6 ms·

This article really highlights how odd our methods of valuing output are. Ultimately if someone is idling for 6 years because they've written a program to do th

by nstart 8y ago

This article really highlights how odd our methods of valuing output are. Ultimately if someone is idling for 6 years because they've written a program to do their job for them, who cares? They are delivering the same output which hopefully the company deemed was valued at X amount BECAUSE it delivers Y amount of profit/returns. This article is actually touching on a deeper level of dysfunction in how we do things like calculating salaries for people. Instead of making things about how much value is created, we tend to tie things to "seniority" or "experience" in isolation. Just because the two are sometimes correlated with value produced it does not justify making that the measure on its own. I remember going up to one of the senior management people in the company I worked at a long time ago and pointing out how I'd saved the company from having to spend salaries and other overheads on 12-20 more people by automation. If the salary for each person was X, I asked for a salary bump of 3X. They gave me a bump of only 0.5X . I eventually pushed it to 1X but that experience taught me that most of the time, extra value you deliver rarely flows back to you in a reasonable way. And from that point on, I stopped treating my job as an extension of my identity or fulfillment of purpose. It became a place where I primarily had a cold hard contract to deliver X value in exchange for Y returns. And if I was ever to work again in a company with similar opaque practices on salaries, any increase in Y returns would be best negotiated before showing my entire hand on how much I could increase the delivery on value X.

