10 ms·

Towards an Untrepreneurial Economy? Rise of the Veblenian Entrepreneur (2019)

147 points by npalli 6y ago

stupidcar 6y ago
It's weird to see stuff like this published as a "paper", as if it were a scientific endeavour, when there doesn't seem to be any experiment, mathematics, or even data involved. Just a lot of conjecture sprinkled with citations. It seems like the epitome of Feynman's cargo cult science. I'm actually very sympathetic with the idea being advanced, I'm just not sure what really separates this and a blog post.
- antognini 6y ago
  Historians write papers. As do philosophers and classicists. There are papers in literary criticism, law, music theory, and theology, and none of them have experiments, mathematics, or data (at least in the scientific sense of the word). I don't think that makes those endeavors invalid. The difference between an academic paper and a blog post is that an academic paper needs to fit into the context of the academic literature through its format (particularly through citation of prior work), and it needs to undergo some form of peer review. None of that is any guarantee of quality, of course. There are lots of terrible academic papers and lots of excellent blog posts. But you don't need to be a scientist to write an academic paper.
  - autokad 6y ago
    But this is economics, not music theory. And while a history paper titled 'Hitler did not start world war 2' may not have any data to back up its claim, if it didn't then it wouldn't be a very good one.
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- talentedcoin 6y ago
  A paper needs an idea that is well-thought-out and well-cited. Outside of math or the natural sciences, it does not need experiments, mathematics, or data.
  - PeeInTheData 6y ago
    Fields outside of those are either just note taking (history), subjective (music), or just nonsense (sociology, anything that ends in “studies”).
  - rini17 6y ago
    If you label one sector of economy as harmful and another one as beneficial, why not use actual data to support your claim? Unlike thesis like "goto considered harmful" there are enough data out there. Authors even mention the actual size of the untrepreneurial industry in $, but don't dig any further.
    - talentedcoin 6y ago
      Yeah, I tend to agree with you there. I get the impression that was just more work, or not the focus of this specific paper. For what it's worth, they do say > Rather, we seek to provide a description of a subset of the population of ventures which appear to be growth-oriented entrepreneurship but on closer inspection are not. The exact size of this sub-set is a matter for further empirical study. So, I'm looking forward to the follow up I guess :)
- dang 6y ago
  "Please don't post shallow dismissals, especially of other people's work. A good critical comment teaches us something." https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html Reflexive, generic comments are much more boring to read than they are to write, and they take threads in uninteresting directions. With a submission like this, if you don't find something to engage with in the article, there are lots of other things to read on HN's front page.
- rmrfstar 6y ago
  I haven't read this paper, but... What separates a good paper from a blog post is the attention it devotes to second and third order consequences, its discussion and dismissal of likely counter-arguments, and the author's framing of the new idea in the context of existing literature. This is true for social science papers and law-review articles as much as it is true for machine learning and engineering papers. These are the hallmarks of careful analysis that are generally lacking in hot-take blog posts.
vikramkr 6y ago
Truly a miracle it is to witness the birth of new jargon. For academics working on understanding things like societal/economic dynamics, perhaps take a moment to consider that for the work to have any real impact, it needs to be understood by laypeople? Biologists can get away with naming things all sort of nonsense because the everyday person doesnt interact with it, but if you're trying to highlight destructive dynamics in the entrepreneurial sector, saying "this is an example of Veblenian Entrepreneurship!" doesn't communicate anything. Most of the writing that actually influenced the field use terms that are understandable and communicable build on terms already understood by practitioners, like minimum viable product or strategic inflection point. Making an argument with a whole bunch of jargon like "Ideology of Entepreneurialsm" or "Veblenian" just means anyone that wants to engage with the text has to go look up a bunch of random terms to figure out that you're referencing some 1800s era economist that coined the term "conspicuous consumption." It also makes you wonder if this level of being divorced from the actual practice impacts the analysis and if the findings are based on an actual understanding of the field or just an academic bubble. If, as they say at the end of the paper, this should be used as a catalyst to change entrepreneurship education- I wonder if they understand first how many people start companies because they majored in entrepreneurship, and second if they understand just how accessible this terminology and jargon is and if it would be getting in the way of making actual impact on curriculums
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- chartpath 6y ago
  TBF this is an academic article though. Why should total accessibility of language to non-experts be a goal in that venue exactly? Isn't it reasonable to expect that other educated people will check the citations? Also in this case it looks like the authors are from business schools. Business buzzwords are a well known and common absurdity. On the other hand, I might be freaked out if random names for stuff started coming out of logic or maths circles.
- ksdale 6y ago
  FWIW, I am only interested in economics as a hobby, and I knew immediately what Veblenian meant. It's a pretty common reference in the field. I think you raise a valid point about the impact of overly academic work, but I also think it's not unreasonable for academics to expect that their primary audience will have a passing familiarity with the major figures in the field.
ackbar03 6y ago
Ouch. But it also seems that the quality of research is falling? I guess it's cause I come from a technical field but a paper with a bunch of text, citations, and a general concept can be called research in the business field? Is it any wonder there is so much bs out there?
- cma 6y ago
  Seems better than sprinkling it with misleading false-quantification through scientism based charts and figures.
