signed (including John Doerr and Mike Moritz from our world). So there's no requirement that money be contributed to nonprofits now as opposed to later. Each of our GPs will make their own personal decisions, with their families, on timing. But this leaves open the opportunity for some of us to give more actively sooner (like for example Pierre Omidyar has done), whereas others might plow all of our earnings back into for-profit ventures now and for the forseeable future and become active donors later (as Warren Buffett himself did).

So don't think of it as money coming out of the for-profit cycle sooner than it would otherwise -- necessarily. (We did announce a collective $1 million cash donation to six area nonprofits today, but that's hopefully a small part of what we will be able to do over the long run.)

In my own case, my wife and I are active donors now, most notably to Stanford Hospital. But not at a proportion that prevents us from being major personal investors in each of our own venture funds, as well as investors in several other funds and various other kinds of businesses.

I also agree with the commenter that it's not like money vanishes when it goes to a nonprofit. Nonprofits spend money just like any other kind of entity, and that money gets recycled right back into the capitalist system.

Some changes are best made via a for-profit venture, and some aren't. I'm interested in both kinds of change, and that means that I'm involved in both worlds.

Zuck paid, what, a cool billion for Instagram? Elon spent $800 million, and has an orbital vehicle that can dock with the ISS. And SpaceX is actually profitable.

So, yeah, you can be for-profit and change the world. Or be for-profit and help people share photos. Changing the world is a pretty big grey area.

It's not yet clear which venture will have a greater impact on the world. People here consistently underestimate the significance of democratizing the media.

In general, I agree. In this specific case, I disagree.

I'll confidently bet that Instagram will be "integrated" or forgotten in a few years, relegated to the dustbin of ephemeral "one feature" companies that briefly caught on with hipsters before winning the startup lottery. Meanwhile, SpaceX will still be going strong, revolutionizing private space travel and space cargo delivery, and possibly have achieved tangible milestones toward the first manned voyage to Mars. One company is not much more than an iPhone camera app with a web backend for sharing, is cheap to do, and something that many thousands of developers could do well. The other is doing rocket science, costs hundreds of millions plus, and is staffed by a team of folks of a kind where few can do it well, if at all -- and especially, it now appears, also do cheaply. Humans had tons of pre-existing ways to share photos and "apply cool filters" before Instagram came along. Humanity has very few ways of getting into space (ie, rocket companies), and now SpaceX is one of them. And I respect the significance of democratizing media -- but I felt it was very well democratized in dozens of ways before & without Instagram.

And don't even get me started on Gmail. (kidding!)

Well put. I think monetary value and impact don't necessarily correlate. One could have an amazing, long-term impact on the world without it being reflected in 'price'.

Reminds me of some of the recent Valve stories, specifically the anecdote about Doom being the most installed piece of software [1].

[1] For those that didn't know this, see the post below and scroll down to 'Valve is different'

http://blogs.valvesoftware.com/abrash/valve-how-i-got-here-w...

SpaceX is part of the first wave in its field, Instagram is at least second wave of democratizing media.

I'm not sure what these two things have to do with each other. Elon Musk's goals with SpaceX are entirely different than Facebook's goals with Instagram. No business purpose of Facebook's would have been served by building orbital vehicles. Facebook hasn't even gone public yet; the money we're talking about isn't yet Zuckerberg's to spend randomly.

Zuckerberg has majority ownership of Facebook shares; he has defacto control of whatever capital Facebook has available to it, whether it's "his" money or not. Was there not discusion that he didn't confer with Facebook's board before completing the Instagram purchase?

No: majority shareholders of corporations continue to owe fiduciary duty to the minority. This is obviously tangential to the real point, though. Google paid more than 12 SpaceX's for Motorola. Would docking with the ISS help with the Android patent problem?

The directors are fiduciaries. Shareholders aren't fiduciaries and don't owe a duty to other shareholders.

While majority stockholders may not be fiduciaries, googling "duties to minority stockholders" suggests that they have some duties wrt minority stockholders, at least in some cases.

