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The Access Economy: Why the Normal Distribution Is Vanishing (2015)

alexdanco.com

131–140 of 160 posts

Re: The Access Economy: Why the Normal Distribution Is Vanishing (2015)

#131
post #119

Earlier quoted context omitted.

The resource they consume is wealth. It's disingenuous to claim that a wealthy person does not consume more resources. Houses are a particularly poor example. A wealthy person may have a 2. 5 million mansion and a quarter million dollar vacation home and own 3 rental homes. They may trivially capture some of the resources available for others housing by buying up the housing supply and renting for more than the cost…

> They may trivially capture some of the resources available for others housing by buying up the housing supply and renting for more than the cost of the mortgage while fighting to maximize the value of investment by limiting the supply of new housing. You're focusing on accounting, which is fine and all, but there are two scenarios here: (1) There are 10 houses, 10 people live in them. Everyone owns their own house.…

When you find yourself proving that 2 + 2 = 17 this is your cue to examine the chain of logic that got you there.

The idea that one person can own everything and everyone is equally well off as if they all owned equal shares is wrong on its face.

In practice in an environment that isn't deeply unequal the landlord creates value by investing capital in maintaining housing stocks that renters may lack or not want to invest. They trade both current money and foregone future wealth for increased flexibility and predictable costs.

In an increasingly unequal one renters have no options because nearly 100% of the value they create for society is captured by others including the landlord or go to pay for their increasingly lackluster survival. In many cases they may end up creating less total value for society and themselves because they can't invest the time and money to maximize their own value.

Your 9 renters example is too small in scale. Back in reality some portion are pushed onto the street, some live substantially poorer lives, families barely see one another because one party or both is gone 60-70 hours per week, people die sooner due to substandard health care, people don't go back to school because they can't work 60 hours to support their family AND go to school. People don't take chances that would improve themselves because they can barely afford to live now. They live in the ghetto because that's all they can afford.

Having an increasing share of the wealth means trivially mathematically that others have less. Only for the upper middle class does that mean they have just as nice a house in a less desirable neighborhood.

Meanwhile in reality in the last several decades 25% more than previously, people take a look at life ahead of them and put a gun in their mouth,forego going to the doctor and end up dying of an infected tooth, or ration their insulin and wind up dead.

Re: The Access Economy: Why the Normal Distribution Is Vanishing (2015)

#132
post #119

Earlier quoted context omitted.

The resource they consume is wealth. It's disingenuous to claim that a wealthy person does not consume more resources. Houses are a particularly poor example. A wealthy person may have a 2. 5 million mansion and a quarter million dollar vacation home and own 3 rental homes. They may trivially capture some of the resources available for others housing by buying up the housing supply and renting for more than the cost…

> They may trivially capture some of the resources available for others housing by buying up the housing supply and renting for more than the cost of the mortgage while fighting to maximize the value of investment by limiting the supply of new housing. You're focusing on accounting, which is fine and all, but there are two scenarios here: (1) There are 10 houses, 10 people live in them. Everyone owns their own house.…

Protip: No amount of wealth creation will ever trickle down to the poor people.

We can increase equality by providing free national health care and a social safety net that would allow people to take time off and retrain along with educational opportunities.

Turns out that this works better than giving handouts to the rich.

Re: The Access Economy: Why the Normal Distribution Is Vanishing (2015)

#133
post #9
post #3

His paragraph about jobs is spot on. I've seen this in my own workplace on a team that is 75% contractors and 25% full time employees. Contractors are seen as completely replaceable, and if one leaves they'll be replaced with another one after a quick round of interviews. However, if a full time employee leaves, the process to replace them seems to take much longer as it appears that those doing the hiring are lookin…

I think people could argue that even years ago many workplaces have been sort of bifurcated between people that would be "first to fire" and those that were "integral", but these days it appears that its become more institutionalized by the use of the contractor and full time employee classes -- I would say generally not a great trend.. seems better to at least allow the illusion to people that are initially consider…

You’re touching on something that may affect these companies medium/long term.

The fact that there’s a class divide among workers now naturally selects out many workers that otherwise might be incentivized to create more wealth for the company. This could have long term consequences in industries that formerly relied on innovation.

Re: The Access Economy: Why the Normal Distribution Is Vanishing (2015)

#134
post #130

Earlier quoted context omitted.

In any industry where good employees are in high demand (like tech) this strategy has the unfortunate effect of filtering out most individuals who are both good employees and experienced. None of the really good software engineers I know would accept this arrangement unless the contracting wages were a ridiculous multiplier of their normal salary.

Really? Because I wouldn't accept a normal salary unless it was 20% higher than my contracting rates. Because I go through my own company I get to minimize my taxes so much that regular employment seems like a ripoff by comparison.

Yes really.

First, for a number of positions, salary can make up less than 70% of total compensation. Things like healthcare, stock options, bonuses, PTO, etc. are worth quite a lot of money. To make up for that you need a good multiplier on salary.

Second, unemployment benefits and the possibility of severance offer increased stability that many find both useful and comforting, this is another multiplier on the salary number.

Third, and I think most importantly, the person I'm responding is looking at contractors who want to be employees. We can even set aside the fact that such people, in my experience, rarely set up corporations are do the research to find the tax savings you achieve (kudos on that). If you're an in-demand professional there are people who will hire you on terms you like. Every really good software developer I know with over 4 years of experience never spends more than a couple weeks on the market and are flooded with offers, why bother with some contracting "test" when they could have a good job today? The people I'm acquainted with would only subject themselves to that for giant gobs of money.