- Nasrudith 6y ago
  Unfortunately yes - bullshit is how many make their living in business. You would expect separation between doing and studying however, it is quite looked down upon for field researchers to maul sheep along with the wolves when studying livestock-wildlife interactions. As for research as a whole it would require a metanalysis of a lot of papers over the year. It is possible it was always distributed about the same, or there were other filtering effects like stinkers didn't propagate as far in the past with higher publishing costs so we can't tell for sure. Snark aside it is more like a clickbait article in making assertions and failing to either provide qualatative justifications or properly constrain them to the subset actually examined. Most businesses fail and dissolve in their first year period. A qualatative study that looked at numbers of "great outliers" may be more permissible but one which tries to make broad claims. It isn't even consistent with the definitions, and axiomatically assumes low quality and waste for veblen goods. There have long been whole markets out there for high status "green" or "socially conscious" goods that cost more than the commodity as effective status signaling as an effect (whether it is primary or secondary depends on the individuals involved and their sincerity and consistency of action). Low quality is also poorly defined. They imply cheap goods upsold but that doesn't make it poor enterpenuariship - going bankrupt in an easily preventable way and failing would be though. It appears to be yet another tedious academic political axe grinder.
- dang 6y ago
  "Please don't post shallow dismissals, especially of other people's work. A good critical comment teaches us something." https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html Reflexive, generic comments are much more boring to read than they are to write, and they take threads in uninteresting directions. With a submission like this, if you don't find something to engage with in the article, please find something else to read that you do find interesting.
0x00B664 6y ago
I find the premise to be rather Baudrillardian than Veblenian, or perhaps it's simply that Baudrillard encompasses Veblen. In essence: the meta consumption of the symbol of entrepreneurship, on the assumption that it increasingly holds more social value than any economic output, imo extends the behavior beyond mere Veblenian, i.e. conspicuous, consumption.
neilk 6y ago
This is fascinating. In passing, they mention how the highly privileged may conspicuously consume 'immaterial' goods for status, and the less privileged do more traditional conspicuous consumption of expensive goods. So if wantrepreneurism is a form of conspicuous consumption for the privileged - or those who desire to become so - what's the equivalent for the less privileged? I think it has to be MLM and Instagram influencing. The wantrepreneur wants to be a mini-Jobs, but the MLM/Insta dreamer wants to be a mini-Kardashian, hawking products with a glamorous image. But their desire is exploited ruthlessly by a system that promises success but will mostly drain their wallet. Nevertheless a lot of them feel the need to keep going, largely because they've publicly bought into the image. Maybe it's about what forms of success one is exposed to and what one sees is popular among one's peers?
- creddit 6y ago
  Ha, I really like this analysis. Has a Venkatesh Rao feel to it.
- DenisM 6y ago
  > Maybe it's about what forms of success one is exposed to and what one sees is popular among one's peers? Fashion is fashion. For some it's a rebellion, a coming of age story, for others it's a way to blend in with the peers, be one of the cool guys. On a tangent: many (most?) investors are playing the same game, only by proxy. This is why the VC industry is losing money as a whole - they aren't there for the money.
  - Enginerrrd 6y ago
    IMO the VC industry as a whole is losing money because a large fraction of them suffer from luck/survivorship bias & lack the wisdom to recognize that was the key to their past successes, and they all have a serious case of FOMO. A lot of tech hype is just hype and the reality is, if you don't understand a technology and if/why it really is superior to existing solutions, you almost certainly aren't going to make money off it.
    - 6y ago
NicolasGorden 6y ago
I read the actual research and it seems to me the authors are confounding a lot of things. I believe people with a decent background in business and economics should see this. A few things that jumped out at me: 1- The rise of specialized services that lower the entrance bars for many industries. 2- The rise of the wantrepreneur. 3- "Inefficient market offerings" that reduce innovation. The answer to these: 1- Yes by lowering the entrance bar with SAAS products, regular people can create companies more easily. This means many people that shouldn't be company owners are now. But this is hardly a bad thing. The converse to this is that many people who should be entrepreneurs that weren't are. 2- This is really complex. And yes, the ease of starting a business and businesses that service businesses will always play into this segment. But it's hard to blame mailchimp for the rise of the wantrepreneur, which seems to be a logical conclusion if we follow the premise of the study. Since that's not a logical conclusion, it follows the study's premise isn't very sound. 3- As I understand it, inefficiencies in the production of services means more people offering a service than can be sustained by the demand of such services. Such events are normal when industries are in flux. It's actually a good thing, as it fosters competition and the surviving brands are stronger, leaner and smarter than they would be if there wasn't such 'inefficiencies'. I'm really not sure what people see in this study. Even the language used is... emotional? lacking? I mean, it's just not language that lends to nuance and understanding. It's almost marketing like. And I say this as someone who is a digital marketeer, so I'm not using it as an insult. It just feels out of place, I expect analytical language in a study.
- Animats 6y ago
