7 ms·

PG: “Any industry that still has unions has potential energy”

72 points by nichodges 11y ago

api 11y ago
There are some fantastic counter-arguments in there. For the record I think both sides have valid points: unions do make industries "sclerotic," but they also exist to prevent a deflationary race to the bottom in wages. I'd reference Peter Thiel's comments on competition from Zero to One-- they apply just as well to labor as they do to companies. "All workers can't be paid union wages" is perhaps true, but flattening the labor market completely would result in a squeezing of disposable income that would harm the economy overall not to mention the well being of its participants. As Thiel correctly argues: surpluses are required for pretty much anything outside the status quo to happen. If there are no corporate surpluses there can be no R&D or expansion. If there are no labor surpluses, there can be no adoption of anything new or interesting or novel. How many impoverished check-to-check workers will be purchasing an Oculus Rift or a Tesla? A lot of the criticism of unions is also hypocritical. For example, corporate executives as a class are de-facto unionized. Why is it that companies pay absurd salaries for directors? Being a CEO is a hard job but it's not that hard. The reason companies hire superstar directors and pay them superstar wages isn't because these people are actually hundreds or thousands of times more effective. It's because these people are connected. They're plugged into the "old boy network" a.k.a. in the union and that confers a privileged position in relation to things like raising money, making big deals, protecting companies from government scrutiny (the CEOs union has a revolving door with government), etc. A great recent example would be Condi Rice being recruited for the Dropbox board. What expertise does she have in IT enterprise marketing, distributed systems, engineering team building, ...? None. But she's very connected in the "union." I think it's reasonable to hypothesize that any time you see what appear to be above-market wages being paid for any form of labor, something union-like is going on even if it's not officially organized as such. I also love the comparison of YC to a union. It's very much like one. An open question for pg: Would he be willing to forego YC's union-like attributes? This would entail ceasing all collective bargaining with investors on the part of YC companies and refusing to permit companies to openly leverage the YC brand to increase their clout in the market. YC could still provide co-working space and mentorship but could not use any collective marketing, branding, or bargaining strategies to assist its companies in fund raising or growth. Wouldn't it be a more efficient market if startups competed only on merit and negotiated in a flat market domain with investors?
- gobengo 11y ago
  If {YC,CEOs} are like unions, then the corollary to OP is interesting "{YC,CEOs} have potential energy that could be released by startups."
  - api 11y ago
    I believe this is true, and there probably are things that could be done to "disrupt" both these markets. YC (and to a lesser extent Silicon Valley itself) have union-like characteristics. Why is it that a bunch of companies working on distributed networks that are designed to permit easy global communication have to be located within 20 miles of each other and consequentially forced to spend sizable percentages of their investment capital propping up an absurd real estate market? This is being disrupted by things like AngelList that make it easier for startups in more reasonable local markets to raise capital on an open flat market. The death of Detroit wasn't caused by the death of cars. The automobile market has grown since the 1970s. It was caused by the global geo-diversification of the automobile industry. I wonder if the same thing could happen to SV (and YC) as a result of similar disruptive market shifts in the IT/Internet/tech markets. Since investors are to a great extent the customers in this market, the shift could come if investors see superior returns from companies outside the SV/YC orbit and decide that paying the Valley Tax is not justified. Also like Detroit, SV's cliquish quasi-unions are perhaps a bit smug and self-satisfied and don't see it coming. I'm not sure how you'd go about disrupting the "CEOs union." Let's make the question more concrete: what value does a union hire like Condi Rice (just using her as one example) bring to Dropbox and how might a startup replace that with something more efficient? I personally don't know enough about the high corporate world to know the answer, but I suspect a few around here do and might have some ideas. Maybe it would be possible to leverage your customer base. If you have something people love -- like AirBnb for example -- and are getting flak over it, which would be cheaper: to mobilize your customers or to hire a $200m/year CEO with government connections?
  - vacri 11y ago
    I think it illustrates that while the tweet sounds insightful, it's actually nonsense and doesn't stand up to scrutiny. Besides, every industry has unions or entities that are similar to unions - even the software/startup industry - so it's basically saying 'startups can work anywhere'. I'm also curious to see how a startup would 'release the potential' held back by bus-drivers' or coal-miners' unions, such that there would cease to be such unions (ie: 'the sclerosis is removed'), without there being the reduction in wages/conditions that the follow-up tweet mentions it's not trying to pursue.
kuro-kuris 11y ago
Sometimes the political divide between Europe and the US becomes glaring on Hacker News. I feel this tweet is one of those moments. Our differences makes us more interesting but this tweet was a bit hard to digest.
- diyorgasms 11y ago
  I don't think this is a continental divide at all. I think what PG said here would be considered reprehensible to a lot of Americans, and I count myself among that contingent. This isn't demonstrative of a divide between continents, this is a musing of a man so far out of touch with regular society that he sees a large swath of society as an inefficiency waiting to be obsoleted by a tech startup (which would presumably increase his personal wealth in the process).