Re: The Access Economy: Why the Normal Distribution Is Vanishing (2015)

#135

Earlier quoted context omitted.

Statins, anti-retrovirals, common availability of antibiotics, treatment for TB, vaccines for many population-decimating (in the traditional sense of the word) viruses. Everyone has a super computer in their pocket, the vast majority of human knowledge is available in your hand for free all the time, you can video chat anyone you want anywhere in the world in HD for free, world-leading educators post hundreds of hour…

Things are also moving the other way at unprecedented speed - the expensive ones: housing, medical care, education. None of which is discussing the comparative inequality of the two periods. Are you saying inequality is required for that list of innovations? If so, on what grounds? We came up with contraceptive pills, eradication of polio, visited the moon, transformation of aviation and personal transportation, dome…

Not that it's required, but it's the effect of progress. Individual progress requires focus. With these new options being available every single day, those that have scarce resources have more and more problems with optimising the for their best outcome.

On a poker table, one that has more chips, has advantage over one that has less. Doesn't make it unfair.

Re: The Access Economy: Why the Normal Distribution Is Vanishing (2015)

#136

Earlier quoted context omitted.

Software engineers follow for the same reason as footballers or doctors. In football, there's only a market for the best. Nobody likes a loser. It's the same in health. There's no market for mediocre or bad doctors. Similarly, there's not really a market for software that doesn't work. Writing novel software that solves real problems isn't yet trivial. So there's not a huge market for bad software engineers. And ther…

This is quite confused reasoning. Sports are by definition zero sum games. There can only be one world champion etc. No such mechanism exist for doctors or software engineers. They get rewarded for the value they create, and there can in principle be any number of them, as long as they create additional value.

The market valuation of unicorns also assumes there can be only one "world champion" in each market, with high margins. In the medium term either one of Uber or Lyft has to win or investors have to accept big writedowns.

(Doctors are different, they're not scalable and can only treat whoever's in front of them)

Re: The Access Economy: Why the Normal Distribution Is Vanishing (2015)

#137

Earlier quoted context omitted.

I bought my first house in 2015 in Utah, about 20 min from downtown Salt Lake City. Was not anything special. 1976 construction, 2000 sqft, 0.2 acre, 5 bed, 3 bath, 2 car garage, average condition, just under $200k. Glassdoor average salary for "Software Engineer" (not Senior, etc.) in Salt Lake is currently $89k, 14% less than national average. [1] Single-income house ownership is extremely common here. [1] https://…

Mid-tier cities give a lot of bang for your buck -- Salt Lake, Phoenix, the midwestern midsized cities (Cleveland, St. Louis, Indianapolis, Kansas City, Pittsburgh), Atlanta, etc. Even Portland compared to other coastal options. And even in some of the "very expensive" housing markets, you can still find homes that are affordable relative to income within 40 minutes of downtown areas. Chicago and Boston both come to…

True on both points.

Google, Amazon and Microsoft don't have any sort of engineering presence in Utah. Though Adobe is majorly expanding here. And operationally, Facebook is adding a huge data center.

Re: The Access Economy: Why the Normal Distribution Is Vanishing (2015)

#138
post #11

Tournament wages theory: https://en.wikipedia.org/wiki/Tournament_theory This seems to happen whenever there's (a) direct competition (b) the value provided by the winner is very scalable (media, sports, software) and (c) most importantly, it can't be substituted by splitting the job among more people. So footballers follow this model because you can only have 11 people on the pitch - there's no amount of low-wage no…

Software engineers follow for the same reason as footballers or doctors. In football, there's only a market for the best. Nobody likes a loser. It's the same in health. There's no market for mediocre or bad doctors. Similarly, there's not really a market for software that doesn't work. Writing novel software that solves real problems isn't yet trivial. So there's not a huge market for bad software engineers. And ther…

> In football, there's only a market for the best. Nobody likes a loser.

Would totally disagree - given the number of football competitions [1], it is obvious that there's a market for anybody who wants to and can kick ball.

Same for software engineers - there are 23 millions of those in 2018 [2] and abundance of body shops, government jobs ("good enough for government work") and various engineering support functions says the opposite of what you're saying.

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

[2] https://evansdata.com/reports/viewRelease.php?reportID=9

Re: The Access Economy: Why the Normal Distribution Is Vanishing (2015)

#139

Earlier quoted context omitted.

Statins, anti-retrovirals, common availability of antibiotics, treatment for TB, vaccines for many population-decimating (in the traditional sense of the word) viruses. Everyone has a super computer in their pocket, the vast majority of human knowledge is available in your hand for free all the time, you can video chat anyone you want anywhere in the world in HD for free, world-leading educators post hundreds of hour…

Things are also moving the other way at unprecedented speed - the expensive ones: housing, medical care, education. None of which is discussing the comparative inequality of the two periods. Are you saying inequality is required for that list of innovations? If so, on what grounds? We came up with contraceptive pills, eradication of polio, visited the moon, transformation of aviation and personal transportation, dome…

Most of these things were coming as a side effect of the huge Cold War era military industrial complex. We’ll get it back soon enough.

Additionally, yes, the US society in the 50s-80s was pretty egalitarian and full of opportunities — as long as you were white, male and heterosexual.

Re: The Access Economy: Why the Normal Distribution Is Vanishing (2015)

#140
post #15

This is pretty muddled thinking. He talks about categorical variables and then points out that they are not normally distributed. Which doesn’t make sense. (It almost could, but he skips an important step.) Apart from that it's mostly handwaving and opinion with no actual data. When you don't use data it's unsurprising that your personal experience matches your hypothesis.

True. Still an interesting idea, even if it needs verification (or falsification).
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