  I've read Veblen's "The Theory of the Leisure Class", and I don't see that it applies here. The author writes: "This rapidly growing industry has transformed the nature of entrepreneurship and encouraged a particular form of low-quality entrepreneurship. It has done so by leveraging the Ideology of Entrepreneurialism to mass-produce and mass-market products that make possible what we term Veblenian Entrepreneurship." I'd agree with the first sentence, but not the second. We really do have "entrepreneurship as a service" now. Or did, pre-epidemic. Wannabe writes a pitch deck or a white paper, and convinces VCs, Kickstarter users, or ICO investors to put in money. Get space from WeWork, technology infrastructure from AWS, and turn traffic into revenue with Google Ads. Show the traffic climbing and you're a success, even if not profitable. Some such businesses even succeed in the end. The question is, is this diverting people from doing hard, useful things? Like refurbishing buildings in bad neighborhoods. Installing solar panels and inverters. Tree trimming near power lines as a service. Automating meat-cutting plants. Don't know. We don't have enough of the latter, though. Those things have no low-probability big upside, which is what VCs want.
scottishcow 6y ago
So universities are conspicuous consumption, internships are conspicuous consumption, entrepreneurship is conspicuous consumption. Perhaps the simple fact is that most people are motivated by the need for social validation, and only a tiny tiny fraction of the population is driven instead by things like intellectual curiosity, desire to help others / solve societal problems, etc. So any class of activity that becomes open to a sufficient number of entrants will eventually turn into a form of conspicuous consumption. Now scientific research is conspicuous consumption (MIT Media Lab?), book authorship is conspicuous consumption, and political candidacy is conspicuous consumption. Are there any activities left that doesn’t function as a form of conspicuous consumption?
- z3t4 6y ago
  Medics, fictions, anything that is not considered cool
- pdonis 6y ago
  > universities are conspicuous consumption, internships are conspicuous consumption, entrepreneurship is conspicuous consumption > scientific research is conspicuous consumption (MIT Media Lab?), book authorship is conspicuous consumption, and political candidacy is conspicuous consumption Is the paper making all these claims? I don't see them.
  - exolymph 6y ago
    Sometimes people write comments relaying their own opinions.
  - scottishcow 6y ago
    Never said it does, was it confusing? Maybe my English needs more work.
    - pdonis 6y ago
      > Never said it does Then I don't understand who this question is supposed to be directed at: > Are there any activities left that doesn’t function as a form of conspicuous consumption? My answer would be that none of the activities you list (with the possible exception of the kind of wannabe entrepreneurship the paper is talking about) are conspicuous consumption. But it seemed like you were directing the question at the authors of the paper, not me.
masona 6y ago
I've been seeing a lot of that lately on Twitter: accounts post inspirational quotes/images about being an entrepreneur and 'transparency' about how much money they've made. Always followed by a link to their Gumroad: "Pay me to tell you how to take advantage of people like you, who just paid me."
mementomori 6y ago
Is it more desirable to "actually want to create real economic value" and less desirable to "doing this just so I can tell people I'm an entrepreneur"? Maybe there's some value in "people who shouldn't be owning companies" owning companies, as it demonstrates a kind of economic freedom in a society. Whether a small business is able to make a dent in the economy or even an industry or a vertical is probably another topic of discussion. It's not actually that easy to start and run a business, there's a lot of yak-shaving admin work. Again, this is something that can be solved by throwing money at it (accountants, attorneys). So it does seem like entrepreneurship is prone to be used as social signaling by those who are already privileged. I don't know what argument I'm getting at, but I just know to be more discerning between the two types of entrepreneurs in my own networking activities and the people I choose to build relationships with, so I don't waste time.
somewhereoutth 6y ago
I've watched this kind of thing unfolding around where I am now - good to be given words for the somewhat uncomfortable feeling I was having. I'd realised that entrepreneurship was no longer some crazy people in a shed, but instead now an established industry - but I hadn't quite elucidated the precise identity and nature of the customer. The most egregious example I'd seen was a clearly smart and talented guy ready to torch his budding medical career in order to launch a tourism related startup. Deeply ironic considering subsequent events.
tathougies 6y ago
There are two kinds of 'wantrapreneurs': one who wants to build a business that provides services or goods to the public at large and another who wants to build a business that provides services or goods to other wantrepreneurs to increase their social standing. The internet seems filled with the latter, but in reality, there are probably more of the first, methinks.
tathougies 6y ago
> And society derives no obvious benefits from a profusion of poorly performing ventures. This is where the paper goes from research to opinion piece. It is easily argued that without the failures, there won't be successes. One can also see that while there are many many business failures, there are also unicorns the likes of which the world has not seen before. It is not obvious at all that not having more failed entrepreneurs is a bad thing. Lower life-time earnings is hardly a social cost. If these entrepreneurs ended up on welfare, then perhaps there is an argument. But if they find a fulfilling life doing what they do, and the consequence is they earn less... what problem is it of mine? Why do I need to derive a benefit from them? That seems to be putting my desire for 'stuff' (intangible or not) over their right to do whatever they want with their life. More examples of editorializing: > In contemporary society, the infatuation with entrepreneurs is such that they “are seen as almost having a magical effect on economies—alchemists, whose innovative capacity allows for water to be turned into wine, lead into gold.” (Greene et al, 2008; p. 3). -- citing a source does not make it true
unexaminedlife 6y ago
I genuinely believe most of the entrepreneurs who "make a dent" went in with the best of intentions. I sort of feel that once the wrong investors get involved (or the entrepreneur gets sucked into bad terms) the whole thing (from an outsider's perspective) starts looking more like a ponzi scheme than a traditional business that creates real value for consumers.
Thorentis 6y ago