  - geebee 11y ago
    40/60 splits often turn into "group A does this, but group B does that". It happens a lot. I remember an article about whether people consider various acts on social media to be "cheating". So you know, 85% of women considered having a tinder account to be cheating, whereas 75% of men did (or something like that, I can't really remember). This was reported, of course, as "men and women differ about what counts as cheating on social media" when the data screamed "men and women largely agree about what counts as cheating on social media." The split may be relevant - it does tell you something when 60% of one continent feels one way and only 40% of another does, but "Europe is this, whereas the US is that" is usually a vast oversimplification. It's generally media driven, the differences make for better headlines, but it crops up all over the place.
  - deleted 11y ago
    [deleted]
- llamataboot 11y ago
  We have a plutocrat class. PG is part of it.
- colinbartlett 11y ago
diyorgasms 11y ago
Historically, unions have been very antagonistic to capital. Paul Graham is basically the definition of capital; he uses his wealth to generate more wealth. And what he is suggesting is that startups could fix the inefficiencies in the market that unions have created. The problem is that fixing these inefficiencies would primarily benefit people like PG, who make their money from the ownership of enterprises rather than labor. Generally speaking, the inefficiencies of unions exist to protect the interests of the workers, who generate wealth for the company but more often than not do not have an equity stake in the business. Unions exist to maintain the balance between capital and labor, and to make sure that people like PG don't deprive the laborers of fair remuneration for their work. While we can almost always find someone who will do a job for less money, as a society we have an interest in providing an equitable share to labor, as there are far more workers driving this global economy than there are venture capitalists (or even just plain old capitalists) contributing to the economy in the form of seed round funding and the like.
- sokoloff 11y ago
  My experience suggests that the inefficiencies of the unions exist to protect the interests of the unions. Where the workers are also helped, that seems almost incidental in practice.
  - vacri 11y ago
    Corrupt unions are a problem, however corrupt unions are still better than no unions. Edit: to the downvoters: consider what life was like for workers before unions were widespread.
    - krschultz 11y ago
      For some people. Within the union some members benefit and some members lose relative to individual bargaining. Generally speaking unions base compensation heavily on seniority rather than productivity. That really screws the young, the hard working, and those with the most initiative. I think the net result is a greater share of the profits for labor, but there are definitely some people in unions getting totally screwed by the unions.
jwiley 11y ago
Trying to dig into the question: "Why does anyone care what Paul Graham thinks?" I discovered his Wikipedia entry. He wrote a few books on lisp, neat. Claims to have invented baysian spam filters (applied baysian theory to filtering spam?), neat. Helped make a mediocre ecommerce store which he spammed off on Yahoo, ok. So once again, why does anyone care about what Paul Graham thinks?
- jwiley 11y ago
  Ahh, I get it, he seems to have written a dialect of Lisp that powers hacker news and contributed to ycombinator.
- vacri 11y ago
  PG is basically the reason why this site exists - HN started out as a marketing forum attached to YC. Regardless of what you think of his wider internet celebrity, he is an ('the'?) HN celebrity.
- serge2k 11y ago
  He created HN, and is pretty much a god on a site that likes to worship founders.
dragonwriter 11y ago
This is sort of self-evidently true; the purpose of a capitalist firm is to achieve a monopoly (in exactly the sense used in antitrust law, that is, to achieve a market within which they exercise pricing power) and extract rents from it for the capitalists the firm serves. Unions are a mechanism by which labor does much the same thing, limiting the ability of capital to retain rents even if firms achieve a mechanism to extract them. So, sure, from the point of view of capitalists, the existence of unions is an inhibition to the realization of capital yields.
littletimmy 11y ago
Absolutely reprehensible. Dismantle all protection for labor, keep oppressing them, and you will eventually force a destruction of the very canvas of economic stability against which you want to tap this "potential energy".
- brucefancher 11y ago
  [citation needed]
obrero 11y ago
There are people who work, such as the young programmers in SoMa who work 50/60/70+ hour weeks pounding out code for startups, who after rent and such don't have much savings piling up in the bank, nor much of a social life. These are the people who work, who create wealth. Then there are the parasites - the heirs whose families haven't worked in living memory. The LPs give money to the VCs and whoever else does Series-A type rounds nowadays, who filter it to the CEOs. Unlike the poor 22 year old sap, they have their bets spread. Once a Facebook, or Google, or Oracle gets big enough, they start extracting their profits from the monopoly type situation they created, and from the wealth the workers have been creating. Labor organizes into unions so that the people doing the work, the workers, get to keep more of the wealth they create, as opposed to the money going off in dividends to these parasitic heirs. The parasites hate organized labor, because it prevents the parasites from expropriating more surplus labor time from people who work and create wealth.
mikeash 11y ago
It always amazes me that if you get a bunch of workers together and organize them so they can act collectively, you get a ton of hate and a lot of people assume you're destroying value. Yet do the exact same thing on the employer side and this is not only acceptable, it's the only way we would ever think of doing things. In other words, why can't I replace "unions" with "corporations" and have the statement still be true?
- jnwrd 11y ago