someguydave 8y ago
This is related to Taleb's observation that employment is a kind of "slavery". What he means by this is that you effectively have sold your option to own those to outsized returns in exchange for a regular paycheck.
- hawkice 8y ago
  That's... not what slavery is. That analogy is extremely poor compared to using securities derivatives, which is a field Taleb is familiar with. Edit: also, is this feature of salaried employment so misunderstood as to require an analogy? You get paid a fixed amount, or with specified bonus structure. It's literally the number one fact people know about their employment contracts.
  - someguydave 8y ago
    > also, is this feature of salaried employment so misunderstood as to require an analogy? I would argue yes. Many professionals like engineers and programmers can point to contributions they made to the corporation that have been sold for many times their annual salary. How many of those professionals consider the fact that they could have sold their design for themselves and pocketed the revenue? This is related to Coase's question: why have a firm in the first place? In modern times it seems that ongoing disaggregation of businesses and reduced transaction costs in software would cause more professionals to consider working for themselves, rather than selling their (potential, uncertain, unlimited) profits for a (certain, fixed) income.
- buzzdenver 8y ago
  That sounds more like an option pair for an equity. Both your upside and downside are limited and you get a steady income stream. Slavery is very different.
  - someguydave 8y ago
    Except, is your downside really limited? It's true the company must make payroll while you are still employed. However, the employer has the option of firing you. While this might not put in you in debt to the employer's creditors, it does reduce the value of your employment contract to zero AND reduces your attractiveness to future employers. If you only have had one employer for a long period, this is a large blow. Taleb makes the point that the taxi driver is in an enviable position compared to the salaryman for this reason.
    - buzzdenver 8y ago
      Your downside is limited to being laid off, so it is limited. They can't go after your personal assets if the company goes bankrupt, or claw back past wages. And a couple of tangential points: 1) Being laid off because your company went under is not a bad black mark on your resume. 2) You have the freedom to terminate your employment at any time just like the company can. That's very different from slavery.
- dredmorbius 8y ago
  Thorstein Veblen, in an earlier age.
  - someguydave 8y ago
    There are similarities. They are certainly both critical of business. Taleb has a strong allergy toward anyone who appears to be abusing their position of public trust to swing economic rents towards themselves or allies.
- gnode 8y ago
  A better term for a classical comparison would be serfdom: https://en.wikipedia.org/wiki/Serfdom#Becoming_a_serf https://en.wikipedia.org/wiki/Serfdom#Becoming_a_serf Although, slavery existed within the feudal system as the lowest class of serf.
mk89 8y ago
Why did you ask just for a 3X increase instead of 12-20X? If you don't value what you did, why should your employer? Also, why should an employer raise your salary based on the fact you are automating stuff? It's part of your job, after all. That's what programming is about.
- nstart 8y ago
  The essence of this question is worth talking about. To clarify something first, this was not a programming job. I was managing a team of content uploaders for an e-commerce company. I used software in multiple ways to keep the team at the same size when my original brief was to simplify the process so much that they could hire more people at cheap rates to do the work. So I went above and beyond the brief. The job was so simple they didn't need to hire anyone anyway. The question of why 3X is to do with alignment of interests. I can't offer savings of 20X and ask for that to be added to my salary. Yes I'm creating that value, but we also want to increase profits. If I ask for all the savings, then what makes my solution worth it? Calculating our business margins at the time I came to the conclusion of 15% of the savings to come to me to be worth it given the extra business our team was able to handle due to the automation. Lesson here is how to calculate your ask. My team unit with 20 extra people meant the new work being brought in would be coming in with no profit. The team (without extras) was just breaking even at the time by my calculations. The profits made by automating to accept new business at an accelerated rate was above our usual margins (I think it was about 45%). My ask lowered it but it was still above the company's expected margins on business. My mistake though was that the automation was nearly infinitely scalable. I showed my entire hand and me leaving wouldn't necessarily burn anyone. 6 years since I left, at least two of the tools are still running. Twas a great lesson on negotiation and leverage. Live and learn :)
anonytrary 8y ago
> If the salary for each person was X, I asked for a salary bump of 3X [and they didn't]. ... And from that point on, I stopped treating my job as an extension of my identity or fulfillment of purpose. Indeed, the best work is done when you do it for yourself. People basically sign their brains away when they go to work for Facebook and Google. Those companies will be likely to get B players no matter how many seemingly great people they hire. The 4.0 MIT grad who can recite chapters from his CS401 class isn't necessarily an A player. Most of the A players I know are either ex-Facebook/ex-Google or turned down working at those places because they have more important things to do with their time. The real A players are much harder to find and are much harder to value. Without ownership in what you do, there is a high probability that you will not be at your best. If you need to be paid to do something, it is unlikely to be what fulfills you.
- iopuy 8y ago
  Liked the reply but MIT, my alma matter, grades on a 5.0 scale
  - yuppp 8y ago
    I didn't go to MIT, but it's alma mater
ardy42 8y ago
> This article really highlights how odd our methods of valuing output are. Ultimately if someone is idling for 6 years because they've written a program to do their job for them, who cares? They are delivering the same output which hopefully the company deemed was valued at X amount BECAUSE it delivers Y amount of profit/returns. Their boss cares. This is capitalism, and capitalist ethics say you should be fired if you're idling and not continuing to actively labor for the boss anymore. She's not getting anything in return for your salary. You more than likely signed away all rights to the fruits of your labor when you took the job. That means "your" automation is really your boss's capital, and you have no rights to be perpetually compensated for it. So, if you ever automate your own job, don't tell anyone. Also make sure to make your automation so arcane and impenetrable that no one else can hope to use it.
- gehsty 8y ago
  I think it means that your job should then become automating aspects of the business, then maintaining these automations. Your labour becomes automating.
  - ardy42 8y ago
    > I think it means that your job should then become automating aspects of the business, then maintaining these automations. Your labour becomes automating. More realistically: as a laborer, you shouldn't put in extra effort to automate your job away, because the benefits will likely be kept from you, for the most part. They might throw you a bone as a reward, but a bones are leftovers. They'll keep the meat for themselves. This kind of automation is properly understood as a kind of charity for the people who need it least. The appeal of automating away your job is the freedom it seems to bring to the automator, but that's an illusion. You'll remain a laborer until you're put in a position to go live under a bridge, which is a freedom you've always had. If you want to openly automate away your job, you want to be a software engineer. At a minimum, negotiate a software engineer's salary from you employer before you start that work. However, if you can manage it, it's better for you to start a company to license the automation back in perpetuity.
- crankylinuxuser 8y ago
SmellyGeekBoy 8y ago
> They are delivering the same output which hopefully the company deemed was valued at X amount BECAUSE it delivers Y amount of profit/returns. The output is actually even better in my experience. I know in the tasks that we've automated the output is always 100% consistent, which is more than can be said for the previous human output. Also there's a lot of value in having someone on hand who actually understands the process rather than blindly trusting in a script. They'll more than pay for themselves when it comes to future enhancements or debugging. And I say all of this as an employer - my employees are positively encouraged to automate as much as possible.
- rosege 8y ago
  And is their salary tied to productivity increases from that automation or hours at their desk?
a008t 8y ago
An important thing to realize is that you are not paid based on the value you added during the year. You are paid to make sure you do not leave (for a competitor). I think in the long run, acting in the best interest of the business when you are employed for that business would result in superior income/career than doing otherwise. Another option is finding possibilities for automation that could apply to other companies with similar problems, and starting a separate company selling such automation services. A consultancy could work, too.
rumcajz 8y ago
> This article really highlights how odd our methods of valuing output are. Ultimately if someone is idling for 6 years because they've written a program to do their job for them, who cares? They are delivering the same output which hopefully the company deemed was valued at X amount BECAUSE it delivers Y amount of profit/returns. This is why, in 19th century, they've used to call wage labor, as opposed to self-employment, "wage slavery". You are selling your time, not the goods you produce. https://en.wikipedia.org/wiki/Wage_slavery https://en.wikipedia.org/wiki/Wage_slavery
- thelasthuman 8y ago
  Own people? No way! Wrong! How could you ever entertain this notion! Rent people at sub-subsistence wages? I guess it's okay.
thelasthuman 8y ago
At some level of understanding, all workers know they don't get the full value of their labor. You just got to see it happen right in front of you in real time.

