I'm in the process of reading _Why Nation Fails_. The central thesis is that the rich and poor countries are separated by inclusive vs extractive institutions. The extractive institutions are characterised by elites that attempt to defend their own wealth and status by maintaining the status quo and resisting the creative destruction that may threaten that position.
It seems to resonate a bit here, when Marc speaks of things like regulatory capture. I heard a few years back that a US health insurance startup had to provide on the order of 6000 pages of documentation to be approved. No wonder that there hadn't been another provider for twenty years or so. It seems like some things are hard to build mostly because some people want it that way.
I can't help but think that there's a fundamental flaw in the American regulatory approach. From the European perspective, the US is sometimes viewed as some time of free market haven, but in practice it often turns out that the regulatory burden is much higher. The framework imposed on financial markets by the SEC and related authorities is on a whole different level in the US, and with higher complexity you a also get a larger surface area for special interests to make their mark.
Point being, why not write simpler laws and regulations and leave it to the courts to interpret what adheres to the spirit of it? With the barriers of entry gone, I think we'd see a renewed vitality to many ossified sectors.
> It seems to resonate a bit here, when Marc speaks of things like regulatory capture. I heard a few years back that a US health insurance startup had to provide on the order of 6000 pages of documentation to be approved. No wonder that there hadn't been another provider for twenty years or so. It seems like some things are hard to build mostly because some people want it that way.
Sure, but is this actually a high order blocker? I'd argue that it's not even a first order effect. The problem here is not that we don't have enough insurance capacity; the problem is that we don't have enough ventilators. And it turns out, actually building those things to spec is hard. Intellectual property and regulatory capture are bad things to be reduced, IMO, but they're only part of our current equation.
The moneyed classes of America don't like redundancy and they don't like long term investments. Since they hold such a huge chunk of wealth compared to the rest of America, their preferences (which I might note, Marc represents professionally) make these decisions long before patent troll lawsuits or building inspectors can rain on any parade.
> Point being, why not write simpler laws and regulations and leave it to the courts to interpret what adheres to the spirit of it? With the barriers of entry gone, I think we'd see a renewed vitality to many ossified sectors.
Litigation is the most costly way to settle these things. Your idea would require even more startup capital per small business to overcome the legal obstacles you seemed eager to abolish.
We’re not necessarily talking about litigation here. Like another commenter pointed out, other legal system allows you to ask the courts for decisions without an opposing party.
We're actually not running out of ventilators anywhere. Existing installed base is sufficient and moreover, it turned out the federal government had a large stockpile anyway, which rather invalidates the central thesis of the article re: lack of preparedness.
The claim about ventilators was one of the first dodgy claims I noticed but really the entire first part of the article is a pack of lies. Andreessen says:
"We see this today with the things we urgently need but don’t have. We don’t have enough coronavirus tests, or test materials — including, amazingly, cotton swabs and common reagents"
This isn't amazing. The amount of testing being performed has scaled exponentially over the space of just a few months, from a standing start. In fact there's a lot of evidence that the supposedly exponential growth of the virus was really due to an exponential growth in testing, when positives are viewed as a proportion of overall tests done. It's not an indictment of "the West" that materials run out after such a vast acceleration - if anything I'm amazed it didn't happen earlier!
"We don’t have enough ventilators, negative pressure rooms, and ICU beds"
All three are in plentiful supply. Even in localised hotspots like New York problems are limited to a handful of hospitals.
I've been reading about the near deserted state of most hospitals for over a week now. I don't understand where Marc is getting his information from if he isn't aware of this.
"We also don’t have therapies or a vaccine — despite, again, years of advance warning about bat-borne coronaviruses"
Vaccines can't be created for a virus that doesn't exist yet regardless of how many vague warnings there are, so this isn't remarkable: it's inevitable. As for therapies, that's what ventilators and CPAP are.
"then we may not have the manufacturing factories required to scale their production"
Given the data appearing in a flood of new papers, showing that the virus is not dangerous enough to warrant current policy, no unusual rates of manufacturing scale-up will be required.
"it took scientists 5 years to get regulatory testing approval for the new Ebola vaccine after that scourge’s 2014 outbreak, at the cost of many lives"
I'm actually on Marc's side on this one, in that I suspect current FDA approval processes are overkill. But this claim is also nonsense. FDA allows fast-track approval bypass for cases where someone is going to die without treatment anyway, and Ebola disappeared after 2014 - according to CDC the next time it was spotted was Zaire in 2018 with a grand total of 8 cases. That's not even close to "many lives".
"A government that collects money from all its citizens and businesses each year has never built a system to distribute money to us when it’s needed most."
Tax credits, quantitative easing, loan subsidies. The government has many ways to distribute money to people.
"At least therapies and vaccines are hard! Making masks and transferring money are not hard"
In fact making medical masks is hard. It requires special materials and machines, the supply of which can't be rapidly scaled up.
Headline is literally "Factories are scrambling to make 20 times more face masks a day to keep up with demand amid coronavirus outbreak, but the masks are surprisingly difficult and expensive to make"
As for money, transferring money is easy. Figuring out the right amounts and the right people to send it to, without creating an explosion of fraud and waste - that's not so easy.
The number of tests done so far is about 4 million. Aren't you surprised to find we didn't have 4 million cotton swabs? Barely 1 swab per 100 people?
For reference, Q-tips come in packages of 500 for about $5 at your local pharmacy. They sell around 20 billion per year. Test swabs are somewhat more special and individually wrapped, but 4 million shouldn't cost a lot.
I want to make sure you know that this post is full of bizarre falsehoods. New York and Seattle definitely have ventilator shortages. California had a shortage and that federal reserve of ventilators netted us a small number of broken devices that had to be repaired. Lucky us, the State had a corporate partner that could do it.
I especially want to take issue with this falsehood:
> All three are in plentiful supply. Even in localised hotspots like New York problems are limited to a handful of hospitals.
ICU beds are definitely in short supply. It doesn't matter if a bed exists in another state, folks who need ICU beds aren't usually fit to travel. That's part of why their care is intensive.
But also, only large hospitals have significant ICU capacity. So saying it's only limited to hospitals that have ICU capacity seems very disingenuous to me. It's like saying, "There is no shortage of ICU beds at local clinics." That's true, because no one expects substantial ICU capacity at local clinics. If they had it, it'd be welcome right now.
> I've been reading about the near deserted state of most hospitals for over a week now. I don't understand where Marc is getting his information from if he isn't aware of this.
Where are you reading this? I have relatives in healthcare in NY. They do not relate your story to me.
> Vaccines can't be created for a virus that doesn't exist yet regardless of how many vague warnings there are, so this isn't remarkable: it's inevitable. As for therapies, that's what ventilators and CPAP are.
Who would CPAP machines be for? Why bring them up?
> Given the data appearing in a flood of new papers, showing that the virus is not dangerous enough to warrant current policy, no unusual rates of manufacturing scale-up will be required.
The medical literature is in fact saying the opposite. But now I'm morbidly fascinated what the "reopen the economy" and "it's just the flu" crowd are circulating as "scientific literature."
> Tax credits, quantitative easing, loan subsidies. The government has many ways to distribute money to people.
None of which are actually effective in the face of historic unemployment.
> In fact making medical masks is hard. It requires special materials and machines, the supply of which can't be rapidly scaled up.
Making masks which reduce individual aerosol dispersal is easy. N95 masks are harder. We definitely could scale them up rapidly if we wanted to. This is the territory where things like IP law do matter and do cost lives.
New York doesn't have a ventilator shortage and never did. It had a predicted shortage based on bad simulations, but never a real one. In fact it's now sending ventilators elsewhere:
"On April 2, Cuomo predicted the state would run out of ventilators in six days “at the current burn rate.” But on April 6, Cuomo noted, “We’re ok, and we have some in reserve.” Now New York appears to have passed the apex. Deaths, a lagging indicator, crested at 799 on April 9 and hit 606 on April 16, the lowest figure since April 6. Hospitalizations are also declining, and on April 16 also hit their lowest level since April 6. Cuomo today has so many ventilators he is giving them away: On April 15, he said he was sending 100 of them to Michigan and 50 to Maryland. On April 16, he announced he was sending 100 to New Jersey."
I'm morbidly fascinated by what you're reading that has led you to this belief.
Re: ICU beds: I was talking about the world generally rather than New York specifically. For example in New Jersey on April 8th only 3 hospitals were load balancing to others:
"the field hospital constructed inside the massive Jacob K. Javits Convention Center in Hudson Yards, had 340 patients as of Tuesday afternoon ... The facility has a maximum capacity of 2,500 hospital beds. As of Tuesday afternoon, the Javits Center hospital had treated about 700 patients"
Even on April 1st, the New York Post visited an ICU and found it was only handling double the normal case load, well within capacity (13 patients normally, 26 then):
Certainly there are cases where single hospitals ran out of space and started load balancing onto nearby hospitals. But, that happens during normal times too.
Where are you reading this? [empty hospitals]
The essay isn't only about New York, it's trying to generalise not only to America but the whole western world. And across the world hospitals are laying off staff due to underload:
Who would CPAP machines be for? Why bring them up?
CPAP - the pressure type, not the sleep machines - is now a common therapy for treating COVID-19. For example the British Prime Minister wasn't put on a ventilator but rather given only CPAP (basically, a mask connected to the hospital oxygen supply). This is because there's a growing belief in the medical world that ventilators can cause more harm than good for COVID patients.
None of which are actually effective in the face of historic unemployment.
That's not a rebuttal. Systems to distribute money exist. The idea they've never been built, as the essay argues, isn't right.
If you want to argue they aren't designed for sustaining a world under house arrest, by all means do so, but no country on earth has created schemes specifically for that.
Making masks which reduce individual aerosol dispersal is easy. N95 masks are harder
Andreessen was talking about medical-grade masks designed to protect doctors from patients, not ad-hoc home made things. And for those masks the point stands: it's hard to make them but he says it's easy.
As for medical literature, go read the links to papers and studies here:
There are many links to papers, comments and articles by doctors and other specialists who are arguing that the virus is clearly not as deadly as feared. For example, the serology survey that's in the first link under the April 18th update was discussed here on HN just recently.
That's good news, by the way! Don't you hope they're right? My experience is that some people posting on HN don't actually want to study what people bringing good news are saying.
Sorry, I already have decided in another post your "Swiss Doctor's" summary isnt't very credible and that National Review article seems to have an awful lot of hedging in it.
Thank you for the effort, but I don't believe there is much more to say on the subject.
I'm sorry, you're right. There was a narrow window where there were concerns, but that passed. New York DOEs face ICU bed shortages.
My response here was mostly dismissive because the poster above is clearly trying to downplay the crisis for reasons I can only speculate on. After taking a lot of time to read through the poster's previous links, I'm quite frustrated with how much time I wasted on disingenuous garbage links.
But yes, I lumped Seattle (which briefly did have a ventilator shortage) in with New York on ventilators. This is pretty much the only thing I was wrong about and I'll take this opportunity to own up. But I won't engage earnestly with the previous poster any further.
Please could you link some of the papers you mention on the scale of the coronavirus problem? I'm not doubting they exist, I'd just be interested to have a read.
"A swiss doctor on COVID-19," huh? Well since it's written by a doctor we should give it the benefit of the doubt and read the page and the links. But I confess, upon doing so I find that this is a page full of good (and in some cases, familiar) resources presented in a way that reminds me of a well-produced climate science denial websites.
That's an incendiary claim, so please let me provide an example. Here's point 4 on the overview:
> The age and risk profile of deaths thus essentially corresponds to normal mortality. Up to 60% of all Covid19-related deaths have occurred in particularly vulnerable nursing homes.
"Nursing homes" is highlighted and links to an article talking about mortality in nursing homes and long term care facilities. It is both cautious about its claims (pointing out data is not very good yet) an doesn't make the point that nursing homes are in fact the fatality concentration point. It's not clear how we'd draw a larger conclusion from this.
Another example, next point:
> Many media reports of young and healthy people dying from Covid19 have proven to be false upon closer inspection. Many of these people either (did not)[1] die from Covid19 or they in fact had (serious preconditions)[2] (such as undiagnosed leukaemia).
Firstly, I'm not sure anyone has disputed that young people are much less likely to die of the virus. But there are two links in this point, one to a Daily Mail article about how a coroner is waiting for a toxicology report before ruling the cause of death is COVID-19. This is probably the right call, but an infant testing positive for COVID-19 appears to have died over respiratory distress. It's difficult to just shrug and go, "Oh well that's SIDS not the virus even though the nature of the death is identical."
Really, these points read like someone with an agenda trying to make a lot of cites for legitimacy. But there isn't a lot of evidence of a larger pattern here, just a lot of data which is then presented in a leading way to facilitate a narrative.
Another example of this:
> The often shown exponential curves of “corona cases” are (misleading)[3], since the number of tests also increases exponentially. In most countries, the ratio of positive tests to total tests either remains constant between (5% to 25%)[4] or increases rather slowly.
This is another really misleading bullet point. Looking at [4], we see indeed that the over-time ratio of tests has remained at an average of 25% positive by country (this is of course averaged, hotspots see totally different numbers). But the author has previously pointed out that testing administration has risen exponentially, so this is a constant proportion of an exponential population. If we decline to extrapolate from this, the author cannot make their point. But if we do, we see an exponential growth in COVID-19 cases.
I see more examples but I won't further belabor the point. This resource is written by someone with an agenda they want to execute on. It doesn't appear to be someone honestly engaging in inquiry and arriving at a data-driven conclusion.
> I really can't help but appreciate the irony of alleging agenda in the above poster's sources, while simultaneously citing the Daily Mail, Yahoo Sports, and Twitter.
The post you're replying to did not use those as sources. They were criticizing the website for using those sources (and including them here for reference). Look at the locations of [1] thru [4] in their comment: they're all in the body of quotes.
> I'm actually on Marc's side on this one, in that I suspect current FDA approval processes are overkill.
As I understand it FDA didn't approve Pandemrix, while EU regulators did give it fast track appeal.
Pandemrix causes narcolepsy in 1 in 60,000 people who take it. (so, for the entire US that's about 5000 with a life long debilitating illness that requires constant care.) The risk is very low, but it's there and we need to be careful about exposing a population of hundreds of millions to these risks just because we have an ideological opposition to any form of government regulation.
It's hard to form an opinion on that case without knowing more about Pandremix. How many people did it help? Is the illness it treats worse than narcolepsy? How many people are wrongly prescribed it?
I also wonder what kind of study found such a tiny effect size. 1 in 60,000 would require a staggeringly powerful study to successfully link it to Pandremix.
Not saying you're wrong about any of that, and I suppose I could go research these questions myself. But based solely on what you wrote I don't think there's any way to tell if that decision was good or bad.
> The moneyed classes of America don't like redundancy and they don't like long term investments.
This class denigrating language does nothing to elevate the discussion and it is absolutely false (in the sense that it is only a "truth" within your worldview and the worldview of others who share it), and it is false in the sense that it doesn't accurately describe the behaviors of individuals in the "moneyed class".
The "moneyed classes" as you call it if anything have more redundancy and longer term investments that most other classes. It is incredibly rare for anyone in the "moneyed classes" to not have a balanced portfolio of investments that add in fiscal redundancy in case one investment goes bad. The portfolios are also balanced insofar as balancing short term and long term growth depending on their investment horizon.
The problems you've identified have far more to do with a coordination problem than the vices of individuals.
The "moneyed class" is not one coordinated hive mind mass that all conspire with one another to avoid redundancy and eschew long term investments.
The "moneyed class" like the "unmoneyed class" are all individual actors each acting in their own self interest and trying to figure out an optimal solution given limited imperfect information and handicapped by many cognitive biases.
Any system that is going to solve the issue of redundancy and long term investments needs to acknowledge the reality of limited imperfective information and cognitive biases and the impact these have on human reasoning and the subsequent actions of individuals.
Getting an answer from a court (is X legal?) takes a long time: at least a few years and several hundred thousand dollars. Far too long to wait before building a business around X. Asking people to build the business first and then find out if it's legal isn't how a society of laws is supposed to work.
No, law is not code and it’s very important that it’s not code. Law is subject to interpretation, and that’s great. When bugs are discovered in law, they can be retroactively corrected.
The key part is that the court system can correct for a bug before the law itself is changed; it's a way to fix things as the code is being executed for a particular case, before the developers have even identified how/if the bug applies for other cases and figured out a general fix, much less implemented one.
In each case it may depend upon the 'application'.
For easily-understood fields undergoing well-scrutinized legal code changes it's (presumably) likely that legal drafting issues can be caught and fixed early.
Conversely, in software projects (even open source ones) where the users and authors are few and/or fail to pay attention to mistakes and errors, it could take years to report and fix issues.
All that said, in the presence of a mindful, careful and effective engineering team with responsive users, it does seem that software - or at least software processes like source control, code review and the democratized ability to contribute code changes - has an evolutionary advantage.
The premise: the judiciary is one source of authority; the legislature is another. If we treat contracts and laws as executable programs and specifications, we want to find bugs at compile time, because handling exceptions at run-time is called "going to court".
How do we find bugs at compile time? Static analysis. Formal methods. Formal verification methodologies (Lamport's TLA+, MIT's Alloy) applied to contracts and laws make it possible to SAT-solve for loopholes ("sploits") that violate LTL/CTL specifications. Once law is code you can go full white-hat/black-hat. Automate the fuzzing. https://www.theatlantic.com/technology/archive/2017/09/savin...
Maybe we don't always want "law as code" ... for, say, criminal law. Judicial discretion is important. Human judgement matters. Though if an overworked public defender can only spare two hours out of the hundred you deserve, the robolawyer starts to sound more attractive. What if we send Watson to law school? If you're hunting for a way to stay out of jail, wouldn't you want Deep Blue and AlphaGo to help you find it?
https://www.nytimes.com/interactive/2019/01/31/us/public-def...
There are plenty of black-and-white areas where the rules don't invite human interpretation: mostly things to do with finances -- like how DoNotPay.com can help apply for unemployment. Even in those domains, there are deep, deep pockets lobbying against the kinds of freedom (as in speech, and as in beer) that "law as code" promises.
https://www.propublica.org/article/inside-turbotax-20-year-f...
But, you ask, what about the knowledge acquisition bottleneck? Ah, yes, the AI Winter. Ontologies (SUMO, OWL, UFO-L), visual modeling notations (BPMN, DMN), and a new generation of tools (Flora-2, Protégé) take a new whack at that problem without going anywhere near machine learning and neural nets, which typically lack the nuance you need when every comma counts.
https://www.bbc.com/worklife/article/20180723-the-commas-tha...
Spring is coming. The vision for computable law, as laid out by Michael Genesereth at Stanford's CodeX Center, is for software that does for legal reasoning what the spreadsheet does for quantitative reasoning. (Who's Michael Genesereth? You've heard of Russell & Norvig's textbook on AI. He was Stuart Russell's Ph.D advisor.)
https://dl.acm.org/doi/10.1145/1165485.1165517
Is there any money in this? Hell, yes. In the US, DoNotPay is running a pitch-perfect Christensen disruption playbook. Outside the US, the EU has issued a half-million-euro tender for exactly the Rules As Code thing mentioned above: machine-readable-and-executable regulations. See section 1.4.2 of the PDF at https://etendering.ted.europa.eu/document/document-old-versi...
Oh, and as of last month, Singapore has just thrown $10M behind a project to turn the "law as code" vision into open source software that you can clone off Github.
I've been researching computational law since 2015, and a picture of the future legal tech stack is coming together in my head: open-source, open-standards, laws and contracts drafted in a domain-specific language from the start; libraries of clauses, linters and interpreters and unit testers and theorem provers built into the IDE, that find bugs in contracts in real time as you edit; compilers to English and other languages; model-driven architectures that flow from the specification to the app.
Once that legal stack is downloadable and accessible to the geeks of the world, then, as Joshua Browder would say, DoNotPay a law firm thousands of dollars just to copy and paste a Word doc out of their library. The law firm is not the customer -- as Atrium proved, expensively.
To help move this stack out of my head and into Github, the SG government is funding the development of open-source software targeted to real-world use cases, for drafting rules and contracts in a DSL. They've approved a grant for my small team (hi, Alexis! <3) to hire people to make it happen.
https://www.thetechnolawgist.com/2020/03/31/legalese-singapo...
If you're in a position to move to Singapore (whenever air travel reboots) ... and have skills in obscure but powerful technologies (or want to gain those skills) ... and want to help design a language that could be the basis for the next iteration of the legal industry ... we're hiring:
https://computational.law/hiring
I can see the attraction in making rules/regulation as code. But there is a downside we should be cautious of. Making law into code doesn't necessarily make it more readable/understandable or clearer for humans. In fact, making it into code will make it scalable to add lots of rules (very prescriptive, not derivable from a set of core principles) making them hard to comprehend for anyone but a rules evaluation engine. Anyone who has implemented a business rules engine and operated it in a complex workflow domain (like say e-commerce or banking) knows what I'm talking about. Then, when the machine renders judgement, we will need technical engineers to debug/explain/interpret why the machine evaluated all the rules to this particular judgement. There will also be potential for modeling the legal context of a particular case incorrectly while feeding it to the machine which can make the machine render incorrect judgment. Now, how will you appeal this decision?
You're quite right. Garbage in, garbage out. And if the cost of generating garbage goes down, we're going to get a lot more of it! There are definite risks in misinterpretation and complexity and cruft. As Genesereth quoted:
The Lord's Prayer is 66 words, the Gettysburg Address is 286 words, there are 1,322 words in the Declaration of Independence, but government regulations on the sale of cabbage total 26,911 words.
So, we will have be on our guard. The hope is that if the rules are open and machine-readable, we will be able to counter with software that sides with the user and helps to mount the sort of response that in the past was only available to corporations with very deep pockets.
One intriguing approach is to submit test cases: concrete scenarios, or traces of events, that should result in certain desired outcomes. A diverse range of people in different circumstances could be collected in a comprehensive test suite. If the contract/law passes the test suite, you're good! You can imagine two legislators from different parties with different constituents and concerns, each bringing their set of test cases; and when the negotiated compromise passes enough tests, they proceed, without ever actually reading the text of the bill, lol.
> If the contract/law passes the test suite, you're good!
Not necessarily, you risk the same sort of problems suffered by naïve statisticians who over-fit their data with ever more complicated models. This leads to erratic behaviour in real life and severe lack of predictability outside the range already covered by the data.
You need to run some kind of sensitivity analysis as well because the components used in the implementation (policemen, lawyers, auditors, traffic wardens, etc.) are not all of perfect quality. Think of an audio amplifier design, it looks wonderful on paper and works perfectly in the simulator. But fails spectacularly when built of real world components because each component is not quite exactly as specified. A sensitivity analysis can discover this by, for example, running the simulation multiple times with each component varied according to its expected quality (say +/- 10% for resistors, +/- 30 percent for transistor gain, etc.)
>government regulations on the sale of cabbage total 26,911 words
The only solution is mostly forbid government regulation except for critical things, of which "sale of cabbage" and ten of thousands others now currently regulated are not.
In order to do that within a Democracy, you have to dispel the unconscious notion (that a lot of modern voters have), that the government is a father/mother figure that has unlimited resources, can't make mistakes, and its operated by saints with the "common good" in mind 24/7.
Maybe force the lawmakers to include a text explaining the "spirit" of the law, also including indicators to the law effectiveness. For example, a law is implemented to bring down then "car accidents per million" indicator. If one year later car accidents are the same or more then the law is scrapped.
What you propose of robo-lawyers and law as code sounds as the script for a futuristic Kafka's "The Process" as an episode of Black Mirror.
This made my day! Wish you all the best and hope that this will materialize. Who needs skyscrapers and stuff (Marc is writing about) if you can have computational law?! In the meantime I will try to escape the country that will adopt such techniques the last: ol Germany
Law should be objectively decidable. Thousands upon thousands of pages of enigmatic legalistic nonsense make it impossible to predict a legal decision. When there is this much law, it becomes a paradox where the result is actually lawless - it becomes the whim of a judge's interpretation.
I’m a big fan of anything that will bring effective legal access to everyone. Technology will definitely play a role, but so will legal deregulation. Lots of jurisdictions are experimenting with opening up certain areas of legal practice to people who aren’t lawyers. And they’re rebuilding systems (alongside technology) to make them easier to access without attorneys.
The troubling part is that at some point, we need to tackle electoral reform. Even if we tackle the legal system and provide effective legal access to everyone, we’ll still be a long ways from tackling mass disillusionment. Hell, in lots of cases, disillusionment and/or disenfranchisement are logical results of history!
A piece of this is to eliminate the friction of legal text by open sourcing legal templates, in a graph, on GitHub. The key word here is "source." Legal documents currently are blobs, not source. See github.com/CommonAccord/ Lots of exampless, including the YC SAFES, Series Seed, GA4GH data sharing, etc. It's not full algorithmic, but compatible with algorithmic approaches, like Mike Genesereth's and Meng's.
It seems donotpay can get you into a legal engagement easily, but the other party can tie you up in more legal battles that donotpay doesn't yet handle and then you are screwed if you can't hire and pay expensive lawyers.
This is also a failure to build. We just accept it as a given that courts take too long, judges are too lazy to get their opinions out in a timely manner and the legal profession too often gets fat fees for slow-walking legal proceedings when technology exists to make expeditious dispute resolution much faster. For example, I can think of no reason why we can't mandate that discovery must use electronic format unless the information was never before recorded in an online electronic system. Given that I have never seen a functioning typewriter in a corporate office, I imagine that would smooth things a bit.
Also, just as a matter of how the US legal system works, the presumption is that someone is innocent until challenged, whether by the state or by a private party. A prospective business could not file a petition with a court asking if their conduct was legal or not, since it's not really a controversy. But businesses will always do loads of due diligence with lawyers beforehand, who should help identify areas of legal risk.
Read "Why Courts Don't Work" by Richard Neeley, who used to be chief justice of the West Virginia supreme court. Courts don't work because a lot of people don't want them to work. If you could get a judgement in a week in a minor labor case, employers would have to obey labor law, for example.
Which is enabled by VC funding, which IMO makes them complicit on a systemic level. It's arguable whether you can blame a particular investor for Uber's thoroughly rotten and antisocial business model - but once you see more of such startups getting funded left and right, it's fair to ask the question, "why such business model is even a possible option".
I don't agree that Uber's business model is fundamentally "rotten and antisocial". Short range point to point transport (cabs) was awful before Uber and Lyft. The rides are easier to get, the drivers are less likely to screw you over, and you know in advance just how much things will cost.
I'm glad they took on a legal gray area because cabs had completely used regulatory capture to get away with being a terrible service to the public.
I'm talking about the "it's better to force forgiveness than ask for permission" part, and they weren't in grey area - in a lot of places, they were doing plainly illegal business. I'm talking about their business model of "let's do illegal business and use deep pockets to keep regulators at bay, until we get enough public support to make ourselves invulnerable". Also known as totally unfair competition. I'm also talking about insurance and worker rights shenanigans, and a host of other sociopathic behaviors their management exhibited (all reported on in detail over the past years).
On top of that, cabs were awful in some cities in some places around the world. They worked well enough in others. Over here (Kraków area, Poland), we had private point-to-point transport companies that managed to change the law through a proper court process, like civilized people do.
Key to their strategy was actually providing the public with something most people actually wanted, regardless of legality. Very few lawmakers want to aggressively go against public sentiment just because the law says they should.
> Key to their strategy was actually providing the public with something most people actually wanted
The people who want the service are not necessarily the same as the people who are affected by the externalities of the service.
Everyone loves having AirBnb available to expand selection in NYC when they visit, but how many New Yorkers who aren’t AirBnb hosts love having tons of short term rentals in their building?
I agree that people didn't really understand what they were getting into fully when they initially agitated for it, but it's definitely the case that there was broad initial public support which is what allowed the companies to get a foothold.
This is an American doctrine, that there must be an "actual case or controversy" - Canadian courts can and do issue advisory opinions to interpret regulation.
Pre-enforcement lawsuits do exist to answer questions for parties prior to taking actions that would result in liability. One was just recently decided in favor of the ACLU.
Not a court, but government agencies can and do issue "guidance" documents after receiving feedback. For example, the EPA guidance on Class VI (CO2) injection wells [1] and IRS guidance on 45Q CO2 capture and storage credits [2]
Problem is, the faster courts are, the more likely people are to actually wait for them, which ends up a net slowdown. Really the only path to success is, take a risk to try to beat the competition and hope the courts side with you in the end. And if you're successful, they probably will.
IMO this is a classic case of loss aversion. Enforcers of law are put in a position to make subjective decisions that impact them personally. They don’t want to make a decision. They want someone else to make a decision. Decision stew until they can be disassociated with any person or group. This takes time. Usually the decision is tempered to absolve all parties and thus be convoluted and misinterpreted. Rinse and repeat.
I don't get why everybody is raving about "Why Nations Fail". Their definitions of inclusive/extractive institutions seem hopelessly muddled. It is almost as if they've collected all the stuff they liked in prosperous countries and called it "inclusive" and then did the same with all the stuff they disliked in impoverished dictatorships and called it "extractive". If you try to distill a succinct definition of these concepts and then apply it, you run into contradictions such as (borrowing an example from Fukuyama): "The Indian political system is so inclusive that it can’t begin major infrastructure projects because of all the lawsuits and democratic protest, especially when compared to the extractive Chinese one."
If the thesis is "institutions are important for prosperity", it is kind of obvious. But the book does little to explain exactly what kind of institutions.
> I heard a few years back that a US health insurance startup had to provide on the order of 6000 pages of documentation to be approved. No wonder that there hadn't been another provider for twenty years or so. It seems like some things are hard to build mostly because some people want it that way.
Very often regulation starts lean, then inevitably some assholes take advantage of it to their profit, so the regulation becomes more and more specific and complex. Rinse and repeat.
It starts at individual level. In France, health insurance providers started reimbursing eyewear, with a rule "one pair of glasses each 2 years". Now everyone buys new glasses every 2 years, sharp, because "I'm paying for it", even if they don't really need new glasses. Stuff like this make insurance price go up for everyone as a result, which incentivizes you even more to be an abuser. The rules are now more strict about the how much is reimbursed, because people obviously go for most expensive Gucci frames allowed.
Insurance is not meant to cover routine purchases, it's meant to cover purchases that are unexpected and too large to cover.
We have a publicly paid health system in Norway, but we still have:
* Copays until you reach €200
* No dental coverage for routine operations (only major surgeries)
* No eyewear coverage (I assume if you have some eye illness requiring surgery or similar it will be covered)
Seems to work fine, and that France should change what insurance does cover
I think the single biggest roadblock to building new things is regulation. How do we eliminate most regulations, and simplify the rest to fight off regulatory capture?
What if we had a github for laws and required that anybody who worked on a law use their real name and if they were paid by a company they had to list how much?
Regulation is all about stopping people from getting taken advantage of, or hurt, usually by their own decisions.
Financial regulation is mostly about stopping people from selling dodgy investment schemes that are some variant of Ponzi.
Health and Safety regulation is mostly about stopping people from doing stupid things that might kill them.
FDA is about stopping Snake Oil salesmen. And y'know, making sure the drugs we're sold don't make us worse.
You can see it coming in the Cryptocurrency world - people lose money on stupid bets and then feel that someone else should have done something to stop this. Someone being the regulatory agencies.
So what would a solid set of regulations for crypto look like? What process would you devise that would result in a set of rules that prevented most of the crooks from profiting from their crookedness, while allowing honest folks to make some money investing in crypto?
"Use GitHub for lawmaking" is something I've had in mind for a long time. However, not sure how this could work in practice.
I've heard from a friend of mine who used to work for Deloitte (or similar kind of company) that on practical level, lawmaking often happens in those private consulting/lawyer's offices - it's not like a MPs sits down and write stuff down themselves. So the git commit would say "John Smith the lawyer" which tells you nothing.
There's probably also so many patches and reverts and rewrites going on that history would be really bloated. Or if you want nice history, you lose all those important nuances you wanted in first place ("who exactly put this comma here which changes the whole meaning?").
It would also probably horrendously slow down the law making process. (which might actually be a good thing in many scenarios!)
Point being, why not write simpler laws and regulations and leave it to the courts to interpret what adheres to the spirit of it? With the barriers of entry gone, I think we'd see a renewed vitality to many ossified sectors.
I agree with your overall point, but you have the regulatory differences between the US and Europe exactly backwards. Europe (excluding England somewhat) has a statutory legal system. Things are either legal or illegal according to laws that have largely been written down ahead of time that anyone can go read and figure out.
In the US we have a common law system where much of our law is written by the courts in response to specific cases where judges interpret the general principles described in the "simpler laws" you speak of.
In practice this means that, under many circumstances, things move a lot slower in the US because of the time and expense of litigation (and even the threat of litigation). This is one of the reasons that it's harder to build things in the US. Our public transportation systems (trains, subways, etc) cost on the order of 5-10x more than similar ones in Europe. Our different legal systems is one of the big reasons why.
I may not have expressed that point very well, but it seems like the common law system would encourage less explicit regulation rather than more, so that seems like a bit of a contradiction. Does the need for more litigation drive a desire to be more explicit in how statues are written?
As the parent notes. The issue is if you have a simple law say "Do not dump harmful chemicals into waterways used for drinking, shipping, etc." this leads to a lot of litigation regarding what is a "harmful chemical". If instead you have it all spelled out "harmful chemicals being one of coal ash, hydrochloric acid, asbestos, ..." (don't quote me on these). Business's know what the variables/costs effecting operations are up front. Only reacting and being liable if the list changes through the political process.
The parent was saying the US approach instead define what a harmful chemical is after the fact. Leaving companies to need "insurance"/a cost benefit wager before something is built. Otherwise they could be screwed later after litigation.
IMO, I can see both sides but preferably I would want simpler laws from political processes which are then refined into explicit interpretations by subject matter expert strong government institutions. But we have lobbying/revolving door government employees and trashy textualists in the US so it doesn't work out that way...
A federal 3 letter agency unilaterally writes detailed regulations, that are for practical purposes law.
One problem is that the regulatory agency gets captured by the industry, which means the regulation ends up being a way for the established industries and companies to make competition unfeasible.
The regulatory capture conversation from the likes of pmarca is always about advocating reduction of regulation because otherwise the regulator starts working in favor of the big guys against the little guys. But to me that is the wrong way to look at regulatory capture. The antiregulation politicians are the ones that tend to put big business lobbyists in charge of regulation. We need good regulation, not less. Good regulation that evens the competitive playing field and protects exploitation of externalities. without regulation the bug guys lock in the rents with no space for competition. We need good regulation. But you don't vote for the antiregulation guy to get good regulation, he's trying to destroy regulation not improve it. Less government is a red herring, we need better government.
Thing is, good regulation is extremely tough. A good regulator needs to deeply, deeply understand the industry, where it has been, where it is going, and what the problems are; they need to deeply understand the spirit of existing laws rather than the letter of the law and be ready to thoughtfully and creatively deal with edge cases; they need to have some risk tolerance to allow for growth while still protecting people; they need to be able to balance the interests of competing groups; they need to be able to be proactive / innovate rapidly in the face of changing conditions meaning they need to understand the bleeding edge and be consulting with the groups at it; they need to see big problems like pandemics coming and push people in the right direction; they need to resist the calls for deregulation for deregulation's sake from industry as well as resist the calls for regulation for regulation's sake from politicians who want to appear like they're doing something about a problem; they need to deeply care about the users they are charged with protecting; Finally, they have to have brass balls. They have to be unafraid of standing up to politicians / the public / industry and saying you are wrong or sorry, we were wrong.
It's really tough to find lots of people who can do all that for not much money / acclaim potential.
I believe what you call pmarca's view is also the view of researchers in the field. The term "regulatory capture" comes out of the Public Choice branch of Economics.
> We need good regulation, not less
The result of the research is that that is, in general impossible. Sure, some regulators do good work for some period. But the general forces and incentives in play push quite strongly towards the regulator being captured.
The better working alternatives are laws, where disputes or guilt are decided by courts. Since there is no regulator to capture in this scenario, things work pretty well. Of course, lawmakers can also be captured, but that's harder.
One fascinating* thing with the field of economics is that so m any thinks their opinion is worth as much as the expertise of professional in the field.
You routinely hear people confidently claim the economics field is wrong about things they've studied for decades or centuries, because of simple arguments that are all thoroughly accounted for in the beginner literature.
Sorry but an argument from authority in the field of economics is not even a little bit convincing to me. Not only is economics a "social science", which are notorious for lack of rigour, but economics itself is purposefully bifurcated into biased partisan "schools". There are many economists which study solutions to regulatory capture who do not suggest that regulators should be cut, if you're only aware of one school of thought in this area then you've been looking in a limited bubble.
Not sure that is how the cookie crumbles, rather: it will be decided that chemical X is harmful at a certain dose, which leads to some permissible concentration Y of X, and that Y can then be used for regulation of disposing X.
A place that needs to dispose a certain volume of X with concentration >Y then pays a sort of a mixologist to dilute X to a concentration <=Y before dumping it all anyway (unless it would be less expensive and more practical to react X away).
It means power is captured by those who can afford lawyers, and lawyers are expensive. There's no way to plan your risks up front in an area with not a lot of case-law, because you don't know them - your business plan now gets to be "hopefully we win this case in our favor in the next 3 years, but if it goes all the way to the supreme court..."
Lawyers are expensive only if _you_ have to pay for them. In English law (UK/EU) loser pays most lawyer's fees. This also disincentivizes businesses to start unwinnable cases in order to ruin other businesses with legal fees.
Correct. Common law = less explicit legislature passed regulation. We have far less regulation of this kind in the US than in Europe BUT we have far more common law regulation.
Yeah, but when the practice of this is different with it often being up to regulators what actually is allowed and what isn't. The obvious recent example is that GDPR enforcement is (often intentionally) not strictly following the letter of the law.
Well, GDPR is not actually a law, but a framework that must be used by EU member states to implement their own laws. That may be one cause of local enforcement being not fully aligned with GDPR.
But yes, the local GDPR laws do seem to be intentionally underspecified, like you said.
Because a law is a machine to compact thousands of hours of ethical thought into an actionable doctrine. It's designed specifically to take the subjectivity and bias out of executing policy, which is introduced by a single (or small group of) human brain(s) working on a problem for a few weeks, at most. Courts are a last-ditch effort to jury-rig a conclusive plan of action to rectify whatever dilemma come before them; as with similar tasks, they're more expensive and time-consuming at-scale than just planning correctly at the outset.
This is why judges cannot be the highest power - the people still need to be able to hold them accountable to ensure that the legal institutions don't become inaccessible to the common man.
(Not that they are accessible now... but it could be worse.)
That was Scalia's point in his dissent of the gay marriage decision:
Scalia argues in his opinion that the court is increasingly creating policy rather than serving as a neutral arbiter.
“Today’s decree says that my Ruler, and the Ruler of 320 million Americans coast-to-coast, is a majority of the nine lawyers on the Supreme Court,” he writes.
“This practice of constitutional revision by an unelected committee of nine, always accompanied (as it is today) by extravagant praise of liberty, robs the People of the most important liberty they asserted in the Declaration of Independence and won in the Revolution of 1776: the freedom to govern themselves.”
People in one part of the country go to the courts, and force their will/values on the rest of the country. Activists across the political spectrum do it.
It’s funny since that specific ruling is what stopped a minority of the US population from imposing their will/“values” on the rest of the country.
Clearly the electoral college and legislature is not setup properly to reflect the will of the people at this point in time, so we have a better chance of it happening from 9 Supreme Court judges.
Campaign finance reform, same day primaries nationwide, vigorously prosecute bribes and conflicts of interest, make corporate lobbying illegal, prevent industry careerists from holding office, prevent outgoing politicians from working in the industry for some cool off period
These things aren't hard they're just blocked by years of propaganda by incumbents.
Introduce a rule that any new law should be submitted in the handwriting of its actual authors. And not the handwriting of interns, or staffers of the official authors, the author themselves.
Congress has a 20% approval rating, polled weekly for over the past decade. Yet we vote every two years for the same folks who give us the same results. The problem isn’t them. It’s us.
Why does US Congress approval rating matter? If I considered my congressperson 100/100 and everyone else 0/100, the House would get an overall rating of around zero.
Obviously since I can't elect members of the House of Representatives from other districts, I could totally approve of my congressperson and senator and it still not be my fault for the other guys in power.
I'd say the problem is one of competition. "We" cannot choose better legislators unless better legislators come forward for selection, but the incumbents - and by that I mean parties elected or not - have so much money and machinery behind them that to turf them out would be nigh on impossible.
The problem is that each “we” is pulling to benefit themselves at all costs.
Hence giant military fighter jet contracts that span multiple congressmen’s districts around the country, and while being terrible for the future of the country, is untouchable politically as not a single person will vote against their economic interests.
I was going to say the same. Lawmakers are elected officials. They're incentivized to do what gets them votes. And voters are concerned with the complexity of laws. Perhaps what we need is better education to create more informed voters. But if lawmakers are in charge of that, too, I'm not super hopeful.
Several years ago I signed up to follow 3 politicians I cared about using this site https://www.govtrack.us/. Give it a try, and I think you'll see the deluge of laws, bills, and opinions is too much for a mere mortal mind with a 9-5.
I think this is why we talk about congresspersons' army of staffers and interns. You would not want a single person trying to deal with the complexity of all this information they need to have an informed opinion on in order to vote for/against.
The inclusive vs extractive institutions mentality makes sense but I think in the exact reverse way then you suggest.