  Wait, isnt doing the same thing on the employer side called a trust? If this isn't what you had in mind please elaborate.
  - mikeash 11y ago
    How do you figure? A trust is when employers not only organize, but that they all join together such that there is no competition. The equivalent on the worker side would be a single union that covers all workers in a particular field. And while I'm sure such things exist, it's nothing inherent to unions.
  - obrero 11y ago
    Are you joking? The United States is dominated by the modern trusts. In 1911 Standard Oil was broken up. In 1999 the two major Standard Oil subsidiaries - Standard Oil of New York and Standard Oil of New Jersey merged once again, into ExxonMobil. In 1984 Bell was broken up. Now the Baby Bells have merged back together with the countries local loops dominated by Verizon and AT&T (and Qwest) and the wireless spectrum also dominated by AT&T and Verizon (and Sprint...and T-Mobile, which AT&T tried to merge with, then Sprint - and which will be merged or carried off to the graveyard in the coming years). Monopoly is the name of the game, or duopoly any how - and everyone from Peter Thiel to Warren Buffett is pretty open about it. The "Big Eight" accounting firms have been halved, they are now the Big Four. The media is owned by the Big Six, which is really the Big Five as Redstone controls Viacom and CBS. The US is full of trusts and monopolies and the trend has been for more of the same. Even breakfast cereals have a Big Four. Less than 7% of workers in private industry are in unions, and that number has been falling.
ikeboy 11y ago
Followup clarification tweets: (I don't mean in simply paying people less, but rather that industries afflicted by unions are sclerotic so have left lots undone.) There is much more money in doing new things than in paying people less. edit: this received a number of downvotes, and I'm having trouble understanding why. Presumably providing context is a good thing here, right? There are comments that would be better informed if they had seen the follow up tweets.
- Sideloader 11y ago
  Perhaps because it's incredibly vague to the point of being meaningless? What, for example, does "sclerotic" mean in this context? What things are left "undone"? There is more money in doing what "new things"? More money for whom?
  - deleted 11y ago
    [deleted]
  - ikeboy 11y ago
    I'm not endorsing any of these tweets, I'm literally just quoting them for people who only saw the first tweet.
leroy_masochist 11y ago
If I were to put this tweet in my own words in order to convince others of its truth I'd say something like: companies in industries that have met both of the necessary conditions of having unionized workforces [0] could probably be improved by the application of recent technological progress to that company's operations, but most large companies lag in their efforts to refactor their processes, so there's an opportunity for brand-new companies to gain market share by using new technology in ways that make them categorically better at delivering the product or service associated with that industry. The problem I have with this tweet is that it makes PG look like an arrogant, detached asshole. It's the kind of thing that non-VC's imagine that VC partners say amongst themselves while swilling $500 organic Merlot in their palatial estates in Woodside. PG to a great extent is seen by the outside world as speaking for the Valley, which is usually a good thing because usually the stuff he puts out there is thoughtful and makes him look smart. I'd say this tweet is a pretty big outlier from that pattern. [0]These are: a) existing for long enough and b) employing enough people that their workforces decided to unionize
hyperpallium 11y ago
Without unions (or minimum-wage laws), the price of labour reflects supply and demand. Skills in shortage have higher wages; unskilled labour drops to starvation wages - or below, provided there are replacement people. In good times, with labour in demand, wages are higher, up to the point where the demand is met. Wages can go no higher. If there are enough people, these wages might be quite low. The remaining surplus is captured by capital. In bad times, when demand for labour is low, wages may drop arbitrarily low. Another solution to starvation-wages or below is social security or, more radical, universal income. It acts like an employer competing for labour, providing a minimum-wage threshold, through market forces. If capital doesn't offer sufficient wages, labour chooses the safety net. However, this ignores the non-wage benefits of employment: people like to work, to be important/needed/useful, to be part of something, social contact, etc not to mention practice and acquisition of skills. Finally, to be fair to pg, unions also represent a freezing of a particular way of doing business. Like back-compatibility or a requirement to use a particular technology, it restricts the way work can be organized. It prevents work from being "re-factored" - even if there exists another arrangement that would be just as good or even better for workers. Inflexibility eventually causes inefficiency. [ BTW I think there are three levels of systems that we can optimise for "efficiency": technical systems are efficient at their task; a business as a system is efficient at making money; a society as a system is efficient being something people want to be part of - that is, serving their needs. ]
dropit_sphere 11y ago
You know, like a log of wood does. Light the sucker and you'll unlock all its value!
joeblow99 11y ago
All this pro-union wishful thinking is funny to read. Paul Graham is so right.
brchsiao 11y ago
The main protest here seems to be that fixing what unions break inevitably benefits capitalists while cheating the worker. I'd genuinely like to know: what's the best example of an industry disrupted in this way that left workers net behind? Everyone knows it's annoying to see the rich philosophize in armchairs while the rest of the world does the lifting. Is that all that's left to say? pg seems to be claiming that (a) unions indicate breakage for startups to fix, and that (b) fixing this breakage is in fact more profitable for startups if they do it good-naturedly instead of simply taking workers' pie. Is this false?