IIUC corporate officers are fiduciaries as well; hence, shareholder lawsuits. As CEO of Facebook, Zuckerburg could be liable for wasting Facebook's money.

This line of argument the last week or so has made no sense to me.

Whether you agree with him or not, Zuckerberg's motivation for Facebook buying Instagram was related to the business of Facebook. Elon didn't make PayPal or Tesla start a rocket division, he set up a completely separate venture with its own goals.

Being in space isn't the be-all, it is rather just a very expensive government-backed hobby.

You have to understand though that "charity" is a word just like "education", "religion", "race", "child molester" that is a third rail. People will rarely speak out against the first 4 and nobody, with the exception of a defense attorney or possibly family will ever take the side of a person accused of the latter.

This seems a bit naive. One needs to continually generate resources to continue to be able to finically stomach bets on risky ventures (startups). It wold be the equivalent of a farmer giving away all his crops and not having money to fix the engine on his thresher the following harvest.

Dependent on the details this should be applauded. Although I think it would be much more interesting if they took part of their money and created grants for companies doing good in the world that would have trouble sustaining profitability.

> ...it would be much more interesting if they took part of their money and created grants for companies doing good in the world that would have trouble sustaining profitability.

That is a very interesting idea but I suspect hard to apply in practice. I'd love to see someone try.

One example is that a number of local VCs support our local physical bookstore Kepler's in that way (it would have closed long ago if not for their grants) -- they feel its presence makes the community a better place.

> Put away your Ayn Rand books ... and go make some money of your own.

Does Ayn Rand have similar opinions? I'm trying to figure out what you mean by that.

Yes. Rand does not just think that forced redistribution by the state is immoral, but also that private charity is at best morally neutral, and often wrong depending on the nature of the charity (particularly if it is "sacrificial", or is given in response to the needs or shortcomings of the recipient, which in my opinion describes most of the charity in the world today). Her fictional works perhaps lend themselves to a bit of interpretation on this point, but her non-fiction work is quite unambiguous.

I know many libertarians are in favor of private charity and consider it a virtue, and many of these same people are also fans of Rand, but they should realize that she disagrees with them on this point.

Libertarianism is about people being free to choose what to do with their money. If they choose to give to charity, light cigars with banknotes, spend it on blackjack & hookers, invest in space flight, etc., it's all their right to make that choice.

It isn't about the relative virtue of doing this or that.

Ayn Rand was a harsh critic of libertarianism. That's a bit funny considering how close her philosophy is to libertarianism.

I unfortunately can't find a reference (but I'm hoping someone else can!), but my understanding is that group conflict is often greater between those who have similar ideologies than between those of very different ideologies. For example, Emacs vs. Vi rather than Emacs/Vi vs. Visual Studio or Lisp vs. Scheme rather than Lisp/Scheme vs. everything else.

She was against people feeling like they had an obligation to self-sacrifice, but she wasn't against charity as the projection of one's own values [1]. A lot of people misunderstand Ayn Rand.

[1] http://aynrandlexicon.com/lexicon/charity.html

One of the best interviews I've seen with Ayn Rand, in her own words if anybody cares to read:

http://ellensplace.net/ar_pboy.html

It's important to actually see it in context. I may not agree with her whole overall worldview, but there are parts that are good, and reading her actual words in context shows she's not really a lunatic or savage.

I can't actually see into their houses, so I'm just speculating that they have some Ayn Rand books, but I've noticed a strong correlation between liking Ayn Rand and thinking charity is bad.

The point is that those people who are most likely to have a negative opinion of this are the types that read Ayn Rand and quote her. It's not so much a statement about her beliefs (I could see this going either way, really), but a statement about the people who she inspires.

It's sad to see so much misplaced cynicism here.

How much cynicism are you seeing in this thread?

Well said. Might we see a similar pledge made by YC soon?

Also, it's their money, they earned it. Let them spend it however they want.