It's precisely because of the Wests (and like Marc says it really is the West) failure to respond to this crisis. It's the excess of inclusivity that leads to short term, ballot box decision making in response to crises, and it is the short term, market logic that leads to loss of autonomy and neglect of long term goals that Marc talks about in the piece.
It's the politication of a healhcare / virological crisis that renders responses ineffective. When the American president gins up armed protesters during a pandemic that is the direct result of the inclusivity praised in the book. It's crisis response turned into a media spectacle and an election campaign.
Efffective resopnse to the crisis was visible in East Asian countries in which 'elites' can govern without constant interference, and that's not a glorification of China, but also of democratic countries like Taiwan, or so-so democratic countries like Singapore. What they all have in common is that decisions are made by leadership which can act with the necessary degree of autonomy.
> What they all have in common is that decisions are made by leadership which can act with the necessary degree of autonomy.
No, what they have in common is that they've been through this experience before with SARS, learned from it and setup procedures so they could act faster next time.
All the recent outbreaks of viruses like this have originated from East Asia.
I really wouldnt give much praise to the great governing elite that failed to prevent this in the first place, despite scientists telling them about it a long time ago.
Not only is that factually incorrect as the other user pointed out, but you may be surprised that more than half of the worlds population lives in this circle (https://i.imgur.com/CK6aONG.jpg), so the fact that a lot of diseases originate there isn't as surprising as you might think.
Not to mention that diseases can break out everywhere, making the response to a pandemic significantly more important than trying to shift blame for what is essentially a game of chance.
"Why Nation Fails" is a phenomenal book. I'm sorry, but I have a hard time to think of US institutions as reasonable examples of how the author portraits creative destruction and extractive institutions.
I understand there might be some broken things in your nation's systems. Still, the fact you're able to discuss them here or work towards changing them through legal methods, shows the US is far off on the right track of constitutional rule and pluralism.
Yeah, I generally agree. The book does highlight how much of it is hinged on contingency, though. The US has strong institutions, but the dynamic of having elites opposing change is still present, obviously. High barriers of entry is a prime example of how it can be done when other options are unavailable.
Medicare Part D coverage of prescription drugs. Seniors now have subsidized coverage for not a lot of money and the program costs less than the forecast.
A bunch are changing in real time right now. For example, telemedicine being full legalized and paid by government insurance, same as in person doctor visits.
It used to be very expensive to travel between US cities because a govt agency (forget the name, maybe the board of air travel?) set the who what how could fly planes from a to b, and at what price. Think mad men times, panAm, etc.
That agency was eliminated circa 1980 by some stroke of luck and perfect alingment of planets. Ticket prices plummeted and this opened flying to the poor.
That was also the last time a US regulatory agency was disbanded.
This wasn't because of regulatory overhead, it was because they had created regional monopolies for the airlines. It's exactly like insurance (or prescription drugs, if you're thinking internationally) is now, and that industry wages a life and death fight every time that"deregulation" comes up. It's corporate welfare created by federal corruption.
Is it possible that extremely high costs to enter the business, as well as extremely high operating costs mean that only the biggest airlines, with the most network benefits survive?
Sure. It's not an either/or. An airline company is hard to start regardless of what the gov't does. However, parsing out routes and giving airlines monopolies on them adds a significant number of bricks to the wall.
We might soon have another federal regulatory agency disbanded but considering which one it is I’m not sure if that will be a good thing for anyone but banks.
You are confusing regulation that protects the oligarchy, throwing spanners in the wheels of potential independent competitors, with regulation that effectively protects the health and safety of the people.
The US might have the former, but when Europeans refer to a lack of regulation in the US they mean the latter.
Totally, spot on. I think a great next step would be democratize the system that performs those tests and works with the regulatory institutions so new pharma companies can focus on innovation. A reasonable analog are the fintech startups that provide APIs and say essentially "were regulated so you don't have to be". That stuff is important and we should DRY it up so we don't have to copy/paste it every time we start a company.
> I heard a few years back that a US health insurance startup had to provide on the order of 6000 pages of documentation to be approved. No wonder that there hadn't been another provider for twenty years or so.
I think the difficulty involved in spinning up an insurance company probably has literally nothing to do with those 6000 pages of documentation, but if I suspected otherwise, it would seem like what is actually on those pages is a lot more relevant than how many of them there are.
And what would it solve? If you can enter the market but later on you are judged in the court for doing something wrong - you are better to be forced to think about it before you even start it.
The problem here is growing complexity, which governments doesn't recognize as a problem for some reason. There should be some institution in the government body, which primary goal would be to reduce complexity of governance.
If it was just health insurance and similarly "risky" industries that required the 6000 pages, it wouldn't be so bad.
Earlier this year Lambda School (an online school where you watch videos and learn things) got fined $75k by a California regulator for the crime of teaching without a license. One single state license application required "2177 pages and weighed 25 pounds," and they're having to do this for many states.
I respectfully disagree about what it takes to be approved as a health insurance COMPANY (as opposed to a broker). In fact I am quite happy that regulators require you to show that 1) you know what you are doing 2) you have a massive balance sheet to protect your customers if they need it. The point 2 is super important in the context of VC-backed companies. There is simply no way to build a massive insurance company that way, the return on equity is too low. Unlike airbnb you just don’t go out and raised $2B in debt because you are running out of money and you can’t pay claims. Regulators would step in way before, and they have done that multiple times.
Witness what is happening today: I have not heard from any health insurance company requesting a bailout (unlike most companies). State regulators are a pain in the neck, are conservative but - in your interest - they control how the insurance company uses their capital (you grow too fast = you must add more equity, a bit like working capital), and how you invest your money (they restrict the amount of equity you invest in). All in the interest of the consumers.
Think for a second: if the balance sheet of your health insurance company looked like the balance sheet of Softbank’s vision fund? Would you like to hear “we are sorry, we’ll have to stop your cancer treatment, we are out of money”.
Health insurance companies are regulated at both the State and Federal level. The goal is to make sure that they are fair and will pay the claims when you need that down the road. Like everything in financial services (your savings, your retirement fund, your health for you and your family) this is not the place for fly by night startups. While it is visually appealing to see a better UI, you hear startups "disrupting this dinosaur industry" but very few of them succeeded. And maybe it would be nice, but smart investors (after say series B or C) realize that the returns are not that great and the company requires a massive amount of equity, in fact locked in low risk investments/stable bonds.
Sure, you can target a very young workforce and ignore the sick, the old, the crippled, those overweight or whatever else there is. And you can make money within the startup ecosystem, when everybody works out, eats well, and is super healthy.
But it is simply illegal and my advice for you is to buy insurance from an old, stodgy company. Maybe a mutual company? I don't care if wework is out of money, I can always find space somewhere else. When you have cancer, or when you child is disabled, you don’t want to deal with insurance regulators who have seized the assets of your shiny new health insurance company startup.
There is no room for mistakes when it comes to your health and your savings.
Disclaimer: I have Kaiser, I never use them, but I am sure they will be there when needed.
I wonder what you think about the necessity of the health insurance industry? Seeing as how apparently it began as a sort of subscription service to keep hospitals afloat when beds were empty... It is a lot to wrap my mind around, but I have the general feeling that insurance drives the prices of health care way up and we would be better if we could all pay out of pocket for most things, but be covered by a true 'risk mitigation' insurance solution that would kick in when indeed we got cancer, or got in a car accident or the like.
Insurance companies are kind of a costco, they buy stuff in bulk , sell it retail, and manage to get a 5% margin.
My humble opinion: the health care system in the US is totally screwed up and nobody wants to recognize that (except those paying maybe, and I am not even sure of that because they are conned into thinking "that we have the greatest healthcare system in the world").
Everybody is trying to pull the blanket their way. It is obscenely too expensive with little results (worse results than Europe and 4x the price). This is pathetic and a total failure.
Go medicare at scale, and for everybody? But the government does not know how to control the costs on medicare either.
Then religious beliefs get in the way: if 75-85% of the cost of insurance is wasted in the last year of your life, you understand why they keep you artificially alive so everybody can milk the system: never ending MRI's, super expensive drugs, etc...Hospitals, doctors, medical devices providers, everybody feeds on the system, and blame the lame insurance companies/costco of the healthcare world.
This is sad because so many people do not have the means to pay for that, few have access to the type of healthcare engineers have access though work.
AND you have not looked into the arcane world of pharmacy bids company. Stick your nose into their billing, you are guaranteed a 20% discount (Oh, sorry we discovered several mistakes). But this is boring stuff for 2020 startups who "want to disrupt the industry".
Now you wonder why the Democrats are pushing TONIGHT last minute negotiations in DC to add another $250B in stimulus money. We'll sign ONLY if you carve out, say $50-100 Billions or additional money for...HOSPITALS!
100% it’s politics, it’s self-interest. The reason why we don’t have Musk’s Alien Dreadnought factories throughout the US is related to the reason Elizabeth I rejected weaving machines; the people who have power will not gain enough from it and may even lose. Elizabeth I feared the consequences of creative disruption on her constituents, and the knock on effect that might have had to her tenuous grip on power. Today in the US we see silly policies that are pushed to make a few people rich at the expense of society as a whole. The more we are able to dismantle monopolies, and weaken the capability of incumbent industries to skew legislation in their own favor, the more society will move forward.
Who would gain? Politicians try really hard to pull in facilities. Look at the GLobalFoundries spending debacle in NY. Or the Panasonic/Tesla battery facility in NV at, what 2m in grants per employee. Or Foxxcon in WI.
These facilities aren't that economically beneficial. Capital investors aren't, as PMA implies, stupid: they don't build because there isn't much money in it.
Politicians bend over backwards all the time. Massive subsidies are the problem, not lack of interest.
The reason people go elsewhere is to play regulatory arbitrage. To avoid the inspections, the pollution rules, and the long term environmental costs. The Bay area is filled with Superfund sites. Same for the Puget Sound, Boston Harbor, and the Hudson. No one should eat too many fish...because worlrdwide Mercury levels are high.
I feel like all the replies comparing legal system differences between the US and the EU miss a crucial element - the difference in the characters of the people participating in each society.
I'm now going to make a couple of broad generalizations. Note, that I'm aware they do not apply to every person, or even state in the US, or member nation of the EU.
However having lived in both for a number of years, I do have some personal insight.
Europe and Europeans are a cohesive society where the ideal is a flat society without too many outliers. Standing out from the field is not promoted. And career aspirations are about attaining a work life balance and produce meaningful work. The overall societal system works, offers many opportunities for education and entrepreneurship, but within a well lit path. Europe is a fast moving train.
As a result, people look for ways to succeed within the system.
The US is a "land of opportunity" in all the best, and all the insidious ways that this implies. People are looking to separate themselves from the pack, to be "insanely great" in some way or another, and see society and laws as just impediments to that goal. The US is a rocket powered supercar.
As a result, people look for ways to succeed in spite of the system.
This is why both the US needs a common law system (because the population would never tolerate a restrictive "write everything down" statutory system because would consider it overly restrictive to their liberty), and also why it fails. Because people and corporations abuse the common law system to violate the spirit of the law as much as possible to succeed and thrive in the short term. So half the country is constantly tries to create more regulations and the other half is trying to tear down existing ones.
This is why in the US the most innovative companies and people can succeed on a 5-10 year timeline, and so the biggest public companies in the world are there, but why Europe is much better at building 20-50 year projects and so have better infrastructure. (I'm ignoring China completely here because China is better than both at everything now, but is also an authoritarian dictatorship, so it's even harder to compare that apple to the other oranges).
Ultimately my point is that the EU raises a certain type of person and attracts a certain type of immigrant, and the US another.
I'm Canadian, so I frankly think both extremes are distasteful. I find the US a post-apocalyptic every-man-for-himself dystopia. And I find the EU a restrictive stifling nanny-state. Canada is just right for me.
But I appreciate that the world has both extremes.
I’d say Italians, Germans and Swedes have much more in common with each other than with the US. The way of life is slightly different, but the philosophy is the same.
Well then, California is california-sized as well, so if that approach does not work for USA in its entirety then perhaps it can fix the healthcare system in California?
>Point being, why not write simpler laws and regulations and leave it to the courts to interpret what adheres to the spirit of it?
This will _never_ happen. The vast majority of people are too intellectually challenged to see the benefit of simplicity. The earlier someone understand this fundamental fact about the vast majority of people, the earlier they can probably channelize efforts in the right direction ( what ever that might be), rather than hopelessly toil to make laws simpler. Democracy=tyranny of the masses.
> Point being, why not write simpler laws and regulations and leave it to the courts to interpret what adheres to the spirit of it? With the barriers of entry gone, I think we'd see a renewed vitality to many ossified sectors.
Because regulation in the US is rarely the problem.
We have a US mask manufacturer sitting outside Dallas who never went 24/7 in production because NOBODY WOULD PAY HIM.
Billionaires shouting "Hey, we'll pay for preproduction on vaccines" because they know they won't have to deliver isn't helpful.
Handing a small business $10 million so he can go full tilt would be helpful. But then these billionaires would have to cough up actual CASH.
Those rules and regulatory frameworks exist for a reason, and with something like health insurance you don’t see better outcomes in states with lower regulatory burden.
Same with the financial burdens that companies cry about. Enron, GlobalCrossing, etc all demonstrated that corporate governance required the federal stick to behave.
Anderseen’s article is pretty lame with respect to why we can’t do things. We can and we have. The difference is now that you have executive leadership that is batshit crazy people have taken over the government. That happened because of the absence of regulation that gives extremists like Alex Jones, who were relegated to public access cable and weird newsletters in the 1980s access to the public at large.
Taking off what rails remain isn’t a strategy for success.
"I'm in the process of reading the book _Why Nation Fails_. The central thesis is that rich and poor countries are separated by inclusive vs extractive institutions.
It seems to resonate a bit here, when Marc speaks of things like regulatory capture."
However if we actually look at the pages of that book from 2012, the authors never use the US, or any present day "Western" country, as an example of one that had or has extractive instutitions. Instead they cite examples such as Mexico, Colombia, Argentina, Venezuela, Uzbekistan, Zimbabwe, Sierra Leone, Angola, Sudan, Chad, Cameroon, Liberia, Egypt, North Korea, Nepal, or Haiti.
According to the authors, the US currently has inclusive institutions and uses the example of the software industry as a success story to support this argument. This industry is in fact the blog post author's area of focus as a former programmer turned venture capitalist.
To quote from the book:
(Note the bit about fraud. The US had serious problems with fraud 100 years ago, and still does. Consider that is why the SEC exists. Many would argue it has very limited powers of enforcement to deal with modern-day fraud.)
"Bill Gates, like other legendary figures in the information technology industry (such as Paul Allen, Steve Ballmer, Steve Jobs, Larry Page, Sergey Brin, and Jeff Bezos), had immense talent and ambition. But he ultimately responded to incentives. The schooling system in the United States enabled Gates and others like him to acquire a unique set of skills to complement their talents. The economic institutions in the United States enabled these men to start companies with ease, without facing insurmountable barriers. Those institutions also made the financing of their projects feasible. The U.S. labor markets enabled them to hire qualified personnel, and the relatively competitive market environment enabled them to expand their companies and market their products. These entrepreneurs were confident from the beginning that their dream projects could be implemented: they trusted the institutions and the rule of law that these generated and they did not worry about the security of their property rights. Finally, the political institutions ensured stability and continuity. For one thing, they made sure that there was no risk of a dictator taking power and changing the rules of the game, expropriating their wealth, imprisoning them, or threatening their lives and livelihoods. They also made sure that no particular interest in society could warp the government in an economically disastrous direction, because political power was both limited and distributed sufficiently broadly that a set of economic institutions that created the incentives for prosperity could emerge. Secure property rights, the law, public services, and the freedom to contract and exchange all rely on the state, the institution with the coercive capacity to impose order, prevent theft and fraud, and enforce contracts between private parties. To function well, society also needs other public services: roads and a transport network so that goods can be transported; a public infrastructure so that economic activity can flourish; and some type of basic regulation to prevent fraud and malfeasance.
Though many of these public services can be provided by markets and private citizens, the degree of coordination necessary to do so on a large scale often eludes all but a central authority. The state is thus inexorably intertwined with economic institutions, as the enforcer of law and order, private property, and contracts, and often as a key provider of public services. Inclusive economic institutions need and use the state."
The US approach to business does have its flaws. However the book "Why Nations Fail" does not address them. To the authors, the US is a nation that "succeeded", and continues to succeed, by having inclusive institutions, not one that "failed" or is failing today.
A book like "Why Nations Fail", and there are many others like it, arguably encourages readers to view the US, irrespective of its flaws, as the shining example of what a country could/should aspire to become. There are no present-day comparisons of the US with Western Europe in books of this type. Such books are arguably part of the reason for certain institutional problems that will forever remain unfixed in the US, e.g. regulatory capture and complexity, because books like these have themes that support the idea that America's "solutions" are not just different but better than all the others.
This book really has no relation to any criticism of US institutions. If anything, it supports the idea that the US has the best formula for creating a rich country, i.e., a country where "anyone can be rich". They compare how Bill Gates became wealthy versus how Carlos Slim became wealthy.
Main Concepts Inclusive and Extractive Institutions
Towards a Theory of Institutions
Extractive economic institutions: Lack of law and order. Insecure property rights; entry barriers and regulations preventing functioning of markets and creating a nonlevel playing field.
Extractive political institutions -- in the limit of absolutism: Political institutions concentrating power in the hands of a few, without constraints, checks and balances or rule of law.
Inclusive economic institutions: Secure property rights, law and order, markets and state support (public services and regulation) for markets; open to relatively free entry of new businesses; uphold contracts; access to education and opportunity for the great majority of citizens.
Inclusive political institutions: Political institutions allowing broad participation pluralism and placing constraints and checks on politicians; rule of law (closely related to pluralism).
But also some degree of political centralization for the states to be able to selectively enforce law and order.
Because they have extractive political and economic institutions.
These are difficult to change though they can be successfully challenged and altered during critical junctures.
The roots of modern world inequality lie in the emergence of inclusive institutions in Britain and the fruits of this - the industrial revolution - spread to those parts of the world that had similar institutions (settler colonies) or quickly developed them (Western Europe).
Other parts of the world languished with extractive institutions which have persisted over time and thus remain poor today.
Regulatory capture is indeed a major underlying cause of a lot of the issues, but who will actually do the political work to fight against it? Someone spent money to capture the regulations in the first place, through lobbying and campaign donations. Who will spend the money to lobby and donate for the cause of undoing that?
The "builders"? No, their focus and limited capital is spent on whatever it is they are working on.
The most logical choice would be the investor class who supports such work. After all, these regulations create legal risk (from lawsuits/fines/regulators) for the ventures they fund. It also makes employees more expensive (through higher housing/education/medical costs), thus requiring more investment just to get a venture going. Yet, why is there no real, funded, concerted effort against regulatory capture? Just essays and talk?
I suspect two potential reasons:
(1) Opening regulations would help all current and future ventures, not just an investor's own portfolio, so no single investor has an incentive to do it by them self.
(2) Such investors are typically wealthy, and spending money to tear down regulatory capture that other wealthy people already paid for would be... uncomfortable. Such spending could be seen as indirectly attacking friends, relatives, college classmates, etc... No one wants to be labeled a class traitor.
In San Francisco, at least, YIMBY is the organization that is organized around ending regulatory capture in housing, and The Neoliberal Project (in SF YIMBY Neoliberal) is organized around broader dismantling of regulatory capture.
We mobilize people in support of reform-focused politicians and have even started running our own (Sonja Trauss in 2018 and myself in 2020).
Happy to talk more about it -- steven.buss@gmail.com
Happy to talk more about it
I find it interesting how affordable housing must be very near high economic opportunity.
Seems to me it's a fight for convenience too.
They built Las Vegas in the desert to avoid restrictions, what's preventing this generation to build new cities?
The whole Covid problem will make quests to increase population density more difficult. But perhaps will also spread opportunities around, or move them online, so this zoning struggle will stop being important.
I fight for both market rate and subsidized housing in high-opportunity cities because it's the easiest way to life people out of poverty.
Being able to live near high-income jobs is the most direct path to the middle class in America. If we want people to not live in poverty, then it makes sense to subsidize their access to opportunity. That means subsidizing education and housing.
I've had fun nights talking with friends about starting a city. It's really fun to think about how we'd design the city to maximize opportunity, but there's no getting away from the value an existing city provides. Fixing a city with already high opportunity is just fundamentally cheaper than starting a city from scratch. All we need to do is win a few elections -- we're talking less than $100MM. A new city that is aiming to compete is a $100B+ project.
As engineers we often think the best way to fix something is to build a new version. But this is rarely true in institutions. Think of governments as legacy systems: they've been built up over time and have a ton of hacks keeping it running. Think of Spolsky's generally good advice: "Don't rewrite code" https://www.joelonsoftware.com/2000/04/06/things-you-should-...
It is easier to fix an old and broken system than to replace it wholesale. Let's focus on fixing government instead of replacing it.
Education already is subsidised through state and private scholarships. And I believe rent is also capped in many places.
Seems a tautology that access to high-opportunity would help an individual. But if rent is too high as to be unaffordable, then the place is not so high-opportunity. Cost of living can't be excluded from the opportunity calculation.
I get that some sort of 'jump-start' in life might be required but can't help but feel that deep down this will hide a dysfunctionality somewhere.
Maybe something like Lambda Housing would prove this economical theory. Signing an ISA for subsidised housing if this proves to significantly raise the person's income seems a no brainer.
I've read about YIMBY groups before, particularly the one called BARF (if I remember correctly). This is a great start to the type of work that needs to be done.
However, I have to ask: What is your group's funding situation? Who is bankrolling the effort? Is it grassroots funded, or are there wealthy benefactors who agree with the objectives (or, from a more cynical perspective, might be using your group for something)?
For the record, I believe both approaches can work. We have obviously seen the wealthy fund politics in favor of their interests and successfully get their way, but there have been grassroots successes as well. In particular, I am thinking of the National Rifle Association (NRA). Regardless of whether you agree or disagree with its cause, the NRA has 5+ million dues-paying members and it has been extremely successful at deploying those funds to achieve its very specific political objectives.
On a more abstract note: the founders of America may have originally envisioned a system where various interest groups debate the issues and arrive at a governing consensus, but the system has [d]evolved into one where those groups compete to raise funds that can channeled to lawmakers to encourage them to implement preferred policies. Some groups recognized this long ago.
I’m what would be considered a major donor to the YIMBY effort and I’ve donated in the low 5 figures.
It’s generally grass roots though I know some wealthy individuals have donated much more of the total funds.
The progressive camp of SF politics often tries to discredit the YIMBY movement by claiming AstroTurf. But it’s simply not true.
This was started by motivated individuals who started organizing and then went and started looking for donations.
The reality of SF housing politics is all the “local control” has given a lot of power to local groups that can hold a new development hostage. So developers have to essentially pay them off with “community benefit” to keep each group from delaying your project through years of appeals.
This sets up a system where a small number of developers have the relationships and know how to work the system to get their projects done. Limits local construction competition.
We also have local politicians (Aaron Peskin) who own significant amounts of rental properties, and find ways of opposing new housing supply. A policy they directly and personally benefit from.
Thank you for your donations! All of my work is in a volunteer capacity, so your donations help pay for our office space, pay for the few full-time staff we employee, and fund outreach, education, and direct advocacy to move municipalities in our direction.
Your summary is correct. Most of our donations are small dollar from individuals. A few people donate more, and that's because they agree with what we're doing and they have the means to contribute. We're grateful for all support, and donations never influence any of our decisions about what to advocate for.
This is a great comment, and hopefully I could add some real life example around this, esp with 1) and 2).
Uber did this in Europe.
Uber pushed, fought and introduced gig-economy employment laws in every country it has operated in EU, specifically around taxi and for hire transport regulation. Uber employed a huge amount of legal and PR counsel to achieve this, with massive lobbying funding.
And what has happened? It's getting beaten to it's knees by new, mean competitors. Competitors that enjoyed all the same benefits without the millions invested.
Isn't Uber kind of the opposite kind of building the OP refers to?
Uber externalizes so many costs to its drivers. It relies on someone else's healthcare system to care for its drivers. Someone else to pay to maintain the cars.
So far the gig economy is maybe, half building something which has potential social benefit,half building something which clearly does not.
Now, if Uber was lobbying hard for universal healthcare, then that'd be a different story :). But IIRC they mainly avoid or flout the law altogether.
In summary I don't think Uber is a good example of a company that has tried to 'build' in a prosocial way.
The only thing uber has built really, is a way to extract more money from workers with less overhead while circumventing existing worker protection by acting as if they were just the messenger between customers and drivers.
I have the feeling that the real building of the past two decades lies in ever cleverer bussines schemes focused on lock ins, extracting user data, doing as if you are open while there is no practical way anybody could take what you did in any significant way and improve on it. The exiting things always seem to happen outside of that space however.
They did what's the equivalent of selling $10 bills for $1. No surprise customers like it, they get decent service priced at well below the market rate. For a while, that is, because it's only a way for them to leverage VC money to kill off local competitors. Once that's done, Uber's service tends to degrade, and it eventually will even more so, once their money runs out.
>Ubër has also built a service that I, for one, strongly prefer to traditional transportation services.
This is a big reason why things are the way they are: despite all the obvious externalities Uber (and AirBnb) foists on the public, the rich support if because it benefits them.
Nobody want's a new McDonald's destroying their old status quo in their country. People don't want one-world-gov. They want disparate nations, that have charm and local uniqueness. Except that goes directly towards harmonizing international (trade) laws. If you want a lesson, check out how Lidl did in Norway when they challenged local chain stores.
The failure of Lidl in Norway due to vested interests is an argument for one world government.
Maybe if we had one government we’d finally be able to settle on one electrical plug, which side of the road to drive on etc. etc. Imagine if every country developed its own indigenous WiFi standard? How lovely, until you want to read your email.
Charm and uniqueness is great on a postcard, but not when you want to actually achieve anything IRL.
Indigenous solutions typically develop differently for a reason. Building standards in a wet humid climate prone to flooding differ from those in the desert because they have different needs: if you make a standard set of guidelines that applies universally, it will inherently need to be more complicated than the guidelines adapted for a specific scenario.
Part of the brilliance of the internet is the way things are layered; you can have all kinds of different solutions for different layers while keeping things interoperable. If Australia has a different wifi standard than America, it doesn’t mean they can’t connect.
While I understand the impulse to have some central body moderate unproductive standards wars, if you enforce overly strict standards by law you stagnate industries whether you’re trying to capture them.
Just imagine how much time and effort would be wasted trying to get every software engineer to use the same programming language. Arguably it would lead to way less duplicated effort, but you’re never going to get everyone to agree on all aspects of the language. And that’s as it should be; people should have the freedom to chose what works best for them.
If we’re smart and focus more on building base, opt in, very generic/low level infrastructure that can federate responsibility and adapt to differing higher level standards rather than getting everyone on the same set of high level standards, I think we’re better off.
I’m not sure exactly what the regulatory equivalent of a tcp/ip layer would be, but some sort of very basic, fill in the blanks kind of regulatory template would be better than enforcing various discrete world standards.
I think the analogy is a little short-sighted. Having a universal building code doesn't mean every building has to meet the same standard in every way. They can contain conditional logic. Flood-resistance would only be required if the building is in an area with a likelihood of flooding above some threshold.
My point is that you get increased complexity when trying to handle all of the various different situations local solutions were specifically adapted for. Adding the type of logic you describe in that particular example might seem manageable, but there’s a real risk of it ballooning and making what used to be simple rules for a given area require a lot more paperwork/checks/etc, much of which would be irrelevant.
Like with all things, you need balance; some standards can work universally while remaining simple. Others can’t. But in general I think trying to impose universal, robust standards leads to a lot of the over regulation the article and other commenters fault for the lack of building in the west.
Fewer, minimal standards decided by people on a local level seems generally better, imo. There will still be incentives to use universal, simple standards where appropriate, as that typically enables access to a wider range of products and services, and the complex logic of deciding when certain standards should apply vs when they shouldn’t can be distributed/allowed to be flexible and adaptive.
I think the regulatory equivalent of TCP/IP is probably some form federalism. There are many regional examples of this, to varying degrees. You want the minimum set of laws to provide the conditions for local human flourishing everywhere.
“If Australia has a different wifi standard than America, it doesn’t mean they can’t connect.” This would be great IRL! All digital protocols could be reduced to one; but then IRL is also made of physics, so I guess you’d need one physical standard too (USB-C is our obvious candidate), and one harmonised set of radio frequencies etc. It’s those physical properties that are hard to reduce to a virtualised layer.
Kind of impossible when it comes to driving on the wrong side of the road, unless you abstracted the interface in some kind of VR (so everyone is apparently driving however they please, while confirming to one physical standard).
Having worked in a lot of banks, I can appreciate the desire for standardization. But remove competing standards, and you will never innovate again. In any situation, whatever standard you prefer, it was originally created as a new-comer competing standard.
I think this perspective is very narrow minded, in the sense that it only really considers a very narrow category of problem. If you want regulations to be more effective, you need to bring the regulators closer to the people they’re regulating, not further away from them. If that means people end up doing things differently, fine. It’s better than having regulations the either work for nobody, or only a portion of all people. For an analogy, who would you rather be managed by, a manager with 4 direct reports, or a manager with 50 direct reports? (Or a manager with 7,500,000,000 direct reports...)
> I think the regulatory equivalent of TCP/IP is probably some form federalism. There are many regional examples of this, to varying degrees. You want the minimum set of laws to provide the conditions for local human flourishing everywhere.
This has been tried and it doesn't work. What ends up happening is that more and more people decide that their pet issue is more important than regional autonomy.
> Maybe if we had one government we’d finally be able to settle on one electrical plug, which side of the road to drive on etc.
That's nice, but seeing how the wast majorities of crimes against humanity are made by too powerful nation states against their inhabitants I am not very exited to see what atrocities an even more powerful would do.
At least now if the local government are trying to kill you there's a small chance that you might manage to escape to a safer place.
one world standard is not the same as one world government.
one world full bureaucrats regulate-everything-to-death government is a dystopian nightmare.
"Were we directed from Washington when to sow, and when to reap, we should soon want bread" --Thomas Jefferson
"Government's view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it."
> "Were we directed from Washington when to sow, and when to reap, we should soon want bread" --Thomas Jefferson
This wound up being completely false by the early 1900s. Turns out people like to eat and get paid consistently more than they like imagined freedoms.
> "Government's view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it." --Ronald Reagan
Also pretty ironic coming from someone who raised taxes 11 times after fomenting a giant populist tax cut that the country couldn't afford.
That's great if you are Napoleon and have the power to just force the matter. EU comes to mind... But I don't want your rules. I want my rules. There's plenty of world to take from in order to do just that, without trying to impose yourself on the rights of others. In the end, Lidl didn't respect Norwegian conditions. Moreover, they didn't respect Norwegian customers and so most were quite happy looking the other way once things started to go badly for them. In the end, that's on them. Because they wanted to impose their rules, instead of respecting ours. Outside of that, I think we can come to an agreement on petty things like which side of the road to drive on (the Right side, of course ;) ), and what kind of electrical plug to use (I've noticed that the British one could seem a little safer). Perhaps we could come to a compromise?
1. First of all, they're not voted on by "member countries," but by representatives, who's only of secondary importance to peoples who already have to vote in local and government representatives in their respective countries. Second the EU processes are opaque to most EU citizens, and as such decisions made in the commission (where representatives aren't elected but hand picked, btw) and parliament are usually done under their nose, without their knowledge or input. That isn't democratic. That's bureaucratic, and many will agree it's even bad. The veto power complicates things further, only leading to more bureaucratic stand-still and indecision. The same goes for the so-called laws and regulations the EU passes, which are often so monolithic that they are more confusing than helpful. A great example is how trade in many instances simply broke down in Europe during the Corona crisis, due to different interpretations on common laws agreed upon in the EU parliament.
2. They are still relevant in countries who predominantly have older wooden buildings, just as one example.
I sympathise, but you don’t need one world government, just agreement and consensus between governments. That’s hard work though, it requires sacrifice and compromise, and recent history (Trump protectionism, Brexit) is against compromise or sacrifice.
Yeah, I guess what I envisage would be a very minimal federal government, rather than a central point of failure for decisions about every aspect of people’s lives. Very hard to get agreement at that scale though, as you say.
I look to Belgium as an example of the ideal world government. Trying to explain Belgium's government would require a wall covered in newspaper clippings and string, but the short form is that there are 6 independent governments with the same power as the federal government, with very long-standing cultural and linguistic strife between them. As a result, it is very hard to do much of anything on the federal level and instead, most decisions are made locally. As a result, despite Gent, Antwerp, and Brussels being about as far apart from each other as San Francisco and Palo Alto, each has a very different culture and regulatory environment regarding daily life. In Gent, it is completely normal to close one of the major roads into city center for a neighborhood festival. In Brussels, it requires weeks of fighting bureaucracy to legally block a side street for a few hours at 6AM with a moving van.
Even larger issues are handled locally. Until last year, even immigration and work permit issues were handled provincially. It would take 3-6 months to get my work permit renewed in Brussels, but after I moved to Gent, it took 2 weeks.
This all works because it is very hard to get national agreement on anything. Everybody knows that they're not going to be able to push their views on the country, so they work to change their local environment instead.
This is all despite the government being (IIRC) the largest employer in Belgium:
More importantly, Lidl didn't have Norwegian newspapers when they arrived and while some of the things they sold were great a number of others just didn't feel right. A lot of the food they try to sell just didn't work because we aren't used to it at all.
They'd have to completely undermine the world government to turn it into a dictatorship, and get the countries underneath it to go along. Is that much easier than getting power over the entire world the old-fashioned way?
I mean, sure, if you want a toothless world government with no power that wouldn't be able to keep countries in line. In which case I'm happy to report we already have this: its called the UN.
For anything else you would call an actual government, the highest body has the power and physical force to keep those under them inline. Even in the USA, where states rights are a thing, the federal government could easily force them to do basically whatever they want.
Huge countries like India, the US, and Russia have come under the thrall of men whose position in the feature space is near words like “deranged” and “terrifying”... there’s no reason to believe that the same thing could not happen to a world government
Fully fledged totalitarianism isn't overthrown by revolution, a worldwide totalitarianism isn't some kind of necessary stage before universal peace -- it would rather make peaceful, dignified relations of people to themselves and another completely impossible, and maybe for good.
> At this point we find ourselves confronted by a very disquieting question: Do we really wish to act upon our knowledge? Does a majority of the population think it worth while to take a good deal of trouble, in order to halt and, if possible, reverse the current drift toward totalitarian control of everything? In the United States and America is the prophetic image of the rest of the urban-industrial world as it will be a few years from now -- recent public opinion polls have revealed that an actual majority of young people in their teens, the voters of tomorrow, have no faith in democratic institutions, see no objection to the censorship of unpopular ideas, do not believe that government of the people by the people is possible and would be perfectly content, if they can continue to live in the style to which the boom has accustomed them, to be ruled, from above, by an oligarchy of assorted experts.
It's not that we now have less risk for the things that were described by thinkers in the 20th century, it's that we became more complacent and cowardly, less ambitious and more comfortable, and are rationalizing it. We don't know more, we just are less able. We don't rise to the occasion, we pull it down into the gutter with us. This is the whimper our betters have seen coming.
To believe in a one-world government, I think it’s almost a prerequisite that you don’t care about what people actually want. The only line of reasoning I’ve seen sincerely put forward for creating a central world authority to rule over all people is that some people think they know what’s best for everybody else. Not only does what actual people want not matter, but in order to achieve their utopic vision, they must protect people from themselves when they want the wrong thing.
Yup. Just look at how Communist countries view dissent. It's not "this person has a different opinion", it's "this person is broken and we must fix them".
I've been thinking along similar lines - in my mind it boils down to that these days we have problems that only a global government can solve. And you can see this through history - tribes, cities, states, countries, X.
One could view this as Uber making a novice mistake. Instead of just fighting to get rid of employment laws that slowed Uber's business, they should have fought to replace them with laws that entrenched its position.
For example: they could have persuaded legislatures to make gig work legal, but only in the context of "licensed and qualified" platforms. Reaching that status might require submitting forms to government agencies, drafting reports for publication, instituting certain internal policies, having certain credentialed staff on payroll, etc... All tasks that Uber, who would essentially write such a law, would be naturally able to fulfill while newer competitors might not.
This is a long asked question, and the recent book Golden Gates by Conor Dougherty spends part of the book exploring the emergence of a new political coalition that fights this: the YIMBY groups and associated groups. They are very young and inexperienced, but their existence is making huge waves.
There was an affordable housing builder interviewed on the housing podcast Gimme Shelter recently singing the praises of this movement, because it is such a big change from the past.
Milton Friedman did his thing from a university founded by John D. Rockefeller in a Department of Economics that is now named for Kenneth C. Griffin of Citadel Securities. I think it's safe to say that capital does spend on its policy interests, and quite effectively.
This is great observation and speculation on what could happen and where would it come from.
I've had multiple conversations with top-10 VC firm partners during our unsuccessful pitches where one of the sticking points is 'unfair-advantage'. 'How can you lock $user_group/$partners into this transaction/partnership?'
Peter Thiel: "Monopolies are a good thing for society... The opposite of perfect competition is monopoly. Whereas a competitive firm must sell at the market price, a monopoly owns its market, so it can set its own prices."
What the world needs is perfect competition. VCs profess that they live in a capitalist system and work within its constraints, but just about all want to capture some part of it, preventing competition from coming in.
One way to limit competition? Get the government to do it for you. Regulatory Capture.
So, excuse me, if I don't buy this coming from a VC. And I won't buy it from any other VC as well. They are arguing for them to be in control of capture. Meet the new boss, same as the old boss.
So that they can take over the dominant market position, eventually using the exact same tactics to keep entrants out. Anything less would run afoul of shareholder primacy so unless VCs take an active role in promoting ethical behavior from their portfolio, those words are empty as this blog post. Anyone who wasn't born yesterday knows that human beings won't do something that is in direct opposition to their interests (the exceptions to this rule became nurses and doctors and social workers, not VCs) and without an honest to goodness change in laws, reasonable people know that VCs won't change their behavior. Since most portfolio companies are in competition with someone - a fact almost every investor in the industry is cognizant of - anything short of actually spending money on lobbying to change laws and promote their enforcement is an empty gesture.
And none of them try to lock customers, partners or decision makers from going away in any underhanded way, right? Just pure offer-the-best-and-they-will-stick-with-us. And if someone does it better than us and takes them away from us, shame on us!
Nah. Most often a16z, as other VC's, invest in platforms.
What do platforms often do: take an industry, served by many businesses, often small ones, and concentrate it.
Than, the platform does most of the repetitive, scalable, work, while leaving entrepreneurs with doing all risky work, and little place for hiring employees.
As for the employees, their work is commoditized, they get ton of competition which to leads to really deteriorating pay and work conditions, and labor laws are often broken right and left.
> Regulatory capture is indeed a major underlying cause of a lot of the issues
How is it even possible to isolate capitalism from regulatory capture? Capital accumulation inherently creates power and influence, so regulatory capture is surely just the perfectly logical second phase?
Now I can't speak for other government systems around the world, but here in Australia a big step forward would be as simple as having open and transparent government.
Currently we have a Federal Government that loves slapping 'secret and confidential' stickers on as many of it's documents, just to keep them secret.
Add to that they spends large amounts of time, money and effort fighting to keep these details secret by vigorously challenging freedom of information request.
Then we have the problem where all layers of government love getting into bed with big business, while keeping the details of these arrangements secret using 'commercial in confidence' contracts.
Just one example of the later is how the New South Wales Government entered into a secret deal with a private toll road company, agreeing to make major road changes (i.e. closing public roads) in an effort to force traffic through the new toll road tunnel.
None of this was made public at the time and would never have been released to the public had the toll company not gone into receivership.
This brought the matter before the courts and the court forced the government to hand over these secret documents:
To me this is a classic example of the problems with modern governments, where they are more interested in working for big business, rather than serving their constituents.
Yup, I agree. I just can't really see how it's possible to incentivize this at all. To _not_ pursue regulatory capture seem to require an altruistic mindset, which I'm not naive enough to expect from businesses.
In Sweden we luckily still default to making almost every government document, including e.g. all police investigations that reaches the courts, public for all who requests them. It requires special circumstances to make them confidential and nothing that can be done in the loose manner you're describing.
Reading the Wikipedia article, the lack of government transparency is crappy, but I don’t blame the tunnel company for asking the government what their plans were for the existing roads. You can’t build a traffic tunnel on the hope that people use it.
You’d need to figure out what’s happening with the rest of the roads, then make a call to build or not. If the plans for the other roads change, the value of your tunnel might go to zero.
> You can’t build a traffic tunnel on the hope that people use it.
What you are describing is a level of planning and in this case I seriously doubt this project was planned.
The only reason I brought up this one particular example is I still remember it very clearly.
I'd walk home from work and I was constantly amazed as to how bad the traffic would flowed. Every street was full of cars and on many occasions I'd notice I was actually walking faster than the cars on the street (i.e. I'd see the same car at multiple intersections as I along the street).
But on the day the tunnel opening all that changed and the traffic turn from walking pace to gridlock.
The road closure had created a situation where now no cars where moving.
Prior to the tunnel, the driving public had faced 40+ minute traffic delays trying to get out of the city but after the opening that delay jumped to 1.5 hours.
