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Of course it's arguable. You make it sound like founders perform some jedi mind-trick to take money from others. Here's what actually happens. Investors put in initial money because it's a win-win (they get an expected return, founders get starting capital). Employees join because it's a win-win (they get a salary, health, equity, other perks; founders get a workforce). Customers pay cash because it's a win-win (they get a product or service they want, the business gets money). At no point is someone being held down and forced to hand money to someone else.

I am making a meta-argument, and I do think that it’s inarguable.

My argument is this: the core disagreement here is about the allocation of resources between labor and capital.

I’m right. It is.

That doesn’t mean I have settled the argument about what those allocations should be which nobody has, it’s a core organizational element of politics.

But I think his argument is bullshit. It’s a purposeful misdirection because it refuses to recognize the terms of the discussion at all.

One can agree that they would rather see wealth more equitably distributed while also admitting that the current system of private property and capitalism is the most effective at broadly generating wealth.

You could say that, but you also don't have to concede it.

In fact, my argument would be that the more regulated, industrial-policy-driven economies of the recent past were better at generating wealth and improving society.

For the most part, the real conflict that we're having around these topics is about the reorganization of the economy that happened starting in the mid-1970s.

This change shifted the focus of the US economy to financial extraction and away from industrial policies, a role that we sold out to China for the benefit of our elite classes and the severe detriment of our working class.

I don't think pg would disagree that the politicians that discuss this want to allocate more resources to labor. But what he takes exception with specifically is the rhetoric used to justify this "reallocation." AOC's claim:

> “There’s a certain level of wealth and accumulation that is unearned,” she said. “You can’t earn a billion dollars. You just can’t earn that. You can get market power, you can break rules, you can abuse labor laws, you can pay people less than what they’re worth, but you can’t earn that.”

You can produce a motte-and-bailey-type argument where the "get market power" and "pay people less than their worth" are doing all the heavy lifting in that statement. But I think we can agree that she is very much tying the accrual of wealth to various kinds of villainy. That is what pg is taking on. And that matters because the common person would agree with the statement that you should be rewarded for what you create - if wealth accrual is all theft, that perception would make a much stronger argument for the reallocation of resources.

Health is not a perk but an inelastic demand: a threat to withhold health is a threat of physical harm, and a negotiation in which one party's physical health is on the line is quantitatively but not qualitatively different from a negotiation held with a gun to that party's head.

I do not understand your statement, maybe you can elaborate. If you are saying there should be a public option for healthcare, I happen to agree. Then we can have the standard discussions on how the government ought to raise funds for it. If you are saying that by negotiating terms of employment, any employer is intrinsically engaged in violence, that stance is pretty out there.

If those terms include the potential for predictable harms like lack of healthcare or housing if an agreement isn't reached, then yes, I think that is indeed an engagement in violence.

Now I'm not saying that the employer is necessarily morally culpable here — I'm sure most employers would like nothing more than to not have to worry about their employees' healthcare, and certainly I doubt many people enjoy having the ability to take it away. But it doesn't change the fact that it's impossible to have a real negotiation when inelastic demands are (potentially) unmet. Someone under threat of losing health insurance or housing is negotiating under duress, contrary to the comment I replied to.

There can be labor monopsonies but it is not a rule; I promise you that the key employees at a SaaS startup tend to have plenty of options.

This effect is very much not limited to monopolies, though it's certainly easiest to see there. There's no step change from monopoly to competitive marketplace though. If you believe it's the company's moral duty to provide e.g. healthcare then in a non-monopoly situation that culpability is divided, though not abrogated (and beware the bystander effect!). From the employee's perspective, the spectre of physical harm is a bit further off, but it will still colour negotiations.

It's especially insufficient to generalize the working of the entire system from an example of a market in which employees currently have enough power to not really have to worry about the prospect of physical harm because it would be disadvantageous to the employers to cause it. Even if we take the current state of the SaaS startup market as reliable (which it isn't) the original argument was not limited to SaaS startup employees, and in other industries (including ones that are a bit down the pyramid from the SaaS companies) things are a lot less rosy for employees.