72 points by nichodges 11y ago

api 11y ago

There are some fantastic counter-arguments in there. For the record I think both sides have valid points: unions do make industries "sclerotic," but they also exist to prevent a deflationary race to the bottom in wages. I'd reference Peter Thiel's comments on competition from Zero to One-- they apply just as well to labor as they do to companies. "All workers can't be paid union wages" is perhaps true, but flattening the labor market completely would result in a squeezing of disposable income that would harm the economy overall not to mention the well being of its participants. As Thiel correctly argues: surpluses are required for pretty much anything outside the status quo to happen. If there are no corporate surpluses there can be no R&D or expansion. If there are no labor surpluses, there can be no adoption of anything new or interesting or novel. How many impoverished check-to-check workers will be purchasing an Oculus Rift or a Tesla? A lot of the criticism of unions is also hypocritical. For example, corporate executives as a class are de-facto unionized. Why is it that companies pay absurd salaries for directors? Being a CEO is a hard job but it's not that hard. The reason companies hire superstar directors and pay them superstar wages isn't because these people are actually hundreds or thousands of times more effective. It's because these people are connected. They're plugged into the "old boy network" a.k.a. in the union and that confers a privileged position in relation to things like raising money, making big deals, protecting companies from government scrutiny (the CEOs union has a revolving door with government), etc. A great recent example would be Condi Rice being recruited for the Dropbox board. What expertise does she have in IT enterprise marketing, distributed systems, engineering team building, ...? None. But she's very connected in the "union." I think it's reasonable to hypothesize that any time you see what appear to be above-market wages being paid for any form of labor, something union-like is going on even if it's not officially organized as such. I also love the comparison of YC to a union. It's very much like one. An open question for pg: Would he be willing to forego YC's union-like attributes? This would entail ceasing all collective bargaining with investors on the part of YC companies and refusing to permit companies to openly leverage the YC brand to increase their clout in the market. YC could still provide co-working space and mentorship but could not use any collective marketing, branding, or bargaining strategies to assist its companies in fund raising or growth. Wouldn't it be a more efficient market if startups competed only on merit and negotiated in a flat market domain with investors?

