6 ms·

AirBnB is a wildy different beast than Uber and Homejoy. AirBnB is increasing market efficiency around distribution of resources (sleeping space) that normally

by gfodor 11y ago

AirBnB is a wildy different beast than Uber and Homejoy. AirBnB is increasing market efficiency around distribution of resources (sleeping space) that normally would go un- or mis- used and is just about as textbook as you can get of capitalism resulting in better resource allocation. (Issues around lodging regulation and displacement aside, which are real and beyond the scope of this article.) Uber and Homejoy, while also having aspects of efficiency increases, also are tightly coupled with labor, which has always acted as a counterbalance to unfettered capitalism due to the human element involved and the need for people to make a living. However, the authors of this article miss the bigger picture here. The dynamic playing out with these companies is act one of a larger play, where the final act is the complete removal of human labor from the process. The logistics infrastructure being built here is the end being sought, not the profit margin on the labor being sold nor the network of "entrepreneurs." With the logistics in place and the data needed to properly run these services at scale, switching out humans for robots as is cost effective will be a natural transition. All the more reason we as a society need to come up with a better solution to "unskilled people need to eat" beyond blaming the greed of silicon valley companies.

nawitus 11y ago
>All the more reason we as a society need to come up with a better solution to "unskilled people need to eat" beyond blaming the greed of silicon valley companies. The solution is basic income. That doesn't seem realistic in the United States, though.
- ekianjo 11y ago
  > The solution is basic income. Yeah, basic income coming from where? Oh wait, the machines doing all the work, right. Let's talk again when we reach singularity. If ever.
  - gohrt 11y ago
    "basic income" is not the same as "post-scarcity"
  - deleted 11y ago
    [deleted]
  - seiji 11y ago
    basic income coming from where? The idea would be to increase taxes on companies hoarding profits due to increased automation (i.e. "tax the robots and give the money back to displaced humans"). Then you redistribute those profits back to the public by slowly (or quickly) adjusting the social security age down to birth (or age of majority) as revenue from taxing automation increases. Not going to happen in our current political climate though.
    - prostoalex 11y ago
      This only seems to work for the country where such company is headquartered. The technological advantage, meanwhile, spreads to pretty much any country (e.g. countries that had little with invention of television or automobiles have TV sets and roads), so what's the solution for them?
      - dllthomas 11y ago
        Include them in the same system.
        prostoalex 11y ago
        Would the numbers add up to anything above trivial? Alaska has a variable annual payout, and while $1,900 a year is better than $0 a year, it has not led to economic/artistic/scientific revolutions described by basic income proponents.
        dllthomas 11y ago
        "Would the numbers add up to anything above trivial?" Initially? Probably not for those in developed countries. The median per-capita household income (per http://www.gallup.com/poll/166211/worldwide-median-household-income-000.aspx http://www.gallup.com/poll/166211/worldwide-median-household..., as of 2013) is about $3k/yr. For half the people on the planet, $100/yr would make an appreciable difference in their purchasing power (more than 1/3 their monthly income). Is that a practical amount? $100/yr for every person on the planet is less than 5% of the GDP of the US, and less than 1% of the global GDP (GWP). If the US was going to foot the bill alone (it shouldn't), it would be about a quarter of our tax revenues. Steep, but doesn't sound financially impossible (political and infrastructural issues may well be another matter).
  - dragonwriter 11y ago
    > Yeah, basic income coming from where? Coming from taxing capital income like other income, rather than giving it preferential tax treatment that favors the already rich.
    - yummyfajitas 11y ago