For the record I think this is a really positive move.

it's not foolish. it's just not the most efficient way to spend capital. look at it from the point of view of the LPs. A VCs job is to deploy capital and maximize return to it's investors. they should reduce their management fee and carried interest income, and give them back to the LP, or re-invest them and fund more start-ups/create more jobs.

My opinion on this would've been different if they said "I am personally giving 50% of my money to charity in perpetuity..."

The half they are giving away is money they would have otherwise taken as personal income, so it is in fact their own personal money.

The other thing you should understand is that top VC firms such as AH (or YC) are not capital constrained. Dumping in twice as much money won't produce twice as much innovation or profits.

> The other thing you should understand is that top VC firms such as AH (or YC) are not capital constrained. Dumping in twice as much money won't produce twice as much innovation or profits.

That is, of course, correct.

Having capital to invest in more start-ups reduces risks and increases the chances of the VC earning bigger returns. In order to invest in more start-ups, the firm needs top-notch people (partners, associates, etc.).

1. The best people are not going to join a firm that's giving away 50% of their management fees and carried interest income.

2. Not enough people & capital means

-Less investments, therefore more risks and less return.

-Less due diligence and monitoring of portfolio companies (again more risks)

-investors hate risk and low returns

> Having capital to invest in more start-ups reduces risks and increases the chances of the VC earning bigger returns.

That's true up to a point, but only up to a point. You hit the point of diminishing returns pretty early. I wish it were otherwise but there's 40+ years of history that support that theory.

It's not even that there aren't enough potentially great startups. It's that the venture business is a business that scales mostly with people. Each GP can credibly be a primary investor and board member in maybe 10-12 companies at a time. I don't think arbitrarily taking that number up to 20-24 would generate twice the returns, at least without the GP's head exploding in the process.

>It's that the venture business is a business that scales mostly with people.

I agree which is why I brought up the topic of management fees and carry. You need them both to pay for additional people in order to scale your business. (which you addressed in your other comment).

> 1. The best people are not going to join a firm that's giving away 50% of their management fees and carried interest income.

True, but that's not what we're saying. We're saying that the GPs as individuals are going to do that, for the income we would have received in any event. This doesn't affect how the firm allocates fees and carry, and doesn't reduce the incentive for anyone to join the firm who would have joined before.

Thanks for the clarification.

As far as I can tell that's actually what they did say:

"We are delighted to announce that the six General Partners of Andreessen Horowitz, with our families, are all committing to donate at least half of all income from our venture capital careers to philanthropic causes during our lifetimes."

http://bhorowitz.com/2012/04/25/our-philanthropic-commitment...

I think it's an extremely positive statement for them to make.

So here's what I don't get: If people give them money to invest, and they generat returns for the investors in a way that the investors are happy with, what does it matter what fees they charge? It is a mutually beneficial transaction. The investors make money, the fees make the company money. Now the company money that goes directly to the owners, rather than say direct expenses, is the owner's personal money. It is their profit from the transaction. This is what they are giving 50% of away.

The only way I can read your argument, is that the investment company should stop being generally profitable for the owners, and return more money to the investors. How does this make business sense? It would be like saying "Apple makes profit from selling iPhones, and just gives it away to shareholders. They should really bow to the customers and lower the costs and socialist bullshit to the shareholders". Unless of course Apple share holders are magical unicorns who deserve it, and the partners in a VC firm don't.

We do like to think of ourselves as magical unicorns.

Now usually I don't do this, but: Who are you, jimmyvanhalen, to tell Paul Buchheit about "the most efficient way to spend capital", and how Marc Andreessen and Ben Horowitz should do their jobs? Since you apparently know so much about it, surely you top Paul's worth easily?

appeal to accomplishment, appeal to poverty, appeal to wealth

http://en.wikipedia.org/wiki/List_of_fallacies

Capitalism is a system for transferring money from those who are bad at allocating capital to those who are good at allocating capital. That's the magic of it. It also implies that people like Andreessen most likely have an above average understanding of how to allocate capital :)

Doesn't make it any less a logical fallacy. Andreessen partners could wipe their asses with $100 bills. If someone with less money tells them that's a poor use of money, would you tell him clearly Andreessen knows better because they have more money?

