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This reads as though written by someone who has never experienced being on the losing side (the long tail) of all the systems they're advocating for. It utterly

This reads as though written by someone who has never experienced being on the losing side (the long tail) of all the systems they're advocating for. It utterly fails to answer why anyone not at the top of the power curve would want society to be structured this way - most of the described "Social Contract" seems to imply precarity, replacability, and living at the edge of financial disaster for most. Meanwhile, there's little mention that those who hold real power in this kind of system are not part of the curve at all but are those choosing the algorithms and AI systems that rank everyone else. Then there's this: > Trickle down doesn’t work because it existed in a hierarchical structure based on the scale production technologies of the times before 2000. There was much more friction in that old system. But in a network economy, the means of production have shifted. It’s 10X more fluid, can create wealth at a much higher rate, decrease costs at a much higher rate, and the network can raise all boats. To me this reads as "Trickle down didn't work last time, but this time it's different and it'll definitely work". How it will work this time is left as an exercise to the reader.

cryptica 5y ago
Agreed. Moreover, it's infuriating when people claim that 'technology' is responsible for changing the dynamics when they know (or should know) perfectly well that things like inequality and monopolies are caused by monetary policies which subsidize large capital-holders and thus give them an unfair advantage in the markets. Also, to claim that 'the rich keep getting richer' has always been true is misleading, it's far worse today than ever before because our monetary system has never been so decoupled from the underlying economic processes of value creation. This means our system is more unfair than it has ever been before. There is almost no correlation between skill and success; on the other hand there is a significant correlation between cheating and success.
Ensorceled 5y ago
Trickle down didn't work in the late 1900s either. Nor in the late 1800s when it was called "horse and sparrow". It just doesn't work.
- AlexandrB 5y ago
  I find "horse and sparrow" to be a particularly visceral description that neatly describes what's actually being proposed: > 'If you feed the horse enough oats, some will pass through to the road for the sparrows.'
gruez 5y ago
>It utterly fails to answer why anyone not at the top of the power curve would want society to be structured this way - most of the described "Social Contract" seems to imply precarity, [...] and living at the edge of financial disaster for most. How much of this is due to wealth distribution and how much of this is due to human nature? eg, 60% of Millennials Earning over $100k Live Paycheck to Paycheck (https://news.ycombinator.com/item?id=27581105 https://news.ycombinator.com/item?id=27581105)
- triceratops 5y ago
  It would be interesting to know the geographic distribution of those millennials. Living paycheck to paycheck when earning $105k in Oklahoma seems irresponsible. In SF, depending on your situation, that may not be so unreasonable. Moreover, how does that compare to other people (i.e. non-millennials) who make over $100k? The average (not median) savings rate in the US is pathetic - something like 10%. And that's obviously skewed by high-earners and FI/RE types. So 40% of millennials living below their means might actually be quite good in comparison.
  - deleted 5y ago
    [deleted]
- throwawaygh 5y ago
  > How much of this is due to wealth distribution and how much of this is due to human nature? Probably not much. 1. The VAST majority of people who are living paycheck-to-paycheck are not making $100K. According to the same report, Seventy-two percent of those who make less than $50,000 live paycheck to paycheck. Do some high earners live paycheck to payccheck? Sure. But the VAST majority of people living paycheck to paycheck are not high earners. 2. The death of pensions matters. In the post-pension world, maxing out your 401K and then some is a bill. Period. $100K - $20K = $80K. That's almost certainly "paycheck to paycheck" territory if you're raising more than one kid without a spouse, even in low CoL areas. When comparing earnings across time, it's almost more important to consider pensions in addition to inflation. 3. The background of people making >100K also matters. Many people making over $100K are well-educated, which often means significant debt and/or catching up on retirement savings. Think doctors, lawyers, PhDs, etc. 4. CoL also matters. Many people making >$100K are living in a high CoL areas. $50K in Dacatur, IL = $114K in SFBA.
jakelazaroff 5y ago
I think this quote from the beginning of the article is instructive: > We need new social contracts or we’re headed for some nasty conditions. > And we believe it’s up to tech Founders, VC’s and employees to do something about it. "Tech people, please build something that pacifies the masses, or they might rise up and take our money!"
- mistermann 5y ago