A sole consumer of labor is a monopsony, not a monopoly (that would be a union). At any rate, the point is that there are many many employment negotiations that no reasonable person would agree to amount to duress. This is a counterexample to the idea that any negotiation of employment involves duress. I don't need to disprove the existence of any coercive employment. But SaaS companies are especially relevant since pg specializes in showing people how to become billionaires through SaaS. If earning a billion dollars implies some measure of coercion we should be able to find that in a SaaS startup.

Sorry, misread you — but you can substitute ‘monopsony’ into my comment and I think it still holds.

This is a ‘no true Scotsman’ so I don't think I can really respond to it directly. But I'll point out that my claim is not that some contracts bargaining for safety of life and limb are a form of duress but that all inherently are (to some extent). Especially when the other party's BATNA is ‘no guarantee of safety’.

Under this principle no human has ever been able to consent to anything in the history of the world. Certainly 99.99% of humans.

This would also imply that the best thing ethically is not to give people goods in exchange for labor because the simple act of interaction with them puts their housing and food needs under your responsibility.

No human can _100%_ consent to anything (… probably: free will is tricky). Coercion is a continuum, not a binary.

I don't really think that companies (or other parties in trades) bear moral responsibility for this inherently — a company that accepted every job applicant to try to meet their inelastic demands wouldn't last long, so the company itself is also under some duress even if it might like to. Trying to assign blame for complex distributed problems isn't really that simple. Your example in particular is a trolley problem, and I (personally) don't believe that pulling the lever makes you more culpable than deliberately choosing not to pull the lever.

But regardless of your chosen ethics, my point is pragmatic — while it's not correct to say that people take jobs only because they are under duress, it's also not correct to base arguments on them acting on their own free will based on their personal preferences. UBI experiments show significant changes in employee behaviour when inelastic demands are guaranteed to be met and negotiations pertain only to elastic quantities.

That's not quite true, the police hold me down and lock me in a cell if I don't hand money to a landlord.

They don't hold me down and force me to hand money to a landlord, mind, they just lock me in a cell if I don't, so maybe it doesn't meet your standard of proof.

You would get evicted at most. Even if you're in debt, bankruptcy does not come with any criminal liability. You'd have to do something much worse to receive jail time. And I'm not really sure what this has to do with startups, is the claim that the founders are in cahoots with landlords in the Bay Area to hold employees captive?

Being homeless is illegal in many countries, including the one where I live. If I am evicted because I can't pay rent, then obviously I also can't get a hotel room, and my existence is illegal

> it's impossible to create a billion dollar enterprise without a group effort

George Lucas made a movie with a (small) group effort. But what made a billion dollars is his Star Wars universe which is almost entirely his creation.

It literally creates wealth for other people. If my toy sells $10,000 without Star Wars and $100,000 with it, did I participate in making George’s billion, or am I benefiting from it?

> means that they made decisions within that enterprise that resulted in a lopsided allocation of resources at the end.

What do you mean? Every good and service involves many people, but the degree to which they participate in its creation and risk vary. For example, a Farmer may create a more efficient way to grow food. Is the grocery store now entitled to a piece of the reward? They didn’t change anything, all of the improvement is the farmer side.

> George Lucas

Once again, lopsided allocation - George benefited from and is directly responsible for keeping the cost of labor low: https://www.hollywoodreporter.com/business/business-news/100...

Would he have been a billionaire without that? Who knows? But it definitely helped him get there.

I addressed that. The movies themselves are not the source of the wealth and yes the original was created by a group so small that theoretically Star Wars wealth could have been divided evenly and they would be billionaires.

If you say the original crew did not do all the labor required to make the franchise grow in the future (obviously true), you are now arguing different people have had incremental impact on creating the wealth, which is kind of the point.