by nstart 8y ago

someguydave 8y ago

This is related to Taleb's observation that employment is a kind of "slavery". What he means by this is that you effectively have sold your option to own those to outsized returns in exchange for a regular paycheck.

hawkice 8y ago
That's... not what slavery is. That analogy is extremely poor compared to using securities derivatives, which is a field Taleb is familiar with. Edit: also, is this feature of salaried employment so misunderstood as to require an analogy? You get paid a fixed amount, or with specified bonus structure. It's literally the number one fact people know about their employment contracts.
- someguydave 8y ago
  > also, is this feature of salaried employment so misunderstood as to require an analogy? I would argue yes. Many professionals like engineers and programmers can point to contributions they made to the corporation that have been sold for many times their annual salary. How many of those professionals consider the fact that they could have sold their design for themselves and pocketed the revenue? This is related to Coase's question: why have a firm in the first place? In modern times it seems that ongoing disaggregation of businesses and reduced transaction costs in software would cause more professionals to consider working for themselves, rather than selling their (potential, uncertain, unlimited) profits for a (certain, fixed) income.
buzzdenver 8y ago
That sounds more like an option pair for an equity. Both your upside and downside are limited and you get a steady income stream. Slavery is very different.
- someguydave 8y ago
  Except, is your downside really limited? It's true the company must make payroll while you are still employed. However, the employer has the option of firing you. While this might not put in you in debt to the employer's creditors, it does reduce the value of your employment contract to zero AND reduces your attractiveness to future employers. If you only have had one employer for a long period, this is a large blow. Taleb makes the point that the taxi driver is in an enviable position compared to the salaryman for this reason.
  - buzzdenver 8y ago
    Your downside is limited to being laid off, so it is limited. They can't go after your personal assets if the company goes bankrupt, or claw back past wages. And a couple of tangential points: 1) Being laid off because your company went under is not a bad black mark on your resume. 2) You have the freedom to terminate your employment at any time just like the company can. That's very different from slavery.
dredmorbius 8y ago
Thorstein Veblen, in an earlier age.
- someguydave 8y ago
  There are similarities. They are certainly both critical of business. Taleb has a strong allergy toward anyone who appears to be abusing their position of public trust to swing economic rents towards themselves or allies.
gnode 8y ago
A better term for a classical comparison would be serfdom: https://en.wikipedia.org/wiki/Serfdom#Becoming_a_serf https://en.wikipedia.org/wiki/Serfdom#Becoming_a_serf Although, slavery existed within the feudal system as the lowest class of serf.

mk89 8y ago

Why did you ask just for a 3X increase instead of 12-20X? If you don't value what you did, why should your employer? Also, why should an employer raise your salary based on the fact you are automating stuff? It's part of your job, after all. That's what programming is about.

nstart 8y ago
The essence of this question is worth talking about. To clarify something first, this was not a programming job. I was managing a team of content uploaders for an e-commerce company. I used software in multiple ways to keep the team at the same size when my original brief was to simplify the process so much that they could hire more people at cheap rates to do the work. So I went above and beyond the brief. The job was so simple they didn't need to hire anyone anyway. The question of why 3X is to do with alignment of interests. I can't offer savings of 20X and ask for that to be added to my salary. Yes I'm creating that value, but we also want to increase profits. If I ask for all the savings, then what makes my solution worth it? Calculating our business margins at the time I came to the conclusion of 15% of the savings to come to me to be worth it given the extra business our team was able to handle due to the automation. Lesson here is how to calculate your ask. My team unit with 20 extra people meant the new work being brought in would be coming in with no profit. The team (without extras) was just breaking even at the time by my calculations. The profits made by automating to accept new business at an accelerated rate was above our usual margins (I think it was about 45%). My ask lowered it but it was still above the company's expected margins on business. My mistake though was that the automation was nearly infinitely scalable. I showed my entire hand and me leaving wouldn't necessarily burn anyone. 6 years since I left, at least two of the tools are still running. Twas a great lesson on negotiation and leverage. Live and learn :)

