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Markets discover correct prices. Technology drives up the value of some humans and drives down the value of others. We are already seeing entities fight to prev

Markets discover correct prices. Technology drives up the value of some humans and drives down the value of others. We are already seeing entities fight to prevent the market from discovering the correct price for many sorts of labor. Expect this to increase. The resources being expended on this doomed to fail enterprise should instead be focused on turning the sorts of people whose value gets driven down by tech into the sorts of people whose value gets driven up by tech. In other words: it is the industrial revolution and the price of crops is dropping rapidly. Do you institute price controls or figure out how to retrain farmers? It is worth noting that we STILL have price controls on crops left over from the last paradigm shift. I'm not optimistic about our ability to meet this one.

Steko 13y ago
The problem has nothing to do with preventing the market from pricing labor correctly. The problem is that the very nature of web services and scale creates huge lottery winners. The Instagram founders weren't 1,000 times better than other programmers. The market didn't price their labor there. They were at the right place at the right time and were a tiny bit better or more connected or whatever than their competitors. And because of that they effectively won a huge lottery. Everyone else was lucky if they got rent money.
- BrianEatWorld 13y ago
  The market did though. Ignore the raw values and consider the amounts taken into consideration by the economic actors, expected returns, which have a probability component. As the chance of payoff for startups is low, a high payoff may actually be required to accurately price the market to draw the requisite amount of labor.
  - clicks 13y ago
    Isn't that then a really good argument that relying on markets is decidedly not the way to go, and that socialism, for example, is more fair and just than capitalism? In the end, we all want a society that's "fair" to the largest amount of people, where each person gets about as much as they toil for. It seems the market is apparently doing a pretty lousy job, if we've come to a reality where two lucky dudes who were well connected could sell their photo-sharing app for a billion all the while a good half of the country risks getting financially decimated come an unforeseen disease or bad accident somewhere.
  - Steko 13y ago
    "Ignore the raw values" You can't ignore the raw values and just look at means, aggregates and weighted probability functions when the problem we're talking about is inequality. "chance of payoff for startups is low ..." What you're describing is entrepreneurial risk, not the price of labor.
    - BrianEatWorld 13y ago
      You have to though, because when people are considering what career path to pursue, they aren't looking at one scenario, they are looking at the expected scenario. For a start-up this means lots of long hours at low pay with a slim chance at making it big. If you lower that big payoff, start-up employment then becomes long hours at low pay for a slim chance at making very little. If this were the case, no on would work in start-ups. You can't affect the "slim chance" part of the equation because no one knows what ideas will be successful. I am talking about the price of labor, but in aggregate not an individual. This is what sets the incentives for the labor and incentives, not any set nominal value that may be decreed objectively "correct", are what the market sets. Both responses also seem to object along the lines of the Labor Theory of Value. Do you truly believe that the price of a product (wages or otherwise) should be directly tied to the amount of labor going into said product?
- nazgulnarsil 13y ago
  Uh yeah, people working on tech startups don't deserve to win with huge risks on creating yet another photo sharing app. Taking risks is a choice, and using hindsight to criticize the windfall of the winners is silly.

Steko 13y ago

The problem has nothing to do with preventing the market from pricing labor correctly. The problem is that the very nature of web services and scale creates huge lottery winners. The Instagram founders weren't 1,000 times better than other programmers. The market didn't price their labor there. They were at the right place at the right time and were a tiny bit better or more connected or whatever than their competitors. And because of that they effectively won a huge lottery. Everyone else was lucky if they got rent money.

BrianEatWorld 13y ago
The market did though. Ignore the raw values and consider the amounts taken into consideration by the economic actors, expected returns, which have a probability component. As the chance of payoff for startups is low, a high payoff may actually be required to accurately price the market to draw the requisite amount of labor.
- clicks 13y ago
  Isn't that then a really good argument that relying on markets is decidedly not the way to go, and that socialism, for example, is more fair and just than capitalism? In the end, we all want a society that's "fair" to the largest amount of people, where each person gets about as much as they toil for. It seems the market is apparently doing a pretty lousy job, if we've come to a reality where two lucky dudes who were well connected could sell their photo-sharing app for a billion all the while a good half of the country risks getting financially decimated come an unforeseen disease or bad accident somewhere.
- Steko 13y ago
  "Ignore the raw values" You can't ignore the raw values and just look at means, aggregates and weighted probability functions when the problem we're talking about is inequality. "chance of payoff for startups is low ..." What you're describing is entrepreneurial risk, not the price of labor.
  - BrianEatWorld 13y ago
    You have to though, because when people are considering what career path to pursue, they aren't looking at one scenario, they are looking at the expected scenario. For a start-up this means lots of long hours at low pay with a slim chance at making it big. If you lower that big payoff, start-up employment then becomes long hours at low pay for a slim chance at making very little. If this were the case, no on would work in start-ups. You can't affect the "slim chance" part of the equation because no one knows what ideas will be successful. I am talking about the price of labor, but in aggregate not an individual. This is what sets the incentives for the labor and incentives, not any set nominal value that may be decreed objectively "correct", are what the market sets. Both responses also seem to object along the lines of the Labor Theory of Value. Do you truly believe that the price of a product (wages or otherwise) should be directly tied to the amount of labor going into said product?
nazgulnarsil 13y ago
Uh yeah, people working on tech startups don't deserve to win with huge risks on creating yet another photo sharing app. Taking risks is a choice, and using hindsight to criticize the windfall of the winners is silly.