So obviously, who ever signed off on those road changes was never acting on the best interest of the driving public.
If they had been working on some sort of plan on improving the traffic flows they failed miserably.
This isn't just a big business problem, there is plenty of regulatory capture on behalf of other interest groups (eg doctors keep the supply of new doctors low).
There is no enduring structural answer to this problem, it is fundamental to democracy.
The only answers are to struggle for our goals in the political and cultural arenas to hope to marginally improve the situation.
While it's true that there will always be special interest groups, it's not true that the current situation is even close to "more or less the best it can get". There's too much power in far too few hands due to capital accumulation. This is not a natural law.
I was not arguing that this is the "best it can get", just that there is no structural answer to these challenges. There's no way to setup our institutions such that they cannot be influenced by interest groups, so the only thing to do is be vigilant and fight the good fight.
If you look at the whole range of regulatory capture we see, it's not just billionaires who have managed to get what they want, it's all sorts of interest groups who have succeeded in enshrining the interests of incumbents into law.
Good for you for being riled up about the concentration of capital, but addressing that is nowhere near a magic bullet for addressing regulatory capture.
You separate democratic procedure from capital. This is why the Citizens United ruling was such a disastrous decision for the US. However, capital doesn't necessarily mean election wins or regulatory influence, even now. Bernie Sanders raised immense amounts of money, more than Joe Biden did, but Sanders still was not able to win out in most states. There's more to politics than money, though money can definitely raise the volume of one's voice.
I agree there's more to politics than money, but, I think it is fair to say that, whatever legitimate reasons many Democratic Party voters may have had for not voting for Sanders, there is a general media and institutional bias against the Progressive political movement Bernie Sanders represents.
And, not surprisingly, the root of much of that bias is money, in the form of industries which stand to lose (healthcare comes to mind) if the U.S. elected a politician with a Progressive agenda.
I think separating the two is harder than it seems. A big part of government work is economic in nature, so there inevitably is overlap between the two.
Uhm, that's very easy to say, but how is that even possible? Even here in Scandinavia, where money interests isn't as blatantly involved in politics as in the US, most of the media are aligned to corporate interests and vast amount of money are spend by corporations to fund and campaign for right-wing business parties and policies.
Why would Biden need money in competition with Sanders when he got the entire establishment on his side?
When voters in South Carolina go to vote, did they listen to money, to their own hearts, or to "the establishment"? In any case, they did not listen to capital. And this is one way that politics is separated from capital.
There can never be perfect separation, all of society is connected to all of its parts in tricky ways, but part of maximizing that separation is to discover and acknowledge where capital has control of democracy and come up with ways to separate. No ideal is achievable, we can only strive to improve.
1) regulatory capture exists is because you give power to individuals to make decisions for the collective.
2) freedom of speech will always mean if I have money, I can spend it any way I want. That will never change. Therefore, it is impossible to limit money in politics.
Once you understand these 2 principles, its very simple to understand the solution. Money will always impact politics. You simply need to raise the price enough so that you won't end up in regulatory capture.
1) Dillute power. Cause representatives to govern a fixed number of people. For example, 1 house member for every 50,000 people. So the house would go from 431 to 6500. That would make it very expensive to hire lobbysts to capture.
2) Limit power. Term limits for aggregate public service so people can't peddle power of public office. This makes lobbying expensive since you can't permanently buy favor.
3) Randomize outcomes. By far the most powerful. Introduce uncertainty into election successs. Randomly switch winners for the house with state at all levels. So for example, a citizen from VA running for president could end up instead as a state senator for VT, or FL (and vice versa). Same thing for vice president, and any other public post. You want to make sure the "bet" on a candidate win is a very long tail in outcomes so that lobbyists don't really know what power they are actually buying by contributing to the candidate's campaign. Given that we had people like Bush, Obama and Trump in highest office, with varied levels of public office "experience", I think it is a given that there is no real qualification for running for X, other than being a US citizen of a certain age, and actually winning.
That's how you fix the current corporatism running amok in america.
What's the goal here? The American dream?
Well, you need to be able to afford a home and children.
People can't.
Why not? Because they aren't paid enough for the work they do. The money is being made, but it ends up at the top, and not even corporate tax is being paid with all the tax optimization routes.
So what do people do? They begin startups. Most of the time they're done by people who should even waste their time on it, because they haven't been trained to build and run a company. But guess what? It's the only way to "make it" and the "American dream".
Want to be taken care of properly? Pay RN more.
Want better education for people who can't afford? Pay teachers in community colleges more.
Want more R&D? Pay "smart" people more, instead of forcing them to try and do the startup.
Want affordable housing? Force big companies to have offices outside the big cities. Also, value housepricing at 20% of what they're worth not to destroy mortgages. Tax forgein owned housing. Tax owning houses beyond the first one.
Building is not the problem. Building is easy. You talk about robots... how is that gonna help "the american dream"? It's not.
The problem is financial and ownership disitrbution. Normal people stand no chance against tax routes, against their employers, against the government.
They are slaves to all of that.
>Want more R&D? Pay "smart" people more, instead of forcing them to try and do the startup.
... having found that I can attack problems which are 10x harder in academia, as a lowly PhD student, than I was ever allowed to come close to touching in industry, because I didn't have both a PhD and my own company...
Yeah. I would never claim I've done particularly great or world-changing research so far (all my conference papers get rejected, after all), but nonetheless, I definitely think I make more contribution to society overall working on, say, applying Bayesian deep learning to study individual differences in neuroimaging than, say, doing web apps for sports teams or embedded firmware for a product that gets canceled (my previous two jobs).
And I definitely contribute more to society working on the derp larnin' for neuro-imaging than I did when I was unemployed and getting turned down for ML engineer jobs because I hadn't done enough ML before and the stars didn't align my way.
Arrange the money so that it pays to throw smart people at hard, useful problems.
> Force big companies to have offices outside the big cities
Do we really want this? Personally, I love it that last time I changed jobs, I didn't need to move (the new office was literally 3 blocks away from the old one), and that I'm free to change jobs again without having to plan relocation.
Please don't post petty personal swipes. The site guidelines ask you to assume good faith. Maybe you don't owe "Marc" better, but you owe this community better if you're posting here.
This was one of the best posts I've ever read. Thinking about printing it out and framing it. It's more inspirational than anything I've read, and it articulates the elephant-in-the-room problem we all know but aren't talking about.
No one is innovating anymore. Everyone copies each other. Even in the YC crowd, every other thing is a dumb CRUD app or AI snake oil project that has been rehashed since the 80s. Where's the thorium reactors? Why does it still take 3 days to wire money? Where's the brain-computer interface? I never imagined people would be so lazy in the future. The idea of passive investment in an index fund has analogized to every part of our culture. We have come to expect things to magically grow on their own without any effort. Just showing up is supposed to be a sufficient condition to reaping the rewards of growth. You would have thought the 2008 financial crisis would have put an end to this mentality, but it actually made it worse because now everyone who invested in anything in 2009 is now a millionaire without having lifted a finger. Faith in the System restored. Why build anything when your survival doesn't depend on it--the System will take care of you automatically.
All you have to do is "get in"--we see this in the heavy credentialism/careerist people. We are a culture that shows up to the race and starts celebrating at the start line. We are more interested in proving status with fake competition trophies (e.g. degrees, medals, CVs) than doing that which the status was meant to predict.
None of this happens when you're actually on the frontier. In the late 1800s, America was really on the frontier. Large parts of this country had untapped natural resources. There was no shortage of mystery.
Now people believe that there are no new problems to solve. "Someone else is already working on that." This is demonstrably not true--otherwise we would all be living in post-scarcity Neptune colonies--yet everyone acts as though it is true.
People by and large do not work to fulfill their curiosity; they work to survive. They do the minimum to survive. In frontier eras like the late 1800s in America, curiosity and survival happen to align. The principal problem in all this is how to inject curiosity into a jaded populace who believes there is nothing new to discover or accomplish.
Thanks for the post! Why be entrepreneurial if you can just put your money in the SP500 and watch it go to the moon thanks to unlimited QE? The current paradigm is being kept alive by the Gov with all tools it has at its disposal (QE, bailouts), while the right move would be to let it go bust and push the restart button. Making space for a new generation of entrepreneurs to pick up the pieces.
Maybe like many things the OPs post is an indirect consequence of 2008 bailouts and QE.
Zombies were propped up so the only thing entrepreneurs could go after was CRUD apps and adtech.
If banks, airlines, manufacturing were forced to face that reset then entrepreneurs and startups could have a go at genuinely reinventing those industries.
I believe we have reached a point where most people are in an equilibrium of comfort and desire, where the desire to innovate and do more, is perfectly balanced out by the present comforts we are able to enjoy.
People are so doped up on Netflix, cheap takeaway, porn etc. There is relative safety, lack of disease and war for the most part. People no longer desire to improve the world. It's about maximising the small pleasures for as long as possible and then dying.
America used to innovate, improve the world, improve our knowledge. Now it has stagnated. The populace is obese, lazy, and getting dumber.TV and porn were bad ideas.
This is the kind of response that comes from, and please excuse my language, someone who doesn't know what the fuck they're talking about.
There is barely a safety net. There is barely any institutional support for innovation. Accessing either is a competitive process that is purposely obfuscated to reduce costs. The downside involved in preparing for and executing on innovative ideas is potentially lethal for the individual, even if it might be incredibly advantageous for society for even one person to be successful.
If you want people to fly high, you start by putting a trampoline under them, not a trap pit of crocodiles. Things are as bad as they are because the people with the means to push us onward do not understand the problem.
It's not obvious to me your comment has more truth than the one you're replying to. Either argument could be made. Why the rude animus towards the original poster?
The parent argument has been made for going on 3 decades now and is the source of the austerity and institutional divestment that has proven unworkable at best, and disastrous at worst.
It's telling that a single f-bomb is interpreted as more rude than calling the American public - which is by far the most overworked workforce in the West and among such as far as the developed world as a whole is concerned - "lazy."
It's stagnation all the way down. Not only porn, video games, and TV, but cannabis and opiates have taken the 21st century by storm. Before that, the most popular drug was cocaine (and amphetamines). It's symbolic how as Americans lost that rip-roaring innovation culture, they retreated to their couches and numbed themselves with literal opium.
I think there is a ton of innovation occurring. Biotech is exploding right now with CRISPR-CAS9, optogenetic application to mind-machine interfaces are already in rats and monkeys. Medicine, despite covid, is doing great stuff. I'd bet that the large scale testing we're doing will be somewhat sticky and our risk tolerance at the FDA will expand a lot. EE is about to take off again when someone can come up with a cheap and workable memristor; it'll completely change how we do logic at the substrate level, going from discrete to 'analog' math. We're revolutionizing history and literature with tools like google trends. I think a lot of the 'malaise' is just cyclical. Innovation comes in spurts, we're at the end of a business cycle, it's kinda normal.
That said, yeah, the elephant in the room is the massive concentration of wealth and regulatory capture. All the innovations I just mentioned are kinda happening in the back-rooms and on obscure boards like HN. Getting these things to markets and in the hands of professionals is really just terribly difficult. I get the FDA pushing back on things (and largely agree with it), but the big players just seem to push down really hard on innovators. I mean, look at the App-store, it's nutters. Paradoxically, more government intervention is needed, but against the big fish.
> Where's the thorium reactors? Why does it still take 3 days to wire money? Where's the brain-computer interface? I never imagined people would be so lazy in the future. The idea of passive investment in an index fund has analogized to every part of our culture. We have come to expect things to magically grow on their own without any effort.
Not "where's the thorium reactors?" That probably won't work. But why don't we have rows of windmills from the Texas panhandle to the Canadian border (the real US wind belt), and EHV DC lines west to California, east to Chicago, and south to Houston. That could power the US west of the Mississippi. Totally do-able. Proven technology. Profitable.
Because rich people have huge market stakes in the status quo. That's how you get billions in oil company subsidies and token garbage for wind, solar, battery research, etc. It is pure corruption.
While i agree with a lot of your response. I also concede that regulatory capture is a serious innovation inhibitor that has a factor in some of your questions re: reactors, 3 days to wire money, etc. The incumbents have gotten too comfortable and lobbied well enough to protect themselves.
Then you also have the current bailouts of airlines, etc. So the incumbents in this case are too big to fail. You'll never get new entrants/innovators in these areas until those issues are solved.
I think we’re burnt out by too much thrash. Too much disingenuous work, too much greed, too much friction, too much wasted effort, too many stairs to nowhere. We see the soullessness and greed in our bosses, in founders, in the VCs that fund them, in the elected officials that govern all this. To do something new you’re faced with reinventing this whole structure. But we’re burnt out and myopic. Our best idea is to retire and work on a toy project or something. Maybe that’ll lead to something.
If you are interested, Peter Thiel's 0 to 1 has more on this and with more depth. As he says, we are the "indefinite optimists", expecting the future to become better somehow, rather than "definite optimists" that expect to build the better future.
Great reply, thanks, you are restoring my faith in the humanity.
I fully agree that we have to build build build, to surpass technological level of Star Trek. And yes, I do want to live in science fiction.
"Early retirement" is the most retarded concept to me. Yes, I will retire when I will be a retard. Retired = retard.
People in the late 1800 actually hated the idea of retirement; corporations forced them to retire to give way to young people.
Out biggest problem compared to people of 1800 that we have a facebook (or twitter, or instagram). So instead of building, we outjealousing each other with beautiful vacation pics.
I find this essay to be extremely frustrating, and a good example of the attitude I've personally witnessed Andreessen have in the few interactions I've had with him directly.
> Is the problem capitalism? I’m with Nicholas Stern when he says that capitalism is how we take care of people we don’t know — all of these fields are highly lucrative already and should be prime stomping grounds for capitalist investment, good both for the investor and the customers who are served.
He argues that this is true, but then tries to make a central thesis that undercuts this declaration:
> The problem is desire. We need to want these things. The problem is inertia. We need to want these things more than we want to prevent these things. The problem is regulatory capture. We need to want new companies to build these things, even if incumbents don’t like it, even if only to force the incumbents to build these things. And the problem is will. We need to build these things.
This overlooks the fact that Marc is in fact one of these folks who has a profoundly outsized role in deciding what he wants. Like it or not, America follows in the moneyed aristocratic morals of the subjective theory of value. In some sense it is the function of concentrations of capital to assign value to things in America. Therefore, folks in control of lots of capital (e.g., Andreessen Horowitz and other venture firms) and their investors have a huge input into what "we want" as a nation. And yet here he is arguing that he feels like there isn't a national desire for these things.
We don't have it because building these things requires long term investments and folks like Marc and his investors are not interested in long term investments. America's corporate leadership has pursued elastic labor forces with minimal training (and therefore minimal flexibiity), outsourced manufacturing (and therefore long lead times on domestic production) and minimal redundancy in infrastructure because these rich folks think, plan and act on a quarterly calendar. We don't build new homes because homeowners like the value of their goods protected by intense scarcity. We don't compete with China because capital sees value in redundancy only with the framework of internal corporate prognostication, not as an actual net good when considered in a system
While many Americans like to pretend "capitalism" is synonymous with free market mechanics, that's actually false. Capitalism is a dominant force in America's future and the folks with all the power to assign value have been clear: their value lies in quarterly profits. Capitalism means that market competition is reduced and capital concentrates under a small number of collaborating actors.
I agree with Marc's core tenant that "we have to want these things." But I want these things. Hell, we're building grassroots infrastructure in my radio group because our capitalist-driven infrastructure is so antiquated we can't even do a software update to existing hardware without it taking 3 years and taking an entire flood warning system offline.
Marc and his investors have to want these things. They clearly don't. These things would have "taken care of strangers," perhaps, but folks like the people who invest in Marc's funds genuinely don't seem to believe they're worthwhile values. If you'll forgive the tired metaphor, the top 0.5% doesn't see value in these things so we don't have them. We even have some in that 0.5% paying incredible sums of money to run media org's who's entire purpose is to convince people they don't actually want their lives to be better!
> This overlooks the fact that Marc is in fact one of these folks who has a profoundly outsized role in deciding what he wants.
He says what he wants, but then he expects someone else to build it. He's rich: if he wants these things, why doesn't he just pay to get them built? Sure, not all of them, but just pick one and pay to get it built.
But, as you point out, he's not interested in long term investments--and that is the root of the problem. The very people who are the most suited to making long term investments--people who have enough wealth that they don't have to answer to anyone else's expectations for earnings, profits, whatever--are incapable of making long term investments.
Exactly, him & his firm have been leading the bandwagon on crypto investments, social/mobile, ads, "scooters", and all the other sectors which are all hype & no build.
> He says what he wants, but then he expects someone else to build it. He's rich: if he wants these things, why doesn't he just pay to get them built? Sure, not all of them, but just pick one and pay to get it built.
There are a lot of things to criticize about Elon Musk, but he does understand this much.
He could call Harvard and donate a bunch of developers for a year to build that system which could educate a million 18 year olds. Harvard will certainly take his call.
He couldn’t fund all the hyper efficient factories for the country, but he could build one.
Harvard could easily build that out of their own $40,000,000,000 endowment, if their first priority was actually education, rather than protecting their own prestige and the value of their credentials to the elites they mostly serve.
This is another impediment he didn't mention: a sort of regulatory capture working on the social level. Harvard's prestige begs the question of why people want to go there. None of the interested parties want to change that, because it's to their advantage. To provide a Harvard-level education to millions (not simply academically, but to open the lanes of opportunity in all ways Harvard provides) is to destroy Harvard. But then, one wonders what the utility of Harvard is to the average American.
I don't know if it would "destroy" Harvard, but it would definitely make prestige more "merit" based (merit being in quotes because its definition is highly contentious). If Harvard were catered to all students with capable ability and/or drive then we'd have a new class of highly paid professionals. The problem as I see it is with funding. Will the state by itself be able to uphold the funding that supports the infrastructure and academic resources researchers and students need to succeed? Those who were admitted to this merit-based system may contribute, but that leaves room for the incentive-based system that we have today
Trends that hit the black community tend to follow in the working class and, later, middle class and wealthy white communities, perhaps under different circumstances but ultimately similar in nature. Compare the crack/cocaine epidemic with the opioid epidemic, for example. While I support the expansion of elite education, I think it's naive to expect it to be a panacea. Someone still has to see enough value in these grads to hire an order to two magnitude mire highly-paid professionals than there were before. Save some other concurrent intervention, what's more likely is that you'll have more highly-educated underemployed workers than ever.
Harvard seems to have troubling relationships with both China and Saudi Arabia. We need to start treating such relationships as treasonous/harmful to the United States and our future:
If he did what he is proposing, he would be out of business quickly with no investor money to mess around. This entire post reads like a script for Gavin Belson to me.
> If he did what he is proposing, he would be out of business quickly with no investor money to mess around. This entire post reads like a script for Gavin Belson to me.
But this is sort of the central complaint, no? "These people have to want it" is a good rallying cry, but it should apply to Marc and his peers and funders. They have enormously more influence on the direction of industry and infrastructure in our countries than I do, and it'd take a revolution to change that dynamic.
>I find this essay to be extremely frustrating, and a good example of the attitude I've personally witnessed Andreessen have in the few interactions I've had with him directly.
It's like it was written to be the perfect example of SV myopia for the rest of the world. Some examples:
>Even private universities like Harvard are lavished with public funding; why can’t 100,000 or 1 million students a year attend Harvard?
Because the main purpose of Harvard and other elite schools like it is to pick out the best ~18 year olds and set them on the course to be leaders in business, government, law, and other areas. Harvard isn't Harvard because they're better at education. Harvard is Harvard because they get the pick of the litter. Extending their enrollment to a million doesn't mean we get a million more elites.
The funny thing is that we basically do have the education system he asks for in some places. For example, half of medical students attend lectures rarely or never instead opting for online resources. But they still plunk down 100k for those two years because the knowledge is worthless without the credential. (And years 1/2 are the gate way to the clinical education in years 3/4 that must happen in person).
Go look at the a16z team. How many of them don't have a Harvard/Yale/Princeton/Stanford/et al type pedigree? So to answer his own question, people like him are the reason why 1 million students a year can't attend those types of places. Otherwise, their graduates wouldn't be as attractive to people like him.
>Why aren’t we building Elon Musk’s “alien dreadnoughts” — giant, gleaming, state of the art factories producing every conceivable kind of product, at the highest possible quality and lowest possible cost — all throughout our country
Because there's no magic factory you can build to make every conceivable product cheaply. Obviously we don't do it because it's cheaper/more efficient to produce stuff in single purpose factories. Contrary to his argument, we wouldn't get richer by manufacturing more stuff. We'd get poorer.
>You see it in transportation. Where are the supersonic aircraft? Where are the millions of delivery drones? Where are the high speed trains, the soaring monorails, the hyperloops, and yes, the flying cars?
Because none of this stuff is economically or physically practical. He seems to want us to live in a science fiction fantasy world.
>>You see it in transportation. Where are the supersonic aircraft? Where are the millions of delivery drones? Where are the high speed trains, the soaring monorails, the hyperloops, and yes, the flying cars?
>Because none of this stuff is economically or physically practical. He seems to want us to live in a science fiction fantasy world.
I'm pretty sure most of that stuff is highly illegal. Make things illegal, and they don't happen. It's that simple. I mean, just look at uber: it's just a glorified taxi company that was able to circumvent the taxi monopoly medallion system (yet, another system that made competition illegal). And, it took a huge army of lobbyists just to make that legal. Such a small innovation requires so much lobbying, it doesn't give hope for any other kind of innovation.
There was a start up in the bay area: all they wanted to do was put a few more buses on the street. It was rejected very quickly and made illegal. Turns out people would rather get buses off the road with all the pollution and traffic that would have saved, rather than allow workers to get to work a little easier.
Supersonic flight is inefficient and noisy. Drones are noisy, a hazard, and significantly more limited due to lithium density than electric cars. High-speed rail is not illegal, but requires huge capital. Uber may not be economically viable, and there are serious concerns about middle-men marketplace corps socializing the liability, benefits, and wage instability costs the gig economy brings with it.
Cars are noisy, a hazard, and in some ways significantly more limited than horses.
I actually agree with all your points but also recognize there’s a strong prior bias toward what “I know” works or doesn’t today that can preclude the future possibilities.
And cars were not economically viable for the masses for most of their early development. It took decades of technological advancements to produce the distant ancestor of the modern mass-market auto-manufacturing machine.
As for drones and supersonic aircraft, we're going to need much better batteries for the former and far more efficient engines for the latter to them to be more viable than present alternatives. That's not a "what I know bias", it's in hard math and numbers.
It's like how most ships in popular sci-fi are these futuristic, oblong shapes with wondrous curves, when in fact a more realistic approach would be using rectangles for everything but a few niche applications. For anything that humans are going to walk around in/actively use rectangular structures are simply far more efficient. It was true 10,000 years ago, it'll be true 10,000 years from now assuming we're not living in Musk's simulation.
Cars would also be much less useful in the USA without the insane amount of taxpayer-funded road infrastructure and lack of alternate public transportation options. Can you imagine if the people selling cars also had to pay for the infrastructure for cars, you know, like a fair competitive market?
That example suggests a significant amount is funded out of fuel taxes and toll fees, and seems to be kind of a mouthpiece for the energy industry to try to get rid of taxes on fuel.
There are niche scenarios where a horse is more useful(e.g. rough terrain), but for 99.9% of the scenarios of modern life, a car/motor is more powerful and reliable. Horses are also noisy(clop clop clop) and have been known to trample people.
Supersonic flight was tried with the Concorde and its profitability was iffy due to large subsidies involved in its development, and the handling of BA privatization in the late 80s. There are aerodynamic constraints that make supersonic flight inefficient. Unless we magically change physics, supersonic flight is always going to be significantly less efficient than subsonic flight.
Also the quickest way to make something that is starting to become viable(electric cars), less viable, is to make it have to fly(flying drones). You now have to fight gravity 24/7.
This isn't about dismissing the future, it's about people trying to implement these ideas for the last 70 years, and some spunky "disruptor" startup isn't going to magically change the laws of physics once we "git rid of that dang regulations!"
Well, as you said yourself, Uber happened. Why? Because it's investors saw a chance to make a huge profit, and so they _wanted_ to invest in that army of lobbyists.
However those same investors do not seem so excited to put their money where their mouth is when it comes to employment security, healthcare, etc, otherwise they would have _wanted_ Uber to have its drivers be employees, w/all the legal responsibilities entailed.
Thks, could not agree more. More Uber = more pollution and unbearable traffic.
Slap a 50% tax on Uber and use that money for free public transportation. In a recession maybe we'll see more people getting on an electric bus/subway. And our lungs will be feel better.
The devil is in the detail with these things, and I think the point is that, while regulatory capture is a huge problem, there are often legitimate and/or competing interests calling for these regulations to be put in place. Builders don't necessarily like every code they have to adhere to, but that keeps houses from collapsing.
> Because the main purpose of Harvard and other elite schools like it is to pick out the best ~18 year olds and set them on the course to be leaders in business, government, law, and other areas. Harvard isn't Harvard because they're better at education. Harvard is Harvard because they get the pick of the litter. Extending their enrollment to a million doesn't mean we get a million more elites.
It doesn't even do that. Harvard doesn't pick out the brightest 18 year olds to become future leaders. It picks out the most competitive kids who care about going to a place like Harvard.
If all you wanted to do was prove your intelligence, an IQ test is much cheaper and quicker.
Markets build in response to incentives. Most American production choices are determined by markets, including the choices of investors allocating capital.
Public institutions build and manage in response to electoral incentives.
If we're not prepared, it's because the incentives are wrong.
On the market front, once incentives and maybe even insights become opaque at the level of the abstraction of return on investment -- especially on a horizon within which a generation can live and die w/o experiencing a risk event like a pandemic -- then investors will be essentially blind to this.
On the public front, we have at least one political movement in the US that generally stands on the idea that government shouldn't do things like this for the common welfare. That movement is a minority, but knows how to use countermajoritarian features of the US political system to maintain control and is determined to do so (demonstrably well past limits of defensible public stewardship at this point).
That leaves philanthropy, which is helpful, but often scales poorly and is distributed first by proximity to various privileges on the social graph.
And maybe some degree of private capacity to re-think incentives and how long-term value could be structured into short-term incentives in private markets.
If anyone is in a position to do the last two, it's someone like Marc, so it's weird to read this as someone who's in a position nothing like his. Perhaps I'm not the audience. Perhaps others in his wealth class and investor circle are.
> Markets build in response to incentives. Most American production choices are determined by markets, including the choices of investors allocating capital.
This leaves out the most important problem though: regulatory capture and bureaucratic gridlock. Markets would love to build more housing. But they're prevented from doing so by the regulatory state. Markets would love to build nuclear power plants, but they're prevented from doing so by the regulatory state.
Which ultimately comes back to the democratic question of will. We need to elect people who will alter the regulatory state to make way for these things.
Sure, policy matters. It's important to have people in public leadership who understand it and can work on tuning it to avoid or eliminate unintended consequences.
But complaining about either regulation or bureaucracy at a general level is the policy equivalent of approaching software by making general complaints about how terrible existing code is: sure, some of it is probably sub-optimal and should be rewritten, but anyone who's worked in the field for a while knows that the sweep-it-away/ground-up-rewrite impulse is more often wrong than applying Chesterton's fence (make sure you understand why it's there), profiling, and examine potential alternatives against studied outcomes.
> Markets would love to build more housing.
Sure. And would love to chase the wealthiest end of demand and externalize costs of community displacement or ecological impact.
> Markets would love to build nuclear power plants
And would love to externalize the costs of risk and waste management.
Note that these are not arguments against building more housing or nuclear power. There are many metro areas that do need to build housing. Nuclear power has its merits as well as hazards.
They're arguments about specific incentives absent intentional oversight, supporting the general case that it is often irresponsible to believe or advocate that incentives tend towards optimal on their own, and that the primary problem is oversight itself.
> But complaining about either regulation or bureaucracy at a general level is the policy equivalent of approaching software by making general complaints about how terrible existing code is: sure, some of it is probably sub-optimal and should be rewritten, but anyone who's worked in the field for a while knows that the sweep-it-away/ground-up-rewrite impulse is more often wrong than applying Chesterton's fence (make sure you understand why it's there), profiling, and examine potential alternatives against studied outcomes.
This is sometimes true, but it certainly isn't always true. Housing policy, for instance, is largely driven by putting the interests of local property owners over those of new entrants and the broader economy.
> Sure. And would love to chase the wealthiest end of demand and externalize costs of community displacement or ecological impact.
Price the externalities. It's as simple as that. Nobody needs to externalize anything. Housing is plenty worth building to developers even if they fully internalize the ecological impact. And let's not neglect the ecological impact of long commutes when running this calculation.
> And would love to externalize the costs of risk and waste management.
Of course they'd like to do that. Everyone would like to externalize their costs and risks. The job of government is to let people do things, but force them to internalize the costs. You aren't making an argument against anything I said.
> They're arguments about specific incentives absent intentional oversight, supporting the general case that it is often irresponsible to believe or advocate that incentives tend towards optimal on their own, and that the primary problem is oversight itself.
Oversight is fine. Kafkaesque bureacracy and cost disease are not. The present state of our regulatory apparatus is abysmal. That isn't an argument for eliminating it, it's an argument for making it better.
Those kafkaesque bureaucracies come about when oligopolies ladder pull by writing their own regulating legislation. It's not bureaucratic overreach, it's corruption. Facebook recently tried the same thing.
Firstly, that's just not true. That is a thing that happens, but it is not the only thing that happens. Bureaucracies come about for all sorts of reasons, and in all sorts of ways. The one you describe is only one among many of those mechanisms.
And secondly, what's your point? The problem is still what it is. The regulations are the location in the stack that need to be corrected.
My point is that a lot of people have this Atlas Shrugged view of the world, where the noble entrepreneur is lashed to earth by envious, regulation loving, Democratic bureaucrats. But if take that view, then we'll get rid of regulations that are really useful and save lives. You're already seeing this with the rollback of environmental regs. The regulations that stifle innovation are written by "captains of industry" themselves, because manipulation of government via corruption is way easier and far more predictable than R&D/innovation.
So my point is you're missing the point. The symptom is regulation but many regulations are very important. We need anticorruption legislation, we need to break up monopolies, and we need a wealth tax so people can't just strike gold (or cheat people who strike gold), invest in existing ossified industries, rake in cap gains/rent while contributing absolutely nothing, and corrupt our political system with their wealth (and demand that the companies they've invested in also do so in the name of shareholder profits) in order to protect it.
> My point is that a lot of people have this Atlas Shrugged view of the world, where the noble entrepreneur is lashed to earth by envious, regulation loving, Democratic bureaucrats. But if take that view, then we'll get rid of regulations that are really useful and save lives. You're already seeing this with the rollback of environmental regs. The regulations that stifle innovation are written by "captains of industry" themselves, because manipulation of government via corruption is way easier and far more predictable than R&D/innovation.
The problem is bad regulation. We need to keep good regulations, and eliminate bad ones. At the end of the day, the problem is still regulation, as I said.
> So my point is you're missing the point. The symptom is regulation but many regulations are very important. We need anticorruption legislation, we need to break up monopolies, and we need a wealth tax so people can't just strike gold (or cheat people who strike gold), invest in existing ossified industries, rake in cap gains/rent while contributing absolutely nothing, and corrupt our political system with their wealth (and demand that the companies they've invested in also do so in the name of shareholder profits) in order to protect it.
Your policy prescriptions here are entirely orthogonal to the problem of moving society forward technologically. You may want a wealth tax because you don't like inequality, but it isn't going to do any good for the technological development of the world. To do that, you need to streamline the regulatory state.
No, the problem is corruption resulting in, among other pretty bad things, ladder pulling regulation.
> You may want a wealth tax because you don't like inequality, but it isn't going to do any good for the technological development of the world.
Study after study has shown that income and wealth inequality stifles innovation (again among some other pretty bad things). This makes sense if you think about it: the next Archimedes can't innovate because she's preoccupied with how to pay for her sister's insulin.
In fact all my policy prescriptions are focused on innovation, because that's the topic of this thread. Antitrust laws are specifically set up to encourage innovation.
I know you really want to focus on regulation as the big bad, but it's just a symptom of a much larger bad: corruption.
> This makes sense if you think about it: the next Archimedes can't innovate because she's preoccupied with how to pay for her sister's insulin.
Your example is poverty, not inequality. This is a trick people play all the time. They say 'inequality', and then they describe poverty. Poverty certainly reduces innovation. Poverty causes all sorts of issues that reduce intellectual and social achievement. However, inequality and poverty are not the same thing.
Inequality is an inevitable consequence of innovation, in a capitalist society. But inequality does not have to mean poverty for the bottom decile. What we want is a society where those who are able to, work extremely hard to make the world better, and in return are rewarded with a luxurious high-status lifestyle. But those who are not so gifted, or those who choose not to work so hard, are still provided for adequately. IMO the focus on inequality per se is a red herring. It doesn't matter if Jeff Bezos has 100 trillion dollars, as long as his warehouse workers have a decent life.
I think you might respond by saying something about how large concentrations of wealth inevitably influence politics, and inevitably corrupt everything they touch. I can't speak to the latter, but to the former, I found this enlightening:
> In fact all my policy prescriptions are focused on innovation, because that's the topic of this thread. Antitrust laws are specifically set up to encourage innovation.
> I know you really want to focus on regulation as the big bad, but it's just a symptom of a much larger bad: corruption.
'Corruption' is sufficiently non-specific to be meaningless. Saying the problem is 'corruption' prescribes nothing at all. Corruption literally just means "bad things happening to stuff", so of course, it is always to blame when things aren't going well.
The question at hand is: how do you fix it? Saying "fix corruption" certainly isn't the answer. My guess is you'll respond by saying "fix inequality", but you'll forget to add exactly how that would go on to fix "corruption".
No that study explores innovation as a cause of inequality. Which is still bad but not what we're talking about here.
> Your example is poverty, not inequality. This is a trick people play all the time.
Oh so this is your point [1]. No I'm not talking about any inequality, that's a ridiculous strawman (and seemingly wrong, judging by other sources inequality and not poverty is still bad for growth). I'm talking about bonkers levels of inequality causing incomes to stagnate while capital gains skyrocket, leaving tons of money in the investment accounts of the rich and not in the savings accounts of the 99% of the rest of us. Wealthy people by and large don't invest in innovation (look at the share of SV VC money for example), they hoard it, which undermines pretty much all of right-wing economic theory. The only policy measure that will fix this is taxation.
I've done a little [2] token [3] googling [4] for [5] you. This one [6] is a pretty good high level survey if you just want an overview.
> It doesn't matter if Jeff Bezos has 100 trillion dollars, as long as his warehouse workers have a decent life.
Agree; I don't find wealth immoral or unethical on its own. I do find it immoral under capitalism, where by definition profit comes from exploitation (plundering the commons, upselling labor, etc.) And I don't see a better way to provide for Bezos' workers other than by taxing his immense wealth, which he got from their labor besides.
> Slate Star Codex stuff
There's so little money in politics because the wealthy and their corporations are already getting what they want. The false premise of this exposition is that these entities are in competition with each other. They're not, they're colluding. You'll see these numbers spike when big events happen, Deepwater Horizon, etc., and that's to keep the family whole during a troubled time--just like unions during a strike.
> 'Corruption' is sufficiently non-specific to be meaningless. Saying the problem is 'corruption' prescribes nothing at all.
No, when I say corruption I mean a very specific thing: bribing elected officials for special treatment. There's a whole index called the "Corruption Perception Index" to track the public's perception of corruption (which is damaging in and of itself), and there are studies [7] that measure it [8] more fully.
These issues are complex and have deep roots. That's why I've been so tenacious in disagreeing with you about regulations being the cause of our troubles. If we're gonna kill this weed, we've gotta pull it up entirely.
> No that study explores innovation as a cause of inequality. Which is still bad but not what we're talking about here.
It shows that inequality and innovation are correlated across the globe. There is no way to disentangle causality there, and it almost certainly flows in both directions.
> Oh so this is your point [1]. No I'm not talking about any inequality, that's a ridiculous strawman (and seemingly wrong, judging by other sources inequality and not poverty is still bad for growth). I'm talking about bonkers levels of inequality causing incomes to stagnate while capital gains skyrocket, leaving tons of money in the investment accounts of the rich and not in the savings accounts of the 99% of the rest of us. Wealthy people by and large don't invest in innovation (look at the share of SV VC money for example), they hoard it, which undermines pretty much all of right-wing economic theory. The only policy measure that will fix this is taxation.
No, what it's clear you aren't talking about is inequality at all. If you look at the heading of the very first link you sent, it states my point, in the same words!
You are talking about economic mobility.
> Agree; I don't find wealth immoral or unethical on its own. I do find it immoral under capitalism, where by definition profit comes from exploitation (plundering the commons, upselling labor, etc.) And I don't see a better way to provide for Bezos' workers other than by taxing his immense wealth, which he got from their labor besides.
So you think all labor relations are inherently exploitation? People are incapable of agreeing to exchange their labor for money?
> No, when I say corruption I mean a very specific thing: bribing elected officials for special treatment. There's a whole index called the "Corruption Perception Index" to track the public's perception of corruption (which is damaging in and of itself), and there are studies [7] that measure it [8] more fully.
Sure, but in what way is this corruption blocking the building that Andresen is talking about? I can point you to a myriad of ways in which regulation is doing so. But it's not obvious at all to me that corruption comes into play at all.
> If you look at the heading of the very first link you sent, it states my point, in the same words!
Yeah that was my point. The Cato Institute is a biased, partisan think tank and not a credible source. But let's dig into it.
> Poverty may fall as wealth inequality rises, such as when entrepreneurs build fortunes by generating economic growth. Or poverty may rise as wealth inequality rises, such as when crony capitalists gain preferences that distort the economy and reduce growth.
Entrepreneurs building vast fortunes (I'm not talking about a few million, but hundreds of millions or billions of dollars) is a bug, and in a country where many people choose between meds and food deeply immoral. We should redistribute that wealth.
The second point is actually my point, and while I'd like them to cite something (there are weird strategic cites throughout), I'll take it. But I'd like to reemphasize this real quick: "poverty may rise as wealth inequality rises, such as when crony capitalists gain preferences that distort the economy and reduce growth". That's the whole ballgame right there, crony capitalism increases wealth inequality and reduces growth.
> High poverty levels, which are clearly undesirable, are often caused by bad policies, such as a lack of open markets and equal treatment. Wealth inequality is different—it cannot be judged good or bad by itself because it may reflect either a growing economy that is lifting all boats or a shrinking economy caused by corruption.
The US has one of the most free markets in the world, and yet over 20% of our children live in poverty. A lack of open markets is not the cause of poverty. An unwillingness to redistribute income and wealth is.
> WhatsApp... created huge value for consumers by reducing communication costs
There is no cite for this. It's far more likely it was worth that money to Facebook to corner the messaging market, which provided no value whatsoever but did lead to less market choice.
> Jason Furman, the former chair of President Barack Obama’s Council of Economic Advisers, was right to praise the company as a “progressive success story” for its role in reducing prices.
Right-wing economists trot this out all the time, but he wrote that in 2005 and it's a weird appeal to authority besides. A more modern discussion is here [1]. Here's a quote:
> Vedder didn’t seem to hold Walmart responsible for the economic situation its workers faced. Rather, he argued that it’s just economic reality: “Not everybody is going to be in the middle class. Not everyone has the skill sets to do this ... Are there some people in poverty because of low wages? Yes. Will there always be? Yes. In every society, there’s going to be some people making more than others. It’s naive to say, ‘Let’s pay the low-income people more.’”
The consensus is that Wal-Mart being good or bad is irrelevant, whatever it is is a function of capitalism. That's pretty bleak. Wal-Mart's also a terrible example because of the labor and health care costs it farms off onto the federal government. When we defend their actions and their effect on the economy as capitalism working as intended, "entity that's demonstratively destructive to local businesses and wages, hugely burdensome to the welfare state, but uniquely enriching to its owners" says it all.
> Clearly, recent gains by the top 1 percent have not come at the expense of other Americans.
This is, and I'm gonna use this term specifically here, "super false" [2].
> [Gini coefficients] do not support the idea that wealth inequality is bad for [income, life expectancy, and education levels]
That's because using them in that way leads to a correlation/causation fallacy. If you want better information on this, look at life expectancy and education outcomes by income. You probably don't need to though, because you can guess they decline as income declines.
> A Credit Suisse study found that the share of global household wealth owned by the top 1 percent of households worldwide was roughly unchanged between 2000 and 2018.
This paper cherry-picks like crazy. Let me quote you something from the very first page of this study: "The bottom half of wealth holders collectively accounted for less than 1% of total global wealth in mid-2019, while the richest 10% own 82% of global wealth and the top 1% alone own 45%." So yeah, maybe it is unchanged. It's still insanely high.
> Yet commentators on the political left seem more concerned that some countries with broadly rising incomes have experienced increases in wealth inequality. This seems like “spiteful egalitarianism,” as Feldstein called it. That is, a knee‐ jerk dislike of the wealthy even when their wealth stems from productive activities that benefit the overall economy.
Besides being pretty clear ad-hominem, my actual position here is that it's impossible for Bezos to contribute ~.85% of US GDP [3] and it's a bug we should fix with taxes.
I could go on. But in short, this presentation isn't a good faith argument. It uses multiple fallacies and cherry-picks data to further its political agenda. It's not unique to that section, or that presentation. It's what The Cato Institute does.