Some fascinating observations here. What they describe perfectly explains the rise of places like IndieHacker. IndieHacker is basically a website for Veblenian Entrepreneurs to show off how successfully they are, and how far along they are to being real entrepreneurs. It is a place where their real desires (success, social status, etc.) can be easily signaled to other people. The increasing number of innovation hubs, incubators, development grants, boot camps, etc. are taken together, what the article terms the "Entrepreneurial Industrial Complex". An entire industry now exists around making money off people that want to be entrepreneurs, or posturing so that they can profit from the potential success of unicorns (e.g. Incubators that take a cut). SaaS that let's you make a SaaS to provide people with tools for SaaS creation anybody? As others have said here before, in a gold rush, it is the tool makers that make the money. And I think in this current "unicorn rush" that's exactly what we're seeing.
- Barrin92 6y ago
  what this also reminded me of is a story about "fake influencers" I read which are people on Instagram and so on who pretend to be paid influencers, they go on trips, shoot photos but actually nobody is paying them at all. On the one side, of course, there is a real financial motivation to become more famous, but on the other hand like the entrepreneurs, they just seem to want to consume the influencer lifestyle and for a while just pretend like they're engaging in the actual activity.
Ericson2314 6y ago
It's simple, demand "pulls" the economy far better than supply pushes it, and we are a rotten insecure society with no demand. VC as a solution to chronicle too small capital expenditures is like pushing a rope.
jackcosgrove 6y ago
Grades are inflated. Ambitious high school juniors are running bogus charities and non-profits. The smart kids do track and cross country so they can be two sport athletes. Harvard has the same curriculum as Penn State honors. Instagram lives are fabulous and fake. Wantrepreneurs start shell companies to put on their resume. It's all down to our increasing ability to satisfy human material needs. Instead of allocating stuff so people can survive, the economy allocates status so people can be popular. It's an economy of likes rather than an economy of needs.
- ReticentVole 6y ago
  We need a grand strategy. Our first order of business should be to end the burning of fossil fuels, second order being to establish permanent presence beyond Earth. Otherwise it feels like we are just twiddling our thumbs, redistributing wealth (upwards), and slowly dying.
  - bonestormii_ 6y ago
    I want space colonies as much as the next guy, but we really need to try to end homelessness, poverty, and extreme gaps in wealth inequality. Otherwise the rich will just fly off into the sky after they are done with the planet anyway. The production is there. The money is there. If we simply won't do this, we aren't worth preserving as a society.
    - ReticentVole 6y ago
      The willpower and genetic heritage of the poor and homeless isn't there. Most people at the very bottom are in that position because of mental or genetic problems. You cannot continue to throw money at it - you will end up with an endless burden. Instead just fund planned parenthood so that the cycle doesn't continue.
      - bonestormii_ 6y ago
        This perspective is a tragedy, and is just not the case. Guess what--It's hard to get a good job with a criminal record, and it's easy to have a criminal record when you are black/brown. So you take a bad job. And with that job, you remain so poor that you cannot handle the slightest emergency. A huge bill or disaster in your life (medical; car; legal) can pretty much end you. If you don't have a strong network to support you, you become homeless. How do you reconcile the fact that most homeless people have some sort of family structure that is not homeless? I've never seen any evidence that homelessness is an inherited condition. You blame both will power and genetics. Why are you so anxious to believe that society has no role in creating or solving this problem? If you make access to education equitable; if you don't ruin people's ability to engage with the economy with drug offenses that statistically appear quite racist in their skew; if you treat mental problems with medical assistance rather than criminal justice systems; if you regulate housing markets to prioritize making housing affordable rather than prioritize generating passive income for upper classes-- you can have a meaningful reduction of homelessness.
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zamfi 6y ago
Another commenter posted: > It's simple, demand "pulls" the economy far better than supply pushes it, and we are a rotten insecure society with no demand. I'm not sure it's so simple. In certain industries, we have a ton of demand that isn't really met: housing, education, healthcare, to name three. But the reason we don't meet the demand for these (now highly-inflationary) goods and services is political, not economic. 1. We know how to build lots of really nice housing for not that much, but the most in-demand regions prevent that construction through the political process. Any innovation in construction tech has to contend with not just limits on construction in in-demand areas, but also requirements ("all new construction needs rooftop solar!" -- I love solar, but the costs are way, way lower at utility-scale) that increase costs. 2. High-quality, public education used to be ~free, a reality that applied significant downward pressure on private college tuition as well, but state funding has entirely dried up as costs (often non-teaching-related) have soared, in part thanks to (1)! 3. Due to somewhat well-meaning regulation, healthcare has become a disaster of hidden price signals, requiring a team of bureaucrats weeks to months to decide how much money to exchange for a service already provided. Powerful political organizations limit the number of new practitioners trained in the US, There are good and totally justifiable path-dependent reasons why we are where we are in the three industries above. But they are now the largest category of consumer cash outflows, pushing innovation to the margins (cell phones! computers! ads!). The reason housing, education, and healthcare are so expensive is because demand vastly exceeds supply, and supply is limited by politics.
alexmingoia 6y ago
Veblenian academics.
termau 6y ago
I couldn't get all the way though it, it's almost as bad as the circle jerk that is the start up 'industry'. Reading it I just think why does it matter either way? You're either looking for profit, looking for scale, or looking for someone to bankroll you to do those things. The rest is all noise, so much noise.
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147 points by npalli 6y ago