      Capital income does not receive preferential tax treatment. The combined taxes on income + corporate tax + capital gains greatly exceed the tax rate on labor income. Scott Sumner explaining how all capital income taxes are additive w.r.t labor income tax: http://www.themoneyillusion.com/?p=28842 http://www.themoneyillusion.com/?p=28842 Also just do the arithmetic; 1-(1-corporate income tax)(1-cap gains tax) >income tax for pretty much any bracket.
      - dragonwriter 11y ago
        > Capital income does not receive preferential tax treatment. Yes, it does. > The combined taxes on income + corporate tax + capital gains greatly exceed the tax rate on labor income. It makes no sense to combine those things, especially since not all capital holdings which recieve the benefit of favorable capital taxation are investment in entities that are even theoretically subject to corporate income taxes. > Scott Sumner explaining how all capital income taxes are additive w.r.t labor income tax He certainly asserts that income tax "doubles [sic] taxes the money saved, once as wages, and again as capital income." But this is a ludicrous assertion, since the part taxed as labor income is not taxed as capital income. > Also just do the arithmetic; 1-(1-corporate income tax)(1-cap gains tax) >income tax for pretty much any bracket. Even for the things where that might be relevant, that's probably only true if you look at the nominal corporate income tax rate rather than the effective corporate income tax rate.
        yummyfajitas 11y ago
        It makes no sense to combine those things, especially since not all capital holdings which recieve the benefit of favorable capital taxation are investment in entities that are even theoretically subject to corporate income taxes. Could you do some arithmetic? I'm not really sure what you are talking about. But this is a ludicrous assertion, since the part taxed as labor income is not taxed as capital income. This is simple arithmetic. Suppose I'm paid $100, taxed $20 on labor income. Then I invest the remaining $80, cash out at $90 and pay $2.50 in cap gains. I've then paid another 2.8% (adjusted for NPV). Taxes on capital income always come after labor income, except for certain special tax deferred investment vehicles which treat capital income as equal to labor income.
- prostoalex 11y ago
  Alaska is already there with the annual check from oil wealth fund. Addressing the "need to eat" problem though, the government would have a much better leverage withholding the money to buy up food in bulk than let individual buyers with no leverage negotiate their own prices.
glesica 11y ago
> All the more reason we as a society need to come up with a better solution to "unskilled people need to eat" beyond blaming the greed of silicon valley companies. I think part of the reason you see so many people blaming the greed of Silicon Valley companies is that so many "Silicon Valley" people (wealthy and upper-income people associated with Silicon Valley) seem to be ignoring the "unskilled people need to eat" problem or, worse, blaming the "unskilled people" for failing to guess which career paths would be lucrative in the future or for lacking aptitude in those careers. When a non-negligible portion of the conversation actually turns on people who are effectively (or literally, in some extreme cases) calling for a dictatorship of tech companies, you have to expect people to wonder how much Silicon Valley cares about the rest of the world.
- seiji 11y ago
  Our society is moving towards post-ownership. Everything will be as-a-Service. We already see this with code. [X]aaS subscription revenue is more stable than trying to sell direct software then convince people to upgrade to re-up your sales. But, in post-ownership, only those who own capital have income. We end up with two classes: the monied capital owners (who rent out homes/cars/kitchens/software) and the poor people needing to rent from the capital owners (or work from them at an hourly, non-guaranteed rate). The joy of that model is it's so much easier for a wealthy person with a little capital (renting 5 apartments in a city) to take that income and buy more capital (buy 5 new apartments to rent out each year), which restricts the ability for "normal" people to participate in the market by eating the fixed supply. Then, snowballing, your return-on-capital income lets you buy more units faster and faster. You get to remove even more capacity from the public market and you get to turn a scarce housing market into a private money spigot. The age of attracting a 50,000 person factory to your town and filling it with uneducated workers is over. There aren't any future mass-employement systems for unskilled labor that aren't essentially servitude.