gobengo 11y ago
If {YC,CEOs} are like unions, then the corollary to OP is interesting "{YC,CEOs} have potential energy that could be released by startups."
- api 11y ago
  I believe this is true, and there probably are things that could be done to "disrupt" both these markets. YC (and to a lesser extent Silicon Valley itself) have union-like characteristics. Why is it that a bunch of companies working on distributed networks that are designed to permit easy global communication have to be located within 20 miles of each other and consequentially forced to spend sizable percentages of their investment capital propping up an absurd real estate market? This is being disrupted by things like AngelList that make it easier for startups in more reasonable local markets to raise capital on an open flat market. The death of Detroit wasn't caused by the death of cars. The automobile market has grown since the 1970s. It was caused by the global geo-diversification of the automobile industry. I wonder if the same thing could happen to SV (and YC) as a result of similar disruptive market shifts in the IT/Internet/tech markets. Since investors are to a great extent the customers in this market, the shift could come if investors see superior returns from companies outside the SV/YC orbit and decide that paying the Valley Tax is not justified. Also like Detroit, SV's cliquish quasi-unions are perhaps a bit smug and self-satisfied and don't see it coming. I'm not sure how you'd go about disrupting the "CEOs union." Let's make the question more concrete: what value does a union hire like Condi Rice (just using her as one example) bring to Dropbox and how might a startup replace that with something more efficient? I personally don't know enough about the high corporate world to know the answer, but I suspect a few around here do and might have some ideas. Maybe it would be possible to leverage your customer base. If you have something people love -- like AirBnb for example -- and are getting flak over it, which would be cheaper: to mobilize your customers or to hire a $200m/year CEO with government connections?
- vacri 11y ago
  I think it illustrates that while the tweet sounds insightful, it's actually nonsense and doesn't stand up to scrutiny. Besides, every industry has unions or entities that are similar to unions - even the software/startup industry - so it's basically saying 'startups can work anywhere'. I'm also curious to see how a startup would 'release the potential' held back by bus-drivers' or coal-miners' unions, such that there would cease to be such unions (ie: 'the sclerosis is removed'), without there being the reduction in wages/conditions that the follow-up tweet mentions it's not trying to pursue.

kuro-kuris 11y ago

Sometimes the political divide between Europe and the US becomes glaring on Hacker News. I feel this tweet is one of those moments. Our differences makes us more interesting but this tweet was a bit hard to digest.

diyorgasms 11y ago
I don't think this is a continental divide at all. I think what PG said here would be considered reprehensible to a lot of Americans, and I count myself among that contingent. This isn't demonstrative of a divide between continents, this is a musing of a man so far out of touch with regular society that he sees a large swath of society as an inefficiency waiting to be obsoleted by a tech startup (which would presumably increase his personal wealth in the process).
- geebee 11y ago
  40/60 splits often turn into "group A does this, but group B does that". It happens a lot. I remember an article about whether people consider various acts on social media to be "cheating". So you know, 85% of women considered having a tinder account to be cheating, whereas 75% of men did (or something like that, I can't really remember). This was reported, of course, as "men and women differ about what counts as cheating on social media" when the data screamed "men and women largely agree about what counts as cheating on social media." The split may be relevant - it does tell you something when 60% of one continent feels one way and only 40% of another does, but "Europe is this, whereas the US is that" is usually a vast oversimplification. It's generally media driven, the differences make for better headlines, but it crops up all over the place.
- deleted 11y ago
  [deleted]
llamataboot 11y ago
We have a plutocrat class. PG is part of it.
colinbartlett 11y ago

diyorgasms 11y ago

Historically, unions have been very antagonistic to capital. Paul Graham is basically the definition of capital; he uses his wealth to generate more wealth. And what he is suggesting is that startups could fix the inefficiencies in the market that unions have created. The problem is that fixing these inefficiencies would primarily benefit people like PG, who make their money from the ownership of enterprises rather than labor. Generally speaking, the inefficiencies of unions exist to protect the interests of the workers, who generate wealth for the company but more often than not do not have an equity stake in the business. Unions exist to maintain the balance between capital and labor, and to make sure that people like PG don't deprive the laborers of fair remuneration for their work. While we can almost always find someone who will do a job for less money, as a society we have an interest in providing an equitable share to labor, as there are far more workers driving this global economy than there are venture capitalists (or even just plain old capitalists) contributing to the economy in the form of seed round funding and the like.