~~~
> It shows that inequality and innovation are correlated across the globe. There is no way to disentangle causality there, and it almost certainly flows in both directions.
Agree that it's a vicious cycle and requires some kind of intervention to fix.
> So you think all labor relations are inherently exploitation? People are incapable of agreeing to exchange their labor for money?
I think that the labor market is fundamentally coercive and exploitative, yes. When one party needs shelter, food, and medicine and the other just needs a warm body to drive a truck, those parties are not on equal footing and the relationship is coercive. That's why businesses are against things like social welfare programs, Medicare for all, labor standards, and collective bargaining and for things like right to work, independent contracting, and arbitration. Even companies that hire highly skilled workers like SWEs collude to suppress wages (Adobe, Apple, Google, and Intel). Look at the list of things businesses are against and for, which are the ones we have? I wonder why that is.
> The second point is actually my point, and while I'd like them to cite something (there are weird strategic cites throughout), I'll take it. But I'd like to reemphasize this real quick: "poverty may rise as wealth inequality rises, such as when crony capitalists gain preferences that distort the economy and reduce growth". That's the whole ballgame right there, crony capitalism increases wealth inequality and reduces growth.
No. You are twisting the discussion here. Inequality is not the problem. It is a problem when crony capitalism is the source of inequality, on that you, I, and the cato institute agree. Inequality can be a symptom of a broken system, but it is not necessarily a symptom of a broken system. And so inequality is not the measure you should be looking at. What you should care about is the source of that inequality.
> The consensus is that Wal-Mart being good or bad is irrelevant, whatever it is is a function of capitalism. That's pretty bleak. Wal-Mart's also a terrible example because of the labor and health care costs it farms off onto the federal government. When we defend their actions and their effect on the economy as capitalism working as intended, "entity that's demonstratively destructive to local businesses and wages, hugely burdensome to the welfare state, but uniquely enriching to its owners" says it all.
Walmart doesn't farm labor and healthcare costs off to the government. Walmart is not responsible for the wellbeing of its employees, it is not their parents. Society has decided it wants to institute certain minimum standards of living for people, and we enact those standards through the proper channels: government. Walmart is then free to hire those people. That does not mean Walmart has accepted responsibility for their well-being.
> That's because using them in that way leads to a correlation/causation fallacy. If you want better information on this, look at life expectancy and education outcomes by income. You probably don't need to though, because you can guess they decline as income declines.
You're saying a lot of stuff here without really supporting it. You don't get to cherry pick which correlations you like and which you don't. If you want to say that inequality causes these things, prove it. But the fact of the matter is that inequality and innovation correlate strongly across countries, which pretty soundly refutes your original point: that inequality stifles innovation. Now, there may be more to that story, like reverse causality, or other confounding factors. We certainly haven't proven that inequality causes innovation. But we have established pretty well that causality does not flow in the other direction, which was was your original point.
> I could go on. But in short, this presentation isn't a good faith argument. It uses multiple fallacies and cherry-picks data to further its political agenda. It's not unique to that section, or that presentation. It's what The Cato Institute does.
I didn't provide the link, you did. I have no vested interest in that particular source. I'm just telling you what your own source says.
> I think that the labor market is fundamentally coercive and exploitative, yes. When one party needs shelter, food, and medicine and the other just needs a warm body to drive a truck, those parties are not on equal footing and the relationship is coercive. That's why businesses are against things like social welfare programs, Medicare for all, labor standards, and collective bargaining and for things like right to work, independent contracting, and arbitration. Even companies that hire highly skilled workers like SWEs collude to suppress wages (Adobe, Apple, Google, and Intel). Look at the list of things businesses are against and for, which are the ones we have? I wonder why that is.
If you want to enjoy the fruits of society, it seems reasonable to ask you to contribute to it. If you want to go and live in a cave and forage for food in the forest, that seems fine too. But if you want to live in a home built by other humans, and eat food farmed and transported to you by other humans, you are placing demands on the labor of others. What entitles you to that labor if not the exchange of your own? Of course, that then raises the simple question: how much of the labor of others should you get in exchange for yours? Well, we've come up with a whole system for answering that question, one that works pretty well and has elegant answers to that question. I don't doubt that there are others, but it's probably a good idea to fully understand why the one we have works before trying to tear it down.
How can you still say that when the crisis show us that critical jobs are underpaid, sometimes practically slave labor.
Your arguments get countered every single time in this thread, so I'm not surprised he or she didn't reply to you anymore
> How can you still say that when the crisis show us that critical jobs are underpaid, sometimes practically slave labor. Your arguments get countered every single time in this thread, so I'm not surprised he or she didn't reply to you anymore
Economists have studied the question of value basically since the founding of economics. Many ideas have been proposed and rejected. The one you are probably subscribing to is something like Marx's "Labor theory of value".
I could write an argument explaining why the labor theory of value is wrong, but you can just read the Criticisms section on Wikipedia, which will do a better job of it than I could:
If you want to assert that some job is "under paid", you have to have a reference valuation that the current compensation is "under" with respect to. The perspective of modern economists is that value comes from "marginal utility":
Yeah that's an interesting area of study. I do buy the criticisms though, and personally I think that propaganda plays a bigger role. The vast majority of Americans have no idea what their government is doing, and they rely either on inadequate or hyper-partisan, biased media to keep them informed. But those sources aren't there to inform them, they're there to polarize them so they get to the polls. It's pretty classic authoritarianism: blame some outside group, froth up the public to support you so you can implement your corrupt agenda.
I realize this sounds... super cynical and tin foil hat but, maybe that speaks to the seriousness of our situation. If there's tech out there that can fix it, I'm all ears.
> Firstly, that's just not true. That is a thing that happens, but it is not the only thing that happens. Bureaucracies come about for all sorts of reasons, and in all sorts of ways.
So it is true, it's just not complete?
> The regulations are the location in the stack that need to be corrected.
What if the best way to do this is to remove the capitalist incentives that motivate local communities to operate this way?
Yes, it is a thing that happens. But the original commenter described it as the only thing that happens, which is not true.
> What if the best way to do this is to remove the capitalist incentives that motivate local communities to operate this way?
I think that would be great. But how do you enact that? Do you eliminate property rights? What do you replace them with? If you want my view, the correct policy is a land value tax (https://en.wikipedia.org/wiki/Land_value_tax).
A policy more likely to be implemented is to move zoning laws up the governmental stack to the state level, so that they're not so easily locally influenced.
> But the original commenter described it as the only thing that happens, which is not true.
Sorry if I came across that way; that's not what I meant. Of course there are some regulations that are overburdening. But this is like saying we should repeal TANF because it has a non-zero (very low) fraud rate: it focuses on the wrong thing. The comparative burden between the rare overzealous regulation and ladder pulling regulation is bonkers.
Blaming the "regulatory state" for the lack of housing misses the point. Andreeson lives in Atherton, CA, population 7000--not exactly Big Government. Is he pushing the city council to upzone Atherton and allow higher density housing? It would be profitable!
Property developers would be building apartments in Atherton if they were allowed to. It is regulation that prevents it. It is local property owners electing city council members that creates the regulation.
>Markets would love to build nuclear power plants
Sadly, markets would love to build nuclear power plants without paying the external costs, but I pretty much doubt the markets would like to pay all the costs associated with nuclear production.
And BTW, I say this in full support for nuclear power, in fact, I think that carbon, gas and oil are so cheap because they markets avoid paying the external costs that nuclear might be the better alternative. But this is because the markets are not great on accounting for this costs that are passed to society as a whole.
> Markets would love to build more housing. But they're prevented from doing so by the regulatory state. Markets would love to build nuclear power plants, but they're prevented from doing so by the regulatory state.
I don’t like it when people anthropomorphize concepts like economic markets, but I _especially_ don’t like it when they do this to make it seem like the anthropomorphization should be a sympathetic character to the reader.
Like one of the GPs said, above: the market is something that responds to incentives.
Regulation and bureaucracy shape those incentives, sometimes in the ways that you’re describing, but the market is just as “happy” to capitalize on bad housing regulation as it is to capitalize on a lack of any housing regulation at all.
The problem of constructing just the right amount of regulatory apparatus is very difficult, though.
> I don’t like it when people anthropomorphize concepts like economic markets, but I _especially_ don’t like it when they do this to make it seem like the anthropomorphization should be a sympathetic character to the reader.
> Like one of the GPs said, above: the market is something that responds to incentives.
What's your point? The incentives are aligned to build more housing. That's what high prices do, they incentivize supply.
> Regulation and bureaucracy shape those incentives, sometimes in the ways that you’re describing, but the market is just as “happy” to capitalize on bad housing regulation as it is to capitalize on a lack of any housing regulation at all.
So?
A) The point your making is irrelevant to mine. The fact that markets will exploit poor regulation is really neither here nor there.
B) The solution to the problem you pose is, just like what I said, better regulation.
Most of the time those are determined locally, not at the state or national level. Usually by a city council and zoning board heavily informed by its wealthiest citizens.
People like to make this argument as a blind for, "I am tired of building buildings with expensive seismic retrofitting and anti-fire measures, or to even consider they have modern electrical infrastructure." I don't like those arguments very much, as they place an unfair burden on buyers and often represent burdens on already wealthy people, who tent to project far more burdens than they shoulder.
But if we're talking about "the homeowners around us are using the government to enforce scarcity because they love being ghoulish landlords rather than productive members of society" they yeah, I'm on board with you.
Both of these fit through the keyhole of "building regulation" so I'm trying to draw lines to show you where I stand.
I am less opposed to requirements about what must be in a structure for safety of yourself and surroundings. I am very opposed to preventing building whatsoever, or artificial limits to density. People think when they buy a house they have the right to ensure everything around them changes as little as possible. I disagree - you have the right to your own land not changing, but you should not be able to stop your neighbor.
I have heard people complain that building a house is N times more difficult today than 20 years ago, and as someone who wishes to build a house in the future, these complaints worry me. Perhaps there is no need for worry over second hand mutterings, though. I will see what the situation is like when I actually start building.
It seems that usually the legal burden of compliance and regulation forms an efficient service sector that is able to meet it– but in a sort of roundabout way I question the very need for this compliance sector. Thank God for fire safety and non-toxic building materials, but some law is absurd, and represents a process for process' sake when you look at its effect.
> Markets would love to build more housing... But they're prevented from doing so by the regulatory state
Interesting claim. Do you want to detail this more? Most of my experience is not with the State itself being an obstacle, but as a tool in the hands of landlords and capitalists to help enforce scarcity.
Yeah, there's really very little difference between "the State(TM)" at a city council level and the local property owners as a class, and a class that is overrepresented in electoral participation.
> Interesting claim. Do you want to detail this more? Most of my experience is not with the State itself being an obstacle, but as a tool in the hands of landlords and capitalists to help enforce scarcity.
I'm not even sure I really understand your question. Rents in San Francisco are extremely high. What that means is that if you build a new apartment building there you can charge a lot of money for your apartments. Therefore, any halfway intelligent capitalist understands it's a great idea to build apartment buildings in San Francisco. The only reason they are not doing this is that the local zoning laws prevent them from doing so.
> Therefore, any halfway intelligent capitalist understands it's a great idea to build apartment buildings in San Francisco
You don't mean "capitalist" here. You mean, "proponent of Free Markets."
An equally profitable "capitalist" play would be to find out what companies currently benefit from the shortages and to buy those companies, thus securing their revenue.
Capitalism is agnostic to free markets and in some cases even destructive to them.
> You don't mean "capitalist" here. You mean, "proponent of Free Markets."
I just mean any halfway intelligent person who has money and wants more. Their ideology doesn't matter.
> An equally profitable "capitalist" play would be to find out what companies currently benefit from the shortages and to buy those companies, thus securing their revenue.
No, it wouldn't. That's not how anything works. For one, those companies would be very expensive, precisely because they are making so much money. And more importantly, you keep treating this like it's a one player game. It's not. When thinking about how markets work you have to solve for the equilibrium of competing actors. If you go out and buy those companies, then the next guy is going to come along and build new apartments and all of a sudden you won't be able to charge exorbitant prices anymore.
I’m in Munich with skyrocketing prices. And you are wrong about your halfway intelligent capitalist. You see, doing nothing will end in more money earned anyway while doing nothing. So halfway intelligent capitalist can build couple hotels elsewhere. If this halfway intelligent capitalist builds apartment building, it will generate more rent from the new building, but less in total. That is not good for him and he will not build. And zoning laws is an argument to cover ugly truth.
That's not how anything works. You would be right if one person owned the entire city. But that isn't the case. The equilibrium of independent competing actors is for them to build. Yes, if they all colluded together and agreed not to build, they might be able to extract more money (actually they wouldn't in the medium and long term, maybe in the short term). But you'd have to be a complete fool to think that sort of collusion is possible at the scale that would be required.
What you do have are developers pressuring regulators to restrict competition. That is a real thing, and it's called regulatory capture. But that is exactly what I said needs to be fixed.
Maybe in a perfect world with equally distributed wealth it might be the case. But normally all cities have well connected wealthier groups inside.
About Munich’s case: since property tax is calculated based on value of the plot, regulators are not interested in new buildings. They do nothing and collect more and more taxes! What a great situation.
> Maybe in a perfect world with equally distributed wealth it might be the case. But normally all cities have well connected wealthier groups inside.
So, you are positing that the wealthy elite of Munich have come together and agreed not to build high density housing so that they can all make more money, even though if any one of them defects and builds an apartment building they personally would make more money than everyone else?
If there’s anyone in finance who’s less focused on quarterly numbers than VCs, I’d love to hear about them. One of the bigger criticisms of VCs is that they encourage a high risk, high burn, swing-for-the-fences strategy, even in businesses where it doesn’t make a lot of sense.
So while I agree with your sentiments overall, I wouldn’t say that Andreesen is especially reflective of the attitudes that you’re rightly calling out.
Disclaimer: my company received funding from a16z. It’s worth mentioning that, if anything, they have been part of a board encouraging our CEO/founder to think about producing more grand, long-term value, and our CEO already has a strong bias toward long-term thinking.
My experience with fellow post-exit folks is that at around the 3 year mark everyone wants to offload you. People are citing 5 and 10 year ventures as "long-term" which really shows how incredibly eroded the concept of "long term" investments in the US are.
Revitalizing the US electrical and transit infrastructure is probably a century long project, with individual states taking anywhere from 40-75 year. But let's talk more about how Magic Leap secured a lot of debt financing, I guess?
My advice for you is that it makes absolutely 0 sense to bite the hand that feeds you right now.
Interesting that Andreesen mentions Milton 'Shock Doctrine' Friedman. I recently read 'don't be evil' by Rana Foroohar about big tech and 'Goliath' by Matt Stoller, the 100 year battle between monopoly power and democracy in the USA.
I believe we are a dangerous point in history - look at how the Amazon/Bezos monopoly has become even more dominant in the last few weeks of soft martial law, with online orders permissible while countless small businesses are shuttered.
Just in time supply chains and quarterly profits worship have hollowed out holding inventory, which is why there are no medical gowns. Meanwhile China is effectively what the USA used to be economically.
Valley VCs invest heavily in businesses they believe will dominate a vertical and crush competition for maximum profit. This is monopoly power personified.
> We don't have it because building these things requires long term investments and folks like Marc and his investors are not interested in long term investments.
I don't know where you get this from but as far as VC goes a16z are especially willing to take long-term bets. Case in point, when we pitched them, we explicitly said it's going to take us a decade to achieve our goals and they were okay with that.
In the long term we are all dead. So we have to want to do these things for people who are not born yet and who will never pay us or pay us back or be able to even thank us. We have to do these things because these things are the right thing to do.
Having children will give you that incentive. People with no children will have higher time preference -- they prefer today's consumption over investment in the future.
That's why I find a lot of the antinatalism of modern western culture to be concerning.
This. Before I had kids I was always just living in the moment, looking for ways to entertain myself. Not concerned with the climate, retirement, and other long-term ideas at all. Now, with three kids, I’ve really started thinking about the environment and making the world a better place for them to grow up in. I buy sustainable house supplies. I save more in my 401k.
The net impact of having three kids has been a net positive for the environment and society, I believe.
> People with no children will have higher time preference -- they prefer today's consumption over investment in the future.
I don't think that's required, or requires blaming antinatalism. I don't have children, but I recognize that others will, so I'm motivated to address long term problems for the sake of future lives.
There's also some cognitive dissonance in recognizing that the future world faces existential risks like climate change, but then choosing to have children (who will have to live under those risks!).
No. That is false. Climate change is not a function of overpopulation and we could have easily headed it off 20 years ago if existing energy interests with outsized global influence didn't fight us tooth and nail to be exclusive energy providers.
Energy consumption is a function of how many people live and need energy. Sure we now have to fight to provide sustainable energy for 8 billion and soon 11 billion people.
At two or three billion it would not be an issue at all.
It's true, though, all the overfishing, pollution, greenhouse gases, desertification of farmland, extinction of species is all due to the huge explosion in the number of humans on the planet. We're chopping down all the remaining forests and turning the planet into farms and monocultures. At this rate we'd better hope that an ecosystem of just cows and chickens is sustainable.
We don't have to do anything. As women (e.g. in sub Saharan African countries) get more education, the age at which they have their first child increases. As expectations of having your own place increase, and rent increases, the age of having the first child increases. If you want to go all the way, look at Japan, with its aging population and young people who don't want to have sex. Many of them are shut-ins, hikkomori.
Even without this virus, we have been moving towards a world where everyone lives on their own, orders in, gets amazon deliveries, etc. Both parents work for corporations, kids are put into a glorified daycare center run by the government, everyone is overmedicated, from kids (ADHD) to adults (opioids and antidepressants) to elderly (nursing homes) and this is called "a good economy".
If we lowered the workweek to 30 hours, and implemented a permanent UBI (as Spain may do now, and Alaska has done for a while), we could have people spend more time with their families. And if we moved towards increased collaboration rather than competition, we would have a lot more value for the world (think wikipedia vs Britannica, Linux vs Windows, the Web vs AOL etc, Netscape vs IE (thanks for open sourcing that one btw :)) you get the point. Science vs Alchemy.
Anyway, the world has adjusted since we greatly reduced child mortality, and some countries are just playing catch-up. Eventually, we will have a smaller, richer population, with robots and automation doing a lot of the work. That's the future. The only trouble is, shortly after that we'll all live in a zoo controlled by AI :-/
Are parents' incentives really that strong? We need all sorts of laws to prevent parents from exploiting or maltreating their children. It seems that parental instincts are not very reliable.
The negative extremes are, well, extreme. I am not a parent myself, yet, but I think you'd be surprised how great the incentive truly is. If we had a tidy causal analysis of what drives people the world over, I suspect parental instincts would make up a visible chunk of motivations.
But it makes you more receptive to arguments about anything that could endanger their safety and future.
My wife has started to be much more environmentally conscious (vs. economically conscious) over the past year, and I think it all started due to one off-hand remark: I said that I hope our (then about-to-be-born) daughter will be able to experience snow. She brought up that particular phrase to me many times now; it seems it really stuck in her imagination.
> People with no children will have higher time preference -- they prefer today's consumption over investment in the future.
On the other hand, people with children have less resources to invest and are generally forced economically to prefer today's consumption (eg. feeding, clothing, transporting, schooling their kids today instead of buying solar panel stocks for tomorrow).
The idea that having children is an anti-environmental stands is part of a platform called "eco-fascism."
I am not sure you want to involve yourself with those folks and this toxic ideology. It is not inevitable that every life liberated some huge sum of tons of carbon.
Put simply the reason why America doesn't have these things is because the money went elsewhere.
Why e.g. would you build a new skyscraper for people to live in, if you could instead just profit from the scarcity, spend no money and still get out much?
Those who are on top will spend a significant amount of resources to make sure they stay on top and that others don't take their place. Very much of what goes wrong these days is emergent behaviour of that.
This is a much better version of what I was going to respond with, which was, "I dunno, Marc, you're the one with all the goddamn money, you fix it." I think we're on the same page.
Uber is special, but the rest of the companies you named there were at one point rather early in their lifecycle profitable, no?
AirBnB for sure. Pretty sure Dropbox and Slack were in the black for awhile. Please feel free to educate me about Pinterest, I have no idea.
But personally, I think the idea of companies designed to corner a market and then get acquired are just a different kind of medium term investment strategy. For every unicorn you see, there are hundreds of failures where the plug got pulled and information got fed forward to preferential incarnations of the venture.
They are not long term unprofitable for the VCs. Those companies have been through rounds and rounds of growth which has brought in other investors (i.e. who VCs can sell to if they desire).
What about the company that would need to labour for 5 years before they get the MVP out the door?
They are profitable to VCs exactly because system for long-term thinking works, it just consists of different levels of investors, with different risk/reward goals, handing over the same company, still long-term, still unprofitable, one to another. VCs are just one of the first levels of this system.
You can. If your operation generates profit, but could grow faster by plunking the profit back into growth, the VC thing to do would be to demand you reinvest all profit towards growth. But if your business is losing money and not growing, or if its unit margins are negative à la moviepass, then it doesn't make sense to stick around for a decade.
If you don’t mind me asking, what radio group are you involved with? I’m been working on some tangentially related projects and would love to be involved.
Apologies for the new HN account, lost my password for my main one somehow.
>We don't have it because building these things requires long term investments and folks like Marc and his investors are not interested in long term investments. America's corporate leadership has pursued elastic labor forces with minimal training (and therefore minimal flexibiity), outsourced manufacturing (and therefore long lead times on domestic production) and minimal redundancy in infrastructure because these rich folks think, plan and act on a quarterly calendar. We don't build new homes because homeowners like the value of their goods protected by intense scarcity. We don't compete with China because capital sees value in redundancy only with the framework of internal corporate prognostication, not as an actual net good when considered in a system
I would very much like the author of the essay to read "Of Flying Cars and the Declining Rate of Profit":
>With results like these, what will the epitaph for neoliberalism look like? I think historians will conclude it was a form of capitalism that systematically prioritized political imperatives over economic ones. Given a choice between a course of action that would make capitalism seem the only possible economic system, and one that would transform capitalism into a viable, long-term economic system, neoliberalism chooses the former every time.
Thanks, I was worried I would find HN readers to be largely in agreement with it and I'm glad I was wrong about that.
I also find that "we need to want these things" is the key problem with the article. I agree with your conclusions, but I think you've understated the case a bit.
I believe that all of this has happened the way it happened because we live in a society -- and a system -- that has been steadily lowering the value we place on human life.
When I moved to United States in 2013, what shocked me the most was the incredible number of homeless people in Seattle. This is an immensely wealthy, developed country, arguably the most powerful in "the first world". And yet, two of the "five most homeless cities in the world"[1] are in this country.
One of the big problems with the lockdown measures in several parts of the US was "what about homeless kids who depend on their schools". Do you people understand what that sounds like?
So yes, the problem is capitalism. No, not "crony capitalism" or any other variation of No True Scotsman defense of capitalism[2]. This is what you get when you build your whole system around the optimization of one variable -- profit -- and put essentially religious faith into the unproven idea that the Invisible Hand of the Market will make everything work.
Marc ends his essay by saying "instead of attacking my ideas, conceive your own". He's essentially asking people to express their disagreement in a way that validates his ideology. Sadly, the answer to his question about what we should build isn't anything he or the rest of the elites would like to hear.
What we need to build is awareness. What we need to build are societal "firewalls" against the ubiquitous propaganda[3] that inundates our society. What we need to build is a movement.
EDIT: Fixed some formatting problems that I didn't notice initially.
[2]: It's usually the same people who won't accept that "real socialism hasn't been implemented yet" as an answer that deflect critique of capitalism by saying "Oh, that is not capitalism, that's crony capitalism."
[3]: The US doesn't have state propaganda like North Korea or China, and that leads people to believe it's free of propaganda. It's not.
> This is what you get when you build your whole system around the optimization of one variable -- profit -- and put essentially religious faith into the unproven idea that the Invisible Hand of the Market will make everything work.
But this isn't what the whole US system is built around. That's (at least part of) the problem. As others have pointed out elsewhere in this discussion, many of the things Andreessen says he thinks we need to build are thinks that the free market would like to build, but can't because of legal and regulatory barriers.
That said, it is true that free markets are a tool, not an end in themselves. Free markets can help you to provide goods and services as efficiently as possible, but they can't tell you which goods and services should be provided and which should not. So free markets on their own are not enough to have a good society.
(Btw, notice that I said "free markets" and not "capitalism". They're not the same thing, although they are often conflated. "Free markets" means all transactions are voluntary--people cannot be forced into buying or selling anything, or prevented from buying and selling anything; it's up to them to decide. But "capitalism" means that capital is taken to be central to the economy, and accumulating capital is taken to be a positive thing. Historically, having a free market has often been the best way to accumulate capital, but not always: our present regulatory system might well be an example of the opposite, a society in which the best way to accumulate capital is to outlaw your competition through regulation.)
> But this isn't what the whole US system is built around. That's (at least part of) the problem. As others have pointed out elsewhere in this discussion, many of the things Andreessen says he thinks we need to build are thinks that the free market would like to build, but can't because of legal and regulatory barriers.
Really? Which thing? I haven't really been sold a narrative that "regulatory barriers" are in the way of securing domestic manufacturing capacity or building high speed rail. It's securing the initial and sustained capital to build the systems.
> That said, it is true that free markets are a tool, not an end in themselves. Free markets can help you to provide goods and services as efficiently as possible, but they can't tell you which goods and services should be provided and which should not. So free markets on their own are not enough to have a good society.
Folks misinterpret the literature around free markets all the time. They do not make guarantees of efficiency. Neither does centrally planned economies. The idea that either one is inherently more efficient is the legacy of various propaganda campaigns.
> So free markets on their own are not enough to have a good society.
All that said, I do agree strongly that this is true. To some extent, no system inherently promises this. It's just that some systems guarantee equity cannot be sustained (e.g., capitalism or despotism).
As long as American society implicitly believes in the Hayek-ian notion that freedom exists to empower the hypothetical Galt's that they dream exist and imagine that America's moneyed aristocracy serves an important function of assigning value simply by virtue of their spending, no among of free marketspace will fix our problem. Folks have been duped into buying into a scheme where they think they need aristocracy to survive.
> I haven't really been sold a narrative that "regulatory barriers" are in the way of securing domestic manufacturing capacity or building high speed rail.
You don't need to be "sold a narrative". You just need to go read the reams and reams of Federal and State regulations that any new manufacturing plant or high speed rail system (not to mention any other business) needs to satisfy.
> It's securing the initial and sustained capital to build the systems.
But in order for that capital to be used for a new venture, the people who have it need to see a reasonable prospect of a return. If you don't think regulatory barriers are the reason why people with lots of capital don't see a reasonable prospect of return in ventures that, on the face of it, would seem to have an obvious potential for good returns, what do you think is the reason?
> They do not make guarantees of efficiency.
More precisely, the conditions under which a free market is maximally efficient are very often not satisfied in the real world. But I did not claim that free markets were always maximally efficient. I said they are as efficient as possible; in other words, under whatever conditions you have, free markets are more efficient than any other alternatives. Under conditions where free markets are not maximally efficient, central planning is even worse.
> Folks have been duped into buying into a scheme where they think they need aristocracy to survive.
I think there is a sense in which this is true, but it's not the one you describe. The problem I see is that people think they need to be governed by experts--an intellectual "aristocracy", not a financial one. The manipulation of the financial system by the government printing money and skewing the incentives of financial institutions is certainly part of that, but not all of it.
How does this make any sense? You wrote this long, neatly articulated response, but your central premise is entirely flawed.
Marc Andreessen and Andreessen Horowitz and other venture capitalists don't have a monopoly over the future (or current) direction of our society). Hell, they don't even have a plurality of control.
The things that Marc speaks of in this article that are fundamentally broken in the US are housing, education, and healthcare. I see new startups funded in the US every single week that attempt to solve these problems. In the end, though, they are bound by the regulatory constraints that American government imposes on them, and in these three areas, there is a patchwork of laws that is impossible to navigate if you wish to build anything meaningfully transformative. It is simply impossible for Marc Andreessen to deploy capital in a way that can accelerate the pace of housing development in San Francisco, or accelerate the pace of drug development in the US, or make public American high schools have a lower student-faculty ratio. The amount of regulatory capture in these long-running, slow-moving institutions is simply too high.
This is exactly why we need innovation in politics. Imagine for a second, that you declare a region, say 1 square mile, somewhere as almost completely free of all regulations. Then, let all the companies that want to build there, go nuts and build whatever they want. This then serves as an innovation incubator, and an example for the rest of the nation as to what can be built, when we allow it to be built.
Imagine the speed of innovation when it's not regulated. Remember, in the early days of the internet, we had companies and application popping up all over the place. FB, had 100,000 apps in less than 1 year. What allowed such quick pace of innovation is the concept of permissionless innovation. We desperately need this to happen in the real world: maybe not the whole world, but at least some small region, perhaps a new city, or a square mile block.
> Imagine for a second, that you declare a region, say 1 square mile, somewhere as almost completely free of all regulations
Any kind of pollution would be acceptable in this 1 square mile? Any kind of price manipulation? There wouldn't be any consumer protections? No worker protections?
Not all regulation is bad. A lot of it exists for good reasons because the profit motive tends to lead to abuses.
> Imagine for a second, that you declare a region, say 1 square mile, somewhere as almost completely free of all regulations.
Can you murder your competitors in this 1 square mile? Can you steal their inventory? Can you hijack their equipment? Can you threaten their employees? Can you force your employees to work overtime till they drop? Can you dump all your industrial waste wherever you want in that 1 square mile? What about animal/human testing?
That was not much more than one second of thinking but that’s about what this idea deserves.
Ah yes, that's not a subjective thing at all, all we have to do is query our database for all laws where the PREVENTS_STUFF_FROM_BEING_BUILT flag is set to TRUE, and we disable all of those. Easy.
> Hell, we're building grassroots infrastructure in my radio group because our capitalist-driven infrastructure is so antiquated we can't even do a software update to existing hardware without it taking 3 years and taking an entire flood warning system offline.
Yeah, and other local areas that aren't geographically suited for connection to SF's net are starting to kick off their own nets. I expect we'll see a Half Moon Bay centric net in the next two years!
The author is a VC who almost exclusively funds software-based businesses where "build" generally refers to intangibles and businesses based on intangibles. He refers to Western/American effectiveness ("we") in building computers, including smartphones. His famous quote, displayed prominently on his website, is "Software is eating the world."
However, strangely, this post from him calls for building tangible assets, not software. Perhaps some of the funding directed at software can now be directed to businesses whose primary assets are tangible. What do you think.
Consider all the money and willingness to invest that has been directed toward software-based businesses. What if more of that investment capital had gone to non-software-based endeavours that America chose not to build while Silicon Valley VC like Andreeson Horowitz were busy directing focus to software.
It seems to me that his firm could be complicit in a general unwillingness in America to build tangible things. If I was someone following his philosophies over the past few decades, I would be less inclined to invest, or promote investment, in the types of "traditional" business required to build the things he calls for in this post.
> We don’t have enough coronavirus tests, or test materials — including, amazingly, cotton swabs and common reagents. We don’t have enough ventilators, negative pressure rooms, and ICU beds. And we don’t have enough surgical masks, eye shields, and medical gowns — as I write this, New York City has put out a desperate call for rain ponchos to be used as medical gowns. Rain ponchos! In 2020! In America!
This passage is followed by a long list of things we urgently need but don't have in America, from a great educational system to a great healthcare system. I agree 100% with that list of things and the urgent need for them. I'm also happy to see this on the front page of HN!
> The problem is desire. We need to want these things. The problem is inertia.
"Lack of desire" and "inertia" are surely NOT the root of the problem. All of us already want all those good things.
The root of the problem, I think, is that during normal times people and companies have strong economic/competitive incentives NOT TO INVEST in the kind of expensive, robust (i.e., inefficient/redundant) infrastructure that everyone agrees is necessary but on which the payback is highly uncertain, highly diffuse, or might not be recouped until after everyone today is dead.
For example, any company that during normal times heroically decides to make the investments necessary to survive rare events like a global pandemic or world war will quickly go out of business as more nimble competitors sidestep all those costs. Financially it makes more sense for the company "temporarily to ignore" the possibility of such rare events in the future so it can remain competitive today.
> during normal times people and companies have strong economic/competitive incentives NOT TO INVEST in the kind of expensive, robust (i.e., inefficient/redundant) infrastructure that everyone agrees is necessary but on which the payback is highly uncertain, highly diffuse, or might not be recouped until after everyone today is dead.
And who is in the best position to overcome this barrier and invest in stuff like this anyway? Someone like Marc Andreessen, who as a lot of wealth he can invest in anything he wants, without having to answer to anyone else about financial returns. If he and everyone else in his position did what Bill Gates is doing with malaria, and just picked one of the problems he lists and threw money at it until it was fixed, how many of those problems could be fixed? So why he Andreessen writing an article complaining about these problems, instead of just going and fixing one of them?
> We need to want these things more than we want to prevent these things.
This is like saying we need to want to end poverty more than we want to prevent ending poverty. No one is for poverty, but very few people are against it enough to give up their money, power, or time. We need to want these things enough to make sacrifices
> We need to break the rapidly escalating price curves for housing, education, and healthcare
Most of the problems he mentions stem from government. Our government is legacy software and
the author is right that lodged deep within the spaghetti code are leeches who benefit from the current system and fight against change. But they aren't the biggest problem...
Billions of dollars are spent lobbying and the % of that money that is spent pushing for causes like better healthcare or education for everyone is infinitesimally small compared to what's spent lobbying for changes that'll benefit a few at the expense of the many. But this isn't the biggest problem either...
The problem is that the infrastructure that powers our democracy -- the stuff and rules that exist to enable the people to exercise their authority -- is eroding. I asked my grandparents if people always felt like their government was incompetent. To my surprise, they said that when they were young most Americans were proud of the government.
What's the solution? The idea of democracy isn't broken, but our current implementation is. We need an upgraded democracy the way Wikipedia upgraded our old encyclopedias or Amazon upgraded commerce. These aren't new ideas, they're simply new implementations using new tools. Technology is transforming everything around us but our government is stuck in 1776.
You know what the right and left have in common? We all know things could and should be better, but they aren't. Right now we're pointing fingers at the other side, but eventually we'll realize the machine is broken. When enough people feel this way, change will come, and it will come from the bottom up. But it's not as simple as just wanting change as Marc suggests...
First, people need to get angry enough to do something. In retrospect, change seems obvious, but looking forward it's risky. People have to lose a lot in order to put their time, money, and future on the line to fight for something that might not work, and this is hardest for the people who are the worst off in society and most need change to happen.
Second, people will vote for increasingly extreme candidates to try and change the system from within. This will result in incremental change, but it won't reform the system.
Third, a new system will emerge in parallel to our current government. If history is any predictor of the future, this is almost guaranteed to happen eventually. I have no idea what the new system will look like or when it'll emerge, but this is the type of thing we need to build. In fact, I wouldn't be surprised if someone is building it already and we just haven't realized it yet.
Third, non-voting legislative house. 1 member for every 3500 citizens, geography agnostic; get 3499 of other interested citizens together and elect one of you to represent the group, for whatever policies or interests you care for. Members of this body are the only people who are allowed to meet with the Senate during four annual 6-week periods of sequestration. Outside lobbying by non-individuals is banned. Conversely, "legislative marketing" to the public by individually-controlled entities is banned.
In this way, the arms-length nature of the Senate and the existence of a body close to the public are restored, while disrupting the influence of entrenched, established interests.
so it is. Democracy is not broken, but it really needs a modern remake. The problems we face today are more complex than ever, and we should be pushing out solutions based on the best crowd-sourced thinking, for the 99% of the people out there.
Also we need to start codifying the "meta" of government, the same way we have codified the "meta" of software development. Government and society at large should have regular mechanisms to counteract or at least slow the spread of red tape, legislative capture, and other systemic rots.
In particular there are issues that have little to do with government and more with the interaction between people and institutions. For example, it worries me to no end that in the middle of a pandemy the current news cycles centers on finger-pointing and gossip about Trump and the governors, while virology, epidemiology and the intricacies of vaccine development get very little coverage. When was the last time that you saw an explanatory diagram in a wide-circulation newspaper?
At an age where science and technology are more accessible than ever, our media divests attention and citizen time to gossip, instead of motivating people to learn and build more. Admitedly, provoking rage sells more than educating. But isn't social unity and development more important than the bottom line of media organizations? Maybe we should have mechanisms in place to subsidize social utility, and some taxes for toxic content, the same way we tax alcohol and tobacco.
I'm quite sympathetic to a lot of what's in that blog post but... A16Z directly invests gobs of capital, and, indirectly, shapes the outlook of other VCs who follow their investment decisions, and they plow way more money into software/bitcoin than physical companies. Why? Because they are really good at what they do, and they realize that building physical stuff is really hard, and they'd rather invest in areas that have better returns.
I remember during the Theranos saga, Marc Andreessen kept defending Elizabeth Holmes over and over (he deleted most of those tweets unfortunately) - yet he was smart enough to not put any of his own or A16Z's money into Theranos. Words are cheap: let's see A16Z actually lead the way into investing in physical goods before we praise them too much.
That's a valid criticism and something that ran through my mind when reading the article. But keep in mind that there's orders of magnitude difference in what they invest vs. the federal government.
According to these 2 articles, it could be around THREE orders of magnitude -- ~4 billion in for them in 2014 vs. ~4 trillion for the federal government.
One way to think about it is that they could plow 100% of their money into physical infrastructure, and come up with something like half an aircraft carrier ($8.5 billion according to this article):
Looking around a bit more, all of venture capital combined is something like $100 B / year. Which is less than 20% of what's spent by the military in a year, leaving aside all the other federal programs that could produce physical infrastructure.
Apparently, all of VC is also less than half the interest that the federal govt pays on its debt...
As I read the parent comment, the point is not that Andreesen could singlehandedly make a difference with his investments. The point is that his words do not match his actions. His work is fostering an industry whose competitive advantage is not having to build anything tangible for the public's benefit and, in the case of companies like Facebook, not having to pay taxes on their profits.
I always get a bit conflicted with Marc Andreessen stuff.
Like this article starts out with a bold claim that's...wrong.
Germany have done well. A western country has done well. Elephant in the room, massive 80 million person country, major western power, and the American claims no-one's done a good job because the US hasn't.
And then he goes into talking about having pre-prepared therapies or a vaccine. Again, we already have to an extent. You can't make a vaccine before the virus exists, but you can have a way of rapidly making one. We do have pre-prepared vaccines, like this one:
Perhaps the medical system works better in Germany than in the U.S., but the rest of the article's points stand:
- Rents are sky high, and the landowners and people in power have no intention of changing that. In fact, they import more people at any opportunity in order to increase the size of the industrial reserve army and push up rents.
- Germany has no substantial capacity of manufacturing simple goods like masks.
- While Germany still has manufacturing, the middle and lower classes are exploited and relatively poor.
I think its a very big mistake to attempt to quantify quality of life with the numbers below but I could see how someone could try to make the case that Germany is relatively poor vs the USA:
Germans are taxed much higher than people in the US: A tax rate of 42% on income over 57K euros, vs 22% in the US (and the US bracket tops out at 37% for 500K USD). Gross national income is lower, 54K in Germany vs vs 63K for USA (though still quite good). Other sites peg Germany as 82% the purchasing power of the US, though less cost of living. Yet many durable goods are much more expensive in Germany. Cars are ~28% more expensive, gas is more expensive, electronics are more expensive: iPad in the US costs $800 vs $950 in Germany. Utilities are 56% more expensive in Germany, clothing 40% more expensive.
I also thought this as well reading the introduction. Canada has less than 1/2 the number of cases and deaths on a per capita basis than the US so they are doing twice as well as the US in handling this.
Fine up until the last cheap shot. None of those conflicts were wanted or started by the US. Saddam invaded Kuwait, the Taliban enabled 9/11, Assad provoked a civil war in Syria.
Disengaging always makes things worse. After the ‘Surge’ in Iraq the US tried to pull out and what happened? ISIS. The US pulled out of north Syria and our (talking broadly, I’m a Brit) allies the Kurds got massacred and thousands of ISIS prisoners got loose again. Walking away doesn’t work, we tried that with Afghanistan, just leaving it to the Taliban after the Soviets pulled out, and they came after us in New York anyway. It’s a small world whether we like it or not, and we’re in it together.
Both of you make excellent points. My only comment is that it seems like the government (or at least the current administration, despite its multitude of shortcomings) wants to revitalize the American manufacturing industry. They are just failing in their approach (e.g. tariffs & trade wars). I believe with some guidance from the private sector or simply a good pitch, the feds could be quite receptive to the idea of funding programs aimed at building-up next gen manufacturing in the U.S. (particularly if project proposals can be expressed in # of manufacturing jobs that would be created).
As a side note, I haven't heard of "Elon Musk’s alien dreadnoughts — giant state of the art factories producing every conceivable kind of product, at the highest possible quality and lowest possible cost" but I share the enthusiasm for such gigafactories. Next gen factories should certainly bake-in flexibility. Machines that act more like 3D printers than injection mold-ers(?), and have the ability to switch from making, say, car parts to ventilators and N95 masks without a massive effort (or simply switch from making product A to product B depending on consumer demand trends).
Lastly, just a thought, I'm sure VCs have been pitched hundreds of times on specific 'market disrupting' products from wearable tech, to drones, to personal jetpacks. But I wonder how many times they have been pitched an idea for funding company that could make all of these things, and aims to significantly lower the barriers to rapid prototyping of physical goods. meh?
