Live data from Hacker News

The Refragmentation

paulgraham.com

191–200 of 461 posts

Re: The Refragmentation

#191

Earlier quoted context omitted.

I've been thinking about this a lot lately and will ride your coattails for a moment by pointing out that if economics is darwinian, then a possible way out of this situation might be human planning. It doesn't have to be central, it can be a way of living that amplifies the changes you'd like to see in the world. So for example, say a person acquires a certain amount of wealth and wants to make his or her home solar…

"if economics is darwinian" How can economics be Darwinian? The outcome of economic interactions is not a zero sum, whereas a lion who kills and eats an antelope is engaged in a zero-sum interaction. The antelope gets nothing out of it. As a point of contrast, if you buy a car from Toyota, you have not harmed Toyota, nor has Toyota harmed you (hopefully). It is theoretically possible, when humans engage in trade, for…

> a lion who kills and eats an antelope is engaged in a zero-sum interaction

When we apply economic thinking, this interaction is actually not zero sum - antelopes in general benefit from the signal that they need to be faster.

Re: The Refragmentation

#192
post #32

Regarding income inequality, I recommend listening to some of the speeches/debates with Bernie Sanders. E.g. he argues that the greatest receiver of welfare in the US is the wal-Mart family, because they get even richer paying their workers so little that the workers have to live on welfare. (In other words the welfare is "paying" the workers so that Wal-Mart don't have to.) He proposes to rise the minimum wage. http…

Sanders also, least in my mind, poses the question to us, is this morally just? We have a large group of people who are born and cannot afford to go to college, are strapped with debt to go to college, or simply can't make it in college. Do we allow an economic natural selection to weed these people out and suffer or do we as a society take a road based on moral principles to help each other by all of us paying in. Something interesting that I've been thinking about. I also wonder how much it hurts us in expansion of ideas. We have all this engineering talent focused on how to get people to click on ads, optimize e-commerce sales, and much more. What more could be done? Also when food chains break down and fully automate drive thru restaurants.. we'll there go lots of labor jobs... random thoughts feel free to ignore me.

Re: The Refragmentation

#193

"And as long as it's possible to get rich by creating wealth, the default tendency will be for economic inequality to increase." This seems to be the ontological point of his essay, which reads as a loosey historical narrative manufactured to defend his belief that the fight against "economic inequality" will undermine innovation by disincentivizing the next Zuckerberg. But it misses the underlying point of wealth cr…

> his essay [...] reads as a loosey historical narrative manufactured to defend his belief that the fight against "economic inequality" will undermine innovation by disincentivizing the next Zuckerberg

Well put.

The argument that general taxation disincentives innovation has never made any sense to me: no matter how high the tax rate, your post-tax income still scales linearly with your gross income. If your object is to make increasing amounts of money, how does a tax give you less incentive to do so?

Re: The Refragmentation

#194
It's an insightful perspective and, along with PG's stance on the essence of economic inequality per se, a welcome antidote to the populist outrage machine, which does indeed the frame issue largely in zero-sum terms.

However, there are some counterpoints that don't receive adequate representation in this account, in my opinion:

One is the size and scale to which rent-seeking behaviour dominate the American economy. PG does acknowledge here and elsewhere that rent-seeking behaviour accounts for the wealth of many, but dismisses it relatively quickly as a seemingly self-evident byproduct of the expected variance in a society that permits economic opportunity. I think the situation is a lot worse than that; the amount of such parasitism, in the form of regulatory capture, lobbyist influence, outright Gilded Age-style purchase of legislation, revolving-door career paths, etc. account for an extremely significant percentage of US economic output and the unequal concentration of wealth. Consider for example how our healthcare system works (even post-ACA), Big Pharma, the military-industrial complex, intellectual property law and software patents, etc. A great deal of our government is for sale, and the sole purpose of a lot of our legislative projects is to route money into private hands, with the support of the government's monopoly on force, while socialising risks and losses onto the taxpayer. In my specialisation of telecom, I have seen this at work with the hundreds of billions in effective subsidies given to the AT&Ts and Verizons of the world, ostensibly to support the build-out of competitive next-generation broadband infrastructure but in fact to line their own pockets. All in all, the total dimensions of corruption at the top of the economic food chain are in the trillions of dollars, and I feel this insight is not given a fair shake with the same diligence as other aspects of corporate-industrial history of which PG treats.

The second issue relates to the optimal amount of economic inequality we can sustain while maintaining social order and an environment conducive to ongoing innovation. Many revolutions and upheaveals in modern history attest to the fact that when a sufficiently large class of poor and disefranchised people arises and is left to twist in the wind, at some point "radical discontinuities" will occur. Pervasive, festering social ills don't serve the self-interest of the wealthy and the middle class, either; they ultimately impact the security of their lives and their property, requiring them to resort to increasingly drastic measures to keep what's theirs. The market for mass-market and/or consumer products--on which a lot of startup business models depend--is inevitably limited or shrinks when large segments of society see eroding disposable incomes. Instability also negatively impacts the transaction of business by making the outer world less predictable and dependable; lopsided opportunity in savage inequality leads to lopsided and inconsistent educational outcomes and, ultimately, a more heterogenous and troublesome work force.