It's weird to see stuff like this published as a "paper", as if it were a scientific endeavour, when there doesn't seem to be any experiment, mathematics, or even data involved. Just a lot of conjecture sprinkled with citations. It seems like the epitome of Feynman's cargo cult science. I'm actually very sympathetic with the idea being advanced, I'm just not sure what really separates this and a blog post.

antognini 6y ago
Historians write papers. As do philosophers and classicists. There are papers in literary criticism, law, music theory, and theology, and none of them have experiments, mathematics, or data (at least in the scientific sense of the word). I don't think that makes those endeavors invalid. The difference between an academic paper and a blog post is that an academic paper needs to fit into the context of the academic literature through its format (particularly through citation of prior work), and it needs to undergo some form of peer review. None of that is any guarantee of quality, of course. There are lots of terrible academic papers and lots of excellent blog posts. But you don't need to be a scientist to write an academic paper.
- autokad 6y ago
  But this is economics, not music theory. And while a history paper titled 'Hitler did not start world war 2' may not have any data to back up its claim, if it didn't then it wouldn't be a very good one.
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talentedcoin 6y ago
A paper needs an idea that is well-thought-out and well-cited. Outside of math or the natural sciences, it does not need experiments, mathematics, or data.
- PeeInTheData 6y ago
  Fields outside of those are either just note taking (history), subjective (music), or just nonsense (sociology, anything that ends in “studies”).
- rini17 6y ago
  If you label one sector of economy as harmful and another one as beneficial, why not use actual data to support your claim? Unlike thesis like "goto considered harmful" there are enough data out there. Authors even mention the actual size of the untrepreneurial industry in $, but don't dig any further.
  - talentedcoin 6y ago
    Yeah, I tend to agree with you there. I get the impression that was just more work, or not the focus of this specific paper. For what it's worth, they do say > Rather, we seek to provide a description of a subset of the population of ventures which appear to be growth-oriented entrepreneurship but on closer inspection are not. The exact size of this sub-set is a matter for further empirical study. So, I'm looking forward to the follow up I guess :)
dang 6y ago
"Please don't post shallow dismissals, especially of other people's work. A good critical comment teaches us something." https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html Reflexive, generic comments are much more boring to read than they are to write, and they take threads in uninteresting directions. With a submission like this, if you don't find something to engage with in the article, there are lots of other things to read on HN's front page.
rmrfstar 6y ago
I haven't read this paper, but... What separates a good paper from a blog post is the attention it devotes to second and third order consequences, its discussion and dismissal of likely counter-arguments, and the author's framing of the new idea in the context of existing literature. This is true for social science papers and law-review articles as much as it is true for machine learning and engineering papers. These are the hallmarks of careful analysis that are generally lacking in hot-take blog posts.

vikramkr 6y ago

Truly a miracle it is to witness the birth of new jargon. For academics working on understanding things like societal/economic dynamics, perhaps take a moment to consider that for the work to have any real impact, it needs to be understood by laypeople? Biologists can get away with naming things all sort of nonsense because the everyday person doesnt interact with it, but if you're trying to highlight destructive dynamics in the entrepreneurial sector, saying "this is an example of Veblenian Entrepreneurship!" doesn't communicate anything. Most of the writing that actually influenced the field use terms that are understandable and communicable build on terms already understood by practitioners, like minimum viable product or strategic inflection point. Making an argument with a whole bunch of jargon like "Ideology of Entepreneurialsm" or "Veblenian" just means anyone that wants to engage with the text has to go look up a bunch of random terms to figure out that you're referencing some 1800s era economist that coined the term "conspicuous consumption." It also makes you wonder if this level of being divorced from the actual practice impacts the analysis and if the findings are based on an actual understanding of the field or just an academic bubble. If, as they say at the end of the paper, this should be used as a catalyst to change entrepreneurship education- I wonder if they understand first how many people start companies because they majored in entrepreneurship, and second if they understand just how accessible this terminology and jargon is and if it would be getting in the way of making actual impact on curriculums

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chartpath 6y ago
TBF this is an academic article though. Why should total accessibility of language to non-experts be a goal in that venue exactly? Isn't it reasonable to expect that other educated people will check the citations? Also in this case it looks like the authors are from business schools. Business buzzwords are a well known and common absurdity. On the other hand, I might be freaked out if random names for stuff started coming out of logic or maths circles.
ksdale 6y ago
FWIW, I am only interested in economics as a hobby, and I knew immediately what Veblenian meant. It's a pretty common reference in the field. I think you raise a valid point about the impact of overly academic work, but I also think it's not unreasonable for academics to expect that their primary audience will have a passing familiarity with the major figures in the field.

ackbar03 6y ago

Ouch. But it also seems that the quality of research is falling? I guess it's cause I come from a technical field but a paper with a bunch of text, citations, and a general concept can be called research in the business field? Is it any wonder there is so much bs out there?