Not absurd at all. Since a billion years ago the South African (National) Defence Force has always had four equal branches:
- Army
- Navy
- Air Force
- Medical
But the USA is already mostly there: there are eight uniformed services. One is the U.S. Public Health Service Commissioned Corps that employs the surgeon general.
But you will have to stop your military's obsession with earning combat action badges. From what I can tell its creating a class-hierarchy inside the armed services.
That won't help if your aim is to create a serious non-combat uniformed service with the same prestige that mainly does nursing.
I predict this will happen when the US realizes that health of its citizens is a matter of national security. If that doesn’t happen during this pandemic, then I don’t know what can make it see that simple fact except a war happening in the country.
The name might be a bit different though: say, National Health Service.
I don't think "put your money where your mouth is" is a good argument. A16z can be subject to prisoner's dilemma of our collective cultural decline and simultaneously have genuine desire to get out of this predicament we're all in.
He says it right there in the blog post-- the problem is desire. For example, someone is reliably making tons of money in China stamping cities into the ground and building thousands of miles of high speed rail. Why can't we? Doing these things is hard in a sense that we seem unable to get collective wherewithal to do it. It's not hard in a sense that a cure for cancer is.
They can't invest in things nobody will let them build. Who in their right mind would invest in high speed rail from SF to LA knowing ex ante they'll deal with twenty years of regulatory quagmire for the project to eventually be killed by a thousand bureaucrats?
(And I think the bureaucrats are the symptom, not the cause. If we wanted things built the bureaucrats would be out on the street in three months. The cause is cultural decline.)
The high speed rail is nothing to do with bureaucrats (not sure what the term means anymore), but is delayed due the really difficult task of land acquisition, while maintaining property rights, and address thousands of lawsuits about communities objecting to various routes. It is easy to comment on the abstract, but I bet even Marc Andreseen won't be happy if a high speed rail runs in his backyard in Atherton
We used to be able to accomplish things like raising of Chicago[1] over 150 years ago but we can't move a few tiny communities in the middle of I-5 to build an infrastructure project of enormous economic value in 2020? I think that's case in point.
>> The lack of drainage caused unpleasant living conditions, and standing water harbored pathogens that caused numerous epidemics including typhoid fever and dysentery, which blighted Chicago six years in a row, culminating in the 1854 outbreak of cholera that killed six percent of the city’s population.
I think that's the key point right there. Action was taken only after six percent of the city was wiped out. I'm sure we could (and will) be able to do any number of things when faced with an existential crisis of that magnitude.
My hope for the present crisis is that it gives us enough pause to reflect on what we are capable of when our lives are on the line, and extend this into tackling our other social ills -- healthcare, or lack thereof, homelessness, poverty, education.
You can view that as a negative. But you can also interpret this as a positive development, where people at grassroots are empowered to protect their own communities, and cannot be simply swept over.
The way to solve this problem is by (largely) adopting the premise of the Coase Theorem, but we've created an environment where that's impossible. So now a community of a few thousand can hold millions of people and hundreds of billions of wealth hostage.
Half of Andreessen's personal wealth is based on SV commercial real estate (cf John Arrillaga). Anything that helps people get around CA easier is against his direct interests, even if it doesn't run literally through his backyard.
> I don't think "put your money where your mouth is" is a good argument. A16z can be subject to prisoner's dilemma of our collective cultural decline and simultaneously have genuine desire to get out of this predicament we're all in.
I think it's ultimately the only argument. The best way out of a prisoner's dilemma-like situation is for the central authority above the participants to resolve it unilaterally for them[0]. The next best thing is for one of the players to try and force the new equilibrium, hoping they'll be able to survive the disadvantaged position for longer than it takes the situation to reach that equilibrium[1].
Does A16z have enough money and clout to unilaterally push the market until a better equilibrium, one of "building", establishes itself? I don't know. That would be "putting your money where your mouth is", but maybe they know they can't pull it off.
I guess the next best alternative is to take it slow and do a soft push. Write pieces like these, in hopes their message will resonate with other market players. Or maybe it already does? Maybe this article is a mating call[3], a test for whether other funds think the same and will follow suit if A16z decides to put their money where their mouth is, so that everyone can stop funding bullshit software startups and start pouring money into securing a future?
--
[0] - In a prisoner's dilemma involving actual prisoners, you could have a mob boss declaim that they'll kill any prisoner that defects.
[1] - A possible example would be Tesla, which initially faced ridicule for pushing the electric cars; fast forward couple of years, and it managed to force the market to accept the viability of electric transportation, and now all major automakers want the piece of that cake. Which, from Musk's point of view, is Mission. Fucking. Accomplished. [2].
[3] - See this excellent comment that introduced me to the idea: https://news.ycombinator.com/item?id=22798808. In that case, a mating call is a "publicly executed conspiracy to fix prices", but I think it can be generalized as "a method to for coordinating in cases where doing so overtly could be illegal". Which may not always be a bad thing.
I don't know for sure, but there is always a chance that they realize the same thing now and put their money where their mouth is. This is something written with the benefit of hindsight, and could be the scenario that he might have the same insight now that we have and not had it like 5 years ago. (guessing based on the tone of the essay). The other thing is the difference in budgets. The numbers at which they invest might not be enough to scale a full fledged physical project. But I do hope they take a lead into this in the near future.
Further, I would argue that even if he doesnt follow through on this, it is still a good and important essay in the context in a sense that there is every chance this can motivate others to take action. Given his reach and stature among the entrepreneurs, there is every chance it motivates you or me or someone else to take an action - the lack of which is quite apparent today. Call to actions work even when the people mobilizing others do not act on those. Of course, putting your money where your mouth is always a better scenario, but if that does not transpire here, this essay could still inspire others.
I think we are better off focusing on the message versus the messenger. I tend to think that there are good ideas in the post. Given our response to Covid19, the call to build in America is very timely and is not for one person/organization, but for the collective We.
But we build in response to demand. Once people need more of something (e.g. PPE), production ramps up. That effect has been in place and has worked quite well for thousands of years. It doesn't require any policy or government, or even a new social movement, it's just an emergent property of humans being free.
You might argue that we could be smarter, and that we should build excess PPE before the demand hits just in case. This is reasonable to an extent, but probably to less of an extent than you think. The problem is that there are dozens of possible scenarios we should prepare for, and we can't know ahead of time which one is going to strike next. We have to prepare for them all: nuclear bunkers, asteroid deflection, global warming mitigation, sea walls, military capacity, etc, etc. Giving the competition among possible future disasters, it is often wiser to KEEP YOUR POWDER DRY (in capitals, because that is my main point) so you can respond to any of them after they eventuate, not before. This requires that we have the capacity to ramp up production quickly. That's not always a given, so I'm in favor of governmental action to ensure we have "stragetic capacity" to ramp up anything we might desperately need. But I'm not in favor of just building lots of things that we might need.
I've spent the last month setting up a company to build PPEs, so I hope to bring an interesting perspective here.
Most importantly: production ramps slowly because of the implications of structural organization.
1. From what I can tell, our supply chains are carefully tuned for efficient output of known, predictable, quantities
2. If you want to suddenly double, triple, or 10x production, it isn't easy: the reconfiguration necessary is hard. Building new injection molds is hard, the surrounding transport chains are hard.
3. In light of those two facts, our existing manufacturing infrastructure is wholly unequipped to change or to help.
This is exactly where a strategic, savvy reserve would make a huge difference.
You can see this in the flurry of press releases from three weeks ago which have largely turned into nothing. Bupkis.
By contrast, my small, scrappy, and deeply dedicated team of volunteers has designed, prototyped, iterated, refined, and is now shipping emergency PPE in quantity.
I think power grids have a kind of similar problem, super oversimplifying here because this isn't my area: Baseload power plants (e.g. coal) are large and comparatively efficient, but they need to be kept running continuously, and they take a long time to restart. Other types of plants (e.g. natural gas) can start and stop more quickly to meet surges in demand, but they aren't as efficient overall. In order to keep the second type of plant available, but not constantly running, there's a whole separate contracts market for short-notice capacity. What could such a market look like for e.g. hospital equipment capacity contracts? Food growing capacity?
Your analogy with the energy market is quite good, the only thing I would address is that coal plants aren’t more energy efficient than gas plants (roughly 40% and 50%, respectively). The reason coal plants provide the base load is that the raw material, coal, is cheaper than gas. However, with falling oil and gas prices this might change in the ‘near’ future.
The reason the US military (among others) buys so much equipment even during relatively peaceful periods is to keep alive the ability to produce massive amounts of tanks etc. whenever they really _do_ need them. So just not outsourcing these kind of essential goods to foreign nations might be already a great leap in the right direction.
The government, and the US, and in fact most countries, are actually really really big places. 300 million people is a lot of people - much larger then anyone can imagine as actual, real human beings.
The government stockpiling and coordinating emergency measures is exactly what a government is for. The US maintains the largest military on the planet for exactly this stated purpose - just in case. Why is the idea of allocating capacity to preventing non-military disasters seem like such an impossibility?
300 million people is a lot of experts, studies, research and development and logistics, which can run simultaneously to plan for multiple disaster scenarios and review those plans continuously.
Of course there is not a shared level regulation among all the states. But generally speaking, the healthcare industry is a highly regulated system, which means higher costs.
It also has something to do with healthcare being an incredibly difficult product to provide requiring extremely smart people to deliver extremely hard to device solutions, which also result in much of the regulation.
Obviously, it’s possible there is too much regulation and resources are not allocated properly, but on its face, I would expect something as complicated and risky as operating on people’s brains and chemotherapy and transplants to be expensive.
> But the harsh reality is that it all failed — no Western country, or state, or city was prepared
This is silly. There are clear differences in response. Here’s just one example:
21 Jan - The city department of public health activates its operations center to prepare for a potential outbreak.
28 Jan - The city activates its emergency operations center.
25 Feb - The city formally declares a state of emergency to prepare for an upcoming outbreak.
5 Mar - The city confirms its first case of COVID-19.
17 Mar - Shelter in place order implemented.
This was a great timeline. And it comes from the local jurisdiction so many here love to hate: San Francisco.
There are absolutely lessons we should be drawing from this pandemic. And one of them is that the political movements who want to drown government in a bathtub are putting your own lives and those of every vulnerable person you know because of that ideology. And those that want functional government aren’t.
I’m all for more radical solutions too. But if you aren’t going to learn the lessons of the present you’re in a shockingly bad place to tell anyone what’s right for the future.
Also, we need to tone down the white supremacy and learn some lessons from the Asian governments who did well here too. My search space for good ideas isn’t confined to “western governments” and neither should that confine anyone else’s.
NYC and SF have roughly similar sized city budgets when measured on a per capita basis and they had _wildly_ different responses to Coronavirus. Whatever it was that causes such different responses, I don't think it was "political movements who want to drown government in a bathtub."
Yeah, it's fair to point out that both New York and San Francisco are thoroughly Democratic in their politics, and yet responded very differently to the crisis.
The first official case was in March. The actual first case was at the beginning of January.
The shelter in place order means the city failed to anticipate and acted when it was too late. Like the rest of the Western world.
> The actual first case was at the beginning of January.
Receipts please.
You are claiming that the timeline of SF matched other countries where deaths started much earlier and went much higher. Are you really making the claim that our hospitals were overlooking a couple hundred people drowning in their own lungs and unable to breath during the month of February?
Because that would basically have to have been true if we had community spread in early January.
> The shelter in place order means the city failed to anticipate and acted when it was too late. Like the rest of the Western world.
Your assumption is that the death rate being substantially lower in SF and California is luck and not preparation?
That stance doesn’t seem supported by the evidence.
It’s only logical. There are typically 90 weekly roundtrip flights operating between SFO and China or Hong Kong. But somehow no one was infected for two months? Lol.
What I’m saying is that if the West acted like Taiwan there would be no lockdowns. They acted, they were prepared. Western world was caught with its pants down, including San Francisco.
Sure. Let’s learn lessons from Taiwan too that sounds great to me.
(Taiwan activated its health department epidemic operations center on January 20th. SF activated January 21st. If SF had been able to use state and federal powers, we probably would have had a much better shot at avoiding shelter in place.)
No. San Francisco was the first to act, and put pressure on the rest of the Bay Area to follow, and subsequently California. If SF didn't act first, who knows how long it would have taken for other politicians to have the "courage" to put in such draconian, but effective, measures. As far as I'm concerned, London Breed saved tens of thousands of lives in the Bay Area alone, and I hate her politics.
SF’s emergency operations center was active and running. The CDC was still making it illegal for anyone to test outside some unreliable and faulty test kits.
The fact that our federal government was obstructing anyone’s ability to build up a testing apparatus is very much the responsibility of the incompetent management of this crisis by the federal government.
>Every Western institution was unprepared for the coronavirus pandemic, despite many prior warnings.
This is simply not true. In Australia, New Zealand, and several European countries institutions did act fast enough and did manage to flatten the curve. Go take a look at Australia's epi curve [0]. It is flat. Our case load has peaked, there are less Australians in hospital with Covid19 today than a week ago. There is reason to believe at least some Australian states will be completely free of Covid19 within 2 weeks.
Some might argue that this is because of the lucky isolation of Australia. But a similar thing can be seen in South Korea, and even more impressive results in Taiwan. Institutions can solve this. Even, gasp, Western ones. If Covid19 is a test of the quality of our institutions, the USA has failed and Australasia has passed.
I think a lot of Americans want to believe that there was no other choice and that every other country is in the same boat. The fact is that this was an utter failure. With better preparation, communication and leadership, there didn't need to be an economic shutdown.
I like the sentiment. I like the impassioned tone and the call to action.
I'm sitting here thinking: where can I go to help run some machines, lathes, 3D printers, CNC, etc? How can I roll up my sleeve and help build what's needed in these times? How can I help move humanity forward through this pandemic and climate change?
In these times I often turn to the wisdom of Buckminster Fuller, who was more prescient about these times 50 years ago than most contemporary leaders:
> Think of it. We are blessed with technology that would be indescribable to our forefathers. We have the wherewithal, the know-it-all to feed everybody, clothe everybody, and give every human on Earth a chance. We know now what we could never have known before - that we now have the option for all humanity to make it successfully on this planet in this lifetime. Whether it is to be Utopia or Oblivion will be a touch-and-go relay race right up to the final moment.
In so much of what is discussed, here, on HackerNews, and elsewhere, people express their solutions. What does it take for us to build and mobilize to bring those solutions to fruition? Why are we spending so much time spinning our wheels, our time and attention elsewhere, distracting ourselves, and putting our heads in the sand when problems need to be solved? Are the barriers political, educational, financial, etc? What systemic changes can be made if the current system is not working?
Thanks for the Buckminster Fuller reference! Such an underrated thinker.
I hate being overly cynical, but I think that there is a simple answer that can be found by looking at who’s incentivized to not make these systemic changes.
To take that further, there’s a subset of that group that is incentivized to actively prevent such systemic change.
It just so happens that those 2 groups wield the most authority, power, and influence.
So, that leaves me with a view that some may call ‘dystopian’, but I consider ‘hopeful’:
I try not to be too cynical, especially when the article was such a call to action, but I am often prone to it as well.
I feel like I do live a life of privilege and as such I must try to exercise that privilege in ways that won't contribute to the systemic problems as best I can--that I don't contribute to a loss of rights, nor a loss of our essential ecosystems. I do my best not to empower those who wield their power and influence to the detriment of others.
When it comes to the internet, I try to keep McLuhan in mind:
> Once we have surrendered our senses and nervous systems to the private manipulation of those who would try to benefit from taking a lease on our eyes and ears and nerves, we don't really have any rights left. Leasing our eyes and ears and nerves to commercial interests is like handing over the common speech to a private corporation, or like giving the earth's atmosphere to a company as a monopoly.
> I expect this essay to be the target of criticism. Here’s a modest proposal to my critics. Instead of attacking my ideas of what to build, conceive your own! What do you think we should build? There’s an excellent chance I’ll agree with you.
What we need to build is the capacity to make investments in building backstops against low-prob, high-risk, collective risks.
For almost all of those risks, the problem isn't "what to build", it's that we know what to build and keep failing to build it (or we build it just to burn it down again whenever the next crisis hits). The problem is building sustainable capacity.
Here's my idea. Tax the living hell out of capital. Especially venture capital leveraging decades of gov't investment. Earmark the money for disaster prep.
One possible implementation: gov't gets 50% stake on every patent traceable to any federal grant and every company whose founders were funded through federal grants. I don't think that's insane. Y Combinator takes a 7% cut for 150K. The median NSF grant is substantially larger, and NSF grants are "tiny" compared to other grants, and most of that work happens in places where the funded employees can live comfortably on 25K/year. We would expect an even larger cut than 7% for substantially more investment (often millions) and all of that in low CoL areas. But Gov't gets 0%.
Governments DID see this coming, both federal and state. Governments DID build what was need to respond. California, at one time, was prepared for exactly this crisis. Same as France. The 2008 financial crisis wiped out state budgets, and then the fed govt suffered 6 years of gridlock and austerity driven by owners of capital. Government preparations for this substantial and real risk DID exist, but were liquidated so that the rest could fit in a bathtub to be drowned.
None of that would have had to happen if federal and state governments had a non-trivial stake in FAANG, or even just G.
Honest, no snark question -- what exactly US government did in last 30 years that should warrant providing more money to it? Is there any guarantee that another trillion dollars will be used more efficiently than blowing up another Middle East country?
Here's one teeny tiny example. They made a smart investment, to the tune of billions of dollars, in computer science. And not just for the past 30 years, but continuously for the past 100 years.
That investment included a modest (6-7 figure, depending on how your count) investment in a project on digital libraries years before private capital caught on. The private investors were rewarded handsomely for their investment in that digital library, but we, the taxpayers, were not.
You could make a claim about the internet which would be reasonable but that is also a miniscule portion of what the federal government has done with our money so using a teeny tiny example is more of an exception that proves the rule type of thing. The amount we spend on the Federal government and what we get back for it is crazy bad. The problem is NOT the federal government having too little money. It's a huge proportion of GDP, especially compared to when our government was vastly more effective. The problem is that the institutions that make up our government are dramatically incompetent and squander the massive amounts of funding we give it.
> That investment included a modest (6-7 figure, depending on how your count) investment in a project on digital libraries years before private capital caught on. The private investors were rewarded handsomely for their investment in that digital library, but we, the taxpayers, were not.
Definitionally, if private investors made money, so did the taxpayers:
1) The investors are taxpayers who benefitted.
2) The investors returns were taxed and all future economic activity that came from it was taxed.
I still do not understand the logic. Let me put it straight.
1. US Government has unlimited funding, heck, it came up with 2 trillions _during last month alone_ with some financial alchemy which I don't fully understand. But clearly it's not starving.
2. US Government has kinda poor record producing tangible results during last 30 years, in terms of advancing science, housing, whatever. I mean, can CDC quickly figure out in 2020, are the pieces of cloth on my face help to fight the virus or not? Seems it's still up for discussion.
3. Private capital, during the same time frame, gave us google search and maps, smartphones, movies on demand and god knows how much other stuff.
So, based on these 3 observable points, we should "Tax the living hell out of capital"? I still not getting it.
>So, based on these 3 observable points, we should "Tax the living hell out of capital"?
Sure, because the government is supposed to provide infrastructure, which in turn allows all kinds of other stuff to flourish on top.
All those examples that private capital gave - who built the internet and spent enough money to create the early market for computers?
>I still not getting it.
If the government is supposed to supply education, health, and infrastructure, then it needs to be paid for somehow. Corporations don't care since there is no immediate monetization possible (plus tragedy of the commons aspects) and the free market simply assumes this stuff appears out of the thin air (externalize the cost somewhere else).
> Private capital, during the same time frame, gave us google search and maps, smartphones, movies on demand and god knows how much other stuff
That's an extremely lazy and superficial analysis.
Where did the foundational ingredients for each of those things come from? Computers, networks, video compression, touchscreens, materials, ... heck, even pagerank, and a large fraction of the breakthroughs in ML/AI (till very recently) have come from academia -- through publicly funded research. Companies are very good at solving the "last mile" to apply technologies towards making products, but don't typically have the vision or the wherewithal to pursue deeper innovations.
Public funds for research is a tiny fraction of the funds that the government spends. There are trillions wasted elsewhere that shows that overall it is terrible with spending money productively.
All the same, the reason you have maps on your smartphone can be traced to GPS satellites and ultimately the space program itself, funded by the government.
Yeah yeah, SpaceX exists now, decades after all the very tough and very expensive initial work.
Nobody is denying that. The point is that the government is not lacking for funding but poorly spending the money it already has.
Imagine how much more we could have now if the space program budget was more than a fraction of a percent. That won't be fixed by just giving more money to the govt.
Science is incremental, often is done with out clear end products, and value can only really be measured much later typically in terms of wide spread effect. Like the internet existed decades before everyone used the internet. And only because tax dollars supported it.
Thus if you want more output, they only true solution is to fund much more science than is funded today.
If some machine takes your money and produces 98% war and 2% science, maybe - just maybe - the only true solution to fund more science is not to put more money into said machine, but change configuration first.
There is 0 evidence to suggest that private corporations wouldn’t have figured out the same thing. Or those same people sitting around at MIT wouldn’t have built the same thing without darpa.
It’s not like “communication“ is an industry that is starving for investment or talent.
The government sucks at spending money. Giving to the banks is the least stupid thing to do. The banks at least have some way to propagate it down to large funds and eventually to smaller funds that have some sense in what is a worthwhile investment or not.
Aren't the last 30 years sort of the problem though? How about we check the 30 years before that: medicare, social security, the tail end of the new deal, the rapid cleanup of acid emissions which were wrecking forests all up and down the east coast... Seems like, starting in the 80's, you would have looked at this and said hey, this government knows what it's doing, we should let it do more stuff.
Instead we basically did the opposite, starving federal programs everywhere possible (virtually every entitlement or program that existed in the 80's is smaller today on a per-person-PPP basis). And now we're seeing the results in a crisis that demands an agile and powerful government response.
So I'd sort of flip this around: what was it we did in the last 30 years that destroyed our confidence in our own government? Because it used to work.
You might be right, I honestly don't know. But if this is the case, maybe first you need to reform the government (in what exact way? and how the reform should be done, politically?) and after first task is accomplished you can feed it with some trillions of dollars?
Otherwise, "tax the living hell out of capital" will just cause some more big BOOM sounds somewhere in middle east, and deplete private capital from making more investments at the same time.
How about "tax the living hell out of capital" on a spending-neutral basis? Pay off the debt. Stimulate local economies. Increase the EITC ceiling. Hell, write a simple UBI statute.
There are lots of easy (and easily verifiable) ways to spend government money on things people value. That you think there aren't is sort of the triumph of modern conservatism in a nutshell.
It could give that money back to people and let them spend and invest it? More people free to quit working for someone else and to instead work on 'building' sounds like exactly what Marc is advocating. We have our smartest maths graduates trying to make automated trading algorithms skim an extra .0000001% off a trade, which you could argue is not helping humanity progress. Maybe with UBI they will quit that and work on something more long-term? For Marc's dream to come true it seems like reducing the concentration of wealth and power is the first step.
Food stamps, medicare, TANF, and welfare improve the daily lives of millions. And this money is accountable to the person who spent it, to the person who voted to spend it, to who raised it.
Taxing the hell out of capital is a good idea, but our current political reality makes it hard to maintain any public service that's not extremely visible.
These are emergency preparedness problems so funding them means setting aside a pile of money and resources until the emergency actually happens. That pile of money makes an attractive target for capital, who can afford to fund campaigns to privatize those services and then get the emergency stockpile as a reward. That sort of maneuver has to go through a vote, but most voters get their understanding of the world through capital-owned media, so that's not much of an obstacle.
Edit: More and more, I think we need worker-owned news.
Sure, govts. should tax the FAANGs of the world more, but having a "stake" in them means govt. interests suddenly align with corporate interests, meaning regulation for the public good gets sidelined. Net neutrality anyone?
The federal government continued to spend trillions of dollars a year during this period of austerity you're referring to. Any liquidation of emergency stocks was not motivated by financial need.
It is remarkable how uniformly lethargic the entire political spectrum of the West has been with respect to this crisis until it was too late, while we're seemingly also universally unwilling to build housing or infrastructure across the West, while many Asian countries seem to actually be doing a much better job of all of these things. Instead we sit around and bicker about everything and wait.
That’s not an idea for building, that’s just an idea for the government getting more money. The government clearly doesn’t actually need the money when it cares to do something (based on the stimulus bill and the last decades of deficits).
Governments DID see this coming, both federal and state. California, at one time, was prepared for exactly this crisis. The 2008 financial crisis wiped out state budgets
I don't know about California but the same kinda shit happened in France.
In 2007 our health minister had a bad time because she orderer massive amount of tests, masks, and hydro-alcoolic solutions. It was during SRAS, and at the time for 'nothing'.
All those item were needed 3 weeks ago, but the stock were never fully replenish since. Most of those things are perishable.
FWIW CA's tax system is pro-cyclical, because they do tax the richest 1%'s more, but the result is that 1%'s don't make any capital gains in recession years so state tax revenues get obliterated during recessions.
What people? The government (of the people by the people for the people) already receives all of the tax revenue from successful companies. I don’t see a reason to double dip here.
How many large companies have come from federal grants? How much would that tax actually generate? If the govt can print money in emergencies as needed, what would the taxes have done?
I don't see how concentrating more money in the organization that is the worst at spending it will produce any more value.
Modern govt isn't failing from lack of funds, it's how those funds are spent that is the problem.
I build tech enabled, innovative physical infrastructure solutions for buildings. People do want them. VCs, less so, unless it's as high margin as a photo sharing app, destructive and lucrative as consumable businesses like Kurig, etc.
Consumers don't know what they want until the possibilities are presented to them. VCs are literally the gate keepers of much innovative possibilty at the early phases of enterprises. It's not an issue with want, it's that making a quick buck for VCs doesn't come from capital intensive, long ROI cycle businesses. Other asset classes may be better about this but they tend to participate at less innovative stages.
> I build tech enabled, innovative physical infrastructure solutions
Can you explain what it is you do without copying and pasting a line from your pitch deck? This sentence could literally mean any of at least a dozen completely different things.
Sure. Tbh, I didn't really want this comment to be an opportunity to pitch my company or make it too specific about our solution as there are many different types of solutions, categories and problems that could use innovation capital that are second in line.
flair.co is us.
We have taken money from investors, those that aren't afraid of energy problems, that aren't afraid of energy efficiency, and that invest in meaningful problems (and some others too, but much better portfolio mixes than most). Things are (minus covid 19) changing. We are already a key transitional electrification solution, we are solving peak problems on the grid, and we are poised through a few partnerships to redefine home energy consumption in North American homes. I'm adding that for context as our website doesn't publicly lay that out.
All that said, I'm so thankful for the investors that we do have. They listened to our larger vision from the get go, focus on meaningful problems, and put their money where their mouth is. Now that we are realizing this vision, they will realize returns and leadership ROI as this particular blog post fades into the past.
Your post still reads like marketing-speak — it is not immediately clear how you differ from other home builders.
Anyway, I’m not really sure the point of your criticism of VCs. That you eventually found investors is good, but your grouse is that you don’t have prominent venture capitalists among your investors?
Venture Capital, by definition, has a different appetite for risk than private equity for instance, so it is understandable why your idea may not have been interesting to them.
Why? Because it is inherent in their name: venture, noun; ‘a risky or daring journey or undertaking’. Building an energy efficient home is an innovative undertaking, but I’m sure many will agree it hardly qualifies as risky the way social-oriented startups like GitHub, Slack, Pinterest were risky before they matured into going concerns. Social businesses live and die by the power of network effects, so those startups had no choice but to seek out venture funding to fuel their hockey-stick growth and in exchange they promised their VCs high returns.
Home building OTOH may not benefit from seeking out venture funding compared to traditional funding since the risks of construction are pretty well understood. Also, there are no network effects to ride on to massive growth, as is abundantly clear from the WeWork story.
That’s a summary of the purpose of VC. In practice, the fact that VCs herd towards funding the next big cat video sharing app that would surpass TikTok is a different story. More of a failure of imagination of the VC class as a group.
We are not home builders and our site seems like it makes it pretty clear what our consumer offering is. I'm not advocating for home builders to take VC money although there are plenty of construction tech companies with unique ideas that have taken VC.
They'll brag about some lab-grown meat investment that is really 0.01% of their portfolio that's chock full of productivity apps and luxury home goods.
They'll broadcast "we invest in the boldest founders changing the world with science and tech innovation", then back yet another consumer goods startup that literally perpetuates the economic challenges this article suggests to fight.
One interesting funding mechanisms in this space is Emergent Ventures / Fast Grants. It functions more as a non-profit than a VC entity, including recently organizing $10m in funding for Covid-19 research, including from a bunch of names we would recognize (though not Marc Andreessen):
> I very much wish to thank John Collison, Patrick Collison, Paul Graham, Reid Hoffman, Fiona McKean and Tobias Lütke, Yuri and Julia Milner, and Chris and Crystal Sacca for their generous support of this initiative
It will be interesting to see what returns society gets on this $7m.
But in general, I don't think we should be expecting VCs to fund innovation, it is hard to capture most of the value of most innovations, so you end up with VCs writing about how you need to seek monopolies.
Funding innovation is something we should be asking more of our government.
I’d rather he cram this letter up his arse and lead by example with a letter announcing deep investment in infra
Otherwise this is just someone with the freedom to sit around rambling at length trying to look woke
The model of investing he got rich on is part of the problem
Is he actually going to change that or peddle warm fuzzies and never follow up?
Academia knows where the problems are
States know where the problems are
Pay taxes and they can get on it right away
What is it with rich guys who think they’ve suddenly figured out exactly what societies already well known problems are?
What is it with sycophantic men who kowtow to rich daddy types? The professional world I live in is pretty disgusting with its reverence for wealth stolen from workers who do the actual manual labor to enable his creature comforted up the arse life
Absolutely. Even when the first success was largely luck. I know a lot of early Microsoft employees who became successful (read: wealthy) very quickly and many of them harbored a belief that they were capable of success at anything and that their advice was of a superior caliber. This belief has, through the subsequent years, proven to not be all that true.
Math models show financial success is luck and government collusion
Limbic brain function takes on a habit of connecting to facts from past success stores in the cortex, to convince the person that their literal agency will always lead to success
And society continually rewards past success even in the face of nothing but failure in other endeavors
Again, see Trump and all the CEOs and hedge funds that keep being bailed out
I share your cynicism, but the letter could be a statement of changed purpose which front runs exactly the kind of announcements you're looking for. And it may encourage others to start thinking along those same lines. If that is the case, then it may be a good thing.
But I agree, if we look back at this letter in six months to a year and find that he's still driving investments in more lucrative but less useful things, then yeah I agree, he can cram it up his arse.
I also think actual money-where-your-mouth-is actions like the investment in capacity to produce vaccines that Bill Gates is making are way more useful for people with these big megaphones and wallets (but apparently it also makes you a target for the currently in power political faction because the leader of that faction is actually a spineless follower of society's worst impulses, but I digress). But maybe a statement of purpose like this open letter is better than nothing...
I agree that he should put his money where his mouth is, but it seems like most of your criticism here is on capitalism and wealthy individuals rather than the points he was making in the article
What happened with SBA loans that forced everyone into needing VC funding? Didn't people used to just get SBA loans to fund inventions and small businesses? Now it seems like everyone defaults to VC funding.
The issue imo is that SBA is still too narrowly focused on the first 25% or less of commercialization. Perhaps that works for some, I'm not sure. I agree, getting innovation to market is way too dependant upon VC. Worth noting that the traditional banking sector entirely abandoned the innovation economy despite their willingness to fund breweries, coffee shops, restaurants ad nauseum and other business that have huge failure rates but have more collateral and hard assets they can grab on failure.
The issue is that SBA loans require founders to put their house up as collateral or have sufficient real property or capital equipment to collateralize the loan. VC does not.
this sounds like it’s more directed at governments. To build whole institutions at the scale he’s referring to requires trillions.
Biggest problem I see is that we consistently elect people into political positions who are biased toward maintaining the status quo. The word “radical” is a dirty word to voters. We don’t like change. Until we change that mindset we won’t ever have people in government who could even begin to think about what building the future looks like.
I am not the first to point out that our issue is not the lack of resources, but the inability to direct them in a meaningful way. The idea that free-market dynamics will create the best resource allocation is just hard to believe. People will say that "well other system do we have!?" which to me is defeatist, assume the worst from human race kind of approach. There are people out there doing much research on coordination, new ways to have a democracy, novel voting systems (say, quadratic voting). We need to believe that we can do better.
> Like all good mystical experiences, it happened in Vegas. I was standing on top of one of their many tall buildings, looking down at the city below, all lit up in the dark. If you’ve never been to Vegas, it is really impressive. Skyscrapers and lights in every variety strange and beautiful all clustered together. And I had two thoughts, crystal clear:
> It is glorious that we can create something like this.
> It is shameful that we did.
> Like, by what standard is building gigantic forty-story-high indoor replicas of Venice, Paris, Rome, Egypt, and Camelot side-by-side, filled with albino tigers, in the middle of the most inhospitable desert in North America, a remotely sane use of our civilization’s limited resources?
Let's say you have an inspiration, then you work hard on that for 5 years designing up to the last detail of a [business online idea/product]. You put your service online/start selling your product. It's a hit.
Aware of your early success. $BIG COMPANY$ with thousands of engineers and millions of users copies all the details that make your idea a success.
Your early users migrate, now your site goes into the drain, along with all your years of thinking and hard work.
Are you sure that allowing someone to own an idea is insane?
Good implementations of good ideas are rarely easy to copy, which is why so many acquisitions ask not only to buy the product but the team that made it as well. Moreover the last part of your argument also omits that big companies regularly buy the ideas (patent) meaning idea ownership mostly translates into big co idea ownership. Couple that with trivial ideas being patentable (eg website shopping cart), frivolous lawsuits abound, etc. I think your argument sounds good in theory but in practice leads to the exact detriment it proclaims to protect.
Lastly I think the last part of your argument is less compelling if you view it from the customers angle: you shouldn’t be able to go to a different company just because they can offer something you want (better / cheaper), you should have to stick with whoever came up with it first.
Seems like a plausible solution, although I don't think we can trust a single institution like github with that kind of ledger. Why not a public blockchain? We need a large jurisdiction to experiment with these kinds of ideas though. Doesn't the U.S. have fifty of these??
The article chalks it up to a lack of desire, but that seems completely wrong to me.
The sad truth is that building yet another addictive and attention-grabbing way to push ads into people's faces pays the bills. Doing the right thing does not, or at least not in America.
As a German, it took me a while to figure out how business in the US works, but basically everyone only treats things listed next to a monetary amount in the balance sheet as real. As a result, a concept like "for the good of society" does not exist for most CEOs.
There is plenty of well-educated and well-meaning young people happy to build a better future. They certainly had the desire to do that when they started working.
The real question is how to make it financially viable for them to do the building.
You're right, America has long given up the notion of what is "for the good of society" in favor of making money. Walking around SF (until recently) meant literally seeing both millionaires and people defecating in the street. It's extreme.
Marc wants to know how to use capitalism and growth (building) to overcome this, when the best outcome might be just realizing how broken capitalism in America is.
There exist a culture of people who are happy sleeping outside and living on the streets. Even if all the homeless who don’t want to live on the street have a bed, there will be street people. It’s a lifestyle preference where the weather is nice, like beach bums.
I certainly enjoyed the time when me and my friends slept outside on a beach :) but my criticism of the article isn't so much that people make bad choices, but instead that some choices are blocked for financial reasons.
I expect my reply to be buried in the flood of others, but I enjoyed the essay because of the various responses it provokes internally:
1. Optimistic response.
Right on! More influential VCs need to beat the drum of rebuilding the American Dream and the manufacturing base in spite of there being less potential return than shoveling more money into ad tech. We clearly have the talent to build things again, what we need to work on now is the incentives for talented people to take long term risks instead of joining a FAANG or a hedge fund.
2. Cynical response.
The American Dream has absolutely been crushed. We need triage in the short term, not thought leaders writing about the wonderful opportunities ahead of us in rebuilding after the COVID crisis subsides. Those sitting on large amounts of capital should make mass donations to things like food banks across the country because there is a massive risk of millions of people falling into long term poverty in the immediate future. The short term must be about helping those in desperate need. Long term planning can come later.
3. Response as a father
I hope others read this essay and get inspired about taking more risks in building a better future. As for me, I’m a sole provider for my family and must focus my career on making enough money to support those that depend on me.
I could go on, but you get the idea. A good essay is thought provoking in spite of bits and pieces being easily criticizable.
Here Here! We need more reasonable responses from someone not living in the SV bubble putting on a front.
I swear, sometimes I feel like the VCs are stupid enough to be very Marie Antoinette about their monologuing. As if stating the obvious and doing nothing about it helps anyone or anything.
Ok, assume I'm bought into this idea - where would I even begin?
What are some companies working on these kind of fundamental building things problems? I know of the Boring Company, though haven't really heard anything from them since the flamethrowers a few years back. Sidewalk labs was doing some cool things in Toronto, but I think they've been running into big regulatory issues too and it one point it sounded like their plans were completely on hold. The YC New Cities idea sounded intriguing, but as far as I know they never talked about a single thing to come out of that program and it's now been shut down.
I really haven't heard of very many companies at all doing these kinds of things (which is Marc's whole point), and the ones that I have been casually following, I check back 5 years later and they don't seem to have made any tangible progress. Is there just no way to iterate quickly at all in the physical world?
Then of course there would be the challenge of trying to actually get a job at one of these places, I'm not sure what experience would even be required for this kind of work. Maybe a Civil or Mechanical Engineering degree? As a software developer I'm not sure how I'd even get my foot in the door.
I guess that would leave trying to start something myself, but there too I really have no clue where to even begin. It doesn't seem like you can just start tinkering on construction innovations with minimal upfront investment on your nights and weekends like you can with building an app. On this front someone like Marc Andreesen could offer a ton of advice, I'd love to see him follow up on this post with more thoughts about this. Or even announce a program to fund new companies focused on this type of fundamental building.
Anyway, I'd be really curious to hear if anyone knows of either 1. more examples of companies working these spaces to look into or 2. resources to even just learn more about the problem space and which areas might be ripe for innovation.
In many cases, I am not sure his solutions address the real problem.
Housing is rising in price as more people pile into fewer cities. There is no housing crisis in Spartanburg, Louisville, Lethbridge or even Houston. You can build all the homes you want, but unless they are in Manhattan or San Franciso, a billion new homes won't make the condos there cheaper.
You can also build all the colleges you want, but the returns on that are starting to narrow. Hundreds of thousands of grads end up unemployed or underemployed. We could make college free, but that wouldn't create more jobs that require such a degree. Are a million extra college grads at a mass-production school really going to change anything? Employers don't accept Coursera courses as a substitute for a degree and I suspect such a school would be viewed like Coursera. It doesn't help that in America and to a lesser extent Canada, people zoom in on the school ranking and reputation. A lot of the value of the university to an individual has nothing to do with what is taught in classes there, but how competitive it was to get into.
I had a conversation with a dean of a university about offering online courses and the reason they said they would never do it seriously is because that would greatly devalue that people admitted to that school were top tier and thus were top tier on the way out.
Is what makes Harvard special that it is doing something uniquely right or that it has the unique ability to draw the best?
I don't see your point re: housing. The current situation is where the equilibrium has naturally ended up. SF is much more expensive than small cities, but people still get enough value from it (or think that they do) to pay the higher cost and live there. If some of the people on the margin moved to a cheaper second-choice place, they'd be slightly worse off, otherwise they would have already done that. So telling them to move to Louisville doesn't make them any better off.
However, if more innovative ways of building (and getting approval to do it) could make housing twice as plentiful and half the price, that would make them much better off.
Land is expensive in SF, and it is hard to get approval to build new housing. But it's not the only problem. Just building can be insanely expensive, like this project where it's going to cost almost $900k per unit to build affordable housing [1]. It's not clear if some of that is land cost, but it seems to imply that is not the case because it sounds like this is land that is already owned and dedicated to affordable housing.
> I had a conversation with a dean of a university about offering online courses and the reason they said they would never do it seriously is because that would greatly devalue that people admitted to that school were top tier and thus were top tier on the way out.
IMO that's pretty short-sighted. This line of reasoning is that the degree is valuable _because_ its exclusive, not because the degree is evidence of particular skills gained.
If you simply took the exact same course structure and grading from a Harvard degree and put it online for thousands, the skills gained would be identical.
Obviously being admitted to Harvard signals things besides skill. Wealth and connections, for example, though I would argue maintaining those value signals is harmful to society. It's unfortunate that this dean values those things over increased access to education.
> Is what makes Harvard special that it is doing something uniquely right or that it has the unique ability to draw the best?
'Excellence' in institutions is self-fulfilling. Harvard is seen as being the best, and therefore students choose to go there because they believe it's the best. Since the best students go there, Harvard is indeed the best. At the end of the day it's just perception that drives the cycle. Oh also being ludicrously wealthy.
> IMO that's pretty short-sighted. This line of reasoning is that the degree is valuable _because_ its exclusive, not because the degree is evidence of particular skills gained.
The dean didn't disagree that this was a major aspect of its value.
> If you simply took the exact same course structure and grading from a Harvard degree and put it online for thousands, the skills gained would be identical.
