231–240 of 1001 posts
> She was getting richer at a stupendously rapid rate. And yet she hadn't been doing anything bad. The reason her startup was growing so fast was simply that users loved what she'd built. So she could feel from her own experience how wrong that politician was. She wasn't exploiting anyone. I presume it's a company that just has co-founders then? Or everyone is getting an equal % of the share? In which case SHE's not…
Earlier quoted context omitted.
pg is or was the owner of a very influential venture capital fund, that created projects such as Uber and AirBNB. He knows all about setting up structures to extract value, and he also knows which framing makes people more sympathetic instead of angry.
>pg is or was the owner of a very influential venture capital fund, that created projects such as Uber Uber was not a YCombinator company. For some unexplained reason, many mistakenly think it was a YC startup but it's not correct. (The gp's comment is an example of how chatbots hallucinate because they train on the text of people unintentionally hallucinating.)
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- So I would like you all to do me a favor please. I would like you to take out your phones and calculate a number. I know this may seem contrived, but I promise it will be useful for you. I’m thinking of vibe coding a calculator app How Many Babies Died For This where you input your startup idea, life(style) goals and AI token usage and the machine spits out the Net Babies Dead for you to achieve your dreams
How many would it be?
I think the distinction the politician tried to make, was that you don't "earn" a billion dollars the same way the vast majority of people make their money. You become a billionaire by company ownership, not getting cold hard cash. The hierarchy of wage looks something like: 1. hourly pay (how many hours you can work sets the maximum possible salary) 2. base pay + cash bonus (the cash bonus starts to increase your ea…
You say "stuck at (1)" as if most people actually desire this kind of wealth and are trying to become entrepreneurs. The simple truth is that many people don't want to step into that kind of intensity and uncertainty, or lack the skills to succeed in a cutthroat industry. The idea that founders are somehow "cheating" is hilarious to me. Anyone in the developed world can easily become a founder, why don't you try it?
While many don't necessarily value pay as #1, it is important to people. If a regular worker receives a 20% pay increase, that's huge compared to not getting anything, or something which barely covers inflation. Even though the dollar amount may not be much compared to others.
She meant impossible in that one doesn't earn a billion dollars through work alone. The only way to get there is to set up a structure that extracts a billion dollars from a market (usually by building a structure that's more efficient but also generates externalities that are not borne by the person getting the billion dollars). pg's reading of it is so blunt and misrepresentative that I'm nervous about what kind of…
Your phrase “extract” betrays a fundamental disagreement with what Paul is saying. (Externalities does so again) It assumes a zero-sum game where the job is to shift money from one person to another. Value, and thus money/wealth can be created. Literally. You are saying, in different words, that no one can do it “honestly”. He is saying one can.
She meant impossible in that one doesn't earn a billion dollars through work alone. The only way to get there is to set up a structure that extracts a billion dollars from a market (usually by building a structure that's more efficient but also generates externalities that are not borne by the person getting the billion dollars). pg's reading of it is so blunt and misrepresentative that I'm nervous about what kind of…
Your phrase “extract” betrays a fundamental disagreement with what Paul is saying. (Externalities does so again) It assumes a zero-sum game where the job is to shift money from one person to another. Value, and thus money/wealth can be created. Literally. You are saying, in different words, that no one can do it “honestly”. He is saying one can.
1. Extracting from the market or the economy. It seems like (correct me if I'm wrong) this is what you're reading it as? Here you're generally exploiting what private equity calls "pricing power" or what economists call "enclosures" (or "rent-seeking") so inelastic demand (eg housing) or market protection (eg making municipal broadband illegal); and
2. Extracting from labor. This is the basis of the labor theory of value [1].
The point of comments like AOC's is mostly the second one, which is to say that you only become a billionaire by extracting it from your workers. And yes, this is a fundamental disagreement with many people. Some will say that the startup founder who makes a billion dollars deserves it by taking the risk or being the leader or however you want to frame it.
The counterargument is that that value simply wouldn't exist if it wasn't for those workers and their work. Even Instagram, which famously had only 13 employees when acquired for $1 billion, still needed those workers. It would've been nothing without them.
Take Google as another example. The profit per employee has famously been (at times) over $1 million per year.
The term for this is "surplus labor value".
Technically if you look at AOC's statement he mentions >AOC: “There’s a certain level of wealth and accumulation that is unearned. 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” there's some truth there in that PG is talking about capital gains as the owner of…
I don’t think a definition of “earn” that excludes cases like that captures the generally understood meaning.
Three things can be true: 1. Growing at a rapid rate over long periods of time is hard, doable and rewarding 2. Incentivizing the discovery of these things is good for society. 3. Nonethless there is and should be a limit to wealth acquisition, given moral hazard.
To make a similarly glib counterargument to Paul G:
If it's the founders who earned the same monetary value of the companies they created ("because they're responsible for it"), they should bear the same moral and legal responsibility for the externalities.
So far, only SBF is in jail. Lots more of these companies have broken the law.
Let's throw the founders in jail too - they can keep their money!
In aristocracies we traditionally assume or imply that a person can deserve a certain wealth or power simply by being born into it. Capitalism, however, sells us the dream of the meritocracy: your (financial) success in life should depend not at all on factors of chance like birth or genetics but simply how much of yourself you choose to sell to the market.
At any point in time you have control of some tangible or intangible capital, including wealth, physical health, social connections, equipment, information, trained skills, et cetera. Some of these assets are gained by luck, e.g. accident of birth; some of them are gained by trading your time; and some of them are gained by spending another asset (whose origin reduces, recursively, to some combination of luck or time). At any point you can, assuming the market is appropriately liquid, spend some of these assets to get cash.
Some of these assets have force-multiplier effects on your future output in certain domains, from which exponentials naturally arise; but the time spent on them remains linear, and so, if we want to ignore inherited factors (the opportunity to spend the time on things without immediate feedback, say, or handed-down insight about which of these investments will produce the most value in the future, or access to the required tutors) the increase in earnings these things _merit_ has to remain linear as well. There is no way to compound your time and therefore, under an assumption of meritocracy, there is also no morally acceptable way to compound earnings, which I would assume is the point the politician is attempting to make. Under this worldview, any exponential compounding that occurs must, mathematically, be a result of systematically undervaluing the time of an exponential number of other people, since each person can only spend a linear amount of time.
In practice, of course, the assumption of meritocracy is simply wrong, and arguably the concept as a whole is internally incoherent (or at least I don't believe we've yet managed to articulate it coherently: we would have to settle the nature vs nurture debate and completely sever the value of a person's spent time from the accidents of their birth, if such a thing is even meaningful). But I think that's where the claim falls down, not in failing to understand the mathematics of exponentials.
This is slightly disappointing, but it's probably necessary cope. If you want to build startups which move fast and break things, you have to ignore many problems and many people of this state, country, and world. You start by ignoring what a "billion dollars" means, and most people don't think it's stock. Then you have to ignore what "earn" means, which most people don't think is getting stock on the assumption that…