cma 6y ago
Seems better than sprinkling it with misleading false-quantification through scientism based charts and figures.
Nasrudith 6y ago
Unfortunately yes - bullshit is how many make their living in business. You would expect separation between doing and studying however, it is quite looked down upon for field researchers to maul sheep along with the wolves when studying livestock-wildlife interactions. As for research as a whole it would require a metanalysis of a lot of papers over the year. It is possible it was always distributed about the same, or there were other filtering effects like stinkers didn't propagate as far in the past with higher publishing costs so we can't tell for sure. Snark aside it is more like a clickbait article in making assertions and failing to either provide qualatative justifications or properly constrain them to the subset actually examined. Most businesses fail and dissolve in their first year period. A qualatative study that looked at numbers of "great outliers" may be more permissible but one which tries to make broad claims. It isn't even consistent with the definitions, and axiomatically assumes low quality and waste for veblen goods. There have long been whole markets out there for high status "green" or "socially conscious" goods that cost more than the commodity as effective status signaling as an effect (whether it is primary or secondary depends on the individuals involved and their sincerity and consistency of action). Low quality is also poorly defined. They imply cheap goods upsold but that doesn't make it poor enterpenuariship - going bankrupt in an easily preventable way and failing would be though. It appears to be yet another tedious academic political axe grinder.
dang 6y ago
"Please don't post shallow dismissals, especially of other people's work. A good critical comment teaches us something." https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html Reflexive, generic comments are much more boring to read than they are to write, and they take threads in uninteresting directions. With a submission like this, if you don't find something to engage with in the article, please find something else to read that you do find interesting.

0x00B664 6y ago

I find the premise to be rather Baudrillardian than Veblenian, or perhaps it's simply that Baudrillard encompasses Veblen. In essence: the meta consumption of the symbol of entrepreneurship, on the assumption that it increasingly holds more social value than any economic output, imo extends the behavior beyond mere Veblenian, i.e. conspicuous, consumption.

neilk 6y ago

This is fascinating. In passing, they mention how the highly privileged may conspicuously consume 'immaterial' goods for status, and the less privileged do more traditional conspicuous consumption of expensive goods. So if wantrepreneurism is a form of conspicuous consumption for the privileged - or those who desire to become so - what's the equivalent for the less privileged? I think it has to be MLM and Instagram influencing. The wantrepreneur wants to be a mini-Jobs, but the MLM/Insta dreamer wants to be a mini-Kardashian, hawking products with a glamorous image. But their desire is exploited ruthlessly by a system that promises success but will mostly drain their wallet. Nevertheless a lot of them feel the need to keep going, largely because they've publicly bought into the image. Maybe it's about what forms of success one is exposed to and what one sees is popular among one's peers?

creddit 6y ago
Ha, I really like this analysis. Has a Venkatesh Rao feel to it.
DenisM 6y ago
> Maybe it's about what forms of success one is exposed to and what one sees is popular among one's peers? Fashion is fashion. For some it's a rebellion, a coming of age story, for others it's a way to blend in with the peers, be one of the cool guys. On a tangent: many (most?) investors are playing the same game, only by proxy. This is why the VC industry is losing money as a whole - they aren't there for the money.
- Enginerrrd 6y ago
  IMO the VC industry as a whole is losing money because a large fraction of them suffer from luck/survivorship bias & lack the wisdom to recognize that was the key to their past successes, and they all have a serious case of FOMO. A lot of tech hype is just hype and the reality is, if you don't understand a technology and if/why it really is superior to existing solutions, you almost certainly aren't going to make money off it.
  - 6y ago

NicolasGorden 6y ago

I read the actual research and it seems to me the authors are confounding a lot of things. I believe people with a decent background in business and economics should see this. A few things that jumped out at me: 1- The rise of specialized services that lower the entrance bars for many industries. 2- The rise of the wantrepreneur. 3- "Inefficient market offerings" that reduce innovation. The answer to these: 1- Yes by lowering the entrance bar with SAAS products, regular people can create companies more easily. This means many people that shouldn't be company owners are now. But this is hardly a bad thing. The converse to this is that many people who should be entrepreneurs that weren't are. 2- This is really complex. And yes, the ease of starting a business and businesses that service businesses will always play into this segment. But it's hard to blame mailchimp for the rise of the wantrepreneur, which seems to be a logical conclusion if we follow the premise of the study. Since that's not a logical conclusion, it follows the study's premise isn't very sound. 3- As I understand it, inefficiencies in the production of services means more people offering a service than can be sustained by the demand of such services. Such events are normal when industries are in flux. It's actually a good thing, as it fosters competition and the surviving brands are stronger, leaner and smarter than they would be if there wasn't such 'inefficiencies'. I'm really not sure what people see in this study. Even the language used is... emotional? lacking? I mean, it's just not language that lends to nuance and understanding. It's almost marketing like. And I say this as someone who is a digital marketeer, so I'm not using it as an insult. It just feels out of place, I expect analytical language in a study.