And which one would find jobs the easiest?
> It's unfortunate that this dean values those things over increased access to education.
The dean realizes that in a digital society, most things rapidly become winner take all. Their university has cachet, but not Harvard level cachet. They do not think that 99% of universities would survive everyone moving to online education.
Also, here's an essay I really like written more from a tech/software engineer perspective about how to align your career towards building (with an emphasis on building our way out of the climate crisis):
http://worrydream.com/ClimateChange
I've pivoted my career to working on the Julia programming language, because of its focus on science and engineering (_building things!_) rather than what I used to be doing in the software world (e.g. my past job at google), squeezing out more dollars from advertising.
https://julialang.org/
From my perspective a lot of the problem is indeed about _motivation_ and _imagination_, like Marc says.
One place where I'm finally starting to see this kind of desire to build making its way into the public sphere (and not just resonating in tech circles) is with all the growing energy around a Green New Deal (https://www.sunrisemovement.org/green-new-deal).
This is the first time in at least a decade that I can remember politicians talking with the same attitude Marc was. The climate crisis is an incredible opportunity to BUILD! And to build like we haven't built in generations!
I love your desire to find companies working in this space. I am interested to see what responses you get on that front. But I also think a serious way we can help is by shifting the public consciousness towards _belief in our ability to build_, by advocating for things like the GND. So this is how I'm spending my outside-work time right now: volunteering and organizing to spread the vision of a society that BUILDS, and fighting for political candidates that share that vision. :)
I'm in exactly the same boat as you. I want to help build the city of the future, but as a data scientist, I have no idea where to start.
This is advice I haven't followed myself, but might start following: talk with people who are working on building megastructures--not necessarily in your city--and ask how they got started. There aren't any online bootcamps for how to build a monorail, so "tribal knowledge" is probably the only way to go.
I'll let you know if this methodology works for me!
I think it starts with the financial system. The current system incentivizes bureaucracy, regulation and stagnation in part due to the cantillion effect but also indirectly because it destroys capital, increases debt and prevents a savings / capital asset accumulation desire in the populace. Say what you want about the gold standard but it did lead to the great industrial revolution in such a short period of time providing a -somewhat- playing level field for inventors and technologists to push forward while Kings and courtier, Parlamentarians and Senators had a very difficult time ‘controlling the markets’. I see the return to a non inflationary reserve currency as the first order problem to be solved.
Another benefit of a hard-money system (bitcoin would be better than gold nowadays) is that governments can only wage war by spending hard money. And they can only get hard money by extracting it from citizens. It puts a very strong limitation on the government’s ability to wage war, when they need to convince us all to pay for it rather than printing money.
Another common trope is that deflation limits the economy. News flash - you can have a single dollar as long as it can be split to 10000 zeroes. We had a successful global economy for years before fiat took over.
I generally agree with your viewpoint, but the argument against deflation isn't from needing to clerically split currency units, but rather that having currency itself appreciate delays purchases and causes the economy to stall.
But deflation doesn't seem to have held computing back much. And when someone wants a loaf of bread, they're going to buy it regardless of being able to save if they wait a week. I do agree that it will generally slow the economy, and this is a good thing for sustainability and conserving natural resources.
A good indicator that we're well past prudent investing into basically gambling is the SV bubble where equity is paying to flood cities with inexpensive e-scooters, hoping to create a culture of renting them so they can gain a future income stream. The physical goods are so meaningless to the financials that many end up destroyed or discarded. That's the kind of "investing" that the past two decades of artificially low interest rates have caused.
It makes people prefer to buy what they truly need. And over time, things cost less. It incentivizes saving over consumption. And with private money, there can be alternatives to a single currency. The hardest money is saved, and the softer money is spent first.
Exactly. As it stands wealth is drained away from the people with skills to the people with quills.
Thus we end up with mountains of strangulating regs and no bullet trains or hyperloops. I remember Germany, early 2000s, same story: they had their beautiful maglev train on a test track run in a circle for 11 years. They couldn’t build it anywhere. Environmental, political, regulatory ‘uncertainty’. Finally the Chinese invited Siemens on a joint project to build a real track for Shanghai. There is still no maglev train in Germany but several in China...
If you're actually set on the ideas laid out there, don't join a pre-existing company. Find a domain you're passionate about advancing, learn what you need to validate your hypothesis on improvement, then do what you need to do to advance it. If you don't have any passion about whatever you'd be doing, there's not really any point; the world doesn't advance because of people who don't care about what they're doing. Those people make a whole bunch of money, though.
The parent comment is asking for tractable ways for a person to help improve things. Starting a company is not tractable for almost anyone. If you have kids, are poor, etc, you need some form of income. If you don't fit the right mold, you're unlikely to get VCs to invest in you.
Starting a company is not a feasible option for most people, and the average company fails and ends up causing nothing but harm for all involved (in the form of lost years of their life they could be doing something that didn't fail so).
Your answer amounts to "you can't do anything. It's impossible unless you're so privileged or already independently wealthy that you can start a company".
Your answer sounds like "Well, Bill Gates made the Bill Gates foundation, just make your own research institution".
A software engineer is privileged. You're acting as if he or she was a fast-food worker. If you want to actually change things, you've got to use what privilege you have to advance things.
This answer is a shame though. It would be more efficient for a lot of passionate people to join companies with an existing head start instead of starting a bunch of small efforts. More wood behind fewer arrows. A big part of this problem is that our society glorifies entrepreneurship more so than coming together in large cohesive groups to collectively do something big. For example, much of what this article discusses are political problems. Those problems need large political movements and institutions, not startups.
You don't need to be an expert in a field to raise capital or start a company. Most of the most valuable companies in the world weren't started by experts, and most of the most influential ones as well. Venture capitalists will throw money at just about anything.
Well, the thing about building is that when a people achieve comfort and are well-fed and happy, there's very little incentive to build. Countries get old. They get middle-aged and a little tired or complacent.
It really does happen. The question is how you keep on renewing a country and a people when things are going "just fine".
There is really something to the idea that strife / disaster / starting with nothing causes you to yearn to be better and invest in things that you wouldn't do when you've already made it. You raise kids in wealth and they rarely have the same drive as their up-from-bootstraps parents. And maybe nature's checks-and-balances on this is that eventually those people who struggled through adversity and built things get comfortable. They stop wanting to invest, and instead want to extract. It gets hard to get people to be willing to sacrifice like they did when they were young.
The USA has already made it. In its own mind. So most people are not desperate to have high taxes, high effort, low potential of immediate reward -- the kind of thing that builds things that last beyond your children.
Now it's either 15% returns or it's not worth it. Or vote out anyone who proposes something that costs a lot. And only when we see other countries whose people had to struggle from nothing do we realize that standing still sometimes equals going backwards in the global race. It's how you end up landing at La Guardia, trying to take a subway, and wondering how your capital of prosperity could have gotten so bad without anyone noticing.
I don't know how exactly to incentivize a contented culture to be willing to sacrifice. I am sure, though, that social media and polarization and targeted outrage of special interests against any potential idea doesn't help. It's a real puzzle how we're going to get out of this funk and not be passed on the highway by lots of others.
There are two problems: rapidly ballooning income and wealth inequality, and ladder pulling. That explains everything. Why are schools bad? Because we disproportionally fund schools for rich people's kids, and there isn't money or regulatory freedom to innovate there. Why is transportation bad? Because rich people have drivers and private jets, and there isn't money or regulatory freedom to innovate there. Etc etc etc.
Until a16z starts investing seriously in lobbying to end federal corruption, establish a far more progressive tax code (that also considers wealth) and to aggressively prosecute monopolies, I have to assume they're just greenwashing.
> Because we disproportionally fund schools for rich people's kids
I was under the impression that such kids disproportionately went to private school. With a some exceptions (disability programs, ...), private schools don't receive funding from the state.
That is to say, taxes don't disproportionately fund schools for rich people's kids.
Many of these schools are better funded than public schools but that funding isn't through tax dollars.
There are a lot of factors, but AFAIK the main dynamics are:
- We primarily fund schools through states (federal funding is < 10% on average)
- States are largely funded via regressive taxes (like sales and property taxes)
- Until Trump's tax law this was all deductible from federal taxes. Now it's just property taxes and it's limited to $10k (which is pretty high, we're talking a $333k property w/ 3% property tax)
So effectively what happens is everyone pays a flat tax to fund schools, then people wealthy enough to pay income or capital gains taxes get their school payments subsidized by the federal government.
It's also important to note that many private schools are religious and pay no taxes at all. They also receive lots of federal benefits via federally funded and run intermediary organizations. Finally, charitable giving to religious organizations (including schools) is tax deductible.
The effect of all this is a huge education subsidy for high income earners and the wealthy. Couple this with the total lack of redistributive policies for educational funding, and you get what NPR calls "a money problem" [1].
And if education is the silver bullet, what we're counting on to lift people out of poverty, and what we point to when we talk about "equal opportunity", then the future looks dim indeed.
Because for people flying private jets and who actually can make the difference like the one described in the article, public transportation world is non existent.
The best you can hope for is that they can look at the spreadsheet and subtract costs from revenue.
Definitely feels like an inflection point. With all of the rush to return to “normal”, I’ve been thinking about a lot of the ways in which “normal” is pretty busted. And yes, many of us are fortunate to live in this point in history.
But a lot of people aren’t so fortunate, and I don’t know if those gaps have ever been quite so apparent for our generation.
Being really sick over the past month has definitely led to a lot of reflection. There’s a burning desire to make every day count in a way I’ve never felt before. Closest thing being the birth of my kids.
I’ve posted this before, but this essay reminds me of a great West Wing exchange with Chief of Staff Leo McGary:
Leo McGarry: My generation never got the future it was promised... Thirty-five years later, cars, air travel is exactly the same. We don't even have the Concorde anymore. Technology stopped.
Josh Lyman: The personal computer...?
Leo McGarry: A more efficient delivery system for gossip and pornography? Where's my jet pack, my colonies on the Moon?
Seriously, whilst I agree, what can I do about it.
I can't raise the capital to start any business that could challenge these things. I work too many hours to sustain my family to do anything serious as a side project.
I can't find anywhere more progressive to work than where I am, if I could I would move. I have a set of skills which seem to match what Marc wants, yet I earn less than the sales and marketing people.
I can't vote for a political party that wants these things because they don't exist, and couldn't exist in the UK without a massive benefactor.
All I can contribute is an upvote to your article. If someone would buy me a house for my family, and enough cash to run it I would join this crusade. Until then, just an upvote.
Working more is not a guarantee to becoming wealthier or living a better life.
And "learning a new skill" can take an interminable amount of time. Leisure time that we have less and less of as our commute get longer, due to housing costs, and as our jobs cut more and more jobs and put more and more work on individual workers.
"Pull yourself up by your bootstraps!" We need to build the boots first.
> ... The things we build in huge quantities, like computers and TVs, drop rapidly in price. The things we don’t, like housing, schools, and hospitals, skyrocket in price. What’s the American dream? The opportunity to have a home of your own, and a family you can provide for. We need to break the rapidly escalating price curves for housing, education, and healthcare, to make sure that every American can realize the dream, and the only way to do that is to build.
What if building in itself isn't the answer to increasing affordability and ensuring supply of things that matter? What if incentives are the key?
Things the author says drop rapidly in price:
- computers
- TVs
Things the author says skyrocket in price:
- housing
- schools
- hospitals
The former group includes small-ticket items that are often bought with "cash." These are also items with an inherently low regulatory burden.
The latter group includes big-ticket items bought on credit, or paid for by someone else (health insurer). Often, there's a government backstop involved. And these industries have a very heavy regulatory burden.
What if the key to making necessities like housing and education more affordable was to get the federal government out of the business of guaranteeing loans and backstopping reckless investors?
Compare, as another example, the price curve for LASIK laser eye surgery which is purchased out of pocket, to the price curve for every surgical procedure reimbursed by insurance.
Are you claiming that most of the cost in building housing is in labour costs?
At least in places with housing shortages, like the Bay Area and NYC, it seems to me that the high costs comes from the government slowing down (or refusing to allow) new housing construction.
I think a similar problem is evident in healthcare, with certificate of need laws and AMA's restrictions on number of doctors.
> Our forefathers and foremothers built roads and trains, farms and factories
Yes, and most of these were also built by slaves or people in slave-like conditions. It's incredibly easy to build things when you have nearly free labor.
Schools and hospitals also suffer from Baumol's cost disease. As the production of computers, TVs, food, clothing, and other items gets more efficient, the relative cost of industries with low productivity growth skyrockets. Also including symphonies, theater companies, etc., and this leads to them becoming unaffordable in the presence of substitute goods, like movie tickets and recorded music.
Housing, schools, and hospitals also have ongoing costs and costs which don't have meaningful economies of scale. A nurse can only watch so many patients. A teacher can only tend to so many kids.
>What if the key to making necessities like housing and education more affordable was to get the federal government out of the business of guaranteeing loans and backstopping reckless investors?
I would like my representatives to have a say in what is a reckless investors or not.
And I'm not really interested in schooling or health becoming more profitable as a vessel for investment in free market.
I would rather have decent, cheap public education for my kids and something else than whatever we're having for health. That the goal.
Unfortunalty, I don't think it's a great fit for a friction-less market. We're not selling financial instrument, we're trying to give young citizen everywhere a decent education, and have access to health.
> Why shouldn’t regulators and taxpayers demand that Harvard build?
Wait, wut? Last I checked, Harvard is a private institution.
Besides, Harvard produces its graduates because they can be picky on who they can admit. Why would we assume that Harvard can scale to provide a "Harvard education" to someone who didn't qualify to make it in today?
Harvard is subsidized by the federal government and the American taxpayer several ways. It benefits from federal student loan programs. It receives federal research grants. It is allowed to be a tax-exempt institution. And it is allowed to own a tax-exempt endowment. Normal private institutions in America have none of those.
If by "normal private institutions" you mean companies, sure, that's true. But normal private educational institutions absolutely benefit from this and other similar programs. The University of Phoenix, for instance, heavily recruits GI Bill-eligible students, and their right to do so was defended by Republican US senators.
> It receives federal research grants.
You can do this as a private company just fine. SBIR is a great example. I worked at a startup that got federal research grants less than a year after being formed.
> It is allowed to be a tax-exempt institution. And it is allowed to own a tax-exempt endowment.
These are common for normal non-profit institutions in America and are in no way specific to Harvard.
> Normal private institutions in America have none of those.
This is not true. Any non-profit classified corporation would be tax-exempt. This is not particularly difficult to set up. All you need to do is file with the IRS and not have shareholders.
Andreessen's point might not be that the government should force them to do anything necessarily, but that no one even expects them to do anything. They have 40 billion dollars in the bank. No one expects them to do anything with it. The government, donors, anyone in Harvard, the proverbial man on the street, none has an expectation that they should try to do anything greater than whatever they're doing now.
The "nobody expects anything from Harvard" statement might be a bit too strong. I've seen people say that Harvard has a responsibility to do more social good with it's massive endowment. Here's one example [1]:
> Endowments over $1 billion should be taxed if the university doesn’t grow freshman seats at 1.5x the rate of population growth. Harvard, MIT, and Yale have combined endowments (approximately $85 billion) greater than the GDP of many Latin American nations.
So maybe the issue isn't with expectations, but with incentives: to effect change in these old hierarchical systems, you need elitists to be anti-elitist; to make decisions against one's interests for the betterment of others.
For better or worse, the United States government is deeply entangled with the financing of college educations. Much of the money flowing in to Harvard via tuitions is involved in government-related loans in one way or another.
The idea isn’t to make demands of how a private institution spends their money. The idea is to add conditions to government-sponsored loans such that they could only be used at institutions that meet specific criteria. If a university doesn’t meet the criteria, then we don’t give government-sponsored loans to attend that institution.
Harvard isn’t the best example of this idea, but consider how much better the student loan crisis could have been if we attached even minimal criteria that degrees must reasonably be associated with job placement and a minimum level of student earnings after graduation.
It’s not a great idea to let the government essentially funnel money into these institutions at large scale via student loans, then leave students entirely on the hook for consequences, without at least minimal expectations that the universities use this money wisely.
Harvard is a private institution that is widely funded by government-backed loans.
They are also a "non-profit" and so don't pay property taxes even though they have a ludicrously-sized endowment fund which certainly accrues a lot of "profit".
Marc makes a lot of sense but his thoughts come out a bit too simplistic. Yes we deffo need to build (in a sustainable way). But what’s holding us back isn’t our technical capability. It’s the fact that we need creative destruction.
To build those fast trains, we may need to do it over people’s houses. To build safe nuclear plants, some may need to fail. Like SpaceX failures before they get it right.
We have a refactoring problem. To see the results, it could take decades. The demand is there but the power isn’t even in the hands of government. It’s by the people who own corporations and lobbyists, it’s by the private equity folks and the bankers who are over leveraged. They are very happy with current system of seeking rent from their monopolies.
Also we aren’t as organized. China can get shit done. I’m willing to make a bet that by 2030, China will have a higher GDP than US. China knows how to build.
“Many of us would like to pin the cause on one political party or another, on one government or another. But the harsh reality is that it all failed — no Western country, or state, or city was prepared — and despite hard work and often extraordinary sacrifice by many people within these institutions. So the problem runs deeper than your favorite political opponent or your home nation.”
I stopped reading here. I thought this (HN) was a discussion board of thoughts outside the political realm. But this is clearly a political statement begging for a deeply partisan response. Or, worse, a gross misunderstanding of the last century of political history which contributes gravely to an incorrect recollection of all that has unfolded. In effect establishing a deeply political conclusion to the benefit of one specific party at the cost of another.
> But the harsh reality is that it all failed — no Western country, or state, or city was prepared
This is absolutely untrue. What Americans mean about "the West" is the US and the UK. And indeed those two countries reacted absurdly and fared and will continue to fare bad. Many countries in Europe are in the same situation (including France, where I'm from).
But one country did and still does very well: Germany. One of the most urgent tasks should be to understand what they did that worked so well.
A charitable read would mean that no Western country was able to contain the virus without dramatic action such as shutting the entire country down, vs. the two examples in the East, Taiwan and South Korea, who have been able to keep their countries moving.
And it's a really stark contrast: I remember reading about the Taiwanese man who was fined a bunch of money for violating quarantine. What caught my eye, however, was that he was fined for going to a nightclub. During the height of this, Taiwan hadn't even closed their nightclubs, one of the first places I would think you could and should shutdown.
Germany may have done a good job, but I would love to live in a country right now we I could eat at a restaurant and go to the gym throughout the whole crisis.
Living in New Jersey, gives me a front row view of crumbling America. I grew up in India and have no illusions of American infrastructure being third world standards. I'm taking about houses people live. I've been trying to buy a house I like for past 4 years. I've been to open houses in many small towns here. Town after town, I see 60, 80 even 100 years old houses, that are beyond repair. They all sell at upwards of 400K. I talked to realtors about new houses. They said people are afraid to repair or rebuild houses. If you rebuild your house from ground up, the town would reassess their property taxes and often charge 1000 to 1500 dollars a month of a medium sized family home. My friends in India earning much less than me live in far better and newer houses these days.
I think it's the lack of political will in America to make our lives better. You let your politicians (especially at local level) confine you to essentially urban slums rather than let you build a dignified life with your hard earned money.
Certainly not all of them, but the German healthcare system has dealt extremely well. There is plenty of testing capacity, and plenty of ICU beds. Thanks to century old unified health insurance laws.
Edit: Otto von Bismarck actually instituted the health insurance system of Germany, certainly not a socialist!
The republican stronghold of Texas has one of the lowest covid deaths per capita in the United States, better than even California (which is doing relatively well). Deaths per capita at 16/million is lower than almost anywhere in Western Europe.
It's not obvious to me at all you can make a political judgement from covid19.
California was hit early but acted very quickly and effectively. They're also pretty wealthy so they could get equipment and supplies before there was really a rush.
Texas and Virginia had the benefit of getting hit when most people were taking this seriously (i.e. they didn't want to become NYC). You also have to consider public transportation use which is way higher in places like Seattle and Chicago than it is in Dallas, Houston, etc.
So again it's mostly about exposure: density, travelers, being in contact with travelers, being in contact with people who've been in contact with travelers, etc. How quickly shelter in place was ordered (getting a testing system set up would also have worked but you have to act even faster and spend upfront money, which of course we were never going to do) has a direct effect in exposure. And then it's all about how well you get supplies to treat the infected.
So, if we were to to scale Texas' to Germany's "3x population", Germany could still handle that in a week. The implication stands.
> 2. Maybe they haven't broken 200k tests because there isn't an obvious population to test when you've had an order of magnitude fewer covid deaths?
No, it's that they're willing to die for Whataburger. There's nothing else that would tangibly explain a complete refusal by the 9th largest economy in the world to attempt to protect itself.
I don’t mean to critize american healthcare, it’s one of the best in the world. Unfortunately not accessible for the part of society that is uninsured and undocumented.
Marc and his family have donated so much for emergency medicine, the last resort for the uninsured, which is awesome.
What makes me sad is to see how people can end up in an existential crisis, both for their health and financially, because the system is failing them.
American healthcare should absolutely be criticized, I just meant that it’s too early to say, as Joe Biden did two months ago, that a socialized healthcare wouldn’t have helped COVID because Italy has socialized healthcare. We haven’t seen the full destruction of COVID to make an valid comparison.
But it’s just a case of how bad: really bad, or really really bad. When a basketball team can get tests, but ordinary citizens can’t, that is not a healthcare system, it’s a wealthcare system.
Well, if you know that the US represents half the spending on healthcare in the world (!) and that its GDP per capita is 20-60% higher than even the one of Western European countries plus the fact that its total GDP is higher than the EU one... You might be excused for expecting a better result in the US.
I don't know, it looks like Singapore has missed a step somewhere. Adjusted for population and looking at the curves logarithmically, they're not doing so well.
The majority of the new cases in Singapore are in foreign labourer dormitories, so maybe the missed step was not putting enough effort into improving conditions in those dormitories? They put a lot of effort into contact tracing and the like, but that doesn't help much when you have a bunch of people who live together in (presumably) crowded quarters, who are unable to isolate themselves.
It seems a bit too easy to challenge the left to show that the public sector can do amazing things ... when the public sector doesn't have the freedom of action we've given to the private sector, and the left isn't even in control of it right now. "Come on, let's fight, you with your hands tied, and see who's better." Cheap shot, Marc.
Point the second: of course a VC wants people to build. Of course a VC wants creative destruction and displacement of incumbents. But - as I see other people wondering as well - what's a VC going to do about it other than sit on the highest stock tranches and reap most of the rewards?
The left is in control in both California and New York, and many of the problems there are in the realm of state/city governments rather than federal government.
Healthcare, mental healthcare, and welfare for those in the bottom quintiles are two huge problems that are not in the realm of California and New York.
In general, any problem of wealth redistribution (the ones I mentioned above) require a federal solution, otherwise any locality trying to solve them will end up getting an influx of the welfare receivers and possibly an exodus of the taxpayers.
Step 1: fund a national campaign to challenge Citizens United and put new test cases through the courts.
Step 2: restore the federal prohibition (dropped during Obama admin) against propaganda.
Step 3: implement a modern equivalent to Glass-Steagall banking regulation, so that taxpayer capital is not backstopping high-risk investments.
Without a shared model of reality, it is difficult to collaborate on the building of new realities. If unlimited ad/PR spending can be used to manipulate media, the voices and interests of individual humans struggle to be heard, leaving us with flawed models awaiting the next crisis where reality suddenly corrects rhetoric.
If the above is not feasible at the federal level, start with one state and use every available legal/policy/finance tool to (a) pursue similar goals, and (b) encourage migration of like-minded civic leaders and builders from other states.
You see it in education. We have top-end universities, yes, but with the capacity to teach only a microscopic percentage of the 4 million new 18 year olds in the U.S. each year, or the 120 million new 18 year olds in the world each year. Why not educate every 18 year old?
Because the US has too much college education now. About 45% of the people with college degrees are working in jobs that don't require them. The payoff for a college education is often negative now.[1]
I think it's more nuanced than that. America in particular has incredibly high education costs and a mercantile payback system. This is coupled with companies making ludicrous demands on qualifications so people feel they need to have a degree. In turn, graduates are branded as failures if they don't land "college level jobs" because they're saddled with debt that needs paying off.
Lack of jobs seems like an equally important problem here. It's not like if you didn't have a degree you'd be in a better situation. The only difference is that because you have a huge loan, having a low paid job is now a problem. Maybe a better question is, can you survive on a low paid job if you didn't have student loan repayments?
This could be fixed with means-tested payback, like the UK system (also student loans don't affect your credit here). Or simply by making education free, like most of Europe.
There are large intangible benefits to college education. One of them is it strongly promotes mobility (getting out of your home town) and cultural/diversity tolerance. Overwhelmingly in the UK, college towns voted to remain for example. For many people going to university is their first time away from their parents, and it's a transition period between living at home and true independence.
We don’t need to build more things without a market, we need to buy more things that are built right. There’s a surgical mask manufacturer in the states who had capacity a few weeks ago but no hospital would sign a contract, they wanted masks immediately and then go straight back to buying from Asia once this blows over. This same thing could be said for many other categories in the post.
> The problem is desire. We need to want these things. The problem is inertia.
I agreed with most of the essay until I got to this point, at which point I rolled my eyes and briefly skimmed the rest.
It's akin to people who say that the reason there are so many overweight people is that they lack willpower and motivation. Look at pictures from middle-America in the late 1940s - virtually everyone is thin, whereas today you basically the vast majority of a similar population is overweight-to-obese.
Did we all just magically lose willpower over the last 70 years? Of course not, there were huge structural changes over that time in lots of areas (design of our cities, rise of the automobile, industrialized food and agriculture, etc.) that caused the person with "average" willpower to become obese.
Similarly, it's not as though people have less "desire" than before. There are large structural changes, many of which Andreesen doesn't address at all, such as the forces that have led to so much inequality and a hollowing out of the US manufacturing capacity.
I don't fundamentally disagree with Andreesen's goals, but "try harder" is the sort of platitude that rarely brings about real societal change.
Germany also faced the China shock and Japan. They didn't deindustrialize. Policy choices matter. Leadership matters. And the social factors that lead to devaluing competence and doing things matter.
The US didn't actually deindustrialize. US manufacturing by value added is larger than Germany and Japan put together. What we did do is get rid of a bunch of low value manufacturing. We're finding out the hard way that some of that low value manufacturing is actually useful though when you need a hundred million facemasks or ten million test swabs or whatever.
Perhaps desire is the wrong word to use. I don't think he means desire in terms of willpower or motivation, but in terms of ambition. I do think the world has lost some of of its ambition over the last 50 years.
I don't think "ambition" is the correct root cause for "not enough surgical masks", either.
Look at someone like Bill Gates. He had the knowledge of how dangerous a pandemic could be, the financial resources to manufacture or stockpile the basic medical items which would be needed, and as much ambition as anyone on this planet.
I hate to single out anyone in particular, as this is certainly not his fault. I don't mean to pick on him. It's just an example of how even cranking AMBition up to 20 wouldn't have prevented our current predicament.
True, in the case of "not enough surgical masks", it's not ambition (and I don't mean it in a financial sense either). It's a combination of ambition, imagination, foresight and desire.
If Bill Gates had manufactured or stockpiled basic medical items, someone would be complaining about why he didn't do it sooner, or accusing him of profiteering, or somesuch. It shouldn't be up to one person to be responsible for the foibles of the human race, even if they have outsized resources. They just become a scapegoat for our own lack of responsibility.
Using an example where an outcome (weight gain) is completely driven by an individual’s (in)action (consuming more energy than expending) is probably not the best argument for opposing a “try harder” approach to living.
Yes it’s never been easier to eat like shit and have hobbies that require no movement, but the opposite is also true.
Would you say the same when talking about drug addiction, rather than just weight gain? Would it matter to drug addiction rates, if there were cheap Fast Drug stores all across the country, akin to fast food stores?
I think it's quite clear that here it makes zero sense to just say 'try to resist taking these ubiquitous drugs which give short-term satisfaction' as a policy measure. You'd need to treat it as a public health issue in which human beings not rational robots, but instead pleasure-seekers who would be helped by e.g. a sugar tax, policies that restricted the number of fast food stores to a minimum concentration level, healthy-food subsidies, public health and information campaigns, public cycling infrastructure, rules to enable workers to engage in sports at their workplace blablabla.
Apparently willpower is not enough and there are lots of policy instruments we could employ.
To what end do we put the onus of an individuals poor decisions on “policy measures”. Should we put a tax on minutes playing video games? Should we reinstate prohibition?
It’s dangerous to equate someone choosing to “get fries with that” in the same vein as a chemical addiction to drugs.
> Should we put a tax on minutes playing video games?
Of course, if it was necessary?
80% of US men for example are overweight, obese or extremely obese, all of which have substantial and known effects on health, with about half overweight and the other half (extremely) obese. Further, the trend is worsening. You also have a context in which one of the main reasons for caloric surplus is sugar which is priced in the food industry at 7700 calories per $1, way more expensive than many healthy choices, and is known to be addictive.
Then you have studies which show a gradually implemented sugar tax has beneficial policy outcomes, without destroying industries, saving many lives and reducing healthcare costs by orders of magnitude greater than the revenue losses (for which the food industry could be compensated, if you'd want), and improving the quality of life for many people who'd otherwise be diabetics, unhealthy, unhappy.
Now if you can show me statistics where 80% of your friends, colleagues, parents, teachers etc, have some kind of addiction to a particular niche of games, which have widely studied and known impacts on physical and/or mental health, and where a small gradual tax can be introduced to nudge people to other games, without destroying the gaming industry, and being able to compensate any losers in the market due to this policy change, then yes... absolutely I think we should put a tax on that.
> Should we reinstate prohibition?
No, we should not reinstate prohibition. We have no evidence that works. There's lots of evidence that a sugar tax works. As is there evidence that alcohol taxes work. All to a limit, introduced in balance.
I'll grant you that these are not trivial questions and we should not try to control people's lives. But I also think there are some policy decisions that make complete sense. Alcohol taxes by the way, are already quite widespread. This isn't some new big-government idea. It's science-based, experimental based, balanced policy making, that aims to give people a choice, but also incentivise the right choices. It's not treated as a moral judgement question, I love sugar, I keep consuming it, but it's also a public health problem and I'd really benefit from not being able to get a big coke for $1 with every meal, but rather for $4 every now and then. (That by the way, is a way more extreme example than any policy recommendations, which is typically 15%, e.g. $1 to $1.15, and works)
My point is that arguing that "try harder" is a solution to the American obesity problem is provably ridiculous, because we've been saying that for decades and it obviously hasn't worked.
A single outcome in over a single point in time, you mean. It doesn’t address the structural issues, such as cost and availability of healthy foods, that contribute to the need to lose weight in the first place.
> Did we all just magically lose willpower over the last 70 years?
Um no. The people in the 40s didn't have the choice to eat as much as we do today calorie wise. That is really all there is to eat. Food today is cheaper than ever. While that means fewer people go hungry, it means more people overeat. It has nothing to do with city design because cities that existed in the 40s largely in the same form still have greater rates of obesity.
>Look at pictures from middle-America in the late 1940s - virtually everyone is thin, whereas today you basically the vast majority of a similar population is overweight-to-obese.
Tony Hseih tried “to build”. With hundreds of millions of dollars, international renown, support of experts, and the ability to buy anything the project needed. It failed massively. We don’t have Most of these fancy things because either there isn’t demand, or the idea is good but it’s way more difficult to execute than we expect.
Let's not build the Alien Dreadnought, though - we wasted two assembly lines chasing that dream and ended up having to put up a tent in a parking lot to meet 80% of production goals 3 years later, and we ended up _behind_ our peers in automation.
I love the post, but it’s hard to ignore the cynic in me who thinks a large part of the problem lies in these VCs who have defined success to be achieving unicorn status. You know what’s never going to be a unicorn app? An app for tutoring kids. I would have loved to work on that. I tutored kids and I know first hand the impact of tutoring. But guess what, I’m only getting older and I need to make a living in an increasingly expensive world! Guess I better work in a startup with better prospects.
While I'm pro nuclear power, at what point do we say that nuclear isn't the way to go? The cost of solar panels and batteries are declining every year, and you don't have to deal with the terrible stigma that nuclear power has. Sure, new reactors are "zero emission", but will people actually want them to be built?
The Sun is always shining somewhere on Earth. We have the luxury of a nuclear furnace about ~92 million miles away and not going anywhere. Build a Ultra-High-Voltage World Electric Grid as Bucky Fuller described 40+ years ago and we'll make better use of it as a continuous power source.
Nuclear provides guaranteed minimum power production, which is what you actually want. You also want a more diversified system than just eg solar and wind.
It's not acceptable to depend on renewables like solar and wind to try to fill that minimum guaranteed role. They are low on the guaranteed scale, whereas nuclear is high on the guaranteed scale. Grid scale batteries do not fill that role either, not under any scenario short of magic batteries that self-fill perpetually.
Paying the added cost for nuclear at 20-30% of total national energy production, is a reasonable price to pay for higher diversification and higher guaranteed minimum energy production.
We should also boost the grid and build nuclear in low-risk weather locations and distribute from there to everywhere else. Climate change is going to hammer the coasts, right? Perhaps a super hurricane knocks out solar and wind across multiple states around Florida. We bring the lines back up and immediately have nuclear power flowing in from weather-safe foreign states to re-start everything with (those out of state nuclear plants are already handling 20-30% of Florida's power in this concept; if rebalanced properly, they could handle 50-60%+ of all the now-lower power demands in the early re-start phase after such an emergency).
You can get high-concentration of power output capability in a weather-safe area with nuclear, in this model, which solar and wind can't even remotely come close to competing with.
Another person who dismisses or is unaware of the existence of grid scale batteries.
Nuclear could help but it is so centralized it really puts all control in the hands of big corporate and government types, with cost overruns and bankruptcies funded by ratepayers and taxpayers. “Too cheap to meter” was a lie yet the same lie continues to be recycled when talking about the next promised generation. No thank you. I’ll take local control, local and individual ownership, and individual freedom and self determination thank you very much.
I love nuclear power, I used to be a 'nuke' in the Navy, but it's not feasible at today's tech level. There's too great a risk of nuclear accident right now, even if it's very uncommon (risk = severity x probability, if severity is 10/10 then any probability is too high, IMO). Someday, if the financials are right (if profit margins are good enough), or if we need it more than ever (if profit margins don't matter), someone will come up with a guaranteed safe and reliable reactor design, much like Google invented a much better search algorithm or Uber came up with a way to overcome the taxi coalition (I don't support Uber or Google today, but their ideas were revolutionary). Once that 'revolutionary' new nuclear tech comes, if it does, then I'll back it. Today's reactor designs aren't proven, not tested, and cost too much, so for now I will support renewable energy, like geothermal, solar, wind, etc, combined with storage like batteries, dams, gravity potential energy solutions, etc.
What do you mean by severity being 10/10? The issues we had in recent times were fairly mild. As long as they're not hidden and acted on quickly, we seem to cope well. Sure, people die, but it seems like severity 10 only because it all happens in one go. Take the deaths from air pollution, resources transport, mining, production, etc. involved in coal/gas/solar/wind, and put them in one day at the same rate as we had reactor failures - that would seem even more "not feasible".
You still don't understand that it's not financially feasible, for many reasons. I love nuclear, I fucking operated nuclear plants, but until we have passively safe designs that are tested and proven, it's not an option. You're totally correct on the facts, but no one is willing to fund it, that's the fact that killed nuclear.
The problem is that there's tons of deaths from accidents that we can't quantify due to cancer or the like. If we expanded nuclear, who's to say the deaths from mining nuclear materials, cancer, etc wouldn't outstrip those of wind, solar, etc.? Severity and probability are hard to quantify, and with the financial argument, I'm kinda saying that it doesn't matter anyways because no one will fund one of the most expensive forms of energy that has high enough risk profiles that you cannot even insure it in many places.
They already have lots of passively safe designs, but I don't need to tell you the difference between a real reactor and a designed reactor. With the economics of the power industry I doubt a lot of work will go into IFR commercialization.
Yea, that's what I'm saying, there's no financially viable solutions, and someday if we can make one, or if we stop caring about the cost for some reason, then it'll happen. Right now, the problem is that the "safe" designs aren't tested well and they're generally not commercially viable due to cost.
Okay but how does a "knowledge worker" like me, and many of the other readers of HN who work in jobs with little exposure to large-scale structures, get started building the city of the future? I have no idea where to even begin.
I learned how to program by watching tutorials and doing online coding classes. This is how I am used to learning. This method of learning isn't going to work when it comes to say, starting a startup that will build a new monorail. This is such a huge blockage for me and probably others with limited exposure to industries outside of software.
Has anyone ever felt this way and how did you overcome it?
I feel the same way. Hundreds of resources for learning programming online, but little else.
I would love to take a class on "Building plant based proteins" but can't find anything online.
Marc's essay should come with a personal commitment of funding or some other concrete effort towards the future he wants to see. Without that, it's yet another elite op-ed.
I'll just chime in with a fundamental truth and I don't really care who is offended or what HN rules I'll be supposedly breaking: The right has no new ideas, no desire to build anything but their own wealth, and no respect for science, nature, their fellow humans or even basic facts. They are, and always have been, fundamentally evil, full stop. Writing an essay about progress and change, but not recognizing that half the country are backwards, ignorant, selfish, fearmongering, racist, sexist, homophobic, xenophobic cowards who care nothing but themselves is avoiding the core issue. If everyone on the right disappeared tomorrow, the country would be a vastly better place.
The lack of a desire to build is very surprising to me, as an outsider at least. Disregarding politics and everything else, America was (and until now is) a builder's paradise. At least from a taxation and policy viewpoint. I mean, compare US to a place like India which, from a policy standpoint is very anti-builder. Yet, we have seen entrepreneurs springing into action and preparing low cost face shields, low cost masks and what not. Heck they are even making those contactless thermometers.
I am just thinking about this irony, a country of people who have a desire to build, has all the anti-builder policies. A country with the most builder friendly policies has no desire to build. Sigh..
The distillation of Marc’s thesis points echoes “We should have businesses coming out the wazoo!”, at least in my mind.
I think plenty of his points about pushing investment into broad market innovation are very true.
Simultaneously, this post made me think about how we got here. Many of the problems being experienced that are exasperated by the coronavirus are also being contributed to by private industry. I guess the notion of what the government should/should not provide or manufacture is up to personal belief... however, since “small-government” was pushed starting in the 1980s(?), there’s been a big change in the way many public services (and public service dependencies) are operated.
I like the idea of supporting home-grown innovation through startups and market disruption - however, seeing it from the other side, those are also the forces that brought upon harsh realities like experiencing PPE shortages because the manufacturing is outsourced to cheap labor overseas or millions of people relying on shit-tier digital services built by an amalgam of government contractors a decade ago and billed at a ridiculous rate.
I think there’s an opportunity to take the overall message and shift it inwards towards actually pushing government-enabled innovation and development projects. That at least seems more “by the people, for the people” than proliferating a system of voracious hunger to corner off a big pile of sweet government money.
Build too much, and you end up with depleted resources, non-environmental solutions, and outdated artefacts.
Recycling is surely an option, but it should be the fallback, not the default.
While the current crisis could’ve been handled better, it is not at all badly handled. Nature is much stronger than us, and the fact that we are not totally screwed after over four months since the outbreak is impressive.
Over building hospitals for the next pandemic sounds inefficient to me.
As I've gotten older I've realised that sometimes us trying to "build our way out of things" is often just "digging the hole deeper". Technology doesn't have all the answers unfortunately; I used to think so but as I've seen more I realise I was wrong. Someone's progress is someone else's nightmare quite often; especially in a system where capital (and therefore technological control) is concentrated in the hands of the few rich.
Anything you built has inputs, outputs and waste (this is the bad stuff that makes our lives worse and is subject to the problem of the commons) - it isn't an efficient process. Often benefit accrues to the person with money, and the waste goes to everyone else. Sure there are some nice solutions out there but on the whole we probably need less building than done today; and what we do build being much more targeted to society's benefit.
As an example I look at China and think - they build a lot of stuff but I wouldn't want to live there personally with the smog, pollution, bad environment, etc. I live in a nice part of the world but can see "progress" coming close to my door. Maybe I'm just getting cynical.
Right, this is why I'm bullish on additive manufacturing (or 3d printing). It's incredibly flexible and you can retool your manufacturing to produce masks or whatever you need in record time. This technology is maturing rapidly and it's something I feel will thrive in the coming decades as on-shoring becomes more common.
I don't know why soaring skyscrapers should be viewed as some sort of penultimate view for the future. With remote work tech, we can rid ourselves of the need for dense urban cores, and we can decentralize our population centers more appropriately.
Great idea. Decentralizing would be a very effective way to combat disease like this. It would also make society more resilient to other kinds of disasters.
> we’ve been doing education research that’s never reached practical deployment for 50 years since; why not build a lot more great K-12 schools using everything we now know?
Because in 2020, education is credentialism.
Every one of my friends who approached or was approached by a VC was asked: did you go to a good school? Do people up the chain like you? Show us references from professors and supervisors!
This is not some big player hiring a manager-executive, I'm talking about investors whose job is to identify left-field potential and take risks.
You can't create Harvard 2.0 if your measure of success is having attended Harvard 1.0, and Harvard 1.0 is under no pressure to change or adapt.
Even the best VCs won't invest in socially inept dropouts anymore.