As other countries around the world periodically assert, there may be a formula for state economic involvement, taxation and social programmes that better maximises more desirable social outcomes, even if it comes at the expense of bridling notional economic opportunity and the smoothing out of some peaks. Is it not true, for example, that much of the significant innovation in computing and networking from which we benefit today came out of Bell Labs, a quasi-governmental institution whose decidedly mid-20th century model of economic existence created the right incentives for long-tail R&D?

The work done in such places, as in the pharmaceutical industry for example, is now fiercely subordinated to narrow, short-horizon commercialisation objectives, and while that may be a better way for some actors to get rich faster, is it really where we want to go? It seems to me one can raise the same kind of objection about the incentives set up by unicorn-seeking VC funding and California startup capitalism.

All this leads me to say that perhaps these issues need to be considered in a more global, integrated, and holistic way, rather than narrowly construed as problems of economics. If we want to evolve toward a better future, we may need to take up more thinking from the "normative" sphere, which economists hate.

Re: The Refragmentation

#195

A very fascinating article that I have truly enjoyed reading minus the last 10 or so paragraphs where Paul expressed it unequivocally that he's a status-quo warrior and that nothing can be done to remedy the problem of the ever widening gap of income inequality in the global economy and more specifically in the US and that it's a "natural" product of the state of affairs in our world. A classical example of « the nat…

Central planning of the US economy & powerful big government (1930s & beyond) was a Progressive Era initiated reaction to the era of robber barons & crony capitalism (1870s-1910s).

Re: The Refragmentation

#196

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.

One very simple answer is VC money. They want you local and their talent network (of people for your growing startup) is local. Who knows how different Boston would be if Facebook stayed there? (Just one small example)

Re: The Refragmentation

#197
I enjoyed the essay, but I completely disagree that the 1945-2000 represented years when America was most cohesive. That seems like a perfunctory reading of history. American history of mid 20th century is that of strife, disagreement, political battles, fights for race and gender equality, etc. America today seems much more cohesive to me than ever before. Does a New Yorker today have more or less in common with someone from Texas or Alabama than 50 years ago ? I think way more. So, I think the rest of the esay falls down like a colossus with feet of clay, once you demolish the central thesis of cohesion

Re: The Refragmentation

#198

Earlier quoted context omitted.

The last paragraph was the whole point: > I worry that if we don't acknowledge this, we're headed for trouble. If we think 20th century cohesion disappeared because of few policy tweaks, we'll be deluded into thinking we can get it back (minus the bad parts, somehow) with a few countertweaks. And then we'll waste our time trying to eliminate fragmentation, when we'd be better off thinking about how to mitigate its co…

> He's saying income inequality is a feature of technology allowing people to be paid their market value and that you can't 'fix' that. The thing that I worry about is whether this feature is destroying the conditions that allowed it to become a feature in the first place. He mentioned the example of Apple and IBM, which I see as illustrative in another way. Would personal computing devices have become popular in a h…

> As an exercise, try to think of something non-niche that costs around $5k, the price of the Apple II, for which there isn't some form of financing (auto/home/college loans and such). I'm hard-pressed to think of something and I believe it's because there's an increasingly small number of people that can afford such a product.

If someone can afford something with financing, they can afford it without. The difference here is not wealth or income, it's spending and savings habits.

Re: The Refragmentation

#199

Earlier quoted context omitted.

On what time-scale are you looking? A decade out? Two? Three? Europe is in flux in a way that it hasn't been in a long time. And I mean that in a downward way, until the mid 00's we were converging, since then we have been diverging with the '08 crisis as one catalyst and the whole nationalist resurgence as another. Add a couple of million refugees as a convenient scapegoat and the stage is set. Between Le Pen, Wilde…

France and Germany will never again be at war. The EU might seem fragile, but that is because the NATO and the EU expanded to fast. Remember some 20 years ago there was a wall through Berlin, now nearly everybody behind that wall has joined. Russia destabilized Ukraine to stop this movement. Still the EU welcomed Croatia in 2013 and the Eurozone Estonia in 2011, so it is growing. North-Western Europe already has a la…

now nearly everybody behind that wall has joined

... and quite a few folks in front of it, too, which is a significant aspect of the internal tensions that arose as the EU evolved out of the EEC.

Re: The Refragmentation

#200

Earlier quoted context omitted.

They did. Iraq had nothing to do with 9/11, but got invaded because the cabal behind the U.S. President had declared they wanted to invade Iraq already during the Clinton administration. https://en.wikipedia.org/wiki/Project_for_the_New_American_C...

There's a huge difference between maintaining public support to send a voluntarily conscripted army somewhere, and actually instituting a draft and wartime command economy. Do you think your early 2000's out-of-touch war cheerleader would have been so zealous if their family were forced into the army, or if fuel rationing meant they could only drive one of their SUVs? It is all too easy to be pro-war when its only ef…

It is all too easy to be pro-war when its only effect is a new genre of reality TV.

This should be framed somewhere.

Post reply on HN