7 ms·

So, someone spends 12+ hours a day, 7 days a week, for zero pay, for some period of time (say, a year), and for the rest of their life, they receive free money.

• Turing_Machine 11y ago
  Others work the same amount and lose everything. Most startups fail. What you're calling "free money" is compensation for the risk. Without it, most people would not start businesses.
  • Frondo 11y ago
    I don't see how failure or success changes that question of "is a lifetime of free money for some small value of work acceptable?" -- nor am I even saying "no free money ever". I'm getting at, where does the passive ownership cross the line into rent-seeking?
    • Turing_Machine 11y ago
      "I don't see how failure or success changes that question of "is a lifetime of free money for some small value of work acceptable?"" Because it's not "free money". At all. Edit: "free" implies that you don't have to do anything for it. That's not the case. Do you also consider retirement pensions "free money"?
    • mindcrime 11y ago
      Who said it was some "small value of work"??? Starting a company is FUCKING HARD, and the founders put in simply incredible amounts of effort in the early days. I mean, sure, it's different for different companies, but I know I've routinely worked 100+ hours a week for years with no vacation, sacrificed time with friends and family, sacrificed going out, partying, socializing and doing a lot of other things I enjoy, and even (stupidly) sacrificed my health to the point of having a heart-attack and almost dying. So yeah, if my company is ever successful enough to make a continuous profit, you're damn right I feel like I've earned my share of that future profit, even if I do decide to go lie on a beach somewhere and relax. The way I'm looking at it, I'll just be making up for all the times I didn't do that earlier on. I'm getting at, where does the passive ownership cross the line into rent-seeking? Who cares? Let's quit using "rent seeking" as some kind of pejorative. It's not, and it's nothing to make some big deal over.
      • Frondo 11y ago
        You know, let's be honest--starting your first business is hard, because you have to learn about marketing, customer outreach, listening to people and connecting them with things they want, etc. But 100 hours a week, for years? There's something bigger going wrong there--either you're trying to sell something people don't want, you've hired a lot of the wrong people, or whatever, I don't know. That's not typical, and it's certainly not praiseworthy. As for that "indefinite free money for past work," again, you're free to say you want that, and right now it's certainly yours to try and put into a contract. I don't agree that it's moral or right or deserved, no matter how many 100 hour weeks you work.
        • smtddr 11y ago
          >>But 100 hours a week, for years? There's something bigger going wrong there--either you're trying to sell something people don't want, you've hired a lot of the wrong people, or whatever, I don't know. That's not typical, and it's certainly not praiseworthy. You really need to get back to us after you've tried starting your own company. Even when you're not officially on the clock, it's impossible to put it out of your mind. I do not envy start-up founders; I'm quite happy with my inflated bay area engineer salary and up-to-date skillset that allows me to simply jump ship or swim to the next luxury yacht when the current one capsizes. (Honest) founders really pour their heart & soul into the business and have probably made some personal-life sacrifices and trade-offs. Founders more than deserve the lion's share of any benefits yielded by the company.
          • Frondo 11y ago
            And I'd say, you really need to step outside the YC bubble, if you think 100 hours a week for years is at all normal anywhere in the business world.
            • leesalminen 11y ago
              When you're truly passionate about what you do, how you do it, who you do it with and who you're doing it for it doesn't matter what the "normal" business world does. You end up doing what's right for your company at that moment. I don't go to bed without reminding myself that this isn't just for me. It's for my employees (livelihood), my customers (their businesses) and my family (creating a better life). When you frame it like that, hours just turn into numbers. It's irrelevant. Results matter.
  • s73v3r 11y ago
    Why do I care that they "took a risk", though? All I see is that I'm busting my ass, they're laying on a beach, and they're getting more than me.
    • Turing_Machine 11y ago
      You're perfectly free to start your own business and find out just how much ass-busting is involved in doing that.
      • s73v3r 11y ago
        Like I said, what happened in the past doesn't matter. All the employees see is someone taking the bulk of the reward, for not doing much at all. Odds are, we had to replace all of their shit code, or they weren't able to write any of it to start with.
      • Retra 11y ago
        One of the big problems here is that the skills involved in making money in a successful business are not skills that everyone can or should possess. For instance, I spent many years of my life studying physics, and that is probably never going to make me very much money. There's risk. There's ass-busting. But little chance for reward, because the skills are not directly related to networking and wealth-management.
• cousin_it 11y ago
  Then vote to raise taxes on revenues and inheritance. We need enough taxation to give everyone a reasonable standard of living, but not so much as to discourage private enterprise. I think it's achievable, given the recent growth in productivity.
