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Yes. I'm sure plenty of Theranos / WeWork style opportunities will emerge to pick up the slack. It's a fundamental problem of capitalism: the market's notion o

Yes. I'm sure plenty of Theranos / WeWork style opportunities will emerge to pick up the slack. It's a fundamental problem of capitalism: the market's notion of "value" is weighted by wealth, without growth to stir things up wealth concentrates, and those looking to create value are increasingly forced to search for marginal "rich people problems" rather than tackle obvious "poor people problems." You wind up in a paradoxical situation where there are lots of obvious problems that could be fixed by obvious application of labor (e.g. crumbling infrastructure) yet nobody can find a job. This is why inequality is bad. Equality is bad because then you can't incentivize people, but that point generally gets enough air time already. To optimize this system, we should identify which extreme is currently posing a larger threat and back away from it.

xondono 7y ago
Exactly, you get rich by doing what the rich want, not what most people want, that’s why Lamborghini owns Volkswagen! Wait..
- deleted 7y ago
  [deleted]
- jjoonathan 7y ago
  Serving the middle class is an excellent strategy precisely to the extent that the middle class has money. Serving the middle class was an excellent strategy precisely to the extent that the middle class had money. Serving the middle class will be an excellent strategy precisely to the extent that the middle class will have money.
- pineaux 7y ago
  You think Volkswagen makes cars for the poor? Show me a poor person who can buy a new car and I will show you someone who is borrowing.
  - HPsquared 7y ago
    "Cars for the rich" is not their MO.
    - sudosysgen 7y ago
      Their MO used to be "The People's Car". The People do not buy new cars without massive credit anymore, and in general do not buy new cars at all.
      - xondono 7y ago
        “They do not buy new cars” is a great way for car manufacturers to lobby for more benefits. Looking at sales numbers, “they don’t sell as much as they used to” is waaaay more accurate.
  - xondono 7y ago
    I didn’t imply that they made cars for poor people, I implied they don’t make cars for rich people. There’s a lot of people that are neither poor nor rich, that people keep thinking in those terms baffles me.
- chrisco255 7y ago
  "If you want to dine with the classes, you've got to sell to the masses."
deleted 7y ago
[deleted]
zanny 7y ago
> To optimize this system, we should identify which extreme is currently posing a larger threat and back away from it. Except to back away from it is to alter a relationship where the incumbent ruling class holds all the cards and controls all the influence and narrative. Which they don't want to do. So they don't, and the government they bought and paid for just write them windfall blank checks for trillions while the poor threaten governors since they are going to lose their homes and are going hungry. The US had a chance to right the power balance when it was at its most equal in the post war boom period. But instead America decided times were good enough to let scrutiny slide - complacency in plenty and the optimism of the post-industrial were powerful drugs. Since then its just felt like the late Roman republic in its glutinous downfall. The feudal lords will pillage the state until the house crumbles from the inside with nothing left holding it together while the robber barons run wild and happy in their Deus Ex style post-capitalist dystopian corptocracies.
tinco 7y ago
Neither Theranos nor WeWork were trying to solve rich people problems.
- lumost 7y ago
  arguably, they solved a problem of where to stick money to try and get a greater than x% return. To do so both companies took on insane levels of risk by trying to solve impossible business/science problems on the basis that they could maybe just spend enough money and fake it till they made it. In WeWork's case some rational investors may have thought that they'd end up with a monopoly on B-tier office space as a failure mode.
  - jjoonathan 7y ago
    Right, the fact that the market is chasing such high risk investments when there's lots of obvious low-risk work that needs to be done means that the low-risk work has gotten "frozen out" of the economy. Poor people problems aren't problems, as far as the economy is concerned. Still, WeWork and Theranos are only examples of the "bubble" side of the effect, not so much the "freezing out" side, and they don't really illustrate the contrast between unworthy, overfunded endeavors and worthy, underfunded endeavors. I originally had a more visceral, abstract example that did a much better job, but it was attracting so many drive-by downvotes that I decided to retire it while I searched for better wording/examples. Here is the original: Economists invite you to ignore this effect by conflating "value" (the economic notion, which is weighted by wealth) with value (the philosophical notion, which isn't, at least not to the same degree). For example, consider the prospect of feeding starving African children. This action has 0 "value" -- the market will not pay you to do this because the kids have no money with which to pay you -- even though the prospect has loads of value in the philosophical sense. Now consider the prospect of merging up the banks so that they can charge higher fees and offload risk to the federal government. This action has loads of "value" -- it gives investors a return, at scale, and investors have lots of money, so their opinion counts heavily -- even though this prospect has zero or negative value in the philosophical sense. Because it is weighted according to wealth, the economic notion of value diverges from the philosophical notion of value in proportion to inequality, and with exploding inequality, that's a big problem.