Animats 6y ago
I've read Veblen's "The Theory of the Leisure Class", and I don't see that it applies here. The author writes: "This rapidly growing industry has transformed the nature of entrepreneurship and encouraged a particular form of low-quality entrepreneurship. It has done so by leveraging the Ideology of Entrepreneurialism to mass-produce and mass-market products that make possible what we term Veblenian Entrepreneurship." I'd agree with the first sentence, but not the second. We really do have "entrepreneurship as a service" now. Or did, pre-epidemic. Wannabe writes a pitch deck or a white paper, and convinces VCs, Kickstarter users, or ICO investors to put in money. Get space from WeWork, technology infrastructure from AWS, and turn traffic into revenue with Google Ads. Show the traffic climbing and you're a success, even if not profitable. Some such businesses even succeed in the end. The question is, is this diverting people from doing hard, useful things? Like refurbishing buildings in bad neighborhoods. Installing solar panels and inverters. Tree trimming near power lines as a service. Automating meat-cutting plants. Don't know. We don't have enough of the latter, though. Those things have no low-probability big upside, which is what VCs want.

scottishcow 6y ago

So universities are conspicuous consumption, internships are conspicuous consumption, entrepreneurship is conspicuous consumption. Perhaps the simple fact is that most people are motivated by the need for social validation, and only a tiny tiny fraction of the population is driven instead by things like intellectual curiosity, desire to help others / solve societal problems, etc. So any class of activity that becomes open to a sufficient number of entrants will eventually turn into a form of conspicuous consumption. Now scientific research is conspicuous consumption (MIT Media Lab?), book authorship is conspicuous consumption, and political candidacy is conspicuous consumption. Are there any activities left that doesn’t function as a form of conspicuous consumption?

z3t4 6y ago
Medics, fictions, anything that is not considered cool
pdonis 6y ago
> universities are conspicuous consumption, internships are conspicuous consumption, entrepreneurship is conspicuous consumption > scientific research is conspicuous consumption (MIT Media Lab?), book authorship is conspicuous consumption, and political candidacy is conspicuous consumption Is the paper making all these claims? I don't see them.
- exolymph 6y ago
  Sometimes people write comments relaying their own opinions.
- scottishcow 6y ago
  Never said it does, was it confusing? Maybe my English needs more work.
  - pdonis 6y ago
    > Never said it does Then I don't understand who this question is supposed to be directed at: > Are there any activities left that doesn’t function as a form of conspicuous consumption? My answer would be that none of the activities you list (with the possible exception of the kind of wannabe entrepreneurship the paper is talking about) are conspicuous consumption. But it seemed like you were directing the question at the authors of the paper, not me.

masona 6y ago

I've been seeing a lot of that lately on Twitter: accounts post inspirational quotes/images about being an entrepreneur and 'transparency' about how much money they've made. Always followed by a link to their Gumroad: "Pay me to tell you how to take advantage of people like you, who just paid me."

mementomori 6y ago

Is it more desirable to "actually want to create real economic value" and less desirable to "doing this just so I can tell people I'm an entrepreneur"? Maybe there's some value in "people who shouldn't be owning companies" owning companies, as it demonstrates a kind of economic freedom in a society. Whether a small business is able to make a dent in the economy or even an industry or a vertical is probably another topic of discussion. It's not actually that easy to start and run a business, there's a lot of yak-shaving admin work. Again, this is something that can be solved by throwing money at it (accountants, attorneys). So it does seem like entrepreneurship is prone to be used as social signaling by those who are already privileged. I don't know what argument I'm getting at, but I just know to be more discerning between the two types of entrepreneurs in my own networking activities and the people I choose to build relationships with, so I don't waste time.

somewhereoutth 6y ago

I've watched this kind of thing unfolding around where I am now - good to be given words for the somewhat uncomfortable feeling I was having. I'd realised that entrepreneurship was no longer some crazy people in a shed, but instead now an established industry - but I hadn't quite elucidated the precise identity and nature of the customer. The most egregious example I'd seen was a clearly smart and talented guy ready to torch his budding medical career in order to launch a tourism related startup. Deeply ironic considering subsequent events.

tathougies 6y ago

There are two kinds of 'wantrapreneurs': one who wants to build a business that provides services or goods to the public at large and another who wants to build a business that provides services or goods to other wantrepreneurs to increase their social standing. The internet seems filled with the latter, but in reality, there are probably more of the first, methinks.

tathougies 6y ago

> And society derives no obvious benefits from a profusion of poorly performing ventures. This is where the paper goes from research to opinion piece. It is easily argued that without the failures, there won't be successes. One can also see that while there are many many business failures, there are also unicorns the likes of which the world has not seen before. It is not obvious at all that not having more failed entrepreneurs is a bad thing. Lower life-time earnings is hardly a social cost. If these entrepreneurs ended up on welfare, then perhaps there is an argument. But if they find a fulfilling life doing what they do, and the consequence is they earn less... what problem is it of mine? Why do I need to derive a benefit from them? That seems to be putting my desire for 'stuff' (intangible or not) over their right to do whatever they want with their life. More examples of editorializing: > In contemporary society, the infatuation with entrepreneurs is such that they “are seen as almost having a magical effect on economies—alchemists, whose innovative capacity allows for water to be turned into wine, lead into gold.” (Greene et al, 2008; p. 3). -- citing a source does not make it true

unexaminedlife 6y ago

I genuinely believe most of the entrepreneurs who "make a dent" went in with the best of intentions. I sort of feel that once the wrong investors get involved (or the entrepreneur gets sucked into bad terms) the whole thing (from an outsider's perspective) starts looking more like a ponzi scheme than a traditional business that creates real value for consumers.