  - atypicaluser 11y ago
    > The age of filling a 50k+ person factory with uneducated workers is over. Very honest. > Our society is moving towards post-ownership. Now how a bit more honesty? What you really mean to say is our society is moving towards an ownership by the few (shareholders, CEOs, boards) who will indenture everyone else through blah-as-a-Service. The code is owned, the capital is owned, the apartments are owned. It's a joyous model... so long as you're on the right side of the ownership line.
pfraze 11y ago
Paul Graham gave an interesting and relevant talk about wealth inequality at defcon 13 [1]. I recommend giving it a watch. To this article's point, shouldn't parent companies be optimized out as well if we're innovating on marketplaces? 1: https://www.youtube.com/watch?v=v8Lb8ZgQP74 https://www.youtube.com/watch?v=v8Lb8ZgQP74
seanmcdirmid 11y ago
> AirBnB is increasing market efficiency around distribution of resources (sleeping space) that normally would go un- or mis- used and is just about as textbook as you can get of capitalism resulting in better resource allocation. Is that really true? My limited experience with AirBnB seemed to be that providers were in it full time. That wasn't an apartment they used themselves, they are literally acting as alternatives to hotels.
- gohrt 11y ago
  The apartments are in it full time, but landlording isn't a full-time job for a single unit; it is a capital investment that pays more than competitive labor wage.
- knorby 11y ago
  There are plenty of shared spaces (owner is renting out an extra bedroom, etc..), and a few close to a classic B&B (house with several rooms rented out with few frills). Even a lot of the places renting the full place out tend to be people who are flexible in where they stay (they crash at the significant other's place or something), or they tend to only have a couple places. There are certainly cases of people managing pseudo-hotels, but I've used the service for years and I've never stumbled on to any.
  - seanmcdirmid 11y ago
    My only experience is in Paris and Japan. Paris makes sense since the tourist volume is so high. Tokyo is a bit strange, however.
rayiner 11y ago
The discinnect between Silicon Valley and the proletariat is rooted in two issues: 1) Silicon Valley may envision a future where human labor is not needed and society adapts. But ordinary people aren't futurists. They don't envision that coming about particularly soon. Neither the technology not the social change to deal with it. All they see is the short-term effect of automation driving down wages. 2) Silicon Valley has adopted this world view that embraces futurism and automation, but that future doesn't have a well-defined place for unskilled and moderately skilled people nor have its proponents elucidated how those people will be more prosperous in that future than in the present. People in Silicon Valley talk about "bullshit jobs" but have no answers for what those secretaries or HR staffers are going to do when those jobs cease to exist. And Silicon Valley can't hide behind the "we just make the technology, we don't give you answers to social problems" trope because there is a strong social and political component to the current Silicon Valley mindset. Uber isn't just building logistics technology. It's disrupting an outdated industry and breaking down obsolete regulations. They're not just building technologies for the world we live in, they're trying to change the social and political rules that govern that world.
- prostoalex 11y ago
  > People in Silicon Valley talk about "bullshit jobs" but have no answers for what those secretaries or HR staffers are going to do when those jobs cease to exist. It's not unique to Silicon Valley. The company behind automated elevators with buttons did not have a plan for the elevator operators, and Henry Ford did not have a plan for horse stable operators.
  - rayiner 11y ago
    The automated elevator industry wasn't pushing a whole worldview along with their technology, and Henry Ford offered the concrete prospect of well paying jobs building cars. Henry Ford is a particularly bad example because he very consciously addressed the issue of providing jobs.
    - prostoalex 11y ago

