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The Refragmentation

paulgraham.com

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Re: The Refragmentation

#161

Post by r2dnb »

Interesting article, the insight of PG is much valuable but I find his attempt to depict a fragmentation model unconvincing. While this model captures the dynamics at play, it fails to explain them and to introduce an easier way to act on them while this is the point of a model. This sums up an extensive feeling about this article.

I'd like to react to three of my picks. First of all PG conveys with its fragmentation model that long careers in the same company are a thing of the past. I explain an opposite view and support that new companies will have people work longer for them (10 to 20 years) by hiring them much earlier, for much cheaper. This challenges the dynamics presented by PG.

http://read.reddy.today/read/7/hire-high-school-graduates-in...

The second thing is that I found intriguing that PG write "Your prestige was the prestige of the institution you belonged to" talking about college graduates, as if it was a thing of the past and thus presenting himself as a hacker of this system while YC overly represents Stanford alumnis. But this is a paradox that I found with YC in general. They position themselves as a hacker of the system while they really are a cornerstone of this system in many regards.

Therefore - third thing - it wasn't a surprise for me to find in the last paragraph that PG envisages centralization as a better alternative and with a certain nostalgy thinks that the effects of this "defragmentation" need to be contained. Overall, PG thinks like a wealthy man who made his fortune in the late 90s and who has the graduate syndrom - about which I will write momentarily. His insight is certainly valuable but his proposition isn't disruptive.

Re: The Refragmentation

#162

Post by Animats »

He quotes Rockefeller in 1989: "The day of combination is here to stay."

The amusing thing is that he writes this just as the era of fragmentation in the US is coming to a close. We have one winner in search - Google. We have one winner in social - Facebook. We're down to a few retail Internet providers, a few big banks, a few big airlines, a few telecom companies, and a few commercial real estate owners per city. There would be more concentration in those sectors without regulatory pushback.

Re: The Refragmentation

#163

Post by HillaryBriss »

jusben1369 wrote: post #60

The thing to me is Silicon Valley is the place in the US that still looks like that post WWII America. Large monopolies like Google, Apple and FB utilizing fantastic profits and paying amazing perks to employees. Everyone working in and on the same mission acting as a social fabric tying people together. Glass Door and the Internet in general replacing trade unions by helping balance a knowledge imbalance so that wor…

It's certainly true that SV's days as a big tech hardware manufacturer are past.

I am not at all certain, but I have to wonder if something magically keeps SV software innovators glued to SV. This is something I've never understood. But there must be SOME reason why software innovation/work didn't completely disperse from SV ten years ago.

Re: The Refragmentation

#164

Post by randcraw »

three14 wrote: post #124

One taboo on HN is pointing out that even though software is a huge lever, there's no sign of the end of raw human labor. In every industry you can point to jobs being lost to automation, yet you still need many, many people in health care, or construction, or manufacturing, or police, or teaching, or mining, or working for utilities, etc. It's complete speculation to suggest that jobs are disappearing faster than th…

When jobs move from a developed / high wage country to one with cheaper labor, they effectively disappear. That pattern then repeats until the job finally ends up in the least regulated sweatshop in the darkest corner of the planet. Eventually automation will 'outsource' that job too, thereby completing the defragging process.

Does another job necessarily arise to replace each lost job? That's a question that only a religious person would answer.

Re: The Refragmentation

#165

Post by marshray »

Seems I was born around the same time and this is how I remember it too.

Another major economic factor he seems to have left out is government policies encouraging (sometimes actively) the US manufacturing base to leave to other countries. This utterly destroyed the formerly thriving US manufacturing-based small businesses, eliminating a huge percentage of semi-skilled jobs in the process.

Re: The Refragmentation

#166

Post by coldtea »

Amazing how he can describe the post-war era (an era, including the 50s and 60s remembered as a period of ever increasing prosperity, integration, intellectual achievements, scientific and technical progress, powerful movements of social change, job security, every generation having it better than before, etc.) as some kind of "equality disaster".

Yeah, we're moving past it now, but towards something that resembles the pre-war years of robber barons, crony capitalism, and maybe even share-cropping (in modern form) more than some glorious future.