I might be misunderstanding your point then.

Are you saying that he/the small group are solely responsible for Disney wanting to pay 4 billion for it?

Yes I’m arguing that the original crew created within the ball park of a billion in wealth per-head.

The Star Wars franchise earned a tremendous amount of money before the one-time Disney payout.

Jk Rowling and LeBron James are additional examples.

It's instructive that people like you pick people like LeBron James or J.K. Rowling to make your points.

The reason is that the conflict here is between labor and capital. And those two, at least in their primary roles, are labor, as a writer and an athlete. One of them is even a union member operating under a collective bargaining agreement.

They're just the absolute pinnacle top of anything that could possibly be put in that category.

But if I'm arguing that this is really about the division of of the spoils between labor and capital, and you have to resort to picking members of the labor class to make your argument then you have essentially conceded my point, which is that returns to labor are different than returns to capital, and returns to capital are much harder to defend. You didn't pick Bill Ackman for a reason.

Would jk rowling have been as popular without the marketing from her publisher? What about the work of the editor from the publisher?

> George Lucas made a movie with a (small) group effort. But what made a billion dollars is his Star Wars universe which is almost entirely his creation.

If that were actually true, how come we can't predict what the next Star Wars universe will be?

Same for pop songs etc. If it were actually about objective qualities of the creation, and not just luck, the next winners of the lottery would be apparent even before they hit the theaters.

There is null inherent quality in the Star Wars universe causing the billion dollar revenue. If George Lucas wouldn't have been there at the right spot at the right time, the dominant IP would simply have been something different.

If you have kids, you can directly observer what actually happens: The IP owners dump huge amounts of money into merch and product placements everywhere, resulting in them getting in contact with the franchise before they are out of their diapers. My kids came home from daycare roleplaying lightsaber fights without any previous contact with the franchise at our home. The trick is implanting the meme (in the original meaning of the word) into kids' brains before another meme can nest in there.

Inability to predict the universe does not mean the underlying mechanism is actually random. It means you don’t understand it well enough.

Well that conveniently makes your assertion unfalsifiable, doesn't it?

Your position is that any correct prediction or investment can be explained by luck. That sounds more unfalsifable to me - it sounds like you’re neglecting evidence, actually.

The bit about Lucas is obviously not true. The universe he envisioned does not sell itself, it was marketed, developed, painted and modeled, added to, kept fresh etc for many many years by a huge army of people. If the only Star Wars media that existed were the original film, or even the original trilogy, it would sell relatively little by now.

So if you were to assign value to the work to make a new Star Wars toy would you it’s (total value of Stat wars) * (number of people who have ever worked on Star Wars) / (number of people who worked on the toy)?

That’s absurd. Obviously they are creating incremental wealth and their particular toy didn’t make or break billions.

No, I'm saying that you can't attribute any significant percent of the value of a Star Wars toy sold today to George Lucas. If Star Wars had not continued after the 1980 films, these toys would not keep selling so much today.

The post I replied to allocated all of the monetary value of the Star Wars branding of a toy to George Lucas personally, which I think is obviously wrong.

Hmm, what about JK Rowling and LeBron James where the vast majority of their value is explicitly going to their publisher and they keep only a small percentage. Their tiny portion is a billion after everyone else takes most of it!

JK Rowling, the proofreaders, the reviewers, the printers, the marketing, the librarians... Everyone in that list is in effect getting stolen from by the publishers, yes.

in the same way that Lebron didn't go where with his own feet, he benefited from coaches, support, doctors, nutrionists & cooks, all dedicated to putting everything into this one man. Do you think merely being a freak of nature nets you a billion ?

Right, and even if we assume Lebron accomplished his entire basketball career by himself and that his salary is 100% “earned”, his salary didn’t net him a billion dollars.