by gfodor 11y ago

nawitus 11y ago

>All the more reason we as a society need to come up with a better solution to "unskilled people need to eat" beyond blaming the greed of silicon valley companies. The solution is basic income. That doesn't seem realistic in the United States, though.

ekianjo 11y ago
> The solution is basic income. Yeah, basic income coming from where? Oh wait, the machines doing all the work, right. Let's talk again when we reach singularity. If ever.
- gohrt 11y ago
  "basic income" is not the same as "post-scarcity"
- deleted 11y ago
  [deleted]
- seiji 11y ago
  basic income coming from where? The idea would be to increase taxes on companies hoarding profits due to increased automation (i.e. "tax the robots and give the money back to displaced humans"). Then you redistribute those profits back to the public by slowly (or quickly) adjusting the social security age down to birth (or age of majority) as revenue from taxing automation increases. Not going to happen in our current political climate though.
  - prostoalex 11y ago
    This only seems to work for the country where such company is headquartered. The technological advantage, meanwhile, spreads to pretty much any country (e.g. countries that had little with invention of television or automobiles have TV sets and roads), so what's the solution for them?
    - dllthomas 11y ago
      Include them in the same system.
      - prostoalex 11y ago
        Would the numbers add up to anything above trivial? Alaska has a variable annual payout, and while $1,900 a year is better than $0 a year, it has not led to economic/artistic/scientific revolutions described by basic income proponents.
        dllthomas 11y ago
        "Would the numbers add up to anything above trivial?" Initially? Probably not for those in developed countries. The median per-capita household income (per http://www.gallup.com/poll/166211/worldwide-median-household-income-000.aspx http://www.gallup.com/poll/166211/worldwide-median-household..., as of 2013) is about $3k/yr. For half the people on the planet, $100/yr would make an appreciable difference in their purchasing power (more than 1/3 their monthly income). Is that a practical amount? $100/yr for every person on the planet is less than 5% of the GDP of the US, and less than 1% of the global GDP (GWP). If the US was going to foot the bill alone (it shouldn't), it would be about a quarter of our tax revenues. Steep, but doesn't sound financially impossible (political and infrastructural issues may well be another matter).
- dragonwriter 11y ago
  > Yeah, basic income coming from where? Coming from taxing capital income like other income, rather than giving it preferential tax treatment that favors the already rich.
  - yummyfajitas 11y ago
    Capital income does not receive preferential tax treatment. The combined taxes on income + corporate tax + capital gains greatly exceed the tax rate on labor income. Scott Sumner explaining how all capital income taxes are additive w.r.t labor income tax: http://www.themoneyillusion.com/?p=28842 http://www.themoneyillusion.com/?p=28842 Also just do the arithmetic; 1-(1-corporate income tax)(1-cap gains tax) >income tax for pretty much any bracket.
    - dragonwriter 11y ago
      > Capital income does not receive preferential tax treatment. Yes, it does. > The combined taxes on income + corporate tax + capital gains greatly exceed the tax rate on labor income. It makes no sense to combine those things, especially since not all capital holdings which recieve the benefit of favorable capital taxation are investment in entities that are even theoretically subject to corporate income taxes. > Scott Sumner explaining how all capital income taxes are additive w.r.t labor income tax He certainly asserts that income tax "doubles [sic] taxes the money saved, once as wages, and again as capital income." But this is a ludicrous assertion, since the part taxed as labor income is not taxed as capital income. > Also just do the arithmetic; 1-(1-corporate income tax)(1-cap gains tax) >income tax for pretty much any bracket. Even for the things where that might be relevant, that's probably only true if you look at the nominal corporate income tax rate rather than the effective corporate income tax rate.
      - yummyfajitas 11y ago
        It makes no sense to combine those things, especially since not all capital holdings which recieve the benefit of favorable capital taxation are investment in entities that are even theoretically subject to corporate income taxes. Could you do some arithmetic? I'm not really sure what you are talking about. But this is a ludicrous assertion, since the part taxed as labor income is not taxed as capital income. This is simple arithmetic. Suppose I'm paid $100, taxed $20 on labor income. Then I invest the remaining $80, cash out at $90 and pay $2.50 in cap gains. I've then paid another 2.8% (adjusted for NPV). Taxes on capital income always come after labor income, except for certain special tax deferred investment vehicles which treat capital income as equal to labor income.
prostoalex 11y ago
Alaska is already there with the annual check from oil wealth fund. Addressing the "need to eat" problem though, the government would have a much better leverage withholding the money to buy up food in bulk than let individual buyers with no leverage negotiate their own prices.

glesica 11y ago

> All the more reason we as a society need to come up with a better solution to "unskilled people need to eat" beyond blaming the greed of silicon valley companies. I think part of the reason you see so many people blaming the greed of Silicon Valley companies is that so many "Silicon Valley" people (wealthy and upper-income people associated with Silicon Valley) seem to be ignoring the "unskilled people need to eat" problem or, worse, blaming the "unskilled people" for failing to guess which career paths would be lucrative in the future or for lacking aptitude in those careers. When a non-negligible portion of the conversation actually turns on people who are effectively (or literally, in some extreme cases) calling for a dictatorship of tech companies, you have to expect people to wonder how much Silicon Valley cares about the rest of the world.