If only this were a logic problem consisting of three boolean variables... But reality is complex, and so I do give some weight to authority. For example, if I had a question about evolution, I would automatically trust an answer from Dawkins more than one from Santorum, even if you think that's some kind of fallacy.

You are free to believe whatever you want, based on whatever criteria you want. But to argue that something is right or wrong because someone else has more money, has no weight.

Re-read yesbabyyes comment. It makes no argument other than "who are you", "they are famous and accomplished" and "they are rich." It's a poor argument.

Typically the fact that someone has more money would not be relevant, except in this case it's a discussion of capital allocation and a person (Andreessen) who is making a lot of money by being very good at capital allocation. It's like claiming that Michael Phelps's 14 gold medals should carry no weight in a discussion of whether or not he's a good swimmer.

> It's like claiming that Michael Phelps's 14 gold medals should carry no weight in a discussion of whether or not he's a good swimmer.

Not really. It's like Michael Phelp's 14 gold medals should carry no weight in a discussion of whether or not his butterfly stroke has room for improvement.

No one is arguing that Andreessan is not good at making money. If people were, then your analogy would be correct. People are arguing whether or not his money was put to efficient use in this specific instance (by donating to charity).

Having 14 gold medals does not prove to anyone that your butterfly stoke technique could not be better. Nor does earning a lot of money prove that you always make good decisions with money. Take my $100 toilet paper example. Earning a lot of money through good investments does not make using $100 for toilet paper suddenly unassailable to criticism. Does this make sense?

> Having 14 gold medals does not prove to anyone that your butterfly stoke technique could not be better.

Having 14 gold medals means that though his butterfly stroke might or might not need improvement, a random punk on the internet doesn't have the authority to make a judgement call.

> Nor does earning a lot of money prove that you always make good decisions with money. Take my $100 toilet paper example. Earning a lot of money through good investments does not make using $100 for toilet paper suddenly unassailable to criticism. Does this make sense?

No it doesn't make sense. Your $100 for toilet paper example is pushing the boundaries of ridiculous which doesn't have anything to with the topic under discussion.

People who haven't earned through investment preaching people who have made a fortune about efficient use of money, money which happens to be their personal money, is just sad.

the "random punk" is probably a swimming coach ;)

That's the point. The defense should be valid whether or not the identity of the critic is known.

"Michael Phelps sucks. He doesn't know shit about swimming."

This criticism should be valid regardless of my identity and credentials?

That's not what I said. I said that the defense should be valid regardless of the identity of the critic.

> Having 14 gold medals does not prove to anyone that your butterfly stoke technique could not be better.

>> Having 14 gold medals means that though his butterfly stroke might or might not need improvement, a random punk on the internet doesn't have the authority to make a judgement call.

>>> the "random punk" is probably a swimming coach ;)

That's the point. The defense should be valid whether or not the identity of the critic is known.

>>>>> "Michael Phelps sucks. He doesn't know shit about swimming." This criticism should be valid regardless of my identity and credentials?

>>>>>> That's not what I said. I said that the defense should be valid regardless of the identity of the critic.

I don't know what defense you are talking about, and who are these critics defending themselves from, and why are they talking about things they have no fucking idea about, and why do they think "I sometimes drown in my bathtub but my opinions on swimming are as valid as Phelps' because fuck, you can't appeal to authority Even PG agrees with me about appeal to authority being invalid."

All I am saying is:

Does winning 14 gold medals mean Phelps technique is perfect? NO

Does it mean a random punk on the internet can critic him? YES. Freedom of speech and stuff.

Will the opinion mean anything? FUCK NO.

Will it mean anything if the random punk happens to be a swimming coach? FUCK NO.

Will it mean anything if the random punk happens to be a former olympic champion or an olympic coach? IT MIGHT. There are no rules of thumb. Different things work for different people.