Thorentis 6y ago

Some fascinating observations here. What they describe perfectly explains the rise of places like IndieHacker. IndieHacker is basically a website for Veblenian Entrepreneurs to show off how successfully they are, and how far along they are to being real entrepreneurs. It is a place where their real desires (success, social status, etc.) can be easily signaled to other people. The increasing number of innovation hubs, incubators, development grants, boot camps, etc. are taken together, what the article terms the "Entrepreneurial Industrial Complex". An entire industry now exists around making money off people that want to be entrepreneurs, or posturing so that they can profit from the potential success of unicorns (e.g. Incubators that take a cut). SaaS that let's you make a SaaS to provide people with tools for SaaS creation anybody? As others have said here before, in a gold rush, it is the tool makers that make the money. And I think in this current "unicorn rush" that's exactly what we're seeing.

Barrin92 6y ago
what this also reminded me of is a story about "fake influencers" I read which are people on Instagram and so on who pretend to be paid influencers, they go on trips, shoot photos but actually nobody is paying them at all. On the one side, of course, there is a real financial motivation to become more famous, but on the other hand like the entrepreneurs, they just seem to want to consume the influencer lifestyle and for a while just pretend like they're engaging in the actual activity.

Ericson2314 6y ago

It's simple, demand "pulls" the economy far better than supply pushes it, and we are a rotten insecure society with no demand. VC as a solution to chronicle too small capital expenditures is like pushing a rope.

jackcosgrove 6y ago

Grades are inflated. Ambitious high school juniors are running bogus charities and non-profits. The smart kids do track and cross country so they can be two sport athletes. Harvard has the same curriculum as Penn State honors. Instagram lives are fabulous and fake. Wantrepreneurs start shell companies to put on their resume. It's all down to our increasing ability to satisfy human material needs. Instead of allocating stuff so people can survive, the economy allocates status so people can be popular. It's an economy of likes rather than an economy of needs.

ReticentVole 6y ago
We need a grand strategy. Our first order of business should be to end the burning of fossil fuels, second order being to establish permanent presence beyond Earth. Otherwise it feels like we are just twiddling our thumbs, redistributing wealth (upwards), and slowly dying.
- bonestormii_ 6y ago
  I want space colonies as much as the next guy, but we really need to try to end homelessness, poverty, and extreme gaps in wealth inequality. Otherwise the rich will just fly off into the sky after they are done with the planet anyway. The production is there. The money is there. If we simply won't do this, we aren't worth preserving as a society.
  - ReticentVole 6y ago
    The willpower and genetic heritage of the poor and homeless isn't there. Most people at the very bottom are in that position because of mental or genetic problems. You cannot continue to throw money at it - you will end up with an endless burden. Instead just fund planned parenthood so that the cycle doesn't continue.
    - bonestormii_ 6y ago
      This perspective is a tragedy, and is just not the case. Guess what--It's hard to get a good job with a criminal record, and it's easy to have a criminal record when you are black/brown. So you take a bad job. And with that job, you remain so poor that you cannot handle the slightest emergency. A huge bill or disaster in your life (medical; car; legal) can pretty much end you. If you don't have a strong network to support you, you become homeless. How do you reconcile the fact that most homeless people have some sort of family structure that is not homeless? I've never seen any evidence that homelessness is an inherited condition. You blame both will power and genetics. Why are you so anxious to believe that society has no role in creating or solving this problem? If you make access to education equitable; if you don't ruin people's ability to engage with the economy with drug offenses that statistically appear quite racist in their skew; if you treat mental problems with medical assistance rather than criminal justice systems; if you regulate housing markets to prioritize making housing affordable rather than prioritize generating passive income for upper classes-- you can have a meaningful reduction of homelessness.

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zamfi 6y ago

Another commenter posted: > It's simple, demand "pulls" the economy far better than supply pushes it, and we are a rotten insecure society with no demand. I'm not sure it's so simple. In certain industries, we have a ton of demand that isn't really met: housing, education, healthcare, to name three. But the reason we don't meet the demand for these (now highly-inflationary) goods and services is political, not economic. 1. We know how to build lots of really nice housing for not that much, but the most in-demand regions prevent that construction through the political process. Any innovation in construction tech has to contend with not just limits on construction in in-demand areas, but also requirements ("all new construction needs rooftop solar!" -- I love solar, but the costs are way, way lower at utility-scale) that increase costs. 2. High-quality, public education used to be ~free, a reality that applied significant downward pressure on private college tuition as well, but state funding has entirely dried up as costs (often non-teaching-related) have soared, in part thanks to (1)! 3. Due to somewhat well-meaning regulation, healthcare has become a disaster of hidden price signals, requiring a team of bureaucrats weeks to months to decide how much money to exchange for a service already provided. Powerful political organizations limit the number of new practitioners trained in the US, There are good and totally justifiable path-dependent reasons why we are where we are in the three industries above. But they are now the largest category of consumer cash outflows, pushing innovation to the margins (cell phones! computers! ads!). The reason housing, education, and healthcare are so expensive is because demand vastly exceeds supply, and supply is limited by politics.

alexmingoia 6y ago

Veblenian academics.

termau 6y ago

I couldn't get all the way though it, it's almost as bad as the circle jerk that is the start up 'industry'. Reading it I just think why does it matter either way? You're either looking for profit, looking for scale, or looking for someone to bankroll you to do those things. The rest is all noise, so much noise.

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