seiji 11y ago
Our society is moving towards post-ownership. Everything will be as-a-Service. We already see this with code. [X]aaS subscription revenue is more stable than trying to sell direct software then convince people to upgrade to re-up your sales. But, in post-ownership, only those who own capital have income. We end up with two classes: the monied capital owners (who rent out homes/cars/kitchens/software) and the poor people needing to rent from the capital owners (or work from them at an hourly, non-guaranteed rate). The joy of that model is it's so much easier for a wealthy person with a little capital (renting 5 apartments in a city) to take that income and buy more capital (buy 5 new apartments to rent out each year), which restricts the ability for "normal" people to participate in the market by eating the fixed supply. Then, snowballing, your return-on-capital income lets you buy more units faster and faster. You get to remove even more capacity from the public market and you get to turn a scarce housing market into a private money spigot. The age of attracting a 50,000 person factory to your town and filling it with uneducated workers is over. There aren't any future mass-employement systems for unskilled labor that aren't essentially servitude.
- atypicaluser 11y ago
  > The age of filling a 50k+ person factory with uneducated workers is over. Very honest. > Our society is moving towards post-ownership. Now how a bit more honesty? What you really mean to say is our society is moving towards an ownership by the few (shareholders, CEOs, boards) who will indenture everyone else through blah-as-a-Service. The code is owned, the capital is owned, the apartments are owned. It's a joyous model... so long as you're on the right side of the ownership line.

pfraze 11y ago

Paul Graham gave an interesting and relevant talk about wealth inequality at defcon 13 [1]. I recommend giving it a watch. To this article's point, shouldn't parent companies be optimized out as well if we're innovating on marketplaces? 1: https://www.youtube.com/watch?v=v8Lb8ZgQP74 https://www.youtube.com/watch?v=v8Lb8ZgQP74

seanmcdirmid 11y ago

> AirBnB is increasing market efficiency around distribution of resources (sleeping space) that normally would go un- or mis- used and is just about as textbook as you can get of capitalism resulting in better resource allocation. Is that really true? My limited experience with AirBnB seemed to be that providers were in it full time. That wasn't an apartment they used themselves, they are literally acting as alternatives to hotels.

gohrt 11y ago
The apartments are in it full time, but landlording isn't a full-time job for a single unit; it is a capital investment that pays more than competitive labor wage.
knorby 11y ago
There are plenty of shared spaces (owner is renting out an extra bedroom, etc..), and a few close to a classic B&B (house with several rooms rented out with few frills). Even a lot of the places renting the full place out tend to be people who are flexible in where they stay (they crash at the significant other's place or something), or they tend to only have a couple places. There are certainly cases of people managing pseudo-hotels, but I've used the service for years and I've never stumbled on to any.
- seanmcdirmid 11y ago
  My only experience is in Paris and Japan. Paris makes sense since the tourist volume is so high. Tokyo is a bit strange, however.

rayiner 11y ago

The discinnect between Silicon Valley and the proletariat is rooted in two issues: 1) Silicon Valley may envision a future where human labor is not needed and society adapts. But ordinary people aren't futurists. They don't envision that coming about particularly soon. Neither the technology not the social change to deal with it. All they see is the short-term effect of automation driving down wages. 2) Silicon Valley has adopted this world view that embraces futurism and automation, but that future doesn't have a well-defined place for unskilled and moderately skilled people nor have its proponents elucidated how those people will be more prosperous in that future than in the present. People in Silicon Valley talk about "bullshit jobs" but have no answers for what those secretaries or HR staffers are going to do when those jobs cease to exist. And Silicon Valley can't hide behind the "we just make the technology, we don't give you answers to social problems" trope because there is a strong social and political component to the current Silicon Valley mindset. Uber isn't just building logistics technology. It's disrupting an outdated industry and breaking down obsolete regulations. They're not just building technologies for the world we live in, they're trying to change the social and political rules that govern that world.

prostoalex 11y ago
> People in Silicon Valley talk about "bullshit jobs" but have no answers for what those secretaries or HR staffers are going to do when those jobs cease to exist. It's not unique to Silicon Valley. The company behind automated elevators with buttons did not have a plan for the elevator operators, and Henry Ford did not have a plan for horse stable operators.
- rayiner 11y ago
  The automated elevator industry wasn't pushing a whole worldview along with their technology, and Henry Ford offered the concrete prospect of well paying jobs building cars. Henry Ford is a particularly bad example because he very consciously addressed the issue of providing jobs.
  - prostoalex 11y ago