> I don't know what defense you are talking about, and who are these critics defending themselves from

The critics are not doing the defending. Let me break it down for you.

jimmyvanhalen criticized Andreessen Horowitz use of money as being a relatively inefficient, compared to re-investing or lowering their fees. That was the criticism.

yesbabyyes defended with "you are a nobody in the investment world" and "you don't have as much money as Andreessen Horowitz, so you don't know what you're talking about." That was the defense.

The defense to the criticism is invalid because (aside from other logical fallacies), it hinges solely on the identity of the critic (jimmyvanhalen) and his personal accomplishments, relative to the entity being criticized (Andreessen Horowitz).

A defense with substance, one that works regardless of identity or accomplishments, would have been an argument as to why donating all the money to charity is helping people more people than re-investing.

Way to miss the point :)

And who was it that told you appeal to authority was a fallacy? Some authority on fallacies like Wikipedia, maybe? :D

http://lesswrong.com/lw/aq2/fallacies_as_weak_bayesian_evide...

If a wealthy self-made person says something about how to make money, that's stronger Bayesian evidence for that actually being a good way to make money then if some random person says it.

Thanks, daenz. That's what "usually I don't do this" was referring to -- which is a lazy cop out, I agree. Usually I don't do that, either. My bad.

It may not make it better, but I think I did it because jimmyvanhalen's argument was, to me, so... Preposterous. As I understand him, he is basically arguing that if you feel that you have money to give to charity, you should give that to whomever gave you that money. I wonder what he feels about my, admittedly ridiculously small, donations to charity. Am I, too, wrong to give? Should I lower my fees and "give" that money to my clients instead?

Yeah, it's a difficult subject. People are passionate about money. But kudos for owning up to your post... I made a ad hominem awhile back and someone was kind enough to point it out, thought I'd pass around the favor :)

I take it you think one should donate to charity anonymously, but humblebrags are ok? ;)

I just wanted to add that I actually think wealth and investment accomplishments are somewhat relevant in this discussion, regarding your comment on fallacies. Especially given jimmyvanhalen's very strong opinions on what "a VCs job" is, what a16z "should" do, and his confused ending statement on that what they did would be fine by him if they did... Exactly what they are doing.

Don't you agree?

I wasn't bragging. I was trying to relate...I made an ad hominem attack and was called out on it.

I don't really have an opinion on the actual thing being discussed though, other than my comments back and forth with "paul"

I don't really have an opinion on the actual thing being discussed though, other than my comments back and forth with "paul"

I.e., trolling. Yeah, I know.

These are my actual beliefs and I'm arguing their merit civilly. Unpopular != Troll.

"sad to see so much misplaced cynicism here"

Seems that over the last several years or so there has been an uptick in wealthy people using peer pressure to get other wealthy people to give away their money according to some rule of thumb that one groups thinks is right or fair. Wealthy people always gave away money and pressured others at charity events of course. But I don't remember it ever being so public.

I have an objection to this type of peer pressure. Just like I have an objection to Warren Buffet and his "Buffet Rule".

It seems that one of the most downvoted comments below is one where "PR" was mentioned. Was this done for PR reasons. No not entirely. But it also wasn't done anonymously either.

Would you rather that they compete over who has the largest yacht or the most jets? Think of it as a positive form of conspicuous consumption. Just as a business can be good for both the owner and the customer, charity can be beneficial for both the givers and the recipients.

I would rather have them compete over who can pull off the most awesome technological breakthroughs (asteroid mining, cheap space flight, life extension, genetic therapy, artificial biology, vanquishing diseases).

But honestly, how many of them were going to do that with the money, anyway? I agree that charity is better than conspicuous consumption.

"positive form of conspicuous consumption"

I don't see spending money on yachts or jets as negative and somehow the fact that "charity" is mentioned that's automatically positive. People earn a living staffing yachts and jets, they are built by companies employing people. That money circulates further in the economy and provides benefits and is paying for someone's health care and college education.