The next Steve Jobs isn't building something in his parents' garage, because nobody believes in his ability to sell computers. He doesn't have an MBA from Wharton; he isn't a Stanford PhD.
Thiel's "just don't fuck it up" just can't happen in 2020, except maybe by Thiel himself (or Weinstein, who is slowly waking up to this truth).
If anything, crises might force VCs to take risks again. Let the flood of easy M&As run dry and the dam dismantled!
I’d have to watch again to be sure, but I think the scene in Westworld in Singapore is actually in Singapore because Paris was destroyed. There are scenes in futuristic sf also that show Fremont street among others.
"When we were trying to think about what the future could look like, we scouted and examined a bunch of areas, and that's how we came to Singapore. There's nowhere that looks like Singapore; it's absolutely beautiful on a purely aesthetic level. And it's incredibly different from modernism in other cities, even the lines of it; when you look out of the window (of The Esplanade Theatre), you have these, linear lines, but it's cross cut by these curving rows, which on film always looks so beautiful. There's a different texture to everything and the bounce from the water off of the glass there. The other thing that’s really interesting is the incorporation of nature.
Singapore has done this incredible job of integrating nature into the city. We're staying in the Parkroyal on Pickering and there's greenery everywhere, just crawling up there. There’s a kind of beauty to a skyscraper."
Nuking Paris and moving the action to Singapore was one of the most blatant "hey asian markets, western culture was yesterday, we want to say hi on behalf of our TV shows" I've seen. HBO has done a bunch of those kinda scenes, Netflix is doing some as well.
> When the producers of HBO’s “Westworld” wanted to portray the American city of the future, they didn’t film in Seattle or Los Angeles or Austin — they went to Singapore. We should have gleaming skyscrapers and spectacular living environments in all our best cities at levels way beyond what we have now; where are they?
I've definitely noticed more and more of this in other shows. It's not at all a bad thing, just the opposite: it shows there's big money to be made over there.
I want to start a real estate development company to buy distressed land (as opposed to raw wilderness) and develop "living neighborhoods"[1] (like Village Homes[2] in Davis, CA) combining Pattern Language and applied ecology (Permaculture et. al.) and sell them. I think demand would be enormous and it would be a net ecological benefit.
Imagine the "City Country Fingers"[3] pattern:
> Keep interlocking fingers of farmland and urban land, even at the center of the metropolis. The urban fingers should never be more than one mile wide, while the farmland fingers should never be less than one mile wide.
Let the farmland be food forest[4] that also grows starch/sugar crops for local alcohol fuel production and bamboo for construction. The buildings can be designed with hyperinsulation and passive solar architecture to have really low energy requirements.
Very interesting article. 5 cents from post soviet hole I'm in:
[] US/EU moved production to China because it was/is cheaper
[] It was/is cheaper because innovation in production technologies to this date haven't narrowed the gap for US/EU companies to move production back to US/EU.
[] US/EU workers don't want to compete with Chinese workers because they are "too cheap", but can't scale their efficiency proportionally. This is the main challenge of the developed economies - find how to continue growing the efficiency
[] US strategic failure is in putting all the eggs in one basket - China. Why not to have 5 production hubs around the world is not clear (maybe other nations don't want to work as hard as chinese?)
[] Another US strategic failure is to choose offshoring over local production. This could be achieved by lowering minimum wage or if this decision is not politically feasible - import of workforce. For this you could make elaborate laws where people coming to US for work couldn't stay there and had to go back once their work is done. Arab countries are doing this a lot.
[] The conflict of interest became apparent in times of struggle: virus shown that US is not de facto in control of outsourced production overseas
[] It DOESN'T mean that US must bring back production or start wasteful BUILD projects, which no one ever will use. It means that US must start investing even more into bridging the gap between overseas labor costs and automation due to innovation. Or create even more service industries that will be in demand overseas
[] If US succeeds in this mission - it is rightfully the leader of the world, its system is superior and next development revolution will be theirs to benefit from
[] But if US fails to bring the world new development cycle or someone does it before them - US citizens shouldn't expect their living to improve significantly since financial manipulations can bring you only so far
So if robots happen - all of the above resolved. And in times like this it must be quite easy to repurpose robot, which will solve extreme capacity shocks in the system.
BTW US were building high speed trains - it is called airplane! And was winning worldwide competition to date, but decided to outsource critical development to India... So I guess another example of strategic failure.
Really well captured. It's like we all want to have nice things, without having to make them ourselves.
I'm not in US but in Europe, and I feel like many countries are like a 50-year 100M LOC codebase with fragile dependencies on module boundaries. The inertia is massive and refactoring even a small part of it requires enormous effort, and there will always be people unhappy about any change and a maze of laws making stuff difficult.
You need to really think big and have that inner energy to persuade people to change anything. Most people (me including) just don't have, most of the time, enough mental energy for thinking big about the world around after doing their 8h of busywork and 2h in commute to make ends meet.
Most people at their (non-tech) works are not told to think big either; hell, they are probably discouraged to, and are told to juggle an infinite backlog of low-impact "JIRA tickets" and keep the status quo.
I'm not sure I understand the thesis of this essay, and it seems like rambling to me. Is the thesis "we need more desire"? That seems so abstract as to be meaningless. Obviously we all want companies to build new cool useful stuff. I'm failing to see any actionable suggestions or even new insights in this essay.
Such great ideas, both in this article and here in the comments, yet, none of these ideas will bear fruit. Why? Partly due to the fact that the people like Marc Andreessen and others here in this thread that you can clearly see are very capable of thinking through and helping solve some of the issues touched on in Marc’s article don’t run for office. Instead you have glass eyed Attorneys and puppets on both the right and left side in office.
I’m embarrassed often while watching our federal and state leaders talk. I’m watching in utter disbelief, wondering how so many of these people got elected... we voted for them. It’s our fault. If we really want change we need to start with the people running the country, all of them and the system in which it allows politicians to be elected (selected) based on the amount of money they’ve accumulated.
But, as far as education goes, if everyone got a degree, then what's the point? it would have no value at all. The whole point of awarding degrees is to separate those who have them from those that don't. How are employers supposed to know who to higher, if everyone has a degree?
Almost everyone has a high school diploma, that doesn't make high school useless. I learned things in high school that I used in college and continue to use every day.
>The problem is desire. We need to want these things.
Good luck generating the want. You don't have insurance nerds like computer nerds. You can't open your insurance plan, hack it to bits, and then put it back together in an interesting fashion and start your own business with it. You can't iterate and break stuff in insurance like you can with software. Even if you removed all of the regulatory capture, companies in those kinds of industries only come down to profit.
Insurance is boring. What are you going to do, make a $10/month health insurance plan that covers everything? You'll be popular, then broke. But that's what America really deserves: essentially free healthcare. The problem beyond regulatory capture is capitalism at its core because capitalism doesn't like anything given away for free.
"Every step of the way, to everyone around us, we should be asking the question, what are you building? What are you building directly, or helping other people to build, or teaching other people to build, or taking care of people who are building?"
Ultra fast and reliable 3D printing for engineers - submit a file at praxismfg.com and we courier deliver a plastic copy in 0-2 days at a price you'll love.
We run on proprietary printers built in house with advanced features like support-less 5-axis FDM, multi-material/multi-resolution printing, and integrated QC.
The real goal is to combine manufacturing services with a machine tool OEM like Kern Microtechnik has done in precision milling. Combining those two businesses strongly differentiates your service, freeing you from the race-to-no-margins that's wrecking every other 3D printing hub right now, and subsidizes 100-1000x more in-house hardware "testing" than any regular OEM can afford to do, which lets you build great new machine tools at lightning speed.
having a low employment % doesn't meant everyone is adequately employed. i.e employed in productive sectors. say you shift 20% of the people who work in restaurants to manufacturing or road work. that's already a 50% improvement in quality of roads and ifra
I for one believe the quality of generally accessible k12 eduction is America’s biggest problem, by far. Who’s to build if there’s no good system for creating builders? Public k12 education in America is abysmal and few people are talking about it. It’s because we are myopic and talk about problems only when they manifest concretely in the economy. As in people accruing and defaulting in debt, unemployment, crime, etc. We suck at slightly longer term analysis and getting to the root causes. The American motto is “if it doesn’t hurt me, today, fuck it.” Good luck building a robust society with that philosophy.
I think a New Deal style fund for infrastructure and human capital investment projects would be fantastic.
Some ideas...
Government will pay your former salary if you attend a Masters or PhD program and are succeeding there.
Delay recent bachelors grads entering the workforce by heavily subsidizing Masters degrees and PhDs in STEM. (Only others if we must, personally I think social sciences are currently acting as a destructive force in our society and are not behaving as academics but as ideological advocates.)
Massively increase STEM research and development funding.
Free technical and trade schools.
More ideas:
Subsidize universities putting their courses online for accredited degrees.
Subsidize private tutors for all subjects for K-12 kids, creating a large demand for private tutors. Require a bachelors degree that includes the subject to be tutored.
Provide funding to rebuild any manufacturing infrastructure that has been lost in the last 50 years, or just to build more. Especially designed in ways that manufacturing plants can operate safely for their workers in pandemic conditions.
Aren’t most decent Masters and PhD programs paid already?
My friends in PhD programs are paid a stipend. It’s not an industry level wage if that is what you were meaning, but they certainly don’t pay anything to be there.
Yes, I mean to make up for the opportunity cost of not working. Even if the PhD stipend is around $40-50k, that's nowhere near an industry salary that may be needed to support a family, mortgage, and so on.
Which is similar to what I think will end this recession/depression: a vaccine.
Now I would ask which path would have us coming out of this current crisis stronger: 40% of GDP spent on a “New New Deal” or 10% GDP invested in attempt to keep the status quo?
Alternatively, as we're seeing now, more and more people will ignore government orders until the election (at which point we'll see a huge change in tune from leaders), and go back to work. At some point, like in the past, people stop caring about diseases.
More and more poor people who do jobs to serve the rich will definitely have no choice but to go back to work despite the disproportionate risk they take on due to their lack of adequate health care and prevalence of preexisting conditions.
I doubt you will see the ruling class rubbing elbows with the plebs again until there is a vaccine, or at least very comprehensive therapeutics available.
I don't disagree. I believe, though, that our working philosophy limits us: "pursuit of property" in the Lockean sense, and "pursuit of utility" in the Bentham-Mill sense have guided a lot of what we currently build and define the right-centrist consensus. Marxist-anarchist answers are often unsatisfying in that rejecting the market as the benchmark tends to lead towards bureaucratic or tyranny-of-structurelessness outcomes where gatekeeping and favoritism thrive, because, as Confucius says, "the most important thing is to define words" - change the words, change the benchmarks and metrics, and you have set the agenda for society. And if you let people tinker with those benchmarks at random, you get random results, skewed to optimize towards a fairy tale. Think of all the fads and trends you've seen in your career - serious proposals for improving your skills, productivity, status, income, etc. How many of them ultimately ended up being a disproven hypothesis built by someone doing some brand-building? The market weakly indicates demand, but it's a naive system, prone to acting like a toddler.
This is, in fact, often a major question in game design too. When the problem space gets reduced to a score optimization problem(whether score in the context is "high score" or "maximizing some form of output" like HP damage), you often end up with degenerate solutions that involve a repetitive linear application of some technique. And when this appears in a competitive context, the game starts stagnating into a rote exercise of min-max, and other solution sets go unexplored. Competitive players often look for ways to gatekeep and declare a playstyle unacceptable so that they stay in their comfort zone and keep their status - but acceptability is ultimately a matter of what you believe the competition is or should be about. If you don't have that agreement of shared belief, the game itself falls into incoherence, and that is what we see at a broader scale in society where its systems fail.
But there are some answers. One is to enforce a broad set of all-or-nothing contractual failure modes: If you fail the minimums you don't get the maximum. At a baseline we have Maslow's hierarchy of needs setting some of these minimums. And our legal system often works in this direction of adding a minimum. Another is to add buffers, delays and noise on results: If you don't have an instant guaranteed outcome, you can't push your margins nearly as hard, and so you don't end up in a distorted min-maxing zone, but a more systematic one, which can only be manipulated through careful synchronization that "gets ahead of" or "applies leverage" to the problem. This is something we're now dealing with increasingly in an interconnected "instant society" where continuous access is the norm and many activities that were one arduous and needed a strong commitment have been reduced and repackaged into status symbols. Lastly, overt market mechanisms - pricing and bidding and ownership - help when applied appropriately. But they are premised on active participation in the process, humans in the loop who can really think through all the factors. When we automate market activities, we end up back in the scenario of min-maxing.
Lots of fun things to think about. It's not just the building that matters, but the "why" of it. If you can justify the "why" you can get a lot farther.
Housing is about the least desirable form of real-estate development for land owners. That's why low cost market housing is built in former cow pastures outside of town and in town market rate housing development tends to be built for upper income and luxury buyers. That's why affordable housing has been done with public subsidy. First as public housing. Then as tax credit financing and housing vouchers. Recently as a condition of building market rate housing.
Real-estate is where wealth is parked with long time horizons. Pension funds and life insurance reserves and intergenerational personal wealth preservation. When wealth preservation is the goal or the investment horizon is thirty years or more, sitting on under-utilized land waiting for a commercial use on a triple net lease provides higher returns than selling houses. Even better if the land is producing rent off the sunk cost...and there's always a market for used car lots. Housing competes with every other use and most uses are much more profitable and stable.
Even leaving land vacant is better than converting to housing when the goal is wealth preservation. In wealth preservation, if you sell, you have to find someplace else to put the money. When real-estate is the wealth preservation vehicle, that means finding another parcel of greater value for equal cost. E.g. a more valuable parcel than the valuable one already in hand.
>> If the work you’re doing isn’t either leading to something being built or taking care of people directly, we’ve failed you, and we need to get you into a position, an occupation, a career where you can contribute to building.
Most people do absolutely nothing useful, despite skill and desire, and they know it. We all know we’re much better at creating value on our own, but much worse at capturing that value. Something seems really unproductive about this system; must be a better way.
The problem is the failure to differentiate between wealth creation and wealth appropriation.
The USA has a system that makes it easier to appropriate wealth via rentier activity (for example becoming a landlord), than to create wealth (for example building accommodation).
Until this mentality changes you are going to see your living standards continue to plummet.
Rentier activity is a zero sum game. For you to win someone else has to lose. Making this a cornerstone of your economy is a disaster.
> In fact, I think building is how we reboot the American dream. The things we build in huge quantities, like computers and TVs, drop rapidly in price. The things we don’t, like housing, schools, and hospitals, skyrocket in price. What’s the American dream? The opportunity to have a home of your own, and a family you can provide for. We need to break the rapidly escalating price curves for housing, education, and healthcare, to make sure that every American can realize the dream, and the only way to do that is to build.
You could lower the immigration rate and ignore trans-nationalist calls to perpetually increase the GDP, primarily for their benefit. The Asian Tigers + Japan (minus Singapore, with a higher rate, but it's not a true democracy), don't have this problem. You could perhaps more importantly do better to alleviate world poverty, a strong driver of population growth, consequently immigration, consequently large environmental footprints from increasingly more people adopting 1st world lifestyles, such as this American dream of the house, car, education & healthcare, flights overseas, etc.
The problem is incentives. I absolutely agree that we should build more. Building brings us closer to the world outlined in the essay.
But building more doesn't solve the kind of problem like how we were unprepared for the Corona virus.
Neither in the health care system nor on the political level are there any incentives to act in the long term, taking rare events into account.
Preparing for rare events does neither help the current quarterly figures nor a re-election. On the contrary, such preparations require money and attention. When the disaster is there, a government can act in crisis mode. Sums that seemed unimaginable before can be waved through quickly. Even governments that have been in power long enough to take precautions are now getting approval for at least not failing completely in the crisis. And with the approval won, the government still has no incentive to change anything in the long run.
We need to adapt our systems to reward long-term incentives and preparation for rare events. I doubt, however, that the actors will be able to make these adjustments on their own.
> "Part of the problem is clearly foresight, a failure of imagination. But the other part of the problem is what we didn’t do in advance, and what we’re failing to do now. And that is a failure of action ..."
The case of being reactive vs proactive.
1. No one is rewarded pointing out problems. Thus no one wants to be that guy.
2. Reward constructive ways to points out issues / problems.
3. Listen & Acknowledge or disregard. Rewards solutions, goals, and resources (e.g. timeline) for resolution.
Accountability — management/upper leaders fail when failing to document the decision (brush away complaints with no record of decision and does not welcome hearing the issues through the management chains). Document the decision making.
Must have positive culture that every issue/problem pointed out is welcomed so that it can be looked at. Someone should be accountable / responsible for those issues whether deferred or not.
Was it a failure to imagination? Or a failure to take action on such conceived idea, once upon a time? Leaders must lead which includes partnership/collective efforts outside their own organizations...
Sadly, every human attempt at creating a successful system of allocating capital begins to decay as time passes.
With all respect to Andreesen, it is unlikely any of these problems will be solved before the entire post-WWII system collapses.
Climate change, sovereign debt levels, permanent-QE...
Honestly 6 months ago, even those who see doom around every corner weren't really talking about a pandemic.
The problem is, the problems are outpacing the solutions.
This here, written 16 years ago, is still true:
"Consequently, for thousands of years, uncountable coronations, revolutions, coups, appointments, elections, assassinations, and regime changes have occurred. Kings, prime ministers, princes, presidents, secretaries-general, and dictators have found themselves in and out of power. Unexpected changes have removed even powerful rulers. (See the box “Suddenly out of Power,” on page 5.) Still, competent and enduring leadership has proved elusive."
Thing is, no society was prepared. You may name Singapore and Japan but after initial success, cases are now spiking there. You may name South Korea and that will be fair, but their success is a continuation of their failures (effectively they are have a techonology-driven totalitarianism, most Westerners would hate to live there, and this results in more pressing problems than there are in any Western country). Even if Russia that declared itself safe (for ridiculous explanations) initially, now has world's 3rd number of new cases daily and appears to be on track to become one of the worst hit countries - it wasn't preparedness, but rather a delay because of deep poverty and low mobility of post population there - so epidemic took a lot of time to get there.
No one was prepared. This is a black swan event, they happen once in a century. If you try to get prepared to every kind of them you'll spend more than if you just absorb the consequences. Trick isn't preparedness, but rather resilience, ability to get up and move on quickly.
The US was especially unprepared. Compare NYC to anywhere else. We had months to build a testing infrastructure like South Korea, we did practically nothing, and now thousands have died. Hong Kong, Taiwan, South Korea, etc., all did better than we did with worse situations. Government competency matters.
I have been thinking about this problem for a long time, and I think it's cultural. I don't limit it to American or Western culture; I think this a human behavior.
My thesis is that quantitative and spatial intelligences, which are required to build things, are rarer than verbal intelligence and thus more likely to regress to the mean. This makes them harder to pass on to progeny and less reliable as conduits of status.
Highly verbal careers like law and to a lesser extent finance (which is more about networking than crunching numbers at the high level) are more accessible to the average heir, because they require more common skills. If being an engineer or doctor were the pinnacle of social status, it would be harder to pass on social status because it would be less likely that your child would be able to perform those functions.
So elites decided to build societies that gave structural advantages to the so-called FIRE economy because that gave them the best chance at locking in their status. This relegated builder careers to second or third tier status.
I think the writer goes too abstract and in the meantime ignorea several points. It's not like people, companies, and politicians don't want to build. It's because they are voices from both sides that delay creations. And going in bluntly will only make things worse. Going on to undertake big tasks without proper plans and rules will sooner or later cause harm.
I think it's telling that in this conversation so far the one thing not mentioned has been the I-word: Ideology. Though there has been a bit of the C-word: Class.
Talking about what's best for the country is _by_its_very_nature_ s political, whether we choose to acknowledge that or not.
"Politics (Greek: Πολιτικά, politiká, 'affairs of the cities') is the set of activities that are associated with the governance of a country, state or area. It involves making decisions that apply to groups of members and achieving and exercising positions of governance—organized control over a human community ...
... In modern nation states, people often form political parties to represent their ideas. Members of a party often agree to take the same position on many issues and agree to support the same changes to law and the same leaders. An election is usually a competition between different parties"
Another thing I thought was interesting was, when China was building hospitals in a few days, I figured that's something we just could never do. Well we ended up converting Javits into like the third largest hospital in the world in 48 hours. Turns out we really can build a hospital that quickly if we really want to. Maybe it is just a matter of attitude.
I love building things, especially new things. I've started to see over the years that while I've built many things, I've failed just as much to maintain them.
I think there may be a paradox underlying his point: while we need to build things, we also need to maintain things. If I have limited resources (e.g., time, money, land, materials, etc.), then if I choose to build something, I may be choosing to abandon (not maintain) something, or even to destroy that thing. I think this applies to businesses, apps, bridges, skyscrapers, and even relationships. If I start something new, it often replaces the old.
I believe we may struggle with this, because, while we crave new things, we get emotionally attached to old things. We get attached to the way we're able to see the SF Bay from our house and don't want anything blocking our view. We get attached to our expertise and comfort at coding in a specific language and don't want to learn yet another new language. We get attached to the way we've made cars day after day, year after year, and also to the juicy profits and lives that it has given us.
Also, I think a lot of business models rely more on the maintaining of things than they do the building of things (unless you consider maintaining some sort of (re)building, but I don't). Facebook built a platform and for the most part, while adding users, seems to maintain it and want to prevent others from taking their users. Someone who builds a nuclear power plant will probably spend a lot of money building it and therefore wants to "milk the asset" for as much as they can. Even the construction firm who builds the power plant probably has methods that they've practiced over the years, and wants to leverage the learning of those methods more so than learn new ones.
I still agree that we need to build new things, I just believe there are strong financial and emotional reasons for why we maintain old things.
I have nothing against the VC industry just like I have nothing against hedge funds, PE or the banking industry. They manage capital inside a regulatory framework to generate returns for their investors. The VC industry however excels at hype and hagiography which enables them to build up entrepreneurship as a holy calling while urging on legions of founders to take more risk but I digress.....
Imagine Wynn Resorts (world's largest operator of Casinos) berating the world for living large, drinking too much and indulging in non-productive activities. The biggest hits of a16z - airbnb, lyft, pinterest - are companies that are either media assets to monetize eyeballs, or software that extracts more value from existing assets while doing an end-run around existing regulation.
Yaay for a16z for being such baller investors. But to tell the rest of us it is time to build is like Pepsico trying to scare us into healthy habits.
My take... we need to greatly increase access to capital by dropping the accredited investor requirements. It is ridiculous that people in less economically advantaged areas are forced to grovel to those deemed rich for capital rather than ask their neighbors and friends for investments. Instead of allowing these people to make investments, the government throws them a bone by allowing them to 'crowdfund', which is another name for making an investment without being entitled to any of the return (dividends and shares). Instead, we incentivize capital sharing only for the rich and are surprised when the rich get richer.
This is the greatest form of regulatory capture in existence today because it cuts across all industries and fields. It is a regulatory capture of the free market itself by the rich.
> It is ridiculous that people in less economically advantaged areas are forced to grovel to those deemed rich for capital rather than ask their neighbors and friends for investments.
AFAIK the accredited investor requirements only apply to sales of securities to investors who don't have a prior relationship with you. They do not apply if, for example, you want to start a startup and you get ten relatives, friends, and neighbors who already know you to invest in it and give them each a proportionate number of shares of stock.
At least for higher education, I think it's a little more difficult to scale than this piece makes. Higher education has a very entrenched culture of obsessing with fundraising, accumulation of prestige through factors tangential to education quality, and exploitation of undergrad/grad labor. My state school tried to 'build' enrollments in it's historically competitive STEM majors and I just saw these problematic factors become worse; increased reliance on underpaid student TAs, with additional funding being dumped into band-aids such as tutoring programs fractured between departments and stress relief fairs. For higher education it needs complete cultural or policy reform to focus on educating and eliminate cruft, before we can start building it out.
How do the preparations for the next big San Andreas earthquake compare to those that were (or should have been) made for Covid-19? What else do we need to build for something like that?
The impact of the two seem quite similar: at best, stuck at home on a dwindling pile of food that can be replenished sporadically every two weeks while you try to make a living online. Covid-19 didn’t take out physical infrastructure, but decimating the workforce has had a similar effect, and knock on effects are real (how do I service a broken car during lockdown?)
The two big takeaways from Covid-19 for me were: have better food security at home, and invest in a home grade wireless internet connection. I’d probably think carefully about exposure to natural disasters too, the next time I move.
Regulatory capture seems like a red herring that everyone is fixating on here. Marc is right to mention it, but it's part of a bunch of other things and the most important part is the will of people to actually build and try new stuff, and run through walls to make it happen.
One way to win at anything in life is to be counter cyclical. Sure you can also win by being best but the numbers are stacked against you when everyone is doing the same.
As someone funnily quipped the pandemic is so bad that most places are out of stock on podcasting microphones.
If everyone is podcasting and writing apps then it’s much harder to get through the noise.
Find something that no else is doing, maybe something that requires physical presence, just to be contrarian.
So now might a great time to write some software but now and in a few months will be a particularly hard time to turn that into a profitable business.
Remember VCs don’t care if you take losses.
The boom/bust cycle, which they don't have in China, means that anything capital intensive will be given back to the banks on the next down turn and resold to somebody else if a big fish doesn't acquire it between market crashes. That's why nobody builds capital intensive stuff that has a long term ROI, at least in this country.
For example, watch Tesla go broke and give all that beautiful capital they've built back to their creditors before this is all over. This doesn't happen in China, even though lots of companies have debts they haven't paid on in years because the government just buys the bad debts off the banks and the banks continue to lend.
> The problem is desire. We need to want these things.
... and you can't really force that. americans seem unmotivated to want the same things. cynicism drives people to politicization and polarization of everything, including chemical compounds. On the one side, half the people believe that through politics they can force the other half to do their work for them. The other side realizes that and becomes increasingly cynical, hiding their money away from them. there is no sense of common purpose despite the proclamations. maybe the issue is trust
this essay is nice and arousing and all, and hard to disagree with it, but somehow i think people will forget about it
Marc has to accept some responsibility for this as the decisions by himself and his industry for 20 years have been part of the problem.
Building more housing in the Bay area is not part of the solution. What is part of the solution is funding business activity elsewhere, where people are not packed in like sardines and breeding viruses.
Note it does show that the VCs are not a master class because they can't win against bay area landlords. If the ground in the Bay area is so uniquely blessed that is a case for sky-high property taxes, right?
I want to see salesforce, Apple's and similar companies ditch the Moscone center and move their conferences to Las Vegas for one thing.
What if the problems we face today are harder than the problems people faced from before roughly 1980?
What if we're comparing apples to oranges when we say people in the past had more ambition? People would build an entire suburb in the 1950s without filing an Environmental Report to the EPA because didn't even exist. (An environmental report for those who do not know is a massive piece of legal documentation that shows how a prospective development will effect the natural landscape.)
Perhaps Singapore is building gleaming skyscrapers because they've taken the baton from us and have no "baggage" per se.
They way he glossed over money being the problem really shows how much of a position of privilege he is in.
Of course money is the problem.
More specifically, the subset of money that is profits. How can you build if you don’t feel secure in you and your loved one’s futures? Whether that future is just enough to scrape by to making sure your children have a safety net. The majority of people simply do not have the luxury of ignoring money to divert their attention on building. If this current pandemic hasn’t made that abundantly clear, I don’t know what will.
(Yes, I’m aware of the outliers on both ends. I’m choosing to ignore them because to build something meaningful for the future requires the majority. And that is precisely the population that is most concerned about money.)
Regulatory capture? That’s because those in government know how quickly money can be earned and lost. So why not let this happen to secure their own future?
Startups and investors? Everyone is focused on ROI and the short term because that optimized for your wealth. Long term spreads the wealth among employees which ultimately does not help secure your future. If this hurts to hear, it’s because deep down you know it to be true.
It takes a lot of wealth and time for outliers to see that they aren’t building for the future. It’s great if Andreessen sees this issue and is trying to solve for it, but money is not so easily solved for.
> Here’s a modest proposal to my critics. Instead of attacking my ideas of what to build, conceive your own! What do you think we should build?
Sure. I’d love to take the time to flesh out and propose my ideas to you. Then build and iterate on them. But first, give me stable income. Promise to take care of me.
I’ve just been part of a mass layoff for the third time in my life! Every time I’ve built up some sort of financial safety net, it’s been burnt to ashes by a recession. I left teaching and returned to engineering precisely because I realized how impossible it would be to build a financially secure life for my family (parents included).
So that is my challenge to you, Mr. Horowitz and everyone who agrees. What will you do to feed the desire to build?
I love the idea of building, but we also shouldn't lose sight of earth's limited resources.
We don't have unlimited land, and we need much of that for agriculture to sustain the billions of people living here.
When we use energy, we must make sure it comes from renewable sources.
When we build, we must take care that we don't destroy existing ecosystems. And so on.
And since we cannot rely on everybody being responsible on their own, we need regulations. They should be as efficient and frictionless as possible, but let's not dismiss them all together in a frenzy to build, build, build.
Well Marc, one problem is the world of VC-driven innovation. Building truly revolutionary work takes time and commitment, while the VC ecosystem and entrepreneurial culture actively works against this.
- Telling founders to be underpaid and commit their entire finances to the success of their startups forces startups to spend more time finding product-market fit than building what the world needs long-term.
- Hiring employees at below market salary and offsetting with equity incentives people to think short-term. You need to move towards going public and increasing valuation if you want to keep your talent.
- The funding round model forces short-term thinking by constantly forcing companies to prove their vision has a market in a short amount of time. How do you prove that a two-decade project has legs in the first 5 years? The path I've seen is people reducing their ambitions to find traction.
- The VC industry does not value positive social externalities in any appreciable way. Fast growth and revenue is all that matters and we celebrate the companies that achieve that by causing negative externalities.
There's a reason that the most impactful real-world innovation I can think of comes from people like Bezos and Musk who can afford to think in terms of decades.
Maybe VCs are not the vehicles for long-term innovation. Or maybe the leaders of the VC industry could look inwards and find changes to how they approach innovation that could help solve these long-term problems.
When you have extreme wealth and influence, there is an inherent responsibility to ask whether 'you' are doing enough.
Brb in a couple decades. But I was kind of hoping that the domain experts would have thoughts on the topic. I would very much like to build long-term solutions to our biggest problems, but I haven't found a whole lot of mechanisms to do so.
I think you have identified a real problem. There needs to be a vehicle for long term investing in companies. In the UK at least the major vehicle for long-term, even multi-generational, investing is property because of the special protections it has. The richest family in Britain recently transferred £9bn to the next son, tax-free, in this way. It is low risk, and the costs of holding non- devoloped land is low. This leads to all kinds of undesirable effects like land-banking. I feel the cost of holding land needs to go up (land value tax?) to incentivise development. Inheritance tax shields (trusts) need removing. This should get all of this stale capital working and looking for a new home. This could be a longer term VC type fund, perhaps?
Maybe! I wonder how that would work with the internal dynamics of VCs. OpenAI is an interesting case study here. But they ran into the problem that working on transformative long-term projects is expensive and it is very hard to continue to fund it solely on what are essentially group charitable contributions. Maybe the right domain to address this problem is via the government - help shift incentives towards long-term investments in innovation in some way.
The only model I've seen work effectively so far is having on extremely rich person decide on a long-term goal and financially drive that work over a long-period of time - Musk with electric vehicles, Musk/Bezos with spaceflight, Gates with global health.
I share some of the sentiment, but only demand and necessity will drive “building”. An energized or optimistic citizenry surely helps, but to kick innovation into high gear we need a Cold War or something. A crisis where we can go outside at least - this virus really has deflated some of the American spirit it feels like. Sort of stuck in this limbo where everyone wants to rally and help but the touted best way to help is to stay inside. A lot of pent up energy in me at least; perhaps Marc is channeling a bit of his own.
OK, fair enough. If we have to build and do all those things, what is it that we should STOP doing, buying, investing in? There is only so much time, capital, skill, energy (both literal energy and human willpower). What can we sacrifice? Commuting to work in droves? MacMansions? Travel for pleasure? Sporting events, concerts, and mega payments to celebrities? Buying new car every 5 years? Luxury cars? Infrastructure hungry suburbia’s and exurbia’s? Who will take a stab at this question?
Wealth isn't a zero-sum game. People in the first half of the 20th century didn't give up anything to develop electricity, automobiles, air travel, etc. But if our current regulations and institutions existed back then, we'd have missed out on many technologies.
Heck if aspirin were invented today, it's unlikely it would be approved by the FDA. Even if it was, it would be prescription-only. And if caffeine were invented today, the FDA would ban it and the DEA would find and arrest anyone manufacturing or using it.
“The things we build in huge quantities, like computers and TVs, drop rapidly in price.”
That’s great for basically everyone except the people building them. In fact that’s probably the worst possible argument to convince someone to start building more of these things. I don’t know the answer but a lot of this essay was stating what would be best for the whole without really addressing the incentives/drives of the people who are supposed to be doing all this building.
This article was interesting in seeing how demand in these types of circumstances will eventually wear off and all the buyers will go back to looking for the lowest cost:
I just wanted to note that most of Westworld is shot in Downtown Los Angeles! I love that he mentions this though because futuristic worlds in the show have been amazing.
Can't wait to see the same investors praising this essay announce investments in frivolous startups like TikTok lookalikes and Clubhouse in a few months from now
Agreed. Let's start by building a new nation. I propose we rewrite the Declaration of Independence so as to strike out the myths and update it with what science has learned since.
And let's set out with a more ambitious dream than simply providing the opportunity to have a home. A nation not explicitly designed to take care of our needs, such as housing, is inefficient by design.
Myth 1: Independence.
Reality: Interdependence and autonomy.
One wishes there was a more direct call to action here. It reads like a general complaint about how things work and doesn’t really get the ball rolling.
It would help to have a leader who inspires, a leader who brings the opposing side along (knowing that we most of us want the same result, we just disagree on how to get there), a leader who couldn't give a damn about re-election, a leader with a vision of a positive future, and a leader who drives us to our better natures. We haven't had one of those in a while.
"""You see it in manufacturing. Contrary to conventional wisdom, American manufacturing output is higher than ever, but why has so much manufacturing been offshored to places with cheaper manual labor?"""
"""Is the problem money? That seems hard to believe when we have the money to wage endless wars in the Middle East and repeatedly bail out incumbent banks, airlines, and carmakers."""
This is interesting. They are investors, why is he asking the government to provide the capital for this. Shouldn't they be all over these great unexplored opportunities? How many companies that build actual physical stuff have they backed compared to yet-another-SaaS plays? I'm really curious how a pitch of "we want to build/manufacture stuff in the USA" would have went pre-Pandemic at a16z. Even trying to pitch hardware instead of software seems hard enough as is.
"""The problem is regulatory capture. We need to want new companies to build these things, even if incumbents don’t like it, even if only to force the incumbents to build these things. And the problem is will. We need to build these things."""
This is also interesting. Isn't one of the first things they want "moat, moat, moat"? Sure it's nice to ask for easier entry into markets when you try to fund the disruptor. But once said disruptor is funded they also want as much protection as possible.
"""Instead of attacking my ideas of what to build, conceive your own! What do you think we should build?"""
As a start, I would humbly suggest to rethink the model of "relocating all companies to where the capital is located" and move towards "move companies to the places where they should build most of their stuff". It's pretty mindblowing to me why software companies should be located in SV even when their customers are located elsewhere.
I would also argue that building stuff should be done in a more humble way than the typical VC-ambition. Build, test, show profit, grow organically. I think that could be more healthy than pump up 20 builders and hope one goes hyperbolic.
As an aside, the cynic in me thinks that Theranos would probably go through the roof right now if it was still around and waste a lot more capital than it did. It's easy to call for action, any action in times of crisis without being careful and level headed enough.
In the article, Marc doesn't mention software. Maybe software could eat the world faster too(probably will, since many companies starting communicate over the internet). But there is still a huge gap between developers and consumers. I'm wondering what he thinks about that? Also, I'm glad He mention Westworld, great show.
Not sure I agree with the notion that we can ignore political motivation. Obama left a pandemic response organization and the intelligence services knew how dangerous it was going to be.
Trump absolutely failed and is failing at leading us through this thing.
Innovation is great, but let’s not ignore bad leadership.
Andreseen is notoriously conservative and clearly whitewashing reality.
We do want to build things. Our government has rotted from the inside and people inside of our government contribute a large amount of their effort to protecting their own wealth. Look at the senator insider trading story from a few months ago for proof.
We tried to build this thing called "medicare for all". It would have freed people up to take greater risks in their employment because our physical health would not be tied to our employment.
That idea was run into the ground by an all-hands-on-deck media ( the media that is owned by billionaires ) and DNC blitz to shut it down. Because that would cost the 1% some of their money, and the 1% are the ones WITH all the money, so they have the power to write the checks and make things happen.
Healthcare is something everyone needs at one point. We cannot take a risk because our healthcare is insanely expensive and tied to our employment.
We would love to build things. Building things costs money. Most people do not have much money. The 1% do not let us spend "their" money to build things. They take a larger and larger slice of the pie, while everyone else is fighting for crumbs. The ladder is pulled up for labor to fight back with "right to work" laws, and other anti-labor policies. So nothing ever gets built.
I broadly agree with him, but I do think his opinions on the 'right' are more due to media portrayals of right wingers rather than the actual opinions of those 'on the right'. He says.
> The right must fight hard against crony capitalism, regulatory capture, ossified oligopolies, risk-inducing offshoring, and investor-friendly buybacks in lieu of customer-friendly (and, over a longer period of time, even more investor-friendly) innovation.
>
> It’s time for full-throated, unapologetic, uncompromised political support from the right for aggressive investment in new products, in new industries, in new factories, in new science, in big leaps forward.
Regulatory capture is something the right is adamantly against usually. I mean, most right-leaning politicians in America are into reducing regulation.
Offshoring is also something that hasn't been on the right for almost a decade.
Finally, the right typically often has absolute political support for aggressive VC investment. Our current right-leaning president has supported a ludicrously low interest rate to encourage private investment in technology as well as set up economic opportunity zones to encourage investment in underserved communities.
> Regulatory capture is something the right is adamantly against usually. I mean, most right-leaning politicians in America are into reducing regulation.
Getting rid of regulation is the ultimate regulatory capture.
Can you explain rather than simply state? Regulatory capture typically refers to regulations entrenching current players and increasing barriers to entry. By definition, less regulation, lowers barriers to entry of new participants. You surely cannot actually believe that no regulation increases barriers to entry of certain industries?
My understanding of regulatory capture is when the regulatory decision makers are beholden or acting in concert with those they purport to regulate.
Most voters think that some level of regulation is beneficial and support it. Politicians who advocate for the complete removal of regulations don't usually do well in the polls, but this is a widely held belief in right-wing thought. The market will do all the regulating necessary. This has quite obviously been proven incorrect over the years. Nevertheless, the idea persists.
The next most effective way to have no regulations is to keep the appearance of regulations and have the enforcers be completely ineffectual, thus regulatory capture.
So, you end up with the externally perverse-looking, but internally consistent situation where the right will support regulators' existence and even promote their people into those institutions.
Thank you for the decent explanation. You are certainly correct in your assesment. However, I was commenting on Andreesen's caricature of voters 'on the right'. While true that most voters support regulation, right-leaning voters are more likely not to support much at all, so they are entirely self consistent. When restricting yourself to only one 'side', then it's quite misleading to claim that right-leaning voters are siding with the kinds of people who enable regulatory capture.
Your explanation explains why regulatory capture may arise out of an interplay between right-leaning politicians and their constituents. Regulatory capture in your view arises when right-leaning politicians succumb to voters (not necessarily right-leaning ones) desire for regulation. However, this is an emergent phenomenon, not a tenet of right-leaning thought.
So you want more regulation made in an attempt to prevent regulatory loopholes from enabling private players to protect their market position using government regulation? Without any explanation, this position seems absolutely incoherent.
Umm, no? I want there to be regulation in place to prevent monopolistic / anti-trust behavior.
Many "right-wingers" I have talked to want to dismantle many of the regulations that have been put in place for expressly that purpose and actually do pretty well in that regard.
I don't generally want "more regulation". I want the right regulation.
I like the angle, and mostly agree with it, but I have a hard time believing our system isn't already so deadlocked that none of it will ever happen.
Like, it's not as if "the left" wouldn't love to make over institutions like the VA, but has such a thing been politically realistic in ~the last 2 decades?
The biggest argument for tax paid, public sector health care and education, is that it should be much cheaper for the customer when the institutions are made efficiently and not for-profit.
A quality education does not have to cost more than $10-20k to produce (per student). So why are current prices in the $100-200k range?
US spending on public education at the K-12 level is close to 15k per year. Your assertion that removing the profit from the system will lead to significantly lower costs is not supported by the data.
Why should education be a market? Why does it make sense for poor people to get worse education? And if you're thinking the government will subsidize it, how is a sufficient subsidy different than public education?
They are out of business as they are not economically optimal for the market. I see where you're going though.
> The problem is desire. We need to want these things. The problem is inertia. We need to want these things more than we want to prevent these things.
> And the problem is will. We need to build these things.
This is an accusation for lack of motivation. An accusation without any specific substantiation. Hindsight is not a fair substantiation for such accusation.
Motivation is the preference for getting into the most favourable thinkable outcome from the available starting conditions. The current situation was beyond most people's thinkable outcomes, so most of us were caught off guard.
> Part of the problem is clearly foresight, a failure of imagination.