sokoloff 11y ago
My experience suggests that the inefficiencies of the unions exist to protect the interests of the unions. Where the workers are also helped, that seems almost incidental in practice.
- vacri 11y ago
  Corrupt unions are a problem, however corrupt unions are still better than no unions. Edit: to the downvoters: consider what life was like for workers before unions were widespread.
  - krschultz 11y ago
    For some people. Within the union some members benefit and some members lose relative to individual bargaining. Generally speaking unions base compensation heavily on seniority rather than productivity. That really screws the young, the hard working, and those with the most initiative. I think the net result is a greater share of the profits for labor, but there are definitely some people in unions getting totally screwed by the unions.

jwiley 11y ago

Trying to dig into the question: "Why does anyone care what Paul Graham thinks?" I discovered his Wikipedia entry. He wrote a few books on lisp, neat. Claims to have invented baysian spam filters (applied baysian theory to filtering spam?), neat. Helped make a mediocre ecommerce store which he spammed off on Yahoo, ok. So once again, why does anyone care about what Paul Graham thinks?

jwiley 11y ago
Ahh, I get it, he seems to have written a dialect of Lisp that powers hacker news and contributed to ycombinator.
vacri 11y ago
PG is basically the reason why this site exists - HN started out as a marketing forum attached to YC. Regardless of what you think of his wider internet celebrity, he is an ('the'?) HN celebrity.
serge2k 11y ago
He created HN, and is pretty much a god on a site that likes to worship founders.

dragonwriter 11y ago

This is sort of self-evidently true; the purpose of a capitalist firm is to achieve a monopoly (in exactly the sense used in antitrust law, that is, to achieve a market within which they exercise pricing power) and extract rents from it for the capitalists the firm serves. Unions are a mechanism by which labor does much the same thing, limiting the ability of capital to retain rents even if firms achieve a mechanism to extract them. So, sure, from the point of view of capitalists, the existence of unions is an inhibition to the realization of capital yields.

littletimmy 11y ago

Absolutely reprehensible. Dismantle all protection for labor, keep oppressing them, and you will eventually force a destruction of the very canvas of economic stability against which you want to tap this "potential energy".

brucefancher 11y ago
[citation needed]

obrero 11y ago

There are people who work, such as the young programmers in SoMa who work 50/60/70+ hour weeks pounding out code for startups, who after rent and such don't have much savings piling up in the bank, nor much of a social life. These are the people who work, who create wealth. Then there are the parasites - the heirs whose families haven't worked in living memory. The LPs give money to the VCs and whoever else does Series-A type rounds nowadays, who filter it to the CEOs. Unlike the poor 22 year old sap, they have their bets spread. Once a Facebook, or Google, or Oracle gets big enough, they start extracting their profits from the monopoly type situation they created, and from the wealth the workers have been creating. Labor organizes into unions so that the people doing the work, the workers, get to keep more of the wealth they create, as opposed to the money going off in dividends to these parasitic heirs. The parasites hate organized labor, because it prevents the parasites from expropriating more surplus labor time from people who work and create wealth.

mikeash 11y ago

It always amazes me that if you get a bunch of workers together and organize them so they can act collectively, you get a ton of hate and a lot of people assume you're destroying value. Yet do the exact same thing on the employer side and this is not only acceptable, it's the only way we would ever think of doing things. In other words, why can't I replace "unions" with "corporations" and have the statement still be true?

jnwrd 11y ago
Wait, isnt doing the same thing on the employer side called a trust? If this isn't what you had in mind please elaborate.
- mikeash 11y ago
  How do you figure? A trust is when employers not only organize, but that they all join together such that there is no competition. The equivalent on the worker side would be a single union that covers all workers in a particular field. And while I'm sure such things exist, it's nothing inherent to unions.
- obrero 11y ago
  Are you joking? The United States is dominated by the modern trusts. In 1911 Standard Oil was broken up. In 1999 the two major Standard Oil subsidiaries - Standard Oil of New York and Standard Oil of New Jersey merged once again, into ExxonMobil. In 1984 Bell was broken up. Now the Baby Bells have merged back together with the countries local loops dominated by Verizon and AT&T (and Qwest) and the wireless spectrum also dominated by AT&T and Verizon (and Sprint...and T-Mobile, which AT&T tried to merge with, then Sprint - and which will be merged or carried off to the graveyard in the coming years). Monopoly is the name of the game, or duopoly any how - and everyone from Peter Thiel to Warren Buffett is pretty open about it. The "Big Eight" accounting firms have been halved, they are now the Big Four. The media is owned by the Big Six, which is really the Big Five as Redstone controls Viacom and CBS. The US is full of trusts and monopolies and the trend has been for more of the same. Even breakfast cereals have a Big Four. Less than 7% of workers in private industry are in unions, and that number has been falling.