xondono 7y ago

Exactly, you get rich by doing what the rich want, not what most people want, that’s why Lamborghini owns Volkswagen! Wait..

deleted 7y ago
[deleted]
jjoonathan 7y ago
Serving the middle class is an excellent strategy precisely to the extent that the middle class has money. Serving the middle class was an excellent strategy precisely to the extent that the middle class had money. Serving the middle class will be an excellent strategy precisely to the extent that the middle class will have money.
pineaux 7y ago
You think Volkswagen makes cars for the poor? Show me a poor person who can buy a new car and I will show you someone who is borrowing.
- HPsquared 7y ago
  "Cars for the rich" is not their MO.
  - sudosysgen 7y ago
    Their MO used to be "The People's Car". The People do not buy new cars without massive credit anymore, and in general do not buy new cars at all.
    - xondono 7y ago
      “They do not buy new cars” is a great way for car manufacturers to lobby for more benefits. Looking at sales numbers, “they don’t sell as much as they used to” is waaaay more accurate.
- xondono 7y ago
  I didn’t imply that they made cars for poor people, I implied they don’t make cars for rich people. There’s a lot of people that are neither poor nor rich, that people keep thinking in those terms baffles me.
chrisco255 7y ago
"If you want to dine with the classes, you've got to sell to the masses."

deleted 7y ago

[deleted]

zanny 7y ago

> To optimize this system, we should identify which extreme is currently posing a larger threat and back away from it. Except to back away from it is to alter a relationship where the incumbent ruling class holds all the cards and controls all the influence and narrative. Which they don't want to do. So they don't, and the government they bought and paid for just write them windfall blank checks for trillions while the poor threaten governors since they are going to lose their homes and are going hungry. The US had a chance to right the power balance when it was at its most equal in the post war boom period. But instead America decided times were good enough to let scrutiny slide - complacency in plenty and the optimism of the post-industrial were powerful drugs. Since then its just felt like the late Roman republic in its glutinous downfall. The feudal lords will pillage the state until the house crumbles from the inside with nothing left holding it together while the robber barons run wild and happy in their Deus Ex style post-capitalist dystopian corptocracies.

tinco 7y ago

Neither Theranos nor WeWork were trying to solve rich people problems.

lumost 7y ago
arguably, they solved a problem of where to stick money to try and get a greater than x% return. To do so both companies took on insane levels of risk by trying to solve impossible business/science problems on the basis that they could maybe just spend enough money and fake it till they made it. In WeWork's case some rational investors may have thought that they'd end up with a monopoly on B-tier office space as a failure mode.
- jjoonathan 7y ago
  Right, the fact that the market is chasing such high risk investments when there's lots of obvious low-risk work that needs to be done means that the low-risk work has gotten "frozen out" of the economy. Poor people problems aren't problems, as far as the economy is concerned. Still, WeWork and Theranos are only examples of the "bubble" side of the effect, not so much the "freezing out" side, and they don't really illustrate the contrast between unworthy, overfunded endeavors and worthy, underfunded endeavors. I originally had a more visceral, abstract example that did a much better job, but it was attracting so many drive-by downvotes that I decided to retire it while I searched for better wording/examples. Here is the original: Economists invite you to ignore this effect by conflating "value" (the economic notion, which is weighted by wealth) with value (the philosophical notion, which isn't, at least not to the same degree). For example, consider the prospect of feeding starving African children. This action has 0 "value" -- the market will not pay you to do this because the kids have no money with which to pay you -- even though the prospect has loads of value in the philosophical sense. Now consider the prospect of merging up the banks so that they can charge higher fees and offload risk to the federal government. This action has loads of "value" -- it gives investors a return, at scale, and investors have lots of money, so their opinion counts heavily -- even though this prospect has zero or negative value in the philosophical sense. Because it is weighted according to wealth, the economic notion of value diverges from the philosophical notion of value in proportion to inequality, and with exploding inequality, that's a big problem.