  A more optimal system would surely require a sophisticated technical implementation. I don't think the problem with that proposal is with technical people, but more so with the culture and organizational structures that rise to the top under within our current system. A super-wealthy, benevolent entity + good culture + comprehensively good ideas + a good technical implementation seems like what we need right about now - making this happen under the circumstances we find ourselves in seems like the tricky part. EDIT: "good" would probably be more accurately stated as "sufficiently adequate".
imtringued 5y ago
Trickle down doesn't work because it is motivated by the people who benefit from it rather than a macroeconomic need. If the labor market is a buyer market (employers picking employees) then trickle down can't work by definition because the labor market is already stacked in favor of the employers. They already obtained all possible positive sum benefit from the strategy. If the labor market is a sellers market then trickle down could work in theory but a sellers market means we are in an economic boom/expansion so people are happy and don't need further interventions beyond a raise in the interest rate. >But in a network economy, the means of production have shifted. It’s 10X more fluid, can create wealth at a much higher rate, decrease costs at a much higher rate, and the network can raise all boats. Okay now things are getting stupid. Economic saturation (aka overproduction) is sort of perverse. When companies boost production (creating wealth at a much higher rate), demand doesn't necesssarily catch up with increased production. [0] What happens is that the increase in productivity allows you to employ less people. That means less people can afford the overproduction because they are out of a job temporarily. Demand is going down in the short term. This means we are overproducing even more products relative to demand, resulting in even more layoffs. Lots of stuff and nobody there to buy it. Lack of demand then results in lack of investment. The economic growth and productivity growth are slowing down... [0] It may sound shocking but billionaires wouldn't be billionaires if they didn't spend less than they earn. Creating more billionaires or giving them more money is an effective way of decreasing demand and thus the potential for your economy to grow.
- dfilppi 5y ago
  Trickle down doesn't "work", because "work" has been defined a certain way. Define "work" another way, and it does "work". It also presumes that the government somehow has first dibs on what people earn, which is absurd.
  - ModernMech 5y ago
    Also stated as "The purpose of the system is what it does". If the system as designed is concentrating wealth in the hands of a few individuals (who themselves helped set up the system), how can we say it's not working as intended? It seems to be working out very well for them.
justicezyx 5y ago
Your reasoning is not wrong. And I also largely agree with your point. But I want to emphasize that reforming is still vital to the society, even if it just leads to another iteration of the same story. The reason is that reforming gives the chance for the society to repeating the same pattern at a much higher level. I.e., thousands of years ago, the long tail suffers in their body parts and basic livelihood. They might one day suddenly die from anything from disease, violence, starvation, etc. Now, the long tail suffers in comfort. One might be obseity, mental disorder, stress, etc. And system in stagnation often degenerate, not just keeps in tact. The degeneration leads to breakdown of social structure and cultural norms, which eventually leads to chaotic conflicts. With these, reform is the only choice.
jojoss 5y ago
Not only is it left to the reader, but the reader isn't told it took Nature about 400 million years of trail and error and a zillion failures to move from organizing things around Hierarchies to organizing things around Networks - https://www.edge.org/response-detail/10464 https://www.edge.org/response-detail/10464
aaron-santos 5y ago
What the author fails to comprehend is the base has phase shifted into economies of network effects while the superstructure still views them as "just larger industrial scale". This contradiction will resolve itself eventually. What the author fails to comprehend is the magnitude of this separation and the severity of the correction when it does occur. There's more easily refuted points too. The figured titled "How it will really go" is an apologia for the current system. In the last twenty years we have seen real material losses for the majority of people. Access to healthcare, education, and housing has shrunk. To put it simply, we have first hand evidence that there is not a rising tide lifting all boats. What he does get right, he doesn't correctly consider the consequences of. Privacy will continue to be eroded in order to optimize network-effect oriented businesses. People will be forced into this because the current economic incentives will not change. There simply isn't an environment for anything else. What he fails to consider all of the rewards for this aren't incentivized in the system and therefore are easily cast aside once privacy has been eliminated. They may exist as carrots now, but without systemic incentives for them to exist, they won't last. His new social contract is based on a bait and switch. As a whole it comes off as completely out of touch with the material conditions of everyday people. On the other hand, it's his job not to understand.
sergefaguet 5y ago
He’s not saying society “should” be structured this way. It is more about that it “already is” and “will be even more so.”