anonytrary 8y ago

> If the salary for each person was X, I asked for a salary bump of 3X [and they didn't]. ... And from that point on, I stopped treating my job as an extension of my identity or fulfillment of purpose. Indeed, the best work is done when you do it for yourself. People basically sign their brains away when they go to work for Facebook and Google. Those companies will be likely to get B players no matter how many seemingly great people they hire. The 4.0 MIT grad who can recite chapters from his CS401 class isn't necessarily an A player. Most of the A players I know are either ex-Facebook/ex-Google or turned down working at those places because they have more important things to do with their time. The real A players are much harder to find and are much harder to value. Without ownership in what you do, there is a high probability that you will not be at your best. If you need to be paid to do something, it is unlikely to be what fulfills you.

iopuy 8y ago
Liked the reply but MIT, my alma matter, grades on a 5.0 scale
- yuppp 8y ago
  I didn't go to MIT, but it's alma mater

ardy42 8y ago

> This article really highlights how odd our methods of valuing output are. Ultimately if someone is idling for 6 years because they've written a program to do their job for them, who cares? They are delivering the same output which hopefully the company deemed was valued at X amount BECAUSE it delivers Y amount of profit/returns. Their boss cares. This is capitalism, and capitalist ethics say you should be fired if you're idling and not continuing to actively labor for the boss anymore. She's not getting anything in return for your salary. You more than likely signed away all rights to the fruits of your labor when you took the job. That means "your" automation is really your boss's capital, and you have no rights to be perpetually compensated for it. So, if you ever automate your own job, don't tell anyone. Also make sure to make your automation so arcane and impenetrable that no one else can hope to use it.

gehsty 8y ago
I think it means that your job should then become automating aspects of the business, then maintaining these automations. Your labour becomes automating.
- ardy42 8y ago
  > I think it means that your job should then become automating aspects of the business, then maintaining these automations. Your labour becomes automating. More realistically: as a laborer, you shouldn't put in extra effort to automate your job away, because the benefits will likely be kept from you, for the most part. They might throw you a bone as a reward, but a bones are leftovers. They'll keep the meat for themselves. This kind of automation is properly understood as a kind of charity for the people who need it least. The appeal of automating away your job is the freedom it seems to bring to the automator, but that's an illusion. You'll remain a laborer until you're put in a position to go live under a bridge, which is a freedom you've always had. If you want to openly automate away your job, you want to be a software engineer. At a minimum, negotiate a software engineer's salary from you employer before you start that work. However, if you can manage it, it's better for you to start a company to license the automation back in perpetuity.
crankylinuxuser 8y ago

SmellyGeekBoy 8y ago

> They are delivering the same output which hopefully the company deemed was valued at X amount BECAUSE it delivers Y amount of profit/returns. The output is actually even better in my experience. I know in the tasks that we've automated the output is always 100% consistent, which is more than can be said for the previous human output. Also there's a lot of value in having someone on hand who actually understands the process rather than blindly trusting in a script. They'll more than pay for themselves when it comes to future enhancements or debugging. And I say all of this as an employer - my employees are positively encouraged to automate as much as possible.

rosege 8y ago
And is their salary tied to productivity increases from that automation or hours at their desk?

a008t 8y ago

An important thing to realize is that you are not paid based on the value you added during the year. You are paid to make sure you do not leave (for a competitor). I think in the long run, acting in the best interest of the business when you are employed for that business would result in superior income/career than doing otherwise. Another option is finding possibilities for automation that could apply to other companies with similar problems, and starting a separate company selling such automation services. A consultancy could work, too.

rumcajz 8y ago

thelasthuman 8y ago
Own people? No way! Wrong! How could you ever entertain this notion! Rent people at sub-subsistence wages? I guess it's okay.

thelasthuman 8y ago

At some level of understanding, all workers know they don't get the full value of their labor. You just got to see it happen right in front of you in real time.