  • Frondo 11y ago
    Agreed, a hundred percent. I'm doing my own startup right now, even (not profitable, but revenue-positive!), so it's not like I have no dog in this big-picture race. Private enterprise is important. I also see how things are awful skewed in favor of the established money/power. And as for voting on taxes on revenue/inheritance, I do, heh! A few years ago, here in Oregon, they tried to eliminate the estate tax (again), and I happily voted to keep it.
    • mooreds 11y ago
      Actually, the past 70 years, of productivity gains accruing to labor and being fairly widely shared in society, is pretty atypical (over the past couple of hundred years). In most western societies (and other where records are available) those owning production (typically land, but sometimes factories) captured most of the wealth. Source: Capital in the 21st Century by Piketty.
• sfafdsdf 11y ago
  The other side of it is that the entire enterprise would theoretically not exist without that initial effort. While it may not appear fair under certain ethical frameworks for someone to receive free money, it seems to be that the choice is "everyone gets nothing" versus "someone gets more than others because they created it". in my experience, this is a red herring. I know very few founders who don't work harder after an acquisition or capital investment than before. Those who are sitting on the beach tend to have sold their interest.
  • Frondo 11y ago
    Again, how long after that enterprise has existed should a person get to claim free money? I think that phrasing, "may not appear fair," is kind of a weaselly way to say "rent-seeking is ok and let's keep it" (which is, I get it, a common sentiment among people who think they might be the rentiers some day). I don't think it is good for society, certainly not the one I'd like to live in, though it sure is good for the person getting that free money. (And yes, I know this is largely in the realm of hypotheticals, because it seldom happens that the owner is totally absent...)
    • jamestnz 11y ago
      I get the moral argument you're making, but there's a practical side to it, too. In any capitalist system, the fruits (profits) of an income-generating asset (such as a business) accrue to the owners. Assuming that the idea of private property ownership exists, I can't think of any other coherent place for the profits to go, other than the owner. Sometimes, a business might be an unexpected hit, taking off and generating revenues beyond the wildest dreams of the founder. Suddenly the company is flush with cash. Now assuming all the employees are fairly compensated, and all the company's other financial needs are met, then beyond a small buffer, what is there to do with the excess cash aside from paying it out as a dividend to the owner? So I guess my point is that we can make moral hypotheticals all day (about whether it's "right" for the owners of a profitable company to get "free" money "forever" without necessarily "doing anything" further), but I'm not sure what other system we could put in place within a capitalist framework. If a company is treating its employees well, meeting all needs, and still generating an operating surplus, where else would you have that money go, if not to the owners? Also I think your use of the term "rent-seeking" here is incorrect. A business owner receiving "passive" (or at least "not much active involvement") income from the business they own is kinda the antithesis of rent-seeking. Rent-seeking behaviour is the attempt to increase your share of the wealth, by means other than generating additional wealth. When you're the one who owns a profitable company, you're the one generating that wealth. The classic example of rent-seeking is someone installing a chain across a river that happens to run through their land, and then starting to charge people to pass through "their" bit of river. They add no value to the economy in doing this, no product is created nor any service rendered; they are simply extracting rents from river-users. Another example might be when a company seeks to tilt laws/regulations in its favour (e.g. through lobbying), with the intention of increasing the share of the wealth without the business actually having to generate it. Just like the river, no additional wealth is generated as a result of this action: existing wealth is merely being redistributed (toward the rent-seeker) by government policy. The key concept in rent-seeking being that wealth (the so-called "rent") is being captured by a party (the rent-seeker) without them generating it.
• brc 11y ago
  >Should it? Yes. Removing the ability to create passive income streams removes the incentive to invest time and money. Entrepreneurship can be switched off like a light if the incentives are removed. When Entrepreneurship is extinguished, quality of life for everyone decreases. People start businesses knowing the odds are long but the rewards are great if they pull it off. There are those that complain about 'trust fund kids' who are born into wealth. They're a very tiny percentage of population, the wealth doesn't usually last many generations, and 'passing it on' is also a major motivator for many people. For each douchebag with rich parents there are others who use their financial freedom to work on hard problems. Charles Darwin was the grandson of Josiah Wedgwood. Wedgwood was one of the first industrial entrepreneurs and developed many business techniques still in use today. Darwin was an original 'trust fund kid' who used his financial freedom to pursue science and write his books, which changed the world for the better. There will be countless modern repetitions of this pattern, and you'd discard this type of benefit of inherited wealth at peril.