Also the idea that playing on a basketball team is a good counter to the argument that everyone is on a team seems pretty odd for obvious reasons.

Are you sure the root of your concern isn’t that people differ in ability and value?

Can you quickly break down which players on the team are fairly compensated and which are oppressed by LeBron?

I'm the original poster in this sub-thread, and I didn't make any of the points you seem to have ascribed to me.

you’re only strengthening the argument that people deserve asymmetric compensation. LeBron and the NBA have a symbiotic relationship where both of them make more money because they exist. And I would guess the NBA made a lot more money than LeBron.

Are we not discussing this in the context of this parent message?

> The actual opposing argument is that it's impossible to create a billion dollar enterprise without a group effort, and for one person to end up with a billion dollars necessarily means that they made decisions within that enterprise that resulted in a lopsided allocation of resources at the end.

--

> And I would guess the NBA made a lot more money than LeBron.

And yes, in this case I believe the NBA is extracting asymmetrically, from Lebron and others.

Once again, the publisher gave her something like 5-10% of sales and kept 90% to cover those costs and she is still a billionaire!!! So is your real beef with the publisher?

Indeed. And once the publishers have paid their fair share, JKR also will, and she won't be a billionaire anymore.

Harry Potter became a billion dollar business after the movies and toys and so on were created - again, it takes waayyy more people than one to actually produce this amount of money. The initial idea that Rowling herself came up with is of course a significant part of that - but still only a small part of it, in the grand scheme of things.

It's also important to note that Harry Potter making billions of dollars also prevented any other similar books or ideas from making any large profits. The entertainment industry is very much a winner takes all industry. HP didn't hugely grow the children's entertainment market, it just outcompeted other works. This is extremely important to understand, because it directly implies that a huge part of the value is simply that media execs decided to bet big on HP instead of trying out many other possible properties. The money would have happened either way, more or less the same - they just would have been distributed to one or many other authors instead, if JK Rowling hadn't hit it out of the park. People would have bought a roughly similar amount of books for their children to read, a roughly similar amount of toys, would have taken them to a roughly similar amount of movies.

> What do you mean? Every good and service involves many people, but

Well yes. That is in fact exactly what I mean.

> The actual opposing argument is that it's impossible to create a billion dollar enterprise without a group effort

The other thing that we're often ignoring is that it's impossible to create a billion dollar enterprise without luck. You have to be at the right place at the right time.

For the most part only capital gets to roll the dice, but even before that it's a sign of the times that we take it seriously at all when people talk about "earning" a billion dollars. We could all do with a bit more humility.

amusing that the most rational take on HN is immediately down-voted.

>Period. That's it, and it's inarguable.

No it's not, it's actually extremely easy to prove wrong: J.K. Rowling.

She ran the printing press and picked the camera lenses and stacked the books by the cash register and booked her own press interviews? Also who taught all the kids to read?

Why does she have to control the entire vertical process to earn a billion dollars? She sold her work and got paid a billion dollars for it. Who did she exploit? In what way were her earnings unearned?

That’s just back to my original point. Which was that every billion dollar enterprise is a collective or team effort and the only argument is about how the results get allocated.

Which is, as I pointed out, inarguable. No one is spawned alone in the woods to start their adventure independently of the society they are in.

PG says this in his post though. He says the people working for the startup whose founder he talked to are being compensated fairly and properly. To claim his post is a misreading you have to claim every billionaire wouldnt be a billionaire if resources were allocated correctly.

> fairly and properly

He takes that as a given but this is, in fact, the argument and you can't wave it away.

By doing so he's being disingenuous. The argument here is about who gets what. And the startup founder and its employees are not the only participants in the economy.

The revenue flowing in to his hypothetical startup is exogenous to the startup so you have to talk about where it's coming from, who's affected, and how that fits in with policy goals.

For an extreme but accurate thought experiment, imagine concluding your analysis of FTX by noting that their employees were "fairly and properly" paid and then moving on.