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Paul Graham's argument is entirely tautological. 1. Startups are companies that try to grow quickly into billion dollar businesses. 2. Founders have substanti

by gizmo 11y ago

Paul Graham's argument is entirely tautological. 1. Startups are companies that try to grow quickly into billion dollar businesses. 2. Founders have substantial equity in their startups. 3. Therefore founders get really rich when their startup succeeds. 4. More successful startups means more really rich people. 5. More really rich people means more inequality. 6. Therefore more startups means more inequality. PG defines startups as companies that become large and make their founders rich. So yes, you then trivially get "more startups == more inequality". However, this loses sight of the fact that when the goal is to create a billion dollar company in a few years there is a huge incentive to game the system, and to produce all sorts of externalities. Take AirBnB. They are effectively an unregulated hotel business. How can a bed and breakfast compete with an airbnb, when they have to face regulations and taxes? How do the neighbors like it when new people move in every couple of days and party all night long? Sacrifices have to made in the name of growth. Another example is Uber or other sharing economy startups. Employees become independent contractors, who are always on the edge of being fired. Who have to pay for their own uniforms, cars and other equipment in order to do their jobs. It's pretty ruthless exploitation, but Uber is valued at $70 billion and it's super convenient for the customer, so we look the other way. When it comes to software if you want to serve the most people you work with open protocols, you open source your software (so it can be inspected for quality and security), you make importing and exporting to competing products easy and fast and so on. If you want to make a billion dollar business you keep everything proprietary and you create a walled garden with tremendous lock in. Just look at all the open source products that our startups are built on top of. Billions of dollars worth of free software. What do the contributors get? Nothing. (Not strictly true; they get angry bug reports, but you get my point). This is not the natural order of things, so we should question whether this is just. There's a big difference between companies that provide a huge amount of value, and companies that can CAPTURE a huge amount of value. Startups have to be in the second category, and that has huge social implications worth thinking about. The founders necessarily play only a small role in the success of their business -- we all stand on the shoulders of giants after all -- so why should the founders be the ones who capture all the rewards?

apsec112 11y ago
"It's pretty ruthless exploitation" If Uber drivers are being "exploited", why don't they quit? Because no one else would give them a better job, presumably. But that seems perverse to blame on Uber. All they're doing is giving drivers a better deal than they would otherwise get. Suppose your father got cancer, and you decided to sell your grand piano to get some money for treatment. All the other buyers offer $1,000 for the piano, and then I come and offer $1,500. $1,500 isn't enough to pay for cancer treatment, of course, but it'd be crazy to say I was "exploiting" you - I'm giving you a better deal than anyone else would. The problem is the cancer, not the piano buyers, and certainly not me.
- SilasX 11y ago
  It's the Copenhagen Interpretation of Ethics[1]: if you interact with it, you inherit its evil, irrespective of your actual impact on the scenario. [1] https://news.ycombinator.com/item?id=10367855 https://news.ycombinator.com/item?id=10367855
- ZenoArrow 11y ago
  > "If Uber drivers are being "exploited", why don't they quit?" My impression is that driving a taxi is a useful side income for people, as they can fit it around other commitments. For example, if someone has a job as a waiter at a restaurant, but needs to make some extra money on the side to pay their rent/living expenses, then they could take a job with Uber to supplement their income. However, a job that fills a financial necessity can still be exploitative. For example, when it comes to Uber, there's not much in the way of job security. Furthermore, whilst people could theoretically quit, a theoretical new job doesn't put food on the table.
- gizmo 11y ago
  A typical reason they don't just quit is that they need a new car to work for Uber in the first place, which they can get using their xchange program[1] that gives them a large monthly obligation[2]. They can get this even when they don't qualify for a regular car lease because they have bad credit/no income. So they have to work many hours just to get to the 0 point after which they start to earn money for themselves. If they quit they're stuck with the lease, which they cannot afford to pay and makes no sense for them to have with any other low paying job. So the lease serves as lock in -- bondage -- of the worker to Uber, even though they're technically not employees. I think being indebted to your employer in this way is barbaric. Disclaimer: I heard this, haven't verified it myself. [1] https://get.uber.com/cl/xchange/ https://get.uber.com/cl/xchange/ [2] Lease cost. Taxes. Fuel. Insurance.

by gizmo 11y ago

apsec112 11y ago

"It's pretty ruthless exploitation" If Uber drivers are being "exploited", why don't they quit? Because no one else would give them a better job, presumably. But that seems perverse to blame on Uber. All they're doing is giving drivers a better deal than they would otherwise get. Suppose your father got cancer, and you decided to sell your grand piano to get some money for treatment. All the other buyers offer $1,000 for the piano, and then I come and offer $1,500. $1,500 isn't enough to pay for cancer treatment, of course, but it'd be crazy to say I was "exploiting" you - I'm giving you a better deal than anyone else would. The problem is the cancer, not the piano buyers, and certainly not me.

SilasX 11y ago
It's the Copenhagen Interpretation of Ethics[1]: if you interact with it, you inherit its evil, irrespective of your actual impact on the scenario. [1] https://news.ycombinator.com/item?id=10367855 https://news.ycombinator.com/item?id=10367855
ZenoArrow 11y ago
> "If Uber drivers are being "exploited", why don't they quit?" My impression is that driving a taxi is a useful side income for people, as they can fit it around other commitments. For example, if someone has a job as a waiter at a restaurant, but needs to make some extra money on the side to pay their rent/living expenses, then they could take a job with Uber to supplement their income. However, a job that fills a financial necessity can still be exploitative. For example, when it comes to Uber, there's not much in the way of job security. Furthermore, whilst people could theoretically quit, a theoretical new job doesn't put food on the table.
gizmo 11y ago
A typical reason they don't just quit is that they need a new car to work for Uber in the first place, which they can get using their xchange program[1] that gives them a large monthly obligation[2]. They can get this even when they don't qualify for a regular car lease because they have bad credit/no income. So they have to work many hours just to get to the 0 point after which they start to earn money for themselves. If they quit they're stuck with the lease, which they cannot afford to pay and makes no sense for them to have with any other low paying job. So the lease serves as lock in -- bondage -- of the worker to Uber, even though they're technically not employees. I think being indebted to your employer in this way is barbaric. Disclaimer: I heard this, haven't verified it myself. [1] https://get.uber.com/cl/xchange/ https://get.uber.com/cl/xchange/ [2] Lease cost. Taxes. Fuel. Insurance.