ikeboy 11y ago

Followup clarification tweets: (I don't mean in simply paying people less, but rather that industries afflicted by unions are sclerotic so have left lots undone.) There is much more money in doing new things than in paying people less. edit: this received a number of downvotes, and I'm having trouble understanding why. Presumably providing context is a good thing here, right? There are comments that would be better informed if they had seen the follow up tweets.

Sideloader 11y ago
Perhaps because it's incredibly vague to the point of being meaningless? What, for example, does "sclerotic" mean in this context? What things are left "undone"? There is more money in doing what "new things"? More money for whom?
- deleted 11y ago
  [deleted]
- ikeboy 11y ago
  I'm not endorsing any of these tweets, I'm literally just quoting them for people who only saw the first tweet.

leroy_masochist 11y ago

If I were to put this tweet in my own words in order to convince others of its truth I'd say something like: companies in industries that have met both of the necessary conditions of having unionized workforces [0] could probably be improved by the application of recent technological progress to that company's operations, but most large companies lag in their efforts to refactor their processes, so there's an opportunity for brand-new companies to gain market share by using new technology in ways that make them categorically better at delivering the product or service associated with that industry. The problem I have with this tweet is that it makes PG look like an arrogant, detached asshole. It's the kind of thing that non-VC's imagine that VC partners say amongst themselves while swilling $500 organic Merlot in their palatial estates in Woodside. PG to a great extent is seen by the outside world as speaking for the Valley, which is usually a good thing because usually the stuff he puts out there is thoughtful and makes him look smart. I'd say this tweet is a pretty big outlier from that pattern. [0]These are: a) existing for long enough and b) employing enough people that their workforces decided to unionize

hyperpallium 11y ago

Without unions (or minimum-wage laws), the price of labour reflects supply and demand. Skills in shortage have higher wages; unskilled labour drops to starvation wages - or below, provided there are replacement people. In good times, with labour in demand, wages are higher, up to the point where the demand is met. Wages can go no higher. If there are enough people, these wages might be quite low. The remaining surplus is captured by capital. In bad times, when demand for labour is low, wages may drop arbitrarily low. Another solution to starvation-wages or below is social security or, more radical, universal income. It acts like an employer competing for labour, providing a minimum-wage threshold, through market forces. If capital doesn't offer sufficient wages, labour chooses the safety net. However, this ignores the non-wage benefits of employment: people like to work, to be important/needed/useful, to be part of something, social contact, etc not to mention practice and acquisition of skills. Finally, to be fair to pg, unions also represent a freezing of a particular way of doing business. Like back-compatibility or a requirement to use a particular technology, it restricts the way work can be organized. It prevents work from being "re-factored" - even if there exists another arrangement that would be just as good or even better for workers. Inflexibility eventually causes inefficiency. [ BTW I think there are three levels of systems that we can optimise for "efficiency": technical systems are efficient at their task; a business as a system is efficient at making money; a society as a system is efficient being something people want to be part of - that is, serving their needs. ]

dropit_sphere 11y ago

You know, like a log of wood does. Light the sucker and you'll unlock all its value!

joeblow99 11y ago

All this pro-union wishful thinking is funny to read. Paul Graham is so right.

brchsiao 11y ago

The main protest here seems to be that fixing what unions break inevitably benefits capitalists while cheating the worker. I'd genuinely like to know: what's the best example of an industry disrupted in this way that left workers net behind? Everyone knows it's annoying to see the rich philosophize in armchairs while the rest of the world does the lifting. Is that all that's left to say? pg seems to be claiming that (a) unions indicate breakage for startups to fix, and that (b) fixing this breakage is in fact more profitable for startups if they do it good-naturedly instead of simply taking workers' pie. Is this false?