So to answer your question "Would you rather that they compete..." I would rather they do whatever they want to do with the money they have earned without some kind of movement played out in the press which makes it looks like donating 1/2 to charity is the noble choice to make.

No. Just no.

Where do you think money GOES when it is donated to charity? It doesn't disappear. Are you seriously making the argument that it's better for the world that $X is used to purchase an expensive unnecessary item, than actually spending it on things that matter in the world?

"charity" is not some bullshit phrase that means "wasted money". There are a lot of people in the world who make really compelling cases for certain charity money being better spent, in terms of global well being, than almost anything else. See http://www.givewell.org and http://www.givingwhatwecan.org.

I definitely agree. Do you think there's some value in making it easier for companies to promote a "positive form of conspicuous consumption"? Or do you think the action is more of a means in itself?

For example, if AZ said "Hey users of instagram (or users of AZ product that just sold), we're going to let you decide which cause some of this money goes to," would that create a delta in value from the original proposition?

Did you miss the last two centuries where philanthropists built universities named after themselves (or their family members)?

"Surplus wealth is a sacred trust which its possessor is bound to administer in his lifetime for the good of the community." - Andrew Carnegie

Interestingly, many of our investors (LPs), and many LPs of our fellow venture firms, are nonprofit institutions such as universities and foundations that were originally started by people with names like Carnegie, Rockefeller, Ford, Stanford (a "robber baron" of his age), Yale (a governor of the British East India Company of all things), Hewlett, Packard, and the like. Money earned through capitalism that got plowed into nonprofits that invest in modern venture capital -- it's a wonderful cycle.

I have no idea how your comment relates to what I've said.

I said "Seems that over the last several years or so there has been an uptick in wealthy people using peer pressure to get other wealthy people to give away their money"

Did you miss this?

http://givingpledge.org/#enter

Is there peer pressure? Sure, but at the end of the day, everyone of them made a personal decision to make that pledge. Could they have redistributed their resources to more businesses? Ok, but they chose the charitable route. Are there people that need these resources more than businesses? Absolutely: http://en.wikipedia.org/wiki/Millennium_Development_Goals#Go...

Sadly, we do not live in a perfect world. The resources and opportunities we take for granted are the same ones others do not have. Giving others a chance at the life and opportunities that were given to us is probably the wisest investment of all. The returns are deeper than dollars.

By giving half their profit to charity, one could take them as implying that profit is bad, that they don't deserve everything they earned, and that they are appeasing the irrational anti-capitalists (if not siding with them).

I don't know anything about this particular case, but in general many businessmen are complicit in bad philosophy, and sometimes even pay to promote it. That's shameful and harmful.

Business people trade for mutual benefit. That provides value to society even if they never give a dime to charity. And even if they do give a dime to charity, their actual business activities provide more value, both for themselves and others. Businessmen should be proud.

You can find this sort of opinion in the Ayn Rand book _Why Businessmen Need Philosophy_. You might want to read it, and make some effort to reply to its arguments, before dismissing it as wrong enough to dismissively insult in passing.

My job is helping people start business, and I do it in large part because I think it's good for the world, so you don't need to preach to me on the benefits of business.

The mistake being made by many here is concluding that since business can be good for the world, therefore everything that isn't a for-profit business must be a waste. Not all good things are profitable.

you don't need to preach to me on the benefits of business

OK... fine. But if you aren't going to fully understand Ayn Rand's work, then you don't need to preach to us about how misguided you think it is.

The whole point of discussions like this is to have an intellectual discussion. To dismiss people who disagree with you by accusing them of "preaching" (when they aren't) has no place on HN. (As I'm sure you well know.)

I like to think I'm fairly familiar with Ayn Rand's work, though I'm by no means an expert. I'm a computer scientist, but my philosophy minor was supervised by one of the few tenured professors who specializes in Rand scholarship in academia (and he is a fan of hers).