Re: The Refragmentation

#167

Post by clarkmoody »

chrispeel wrote: post #20

It seems to me that much of the fragmentation that the post discusses is just economic specialization, which we should encourage (see Adam Smith). I do think it is reasonable that one limits the 'fragmentation', i.e. that one puts negative feedback in the economic loop in the form of a progressive tax. Negative feedback is used everywhere in electronics and even sometimes by the Fed to control interest rates. Even so…

As an engineer, you should be familiar with chaotic systems, which produce vastly different trajectories based on small changes in initial conditions. Very simple mechanical systems[1] exhibit chaotic tendencies. Control of such systems is possible on the small scale, but large scale chaotic systems may become uncontrollable.

Now imagine an economy made of millions of people who all have different needs, desires, abilities, environments, intelligence, etc. How accurately can you predict how a single policy decision will shape the trajectory of such a collection of people? Now the State pushes thousands of policy changes per year into the system without ever really monitoring the response to a single change.

> many economists throw up their hand and say macro economics is too tough and we just can't predict how it will work

The smart ones do, but the mainstream Keynesian school have the hubris to think they can predict the responses of millions. Most Western leaders have been advised by Keynesian economists for much of the 20th century, and the decisions of those leaders have caused vast displacement, pain, and suffering in the form of economic turmoil and war.

Remember, the State is also an economic actor, and it derives its income by coercive force. Progressive taxes simply point a bigger gun at the heads of those who perform better in the economy.

[1] https://en.wikipedia.org/wiki/Double_pendulum

Re: The Refragmentation

#168

Post by charlescearl »

gotchange wrote: post #79
cushychicken wrote: post #18

Earlier quoted context omitted.

Good observation. Paul's definition of "startup" seems to be "company that grows explosively to a massive size/valuation in a short number of years". The sort of businesses you cite seem to fall under the "small business" moniker, and would probably be one of the mouse-sized companies he referenced in the essay as one that tried to avoid trampling by the elephants of BigCo.

Here's the specific part in question: " People did start their own businesses of course, but educated people rarely did, because in those days there was practically zero concept of starting what we now call a startup: a business that starts small and grows big. That was much harder to do in the mid 20th century. Starting one's own business meant starting a business that would start small and stay small."

Hewlett-Packard, founded in 1939, in a Palo Alto garage. By academics. They were educated at Stanford, go figure.

Re: The Refragmentation

#169

Post by coldtea »

gotchange wrote: post #79
cushychicken wrote: post #18

Earlier quoted context omitted.

Good observation. Paul's definition of "startup" seems to be "company that grows explosively to a massive size/valuation in a short number of years". The sort of businesses you cite seem to fall under the "small business" moniker, and would probably be one of the mouse-sized companies he referenced in the essay as one that tried to avoid trampling by the elephants of BigCo.

Here's the specific part in question: " People did start their own businesses of course, but educated people rarely did, because in those days there was practically zero concept of starting what we now call a startup: a business that starts small and grows big. That was much harder to do in the mid 20th century. Starting one's own business meant starting a business that would start small and stay small."

>Starting one's own business meant starting a business that would start small and stay small.

And what's wrong with that?

Besides it being false of course.

If anything it's more sustainable and more productive (as these business MAKE something, don't just eat VC dollars or at best sell ads) than today's "startups" model, which is based mostly on a speculative bubble + ad money.

All the thousands of major companies, from IBM to Bell and from HP to Apple, Boeing, McDonalds and Kodak, and countless others in all lines of business started as small and grew from there.

It's a perversion (and counters the rest of PGs rhetoric) to narrow startups to "companies funded with VC money for a few years to get enough users/eyeballs in the hope that they can be sold for a few billions" which is more or less the modern kind.

Re: The Refragmentation

#170

Post by three14 »

randcraw wrote: post #164
three14 wrote: post #124

One taboo on HN is pointing out that even though software is a huge lever, there's no sign of the end of raw human labor. In every industry you can point to jobs being lost to automation, yet you still need many, many people in health care, or construction, or manufacturing, or police, or teaching, or mining, or working for utilities, etc. It's complete speculation to suggest that jobs are disappearing faster than th…

When jobs move from a developed / high wage country to one with cheaper labor, they effectively disappear. That pattern then repeats until the job finally ends up in the least regulated sweatshop in the darkest corner of the planet. Eventually automation will 'outsource' that job too, thereby completing the defragging process. Does another job necessarily arise to replace each lost job? That's a question that only a…

This is exactly the taboo I'm talking about. Police, health care, mining, teaching, and surprisingly many others aren't going overseas right now. A lot of jobs are disappearing, and a lot aren't. Why assume that e.g. the American economy won't have enough jobs in the near future? There's no data on HN in all these discussions, and no real trends to extrapolate from except in very specific sectors.
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