cryptica 5y ago

Agreed. Moreover, it's infuriating when people claim that 'technology' is responsible for changing the dynamics when they know (or should know) perfectly well that things like inequality and monopolies are caused by monetary policies which subsidize large capital-holders and thus give them an unfair advantage in the markets. Also, to claim that 'the rich keep getting richer' has always been true is misleading, it's far worse today than ever before because our monetary system has never been so decoupled from the underlying economic processes of value creation. This means our system is more unfair than it has ever been before. There is almost no correlation between skill and success; on the other hand there is a significant correlation between cheating and success.

Ensorceled 5y ago

Trickle down didn't work in the late 1900s either. Nor in the late 1800s when it was called "horse and sparrow". It just doesn't work.

AlexandrB 5y ago
I find "horse and sparrow" to be a particularly visceral description that neatly describes what's actually being proposed: > 'If you feed the horse enough oats, some will pass through to the road for the sparrows.'

gruez 5y ago

>It utterly fails to answer why anyone not at the top of the power curve would want society to be structured this way - most of the described "Social Contract" seems to imply precarity, [...] and living at the edge of financial disaster for most. How much of this is due to wealth distribution and how much of this is due to human nature? eg, 60% of Millennials Earning over $100k Live Paycheck to Paycheck (https://news.ycombinator.com/item?id=27581105 https://news.ycombinator.com/item?id=27581105)

triceratops 5y ago
It would be interesting to know the geographic distribution of those millennials. Living paycheck to paycheck when earning $105k in Oklahoma seems irresponsible. In SF, depending on your situation, that may not be so unreasonable. Moreover, how does that compare to other people (i.e. non-millennials) who make over $100k? The average (not median) savings rate in the US is pathetic - something like 10%. And that's obviously skewed by high-earners and FI/RE types. So 40% of millennials living below their means might actually be quite good in comparison.
- deleted 5y ago
  [deleted]
throwawaygh 5y ago
> How much of this is due to wealth distribution and how much of this is due to human nature? Probably not much. 1. The VAST majority of people who are living paycheck-to-paycheck are not making $100K. According to the same report, Seventy-two percent of those who make less than $50,000 live paycheck to paycheck. Do some high earners live paycheck to payccheck? Sure. But the VAST majority of people living paycheck to paycheck are not high earners. 2. The death of pensions matters. In the post-pension world, maxing out your 401K and then some is a bill. Period. $100K - $20K = $80K. That's almost certainly "paycheck to paycheck" territory if you're raising more than one kid without a spouse, even in low CoL areas. When comparing earnings across time, it's almost more important to consider pensions in addition to inflation. 3. The background of people making >100K also matters. Many people making over $100K are well-educated, which often means significant debt and/or catching up on retirement savings. Think doctors, lawyers, PhDs, etc. 4. CoL also matters. Many people making >$100K are living in a high CoL areas. $50K in Dacatur, IL = $114K in SFBA.

jakelazaroff 5y ago

I think this quote from the beginning of the article is instructive: > We need new social contracts or we’re headed for some nasty conditions. > And we believe it’s up to tech Founders, VC’s and employees to do something about it. "Tech people, please build something that pacifies the masses, or they might rise up and take our money!"

mistermann 5y ago
A more optimal system would surely require a sophisticated technical implementation. I don't think the problem with that proposal is with technical people, but more so with the culture and organizational structures that rise to the top under within our current system. A super-wealthy, benevolent entity + good culture + comprehensively good ideas + a good technical implementation seems like what we need right about now - making this happen under the circumstances we find ourselves in seems like the tricky part. EDIT: "good" would probably be more accurately stated as "sufficiently adequate".