I don't really see this as far off, though. Rand really did believe that it was unethical to be altruistic. Not because it led to negative outcomes, or was inefficient, but because it was, in her view, inherently unethical to be altruistic. The altruistic sentiment was a character flaw at best. She did approve of philanthropy in some circumstances, such as foundations that were set up to advance their founders' views. But it had to be for reasons other than altruism, and it would ideally take into account whether the recipients were "worthy" of the help, not be Christian-style unconditional charity.

You neglect to mention why Rand opposed altruism and considered it inherently immoral: because it means putting other people above oneself and therefore self-sacrificing for others.

That's true, but there isn't really much argument for that position in her work (certainly not argument I found convincing). It's almost assuming the consequent: you prove that putting your own good above collective good is moral because the alternative would be putting collective good above your own good. Well, yes, that's definitionally true. But what's wrong with putting collective good above any one individual's good (including your own)?

Her answer wasn't the consequentialist one that Adam Smith and other market-economy defenders proposed: that self-interest produces the best overall outcome. It was instead somehow more metaphysical, that somehow self-interest is the highest good, and putting any other goods above one's own good is corrupting the greatest good. I see it as a kind of take off on Nietzsche's master-morality/slave-morality dichotomy, except, unlike Nietzsche, she ties it to the free market and commerce. (Nietzsche believed in great people putting their own self-development ahead of the masses, in the elitist sense that if you're better than everyone, you should focus on your own development first... but he considered business and money-making to be a dirty, mass occupation that in no way qualified as "great" or "elite".)

She does provide various arguments. There's no shortage there. Whether you find them convincing is up to you but please don't mix that up with her not publishing stuff to argue her point. For example, not living in a second-handed way is a main theme of The Fountainhead, and that's closely related to the altruism issue.

> Her answer wasn't the consequentialist one that Adam Smith and other market-economy defenders proposed: that self-interest produces the best overall outcome.

Correct.

One thing that might be helpful is to understand Rand's view on compromise. She said you can compromise on concretes when you agree on a principle, but you must never compromise your fundamental principles.

For example, if you agree on the principle of trade, you can compromise (haggle) on the exact price or contract terms, and you're still both following a good principle and can both benefit.

But you must never compromise between collectivism and individualism, capitalism and socialism, life and death, freedom and slavery, rationality and irrationality. Those sorts of compromises between opposite principles amount to sacrificing some good that one shouldn't give up, and allowing in some unacceptable evil. Nor should you compromise your values in order to get something that you don't value or value less. That isn't a reasonable compromise, it is surrendering your values and principles for the benefit of others.

Given this sort of view of compromise, it's no good to ever compromise your own life, no good to ever sacrifice yourself. Anything that asks you to do that is evil. If there is a rational trade to make, then make the exchange and benefit, but don't sacrifice yourself for unspecified or vague future benefits which no one is accountable for providing to you.

> One thing that might be helpful is to understand Rand's view on compromise. She said you can compromise on concretes when you agree on a principle, but you must never compromise your fundamental principles.

This is why I find it so interesting that Rand ended up accepting social security and medicare from the government[1]. You seem to know a lot about Rand -- do you have any idea how she justified her accepting government benefits?

1. http://www.huffingtonpost.com/michael-ford/ayn-rand-and-the-...

She took the benefits because the government took far more than that from her! She was just getting a tiny part of it back.

She actually wrote at length about this issue [1]. That people keep puzzling over it shows that they don't understand AR (which is perfectly fine if they don't claim to understand her), or just want to smear her.

[1] http://aynrandlexicon.com/lexicon/government_grants_and_scho...

That view of compromise is actually at the core of what I don't see convincingly argued for. Why shouldn't we compromise on principles, rather than just concretes, if it would produce pragmatically better outcomes? Why is it better to have dueling, inflexible idealized political positions, the hardline socialist against the hardline capitalist, each knowing they're right through some kind of metaphysical inspiration which can never be shaken by the presentation of actual facts? I would much rather have people in closer contact with reality, working out case-by-case situations pragmatically, than people living in an inflexible, idealized world where they know their views are pure and good, and opposing views are evil and bad.

