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I'm a bit confused about land, labour and capital comparison. It seems that he's complaining about 'land' and 'labour' not getting enough as a result of digital

by adzicg 11y ago

I'm a bit confused about land, labour and capital comparison. It seems that he's complaining about 'land' and 'labour' not getting enough as a result of digital economy, but those are potential inputs, not outputs, so the reference is misguided. Plus, the straw-man uber driver surely represents labor in that part, and they get paid for that.

YeGoblynQueenne 11y ago
Rushkoff argues that the profit Uber drivers make is not sustainable in the long-term, and that Uber doesn't mind because once that runs dry they can then use their profits to jump to another line of business entirely, while Uber drivers will have to always live hand-to-mouth.
ArkyBeagle 11y ago
The part about land not getting enough is prima facie false - housing prices in SF are out of control. But even in the '90s tech boom in Texas, many were using equity in tech companies as leverage to buy and develop land. This in a place with more affordable housing and no water bounding it. What passes for capital in SF is also not necessarily easily understood as capital without extending the concept quite a bit. It's closer to speculation in early phase equities, which is about the ... third derivative of actual capital. Unlike a building full of machines that add great creative value but are hard to move, this brand of capital is many orders of magnitude more ephemeral.
- GFK_of_xmaspast 11y ago
  Are you familiar with the 'Gulf of Mexico' and in particular 'Galveston.'
  - ArkyBeagle 11y ago
    Somewhat. I was meaning more around Dallas, where most of the water has bridges across it and there really was a significant boom in the '90s.
tzs 11y ago
> I'm a bit confused about land, labour and capital comparison. It seems that he's complaining about 'land' and 'labour' not getting enough as a result of digital economy, but those are potential inputs, not outputs, so the reference is misguided. Capital also is an input, not an output, so I'm not sure what distinction you are trying to make. What he's claiming is that in "normal" businesses those who supply the inputs (land, labor, and capital) all get a decent share of the profits, but that in the digital economy most of the profits go to those who supply capital. The problem I see with his claim is that he doesn't actually make a case that this is inherently bad. He uses Airbnb and Uber as examples to illustrate how it can be bad. I agree both of those companies are bad...but they are bad because their business model is essentially based on turning many of the costs of the hotel and taxi business, respectively, into negative externalities, not because of how their profits are distributed among the suppliers of land, labor, and capital.
tdaltonc 11y ago
In the same way that one could talk about 'return on capital,' one could talk about 'return on labor' and 'return on land.' I don't think it's controversial to say that capital and "entrepreneurs" [0] have made much better returns in SV then land or labor have. The arguments usually start why that's the case and whether it can/should be otherwise. [0] Entrepreneur is a concept that AFAIK economics does not have a good way to deal with. It seems to be a special class of labor because entrepreneur make there money by knowing exactly what kind of labor would be most useful. But it also seems to be a special class of capital because they make all of there money on equities (by selling shares in their own companies that they bought for pennies at founding). If anyone has a coherent theory of economics that accounts of entrepreneurs, I'd love to read about it.

by adzicg 11y ago

YeGoblynQueenne 11y ago

Rushkoff argues that the profit Uber drivers make is not sustainable in the long-term, and that Uber doesn't mind because once that runs dry they can then use their profits to jump to another line of business entirely, while Uber drivers will have to always live hand-to-mouth.

ArkyBeagle 11y ago

The part about land not getting enough is prima facie false - housing prices in SF are out of control. But even in the '90s tech boom in Texas, many were using equity in tech companies as leverage to buy and develop land. This in a place with more affordable housing and no water bounding it. What passes for capital in SF is also not necessarily easily understood as capital without extending the concept quite a bit. It's closer to speculation in early phase equities, which is about the ... third derivative of actual capital. Unlike a building full of machines that add great creative value but are hard to move, this brand of capital is many orders of magnitude more ephemeral.

GFK_of_xmaspast 11y ago
Are you familiar with the 'Gulf of Mexico' and in particular 'Galveston.'
- ArkyBeagle 11y ago
  Somewhat. I was meaning more around Dallas, where most of the water has bridges across it and there really was a significant boom in the '90s.

tzs 11y ago

> I'm a bit confused about land, labour and capital comparison. It seems that he's complaining about 'land' and 'labour' not getting enough as a result of digital economy, but those are potential inputs, not outputs, so the reference is misguided. Capital also is an input, not an output, so I'm not sure what distinction you are trying to make. What he's claiming is that in "normal" businesses those who supply the inputs (land, labor, and capital) all get a decent share of the profits, but that in the digital economy most of the profits go to those who supply capital. The problem I see with his claim is that he doesn't actually make a case that this is inherently bad. He uses Airbnb and Uber as examples to illustrate how it can be bad. I agree both of those companies are bad...but they are bad because their business model is essentially based on turning many of the costs of the hotel and taxi business, respectively, into negative externalities, not because of how their profits are distributed among the suppliers of land, labor, and capital.

tdaltonc 11y ago

In the same way that one could talk about 'return on capital,' one could talk about 'return on labor' and 'return on land.' I don't think it's controversial to say that capital and "entrepreneurs" [0] have made much better returns in SV then land or labor have. The arguments usually start why that's the case and whether it can/should be otherwise. [0] Entrepreneur is a concept that AFAIK economics does not have a good way to deal with. It seems to be a special class of labor because entrepreneur make there money by knowing exactly what kind of labor would be most useful. But it also seems to be a special class of capital because they make all of there money on equities (by selling shares in their own companies that they bought for pennies at founding). If anyone has a coherent theory of economics that accounts of entrepreneurs, I'd love to read about it.