imtringued 5y ago

Trickle down doesn't work because it is motivated by the people who benefit from it rather than a macroeconomic need. If the labor market is a buyer market (employers picking employees) then trickle down can't work by definition because the labor market is already stacked in favor of the employers. They already obtained all possible positive sum benefit from the strategy. If the labor market is a sellers market then trickle down could work in theory but a sellers market means we are in an economic boom/expansion so people are happy and don't need further interventions beyond a raise in the interest rate. >But in a network economy, the means of production have shifted. It’s 10X more fluid, can create wealth at a much higher rate, decrease costs at a much higher rate, and the network can raise all boats. Okay now things are getting stupid. Economic saturation (aka overproduction) is sort of perverse. When companies boost production (creating wealth at a much higher rate), demand doesn't necesssarily catch up with increased production. [0] What happens is that the increase in productivity allows you to employ less people. That means less people can afford the overproduction because they are out of a job temporarily. Demand is going down in the short term. This means we are overproducing even more products relative to demand, resulting in even more layoffs. Lots of stuff and nobody there to buy it. Lack of demand then results in lack of investment. The economic growth and productivity growth are slowing down... [0] It may sound shocking but billionaires wouldn't be billionaires if they didn't spend less than they earn. Creating more billionaires or giving them more money is an effective way of decreasing demand and thus the potential for your economy to grow.

dfilppi 5y ago
Trickle down doesn't "work", because "work" has been defined a certain way. Define "work" another way, and it does "work". It also presumes that the government somehow has first dibs on what people earn, which is absurd.
- ModernMech 5y ago
  Also stated as "The purpose of the system is what it does". If the system as designed is concentrating wealth in the hands of a few individuals (who themselves helped set up the system), how can we say it's not working as intended? It seems to be working out very well for them.

justicezyx 5y ago

Your reasoning is not wrong. And I also largely agree with your point. But I want to emphasize that reforming is still vital to the society, even if it just leads to another iteration of the same story. The reason is that reforming gives the chance for the society to repeating the same pattern at a much higher level. I.e., thousands of years ago, the long tail suffers in their body parts and basic livelihood. They might one day suddenly die from anything from disease, violence, starvation, etc. Now, the long tail suffers in comfort. One might be obseity, mental disorder, stress, etc. And system in stagnation often degenerate, not just keeps in tact. The degeneration leads to breakdown of social structure and cultural norms, which eventually leads to chaotic conflicts. With these, reform is the only choice.

jojoss 5y ago

Not only is it left to the reader, but the reader isn't told it took Nature about 400 million years of trail and error and a zillion failures to move from organizing things around Hierarchies to organizing things around Networks - https://www.edge.org/response-detail/10464 https://www.edge.org/response-detail/10464

aaron-santos 5y ago

What the author fails to comprehend is the base has phase shifted into economies of network effects while the superstructure still views them as "just larger industrial scale". This contradiction will resolve itself eventually. What the author fails to comprehend is the magnitude of this separation and the severity of the correction when it does occur. There's more easily refuted points too. The figured titled "How it will really go" is an apologia for the current system. In the last twenty years we have seen real material losses for the majority of people. Access to healthcare, education, and housing has shrunk. To put it simply, we have first hand evidence that there is not a rising tide lifting all boats. What he does get right, he doesn't correctly consider the consequences of. Privacy will continue to be eroded in order to optimize network-effect oriented businesses. People will be forced into this because the current economic incentives will not change. There simply isn't an environment for anything else. What he fails to consider all of the rewards for this aren't incentivized in the system and therefore are easily cast aside once privacy has been eliminated. They may exist as carrots now, but without systemic incentives for them to exist, they won't last. His new social contract is based on a bait and switch. As a whole it comes off as completely out of touch with the material conditions of everyday people. On the other hand, it's his job not to understand.

sergefaguet 5y ago

He’s not saying society “should” be structured this way. It is more about that it “already is” and “will be even more so.”