The problem with using her novels as an argument for the position is that they only really work in an affective, sense, imo, as implying consequentialist arguments, sort of along the lines of a morality tale or fable: look what could happen if things are done this way, or alternately, if they were done that way. And I think a lot of people do read them that way; the famous "going Galt" plot, for example, is commonly taken as a parable for why bad things will happen if you institute too much regulation and burdening of productive individuals. But she explicitly disclaims "things will turn out better/worse" as a reason to accept or not accept her philosophical/political views, so her novels aren't supposed to be read that way. But they're actually more effective that way! Which is why I think it's so common for fans of Rand to ignore Objectivism and instead read her as more of a general pro-free-market, libertarian author.

You seem to believe that there is a conflict between principles and reality. AR did not. Because principles are induced from reality and are always true (within the relevant context).

(By "principles" here, I mean correct ones.)

That's what I think is clearly a sham in her work: her unacknowledged Nietzschean influence is quite strong, and like him, she does not deduce principles from reality, but from metaphysical first principles that are arrived at through an obscure armchair-philosophizing process, certainly not an inductive, scientific one.

That there is really no nuance or context in her novels (or other work) follows fairly directly: these are idealized, metaphysical types, and an empirical or inductive methodology is nowhere in sight. She occasionally claims something about induction, but does not actually follow any such methodology, certainly not in any rigorous fashion.

her unacknowledged Nietzschean influence is quite strong

Can you point to one actual claim made by AR that is in common with Nietzche? I seriously doubt there is one.

Going away from actual claims to mere generalities, yes, AR and Nietzche were both "individualists" in a sense - but in a totally different one. Nietzche in a predatory way, AR in a "mutual trade for mutual benefit" way.

she does not deduce principles from reality, but from metaphysical first principles

She doesn't decduce, she induces, and she does not do it from metaphysical first principles at all. Her core metaphysics is axiomatic, but the rest of her philosophy is inducted from reality. Most of her philosophical essays are just summaries of the results of this process. There is no work that "competely induces" Objectivism. There are a couple of works by Leonard Peikoff that talk about the Objective process of doing this. Until recently, they were only recorded lectures, but "Understanding Objectivism" was just released as a book.

That there is really no nuance or context in her novels

A lot of people don't "get" the novels. Just a few days ago an Objectivist was telling me how mind-blowing Atlas Shrugged is, because there are about "12 layers" (quoting him) of meaning in any given chapter. You would be surprised. It does not appear to be this way on the surface.

You clearly have no idea what you're talking about WRT Ayn Rand.

Who was your supervisor?

One of the people on this page, but I'll let you guess which one. :) http://www.aynrandsociety.org/

I'm interested in finding out if it's the one who is at my school, but like you, I'm hesitant to dilute my own anonymity.

> You can find this sort of opinion in the Ayn Rand book _Why Businessmen Need Philosophy_. You might want to read it, and make some effort to reply to its arguments, before dismissing it as wrong enough to dismissively insult in passing.

Like a lot of people here, I read Rand as a teenager. As a slightly older teenager, I concluded she was an extremist who I think would have hated living in the world that her philosophy would have led to had she been wholly successful (Hobbes' phrase "nasty, brutish, and short" comes to mind).

The point about business transactions being mutually valuable and societally value-add is generally (although not always) true, in my mind, but that doesn't eliminate the need for either government or philanthropy if one wants to live in a civil society.

But, to each her own...

"By giving half their profit to charity, one could take them as implying that profit is bad..."

How do you make this leap? It's utterly baffling to me. Giving something away doesn't imply that it was bad to have in the first place.

I don't see what's so wrong with implying that the might not deserve everything they earned, unless you also think people in poverty deserve to be where they are.

> By giving half their profit to charity, one could take them as implying that profit is bad, that they don't deserve everything they earned, and that they are appeasing the irrational anti-capitalists (if not siding with them).

One could, but one would be wrong :-).

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