Agree on this. Perhaps I'd say it's a failure of being informed on this possibility. But that's it.
> Why shouldn’t regulators and taxpayers demand that Harvard build?
Welcome to the USSR.
If Harvard isn't incentivised, demanding that they build will not make anybody better off.
> Instead of attacking my ideas of what to build, conceive your own! What do you think we should build?
I think Marc Andreessen should manually manufacture surgical masks in his bedroom 8 hours a day 7 days a week and supply Department of Health & Human Services free of charge.
Solve the climate crisis by building — energy experts say that all carbon-based electrical power generation on the planet could be replaced by a few thousand new zero-emission nuclear reactors, so let’s build those. Maybe we can start with 10 new reactors? Then 100? Then the rest?
I partially did. I think the article puts its finger on the main "pulse" of the general problem most people feel with American, perhaps more broadly Western, society- but doesn't offer anything more substantive then a vague "call to action"
if I had to make succinct guess to this "general problem" - I'd wager simply that most people feel like our current institutions are failing to meet most of their needs, and there doesn't appear to be any sense that these problems will be readily addressed anytime soon
> I’m with Nicholas Stern when he says that capitalism is how we take care of people we don’t know — all of these fields are highly lucrative already and should be prime stomping grounds for capitalist investment, good both for the investor and the customers who are served.
I'm not familiar with Nicholas Stern, and will look him up, but does anyone here want to elaborate as if you were talking to a five-year-old?
At this point in the essay, Andreessen is wondering aloud why more building hasn't happened in the United States to solve problems in fields like education, manufacturing, and transportation.
He asks what the reasons could be, and lists several rejecting each of them. One reason that he rejects for why more building hasn't happened is capitalism.
Andreessen thinks capitalism can't be the reason for us not building because the fields he mentions are places where it's profitable ("highly lucrative") for businesses to operate. Replacing capitalism with another system (say communism) wouldn't solve our inability to build, in Andreessen's view.
I don't disagree with his statement, but I disagree with his expectations. These systems are NOT ripe for capitalism. Capitalism is built to fulfill demand. There was never demand from the government for it to distribute cash, therefore they never built a system for it. There was never a real demand for a vaccine, so we never developed it.
Capitalism is why we're in this mess - we're valuing short-term gains over long-term/far-fetched/society-changing results - and a16z is part of that system. Sure, he's at the edge of that system, but I guarantee you he would not have invested in a coronavirus vaccine in mid-2019 when there was no market for one.
I would not say it's time to build. I would say it's time to change our system of motivation. Money does not, and will not ever, solve these problems BEFORE they become problems.
You'd need to argue that they did it faster because of communism. In fact, China starting growing when opening up to markets. Oh and tens millions dead each. And the pollution & resource use is worse too. See https://www.amazon.com/More-Less-Surprising-Learned-Resource...
No, that would be moving the goalposts. The GP post claimed that communist societies "produced less" (I made no claim about "polluted more," which the GP post also stated). I gave 2 examples showing very large countries that went from zero to world industrial power in 50 years. China is very near the top in world GDP right now. The USSR put both the first human and the first artificial satellite into space in that timeframe. Show me a capitalist country that's accomplished so much so fast.
The reason you are talking about growth over a 50 year span is because your basic capitalistic countries like the USA didn't get to play catch-up, because they were always riding the front edge of technological advancement.
Since the PRC's timespan was post-WWII, it's fair to compare them to the Asian tigers and Japan. It's easy to see which did better. Edit: Same goes if we're talking about "building more" rather than doing better.
Not a subscriber to this view, but the concept is that we take care for our family and friends for free, and charity is driven by showing us real people rather than cold facts. For the rest of the "people we don't know", investment and payments are capitalism's way of helping them out.
In this context, it sounds like he's surprised that investors are waiting for government to bail out any normally-profitable airlines, rather than making an investment or buying in while keeping them afloat. This seems simplistic to me; the cost of maintaining an airline or hotel for the upcoming no-revenue months is so high that your investment would be lost.
> We should have gleaming skyscrapers and spectacular living environments in all our best cities at levels way beyond what we have now; where are they?
There are lots of dense cities, with beautiful buildings and streets, 5 story high.
In my view, we're great at building private wealth, but have lapsed at building public wealth. As a society, we can be as wealthy as before the COVID, but we should think about how our wealth is distributed.
However, build what exactly? I don’t disagree with building hospitals and important public infrastructure. However:
1) More exponential growth isn’t by definition for the better
2) We need to ask ourselves, brutally and honestly, what actually needs building, and what doesn’t?
Aside from the obvious tangible tech and infrastructure we can build, there are also many tacit things we should be building and investing in, but that are difficult to measure: International cooperation, resilience, creativity.
There’s no point in building more infrastructure (Andreessen) or trying to populate other planets (Musk), if we continue having paralyzing social inequality and international conflict, which destroy what we build. ️
> [...] if we continue having paralyzing social inequality and international conflict, which destroy what we build
"We" (meaning the US and other developed Western nations) don't have "paralyzing social inequality". Social inequality, yes, but it's far, far from paralyzing. Also, "we" might be involved in international conflicts, but these destroy only a tiny fraction of what we build.
What I want to build is not attractive to short term investors. I want to build towards long-term growth. My challenge and current quest, is to figure out what that thing is.
The problem is not the builders. The problem is those who hold them back: government red tape, bureaucracy and investors who prefer to put their money on another cat app.
Just today I was on Twitter reading a thread where they were dismissing Chomsky as a “neoliberal shill”. Couldn’t imagine how.
The things we need to build will probably require deep involvement of the government, or at least the exit of cronyism and political wave bending on the part of the government. And the vision of a 20, 50 and 100 year plan.
Not sure I see that in our immediate future, here in the US.
There seems to be a lot more cronyism in governments that don't do a lot of useful things. I'm sure there's favoritism in South Korea but at the same time their industrial policy is first rate.
Boomers did build a lot because they needed a way to store this workforce, and building is the way. Capital was short and workforce abundant.
Now it's changing, we have lots of goods and savings to invest, but nobody to take them and actually DO something. Now is time to make sure that people that can create something actually do it. Interest rates are super low, and the economies are flooded with money.
What's the problem here. ZOMBIES!
ZOMBIE companies that just drag resources and never die. If you don't let them fall and you never restructure the system gets sick. And that's what happens now, saving everyone ass is not clever, but printed money is going to those holes.
> .. but why has so much manufacturing been offshored to places with cheaper manual labor? We know how to build highly automated factories.
Western consumers have been voting with their wallets for decades - they want lots of cheap products.
If you want to get a new product produced today you'll likely be able to produce it much cheaper abroad, where there's a more efficient supply chain and cheap labour and with much less initial overhead.
Make your product more expensive you'll likely be out of business before the next global pandemic.
I expect this essay to be the target of criticism. Here’s a modest proposal to my critics. Instead of attacking my ideas of what to build, conceive your own! What do you think we should build? There’s an excellent chance I’ll agree with you.
It's interesting that he manages to say completely uncontroversial things, yet do so in such a way that even he finds them controversial. Is there a word for this phenomenon?
Reworded in a way that doesn't generalize quite so intensely and that doesn't use such an ineffective tone, this 'essay' (I don't really think it counts as one; it's more what you'd expect to hear in a speech) might have actually had legs.
I don't have an issue with the ideas. I agree with many of them.
I just find it a bit absurd that one of the top 1000 people capable of putting them into action is telling other people to go do it while he spends his time investing in them.
Capital is obviously helpful and crucial for building companies, but he is obviously satisfied waiting for solutions to walk in the door rather than chasing them himself.
You realize he’s one of the main players in your enjoyment of the internet as we see it today right?
Then you somehow proceed to say “well why is Michael Jordan talking about how X player isn’t performing!? He should be out there playing right now”... uh what?
So a player moves to becoming a coach or some support character after decades in the game and that’s your great comment?
> You realize he’s one of the main players in your enjoyment of the internet as we see it today right?
I know who he is.
> Then you somehow proceed to say “well why is Michael Jordan talking about how X player isn’t performing!? He should be out there playing right now”... uh what?
If he is on the bench and is talking about how performance is desperately needed, yes. Michael Jordan is old. He can't play as well anymore. Marc Andreessen is in the best position to be a builder in his life.
> So a player moves to becoming a coach or some support character after decades in the game and that’s your great comment?
Players generally stop playing once they for some reason can't (injury, age, etc) or begin to have other priorities and don't view the effort of playing as worth it.
I don't see a reason that he can't, so this is of lesser significance to him than the essay alone would indicate.
You realize he’s one of the main players in your enjoyment of the internet as we see it today right?
This is a drastic over-generalization, and a very controversial one at that. He played a big role in popularizing the Web, which many people believe to be the worst of available options at the time of creation. He also arguably started the trend of "Make the WWW browser do as much as possible."
I personally don't share most of these views, but let's not go overboard here.
It's partly because this is fantasy land stuff, it's provacative in that it spends the first paragraph wiping away any connection to reality, unwinds a lot of hope, then puts you in a position to be put down for being negative.
It's sort of a Jonathan Swift-style critique of American plutocracy in the early millennium. Very clever!
If you stand in a room full of people and say "the sky is blue", you'll get a weird look at most.
If you say instead "Most of you will think it's controversial and criticise me, but I think the sky is blue - you're free to voice your opinion though", you'll get lots of people commenting (as you did) that this is not controversial and the sky is indeed blue. You can get people to spread and talk about your idea this way.
I don't think he'd waste his reputation in that way intentionally, especially when pretty much every word he utters gets to the top of the charts on this site and goes semi-viral elsewhere.
Yet, this is the first one which crossed 300 votes, as far as I can tell (only checked 8 pages back or so) and is currently the highest scoring one. It may be that it's the most interesting one too. But adding popularity didn't hurt.
We also don’t have therapies or a vaccine — despite, again, years of advance warning about bat-borne coronaviruses.
This doesn’t seem like a fair criticism. How do you create a vaccine for a disease you’ve never encountered? We have a hard enough time guessing the right flu strain to vaccinate against let alone a virus like Covid.
And people seem to ignore the flip side of this - spending money to prepare for something that never happens. I’ve seen plenty of people criticizing the government for buying tens of millions of doses of Tamiflu and Cipro that just expire unused.
> Why do we not have these things? Medical equipment and financial conduits involve no rocket science whatsoever. At least therapies and vaccines are hard! Making masks and transferring money are not hard.
> The problem is desire. We need to want these things.
> What’s the American dream? The opportunity to have a home of your own, and a family you can provide for.
The top tier in the U.S. is enjoying a rather good living. They have houses, cars, cheap imported stuff, groceries delivered, accountants and good health insurance. They will also travel to some place in Europe or Asia for a nice vacation to avoid the bad and expensive service in the U.S.
The bottom tier (which is getting larger) surely wants these things. But they are hopeless and both the top tier and the government has given up on them. On other countries (i.e.: Singapore) the government think about the larger population. So they build some public transportation. In the U.S., there is a strong police force, so these things are under control.
This is a complex question, and the answer is not “we are a weak and lazy civilisation, if only we’d build build build instead”.
We’ve put the world’s mask factories where it made the most economic sense, and anyone willing to go out on a limb and move production to where it makes the least economic sense will be crushed by fellow capitalists.
I sometimes wonder if nerds are subconsciously benchmarking our technological and economic progress against science fiction staples, which are great for firing the imagination but are a monumentally poor benchmark of actual progress. It’s very easy to utter the words “let’s colonise the galaxy”, but the logistical and technical barriers are formidable: in reality this undertaking is impossible for our civilisation, because we lack the knowledge that might allow us to do it (assuming that it is possible).
Commercial innovation is a very thin crust on top of a large body of fundamental research, which is required to make things like economic supersonic flight a reality for millions. So before we can “build build build”, we must invest in fundamental research.
> Why aren’t we building Elon Musk’s “alien dreadnoughts” — giant, gleaming, state of the art factories producing every conceivable kind of product, at the highest possible quality and lowest possible cost — all throughout our country?
> Where are the supersonic aircraft?
From an interview[1] with Sarah Lacy in 2018, Marc Andreessen already had the answers:
Q: Is there a way Andreessen Horowitz could stop backing more apps and throw some of the money towards the next SpaceX?
Andreessen:
The capital efficiency of having a small group of software programmers that build amazing software, who then go in and do something in an industry that’s 100 billion or trillion-dollar industry, existing venture capital structure and framework is very good at doing that.
It works very well when it works, and I think that’s very valuable. I always accuse Peter of dismissing all that stuff out of hand, which is probably an overstatement.
The part that I struggle with, and I’m on the verge of agreeing with, it’s SpaceX, it’s Tesla. The trenchant critique comes from Larry Page, Elon, and Peter. It’s like, “OK, software. Got it. What about electric cars? What about the Hyperloop? What about the SpaceX private rocketry?”
What about these bigger, more transformational things? In particular, what about the things that operate more in the real world? What about the things that are really going to affect natural resources, pollution, livability of cities, and all the things that are outside of whatever’s running on the screen?
I think that there’s a validity. Google is doing the self-driving car. The self-driving car is going to work. By the time it works, it will have cost hundreds of millions, and possibly billions of dollars to make work. The self-driving car is not a lean startup. Not in any way.
SpaceX and Tesla were not lean startups. They were very big, ambitious. They raised a lot of money. The big question, the question I’m noodling around, is what about the efforts where you have to say, “This thing is going to take $300 million?” It just is. There’s no shortcut and there’s no minimum viable product. It is going to take $300 million, and that $300 million has to be reserved ahead of time.
Those companies have to be run completely differently because the stakes are so much higher.
What kind of entrepreneur can do that? Elon has proven he can do it. There are not a lot of other people in the Valley today who have done things at that level of scale.
There’s a different kind of entrepreneur. There’s a different kind of idea. There’s a different kind of financing method. I think we’ll all collectively figure it out, but we don’t actually have it today.
What you get is you have a very special entrepreneur like Elon, and then he can do it. What I always say is, “OK, who is the next Elon? And then we’ll talk.”
---
We need more VCs to bet on these ambitious ideas. No more Tiktok, please.
The essay takes it as a given that we should have no confidence in democracy.
[Some] government regulations are bad. How do we fix them? Answer: rich people should manipulate the government even more! Clearly, that must be the answer.
But isn't that how we got here in the first place?
Believe me, I know [our] democracy sucks. I've been to planning meetings in San Francisco. I've seen democracy sucking first-hand.
Our democracy systematically rewards the people who have the means, time and incentive to participate much more often than the average citizen. Anyone who visits enough town halls can tell: you see the same people over and over again, speaking louder than anyone else.
When you have a system that repeatedly gives bad outcomes in a variety of different situations, it's not enough to try to force new particular outcomes. You have to change the way the system works. That doesn't mean you try [and fail] again to get disengaged people involved in politics. Those people aren't involved in politics for a reason. They're busy; they're not rich or charismatic; they don't have strong motivations.
What you can do is change the situation around the disengaged people. The easiest facet is money. Most people do not spend money on politics. Only a small fraction do.
Andrew Yang had a proposal to give citizens a hundred dollars each that could only be spent on political campaigns. It wasn't near the top of his list of proposals, but I thought it was the best idea he had offered. Most people don't have the time or the desire to participate the way that social theorists imagine that they should. But what's great about money is that it is very easy to pool together.
The other thing that's great about money is that you have a lot of bandwidth for your signals. In an election, even a ranked-choice election, you submit maybe a few dozen bits of entropy to the great machine that rules the world and it tries to make something useful out of it. The advice bits are few; the world bits are many. The machine struggles. As the world becomes larger, the machine struggles more. Money is different; money can be spend in many, many different ways. The bandwidth becomes much larger; the machine can at least in principle function better.
In order to actually make sure that money is used in a positive way, though, you need to have a model of the people as they relate to the system of government. Economists like to talk about how the market aggregates information. So too should a democracy. But where a market aggregates information about people's activities, a democracy aggregates information about their opinions.
In other words, in order to fix democracy, you need to find the best way to aggregate people's opinions.
My theory here is simple: most people have a fair understanding of a few things and a poor understanding of most things. If the system could be organized so as to encourage people to spend money on issues they understand better than the norm, the information quality will be higher.
Some of this will have to depend on goodwill. The most clearly lucrative way to spend your money on politics will probably still be to lower your own taxes. But if we give people the opportunity to choose to spend their money on issues that relate to them, specifically, they might feel more included and more inclined to participate honestly.
There is a crisis of institutional trust in America.
Improving democracy seems, to me, to be one of the best opportunities to rebuild this trust. People won't spend money -- "democracy dollars" -- in a positive and conscientious way if they don't actually believe it will work.
How do other large organizations build trust across diverse populations? They fragment. The Catholic Church wields its immense cross-cultural power through a network where most end-users are much more concerned with their local clergy than with the goings-on at the top. This isn't necessarily a model to be copied in its entirety. What's important is to understand how the architecture brings people in.
People are less frightened by small organizations than large ones. What's needed is a mechanism to connect people to those small organizations so that their unique personal knowledge can be propagated through the system.
>I expect this essay to be the target of criticism.
It smells like an utopia. Chasing utopias already ended very bad.
One of the most important points of the communism was that everyone should have all goods and services he needs.
"From each according to his ability, to each according to his needs" said Karl Marx
>Instead of attacking my ideas of what to build, conceive your own!
My proposal would to let people, society and humanity live according to their natural rules and cycles. Trying to coerce people to do something "for the greater good" would never end up well.
Capitalism has it's problems, but we don't know any better system. And capitalism has the great advantage that it's a natural system, fitting society in an organic way.
To be sure that capitalism won't do much harm, we just have to make sure it is fair: no monopolies, fair competition and so on.
Push aside your interlect for a second everybody, stop discussing, start building. Make groups for ideas - you did not understand the article, it did not ask for your opinion but for YOU taking action, if not now then when?
Push aside your intelect for a second everybody, stop discussing, start building. Make groups for ideas - you did not understand the article, it did not ask for your opinion but for YOU taking action, if not now then when?
>> The right must fight hard against crony capitalism, regulatory capture, ossified oligopolies, risk-inducing offshoring, and investor-friendly buybacks
Wow I never thought I'd see this on a blog of Andreessen Horowitz. I was starting to think that nobody cared about value creation anymore.
Interesting essay, but more of a feel good elite speak that anything else. Feels like he skips over the main part on why "building" anything is difficult. That is because we have worshipped at the altars of capitalism for so long that we worship our one true god - SHAREHOLDER VALUE. This is not some rocket science on why we offshore, or why we invest in photo filter apps. Because that generates most returns in capital and creates much larger shareholder value. Building flying cars do not. Looks how much capital was required for Tesla to produce at any scale. And it is still struggling, what 15 years after it was founded ? Now look at Facebook, which was founded at the same time.
I expect a decently big infrastructure spending bill in the near future. It was even one of Trump's campaign promises and interest rates are near zero. I'm fiscally conservative, but I've seen the evidence from Southern Europe that Austerity is not the way forward. Many Southern European countries still have not fully recovered their GDP from 2008. I see many people weary about the future and I think it would do us wonders to see people excited to create a future with Sci-Fi level transportation, advanced manufacturing and cheap, abundant and renewable energy.
People are by nature curious and eager to build. But we also love stories that are too good to be true.
We gave the lazy guys, good story tellers, all the power, and thereby the power how money flows and works.
Money is such a story: There exists some artificial thing, that can be turned into anything we want. What in reality doesn't exist, unless people work for it. Its seams more a trust relation turned into a fetish.
Obviously the stories turned everything in to giant circus pyramid game to generate more magic stuff, and everybody can have it. Well the poor without power, we keep stupid and poor, we can outsource to them, to do all the work and we all become story tellers.
Technology developed by curious nerdy scientists (also bad story telleres btw), could be used that a few are enough to feed and build for many many story tellers. Looks like magic, money can work for itself, hey more magic.
People who actually do something like women and artist and builders are continiously undervalued in this pyramid system as they are not 'usefull'. The working slaves all produced a lot of useless stuff. And as the majority became lazy guys, hey why change anything that is the way the world 'works'.
No, a little virus shows all was big story. In fact there is no magic stuff. Money is no value in it self. Now the few able to build are somewhere far away and take care of themselves.
Now the undervalued, who do the work are suddenly in high demand. Oh we clap and say thank you, thank you, but giving them power, mmmm do we really have to? Can we not just move on, go back to slavery fast.. Suddenly doing became interesting but hey please help can't do any more. I can generate trillions of magic paper if you want, eh trust me, please help. Lets get back fast to the time when the pyramid system worked, and we have to keep dreaming and move on.
It is likely that, we want to keep going on. Allthough it was just fun for a few. Humans love to continue to follow the path they are used to go.
Money is an invention and the way it flows is an expression of power but without trust it is useless.
It doesn't do anything.
We all need food, a shelter, health, love, relations and a lot curious people solving hard problems, learning what makes a virus go around and how to stop it.
We should start to transform the rules and redefine how money works.
For some this idea is so strange as this is a well known constant from heaven. It is not.
What if we give everybody some of this fuel. As long as you live you get money=trust every week just by existing you don't have to earn it and otherwise starve to death and die on the street. Then you can use your power, your vote to tell who you trust to send you a product or service. Oh but it becomes worthless over time. If you don't spend it, it becomes just paper. So no interest rates, no accumulation not inheriting wealth. Only one will have to pay for it, the earth we all together. What if...
What if we all share our knowlege for free..
Mmm now we have time to think. Some people don't like that. ..The long we think the more they yell to go back back...
Great. After flogging for 10 years that software is eating the world and that hard sciences and physical world doesn't matter, a16z now is asking us to build? Color me surprised.
I know this comment might be voted down, but I cannot help it: in times of crisis, ideology is not the answer. Capitalism works great in stable conditions. But it doesn’t manage externalities very well. Hence the need for a strong public sector and safety net that can reel things back in line in times of crunch.
It's depressing this receives this much attention on hacker news.
An extremely wealthy person making an imperative to less wealthy people to "ignore partisan politics and focus on results!"
To this person I would ask... who had the capacity, the agency, the capital, the resources, (and given this article, presumably according to them, THE VISION) this entire time? You did. So rather than make an imperative to everyone with less to "get back on the horse" and "put aside petty differences"– why don't you examine the decisions you made, and examine the systems you were party to, which led to this colossal failure.
"I’m with Nicholas Stern when he says that capitalism is how we take care of people we don’t know"... Uhhhhh people you don't know are dying everywhere meanwhile speculative finance i.e. markets i.e. your entire business is doing great. Fuck off
I don’t think capitalism is the straight up answer. If you are rousing people to create new startups so you can fund sure, but reality is the politics in the country should change. Politicians should be less self-serving and be able to think long term about the good of the people. Companies cannot create the infrastructure or planning needed for pandemics, that should come from the government. Sure companies can make the daily lives more resilient but the initiative should come from the government.
I’ll repost my Twitter thread here, which I wrote in response to Marc’s post. Have great respect for him — and other technologists who believe in the power of progress (as do I); Though unlike Marc, I don’t believe that greater effort and less regulation is needed; rather, we need to reexamine, methodically, the ROOT causes of what creates unaffordable housing.
1/ Naturally, many entrepreneurs tend to believe that the insufficient supply of housing is either due to lack of willpower, insufficient belief in progress (see article below), high building costs, or due to restrictive zoning regulations.
2/ I hurt a little every time I read an article like that coming from well-meaning and intelligent people since these analyses are based on a core assumption: that if only those aforementioned constraints were removed, the supply of housing would increase in proportion to demand.
3/ This assumption, though, is incorrect, even though it’s wide-spread and relatable, especially with entrepreneurs, who solve problems by building new things! (I love solving problems by building new things too!) However, the housing market works differently.
4/ Notice the open-air parking lots in most urban areas: they’re hardly developed, used only for a few cars — even though (and this is crucial) there is an exceptional demand for housing in those areas.
5/ It’s not that these lots are not zoned for housing, or that it’s too expensive to build any kind of housing on those open-air parking lots. None of these things are true. The reason these parking lots exist is because property ownership incentives are flawed.
6/ A person who owns an open-air parking lot often makes more money over time through property appreciation (even minus property taxes), and is therefore not incentivized to put this property to its optimal use, i.e. to use it to provide more housing.
7/ The core problem is that the land market (and therefore the real estate market) is, in actuality, an entry monopoly; an entry monopoly occurs whenever a market is closed to new participants because supply (i.e. land in prime locations) can’t be increased.
8/ See, the market for automobiles (or software, etc.) is different: if there is a greater demand for cars, more cars can, and will, be created.
9/ New land in good locations, however, cannot be made; so if property developers want to build more housing in a good location, they have to buy land from someone who already owns land in that location (if they choose to sell, that is!).
10/ This artificially increases cost, artificially diminishes supply, and drastically limits the supply of affordable housing across the board. Unlike software, the housing market is not a free market. It is a monopoly. Like the game.
11/ There’s a lot more to this topic, but I’ve done my best to summarize a small part of it here in this thread. As you can tell, it’s a topic of great concern to me (to the extent that I wrote a book on it: http://unitism.com).
12/ I hope that what I was able to share has given you some pause; I feel a bit of a pang every time I read an entrepreneur saying “we can solve the affordable housing crisis by simply building more things with more effort.” This hurts. And it’s also uninformed in my view.
This is great. We are really playing the victim with this virus. I think we should be attacking it on all fronts.
Let’s spend the next ten years building a system that can produce a vaccine in three months. Maybe have a national reserve of people standing by to participate in vaccine trials during a crisis.
Don’t have some of the technology? Invent it! Rules don’t allow it? Change the rules!
How many people do you think questioned the Queen of Spain's logic in paying for Columbus to go yatching?
But it lead to the "discovery" of America and massive amounts of European expansion. Ok, debatable benefit...
How many people questioned the validity of the space race? Which the entire world now benefits from the knowledge and technology created during that time.
To pmarca's own history, how many people questioned the resources put into developing the internet, or why the University of Illinois was wasting their time with students building a "web browser"?
Private Public partnerships for the most part, seem to be the only things that can really drive these huge changes. The only counter-example I can think of (and I'm probably wrong) is the computer revolution, which was a grass-roots development.
> Let’s spend the next ten years building a system that can produce a vaccine in three months.
The big problem is that we have to test it long term on a bunch of live human beings to make sure it doesn't deform babies or something. That is the major delay.
Build whatever system you want, but a perfect vaccine ready today would still be well over 3 months from deployment due to the need for safety checks.
How about a crisis only approval. During which time you don’t give it to babies, pregnant women, etc.
It would still be enormously valuable for first responders and elderly. You make sure they have all the information about the unknown risks and let them be consenting adults.
A terrible idea for normal times but maybe ok weighed against the cost of doing nothing in a crisis.
One problem with this idea is that the coronavirus just isn't that severe. If the mystery treatment has a 5% rate of severe complications, then the cure would be worse than the disease. Even 1% might be too much: consider that not everybody will contract the coronavirus, and the people most at risk from it (elderly or with comorbidities) are also likely to be at the highest risk of complications from some novel drug. A 5% risk of serious complications isn't unusually high: thalidomide was around 50% for pregnant women.
If the coronavirus death rate was comparable with the Spanish flu - around 10% instead of 1%, and severe in young healthy people - we'd be a lot more justified in rushing through untested treatments.
If we have a rapid, flexible platform and a great enough need, those 3 months could be enough. But the solution isn't just with the vaccine platform. If, in 10 years, we get lab on a chip working and replace mice with chip based experiments that better reflect human physiology, and/or see a moores law type spike in quantum computation, and/or see breakthroughs in ai, and/or some other set of breakthroughs I cant even imagine right now, we can make the current model obsolete. So it's not just about the vaccine and the drug, but also the ecosystem to test and evaluate them, that needs technological breakthroughs to fuel it.
Who skipped animal studies? J&Js vaccine, one of the most promising ones, went through preclinical trials before human trials started[0]. So did novovax[1]. Even moderna, who was particularly light on animal testing, worked with the naiad to run a trial in lab mice[2]. The industry has been working on covid vaccines since january[0], there has been less time than usual, sure, but nothing to the best of my knowledge has gone into humans without preclinical work.
The entire laundry list can't be accomplished by one person. Can many of those things be done on a smaller level by a billionaire with his connections and skills? Absolutely.
Could he build just one state of the art dreadnaught factory to supply X for California? Yes.
Could he give a university a team of top-notch developers to create an on-demand bachelor's curriculum that could accommodate a million learners simultaneously? Yep. He could even go to Harvard and do that! They would take his call a heck of a lot faster than they would take mine.
I am not demanding that he do everything. Just that he start to lead the way.
I know who he is and that he can build. I just find it interesting how he stepped back from building and now does boards and venture capital. Those can still contribute to building, but it is hardly the same thing as leading the effort.
I checked the portfolio. I don't see many that address the big challenges he talks about.
Governments need to lead on this. I am not sure how corporations can do this without just donating their infrastructure or profits (which would be a great thing to do!). But even then their profits pale in comparison with the money the governments have at hand to spend on these things.
An investor can only invest in building things for which there are demand, and for things that benefit society at large that demand usually comes from the government. Sometimes from philanthropists - but they are piss poor compared to the resources of an entity that can demand tax from every citizen.
I’m talking in context of preparedness for a pandemic, rather than healthcare BAU.
This is the mood of the article which begins:
> Every Western institution was unprepared for the coronavirus pandemic, despite many prior warnings. This monumental failure of institutional effectiveness will reverberate for the rest of the decade, but it’s not too early to ask why, and what we need to do about it.
If you want to be prepared for a pandemic you need stuff built with orders from the government.
Of course startups can help with innovation and may create things that make it easier to be prepared such as a low cost ventilator, but government needs to take care of preparing whatever the tech happens to be.
The list of socially valuable things VCs are responsible for helping to build in the past 10+ years is pretty darn small. Considering their outsized influence and wealth, if they want to know why the future isn't what it should be, they can start by looking in the mirror.
This is what I will call the redirection or hypocrisy fallacy.
Regardless if you think that Marc is fulfilling the values that he claims to support, point this out does nothing to dismiss the actual point that he made.
So his point is still valid. And misdirecting the conversation to being about Marc, is not a valid way of disagreeing with the point being made.
"Every step of the way, to everyone around us, we should be asking the question, what are you building?"
I am doing what he asked at the bottom of the essay. :)
On a more serious note, I don't disagree with the essay. I don't view his point as wrong. It just applies a lot more relevantly to him than most other people who might read it.
Give me a break! "The problem is desire." You gotta be kidding me. Perhaps the real problem is a simplistic view of the world that fails to account for the dysfunctional forces at work in our society.
Did you even notice the Republican party in Wisconsin so desperate to stay in power they demanded that voters risk infection in order to vote? Have you not noticed the divisiveness that is overwhelming our social and political institutions? Did you notice that we have a generation of young people saddled with debt, while large corporations now line up for the dole? "The problem is desire"?
As a non-American, don't vote Joe Biden if you want sweeping changes. Shouldve considered the other Democrats candidates. Youll end up with same status quo
"I expect this essay to be the target of criticism. "
With good reason: in the midst of a global crisis, Andreessen launches himself into the billionaire-splaining hall of fame by enumerating a litany of critical projects he thinks others ought be taking seriously, while notably refusing to commit any of his own wealth and influence toward these causes, nor interrogating how his investing record over the last 20 years squares with any of these apparently deeply held principles.
If you think that's cruel, cover up the name on the essay and read it again. It sounds like an op-ed published by an undergraduate in the campus newspaper — anodyne generalizations set against the straw man of "Western life".
I doubt Andreesen wrote all this with straight face. This part is especially egregious:
>The problem is desire. We need to want these things. The problem is inertia. We need to want these things more than we want to prevent these things. The problem is regulatory capture. We need to want new companies to build these things, even if incumbents don’t like it, even if only to force the incumbents to build these things. And the problem is will. We need to build these things.
No Mark the problem is that American labor is overvalued and the Government does not subsidize it like it does for Agriculture. Why, you ask? Because manufacturing does not get you swing states.
American Manufacturing can rise again if there are no expectations of profit. Which is only possible with Government money. Or if you are Elon Musk, and can convince private investors to lose money for no reason.
This is an upsetting article, sadly, I usually quite like what a16z has to say.
"We should have gleaming skyscrapers and spectacular living environments in all our best cities at levels way beyond what we have now; where are they?"
NO thank you, we are not part of your ultra neoliberal project.
China is the place with the 'most skyscrapers' and it's a craphole for most citizens.
There is absolutely no reason to 'massively build' other than cram more people in and line the pockets of the investor class.
"We have top-end universities, yes, ... Why not educate every 18 year old?"
Marc, with all due respect, do you remotely grasp the notion of 'class' and what's going on with our schools? (Edit - I'm not saying I agree with it, but it exists for certain reasons)
First - the US sends a huge percentage of it's youth to College - far more than other places.
Second - many of them do not qualify and more and more are having to attend remedial classes. LA County kids were graduating at 55% rate, then 'poof' they lowered the standards to get a 77% rate.
US students are largely NOT ready for elite education. The issue is not 'getting everyone to harvard' - the issue is 'getting everyone who deserves to go to a decent school - into one'. This actually isn't a huge problem in the US.
Third - we DONT need more college! College was a legit mark of the elite (legitimately) but it's not anymore. We are failing huge cohorts of kids that do not go to college! The 'problem' is that we provide no path for non-college educated kids to get into the system. We also like to most college kids who think they get a free job. Nope.
Fourth - Education will always be at least somewhat elite. There will always be 5% who are considerably more spectacular, and they deserve a place to go. The US system is not perfect, but it's not bad either.
And this Thiel-esque bit: " Where are the supersonic aircraft? Where are the millions of delivery drones? Where are the high speed trains, the soaring monorails, the hyperloops, and yes, the flying cars?"
No - this post WW2 vector is the wrong kind of 'brute' Engineering. You know what matters more than 'supersonic flight'? Getting a much cheaper and safer flight. And guess what, that has been happening. The market pushes innovation in a specific direction and sorry, it's not 'to the moon' it's to 'LA to NY' for 1/2 the price.
Finally his bit about factories. I share his concern, but at the same time, he writes as though he completely ignores market realities again. We don't build more factories in the US because we've * externalized human rights* to another nation. If Chinese factories can pay pennies, fire people for going to the bathroom, spy on everyone 24/7, pollute up the yang, have the government back national players with money from the central bank and force international competitors out of business ... when then you see why there are 'few factories' in the US.
The 'answer' to 'more physical building' is something he is unwilling to say and that is a nationalist cause with trade barriers, something that neoliberals absolutely hate.
With issues such as lack of PPE, ventilators and chems. for testing it becomes much more clear obviously.
What would happen if the government literally said 'We declar this, that and this sector to be 'strategically imperartive' and therefore all production must happen within the country'. Well guess what? Those 'fancy factories' would get built. It would still be more expensive than China - but - the huge benefit from that is that this would entail a huge transfer of wealth to the poor and less educated for their doing actual, meaningful work. Which is always better than welfare or UBI.
Now - combine this 'factory' problem with the 'what do we do with all these no-college people' and you start to see how these issues resonate.
So yes we need to be 'building' but we need to be building 'up' not 'out'.
'Building out' is a 19th and 20th century strategy. More more more, bigger bigger bigger. Sorry - we are at least for now more advanced than China et. al. and the plan should be 'better'.
We do not need large scale migration or even construction. What we need is a way to make our system fair, accessible, to make sure that 'everyone gets a spot' in the system that has dignity. All of our institutions to work at a higher level - for example, government IT is a complete mess - our services could be improved dramatically with smart policies. US University Systems could expand in the 5 Billion-person developing world, for example. The US is going to help fare more people in the world by being better on all fronts than just having a bigger body count.
I think we can all kind of agree with the impetus of Marc's rant, but I think this is not particularly well thought out, he could take this one as a first draft.
When faced with an existential crisis, we tend to jump into fix it mode. But fix what? The symptoms or ourselves?
Let’s start with ourselves: we have failed miserably at being stewards to this earth. We have failed (not completely but in some very dramatic ways) at building a better future for our children and their children.
We should fix us, first, before we move on to fixing the symptoms of our flawed way of being in the world.
Since you are reading why nations fail I would like to recommend a pairing. How democracies die by Daniel Ziblatt and Steven Levitsky. The central thesis here is parties are the gatekeepers of democracies and when they put party before nation they erode the democracy that eventually fails. More often it’s a slow degrade than a sudden spectacular collapse. The erosion paves way for leaders that are more “spectacular” in every negative way than the last one. Makes you think if trump is the problem or merely a symptom. GOP put party win before a nation by agreeing to nominate an unfit individual for office. They failed as gatekeepers. His presidency will lead to future leaders justifying behaving like him or worse and the “norm” Keeps degrading over time to the point where people are fed up and bring into power a person that they don’t fully understand and one who plays to their fears and portrays themself as their only solution. The book is amazing to read specially with the context of last 4 - 6 years of American politics.
>GOP put party win before a nation by agreeing to nominate an unfit individual for office. They failed as gatekeepers.
Trump won the primary because he took positions that closely follow the article being discussed here, anti-war, anti-outsourcing (additionally he took an anti-immigration position) while all of the other 18 GOP candidates had the same pro-war, pro-free trade, pro-immigration positions that the party gatekeepers (big donors) favor.
I think Ziblatt and Levitsky don't like that voters agree more with Marc Andreessen and what Trump said in the campaign.
EDIT: People didn't elect Trump because they trust the gatekeepers and were tricked by them. They elected him because he was the only candidate who promised to do what the people wanted who was able to _go around_ the gatekeepers by financing his own campaign. We wouldn't be on the road to neo-Hitler if the gatekeepers allowed sane people with popular opinions into the major parties, but that would mean ending the middle eastern wars, raising wages, lowering corporate profits, and ending the cheap labor glut in ways that will seriously dent the fortunes and power of the gatekeepers.
> but that would mean ending the middle eastern wars
Do you want the terrorists to win? >:|
It is a remarkable bellweather of US politics that despite being a relatively peaceful polity the voting public have been unable to drag the country out of a permanent state of expensive and wasteful war. I think both Trump and Obama campaigned as pro-peace candidates so it is a presumably a popular position with voters.
US foreign policy is almost inexplicable when it comes to war. The death, destruction and raising a generation Middle Easterners with excellent motivation to hate America seems like a foolish long term strategy. It also doesn't look profitable.
> US foreign policy is almost inexplicable when it comes to war. The death, destruction and raising a generation Middle Easterners with excellent motivation to hate America seems like a foolish long term strategy. It also doesn't look profitable.
Not for the U.S., not for its citizens, but for a certain set of people the constant war is very profitable. And I think you'll find that those that profit from war have considerable influence over the foreign policy that keeps us in constant war.
War is profitable to energy sector (XLE), aerospace & defense (ITA, XAR). It is profitable to states where oil production is dominant (gulf states, some parts of the midwest). There are many oil billionaires in the states.
Donald Trump was not the only GOP candidate, and he was the candidate with the least internal party support.
>Trump used ideas of populism to persuade the average American throughout the election process.[139] In mid-September, the first two major candidates dropped out of the race.
Very convenient way for party insiders to justify coronation of their preferred candidates regardless of "benefit to the nation." This same line of "gatekeeper" reasoning is exactly what justifies polling locations being closed and reopened elsewhere without notifying voters, years-long revolving door media propaganda campaigns, and accusing everyone who disagrees of being a Russian asset. The Republicans and Democrats alike are guilty of such behavior.
I too believe Trump is a symptom, not from lack/failure of gatekeeping, but rather the act of gatekeeping itself. I think the general public is (subconsciously or not) aware that these party insiders view themselves as "gatekeepers" and are anxious to "stick it to them" even if it comes at their own demise. Whether or not you agree or disagree with them, the issue here is that their trust in what they viewed as democracy was already eroded. This is probably reflected through the terribly small number of working class voters who participate in the political process.
“ The Republicans and Democrats alike are guilty of such behavior.”
This isn’t a useful line of thinking. We can and should draw distinctions between the two parties. They aren’t the same. Pretending they are just muddies the waters.
>GOP put party win before a nation by agreeing to nominate an unfit individual for office. They failed as gatekeepers.
Why do we want corrupt politicians as "gatekeepers" to anything? The Democrats did a fine job "gatekeeping" Sanders from the 2016 and 2020 nomination, to what end?
By the way, nothing will ever get done in the US until the bitter partisanship ceases. Most of what both parties do is political theatre.
> The Democrats did a fine job "gatekeeping" Sanders from the 2016 and 2020 nomination, to what end?
I don't understand this perspective. Sanders lost because he lost primary elections. That happened because democrats didn't believe in him as a candidate. Many of us have been steadfast in our disbelief for years due only to listening to what he himself says about what he wants to do. Why discredit our opinions this way?
Sorry, but if you don't think the entire Democratic machine has been working against a Sanders win for 5 years, you haven't been doing enough research. I know you don't like him, and you are 100% entitled to dislike and vote against him - but to pretend that he lost only because he wasn't popular enough is pretty blind to how our democracy runs.
Not having enough support is the only reason he lost. The DNC didn't go in and tamper votes.
I've seen many sanders supporters get upset over things that they perceive as unfair like how candidates dropped out to stop splitting the vote.
Every single candidate has had complaints about being treated unfairly. People were calling joe's campaign dead in the water. Yang got upset enough that he called out networks in a very public manner.
And yea, Sanders wasn't supported by the establishment. But like we've seen with Trump, the establishment doesn't matter if the candidate has real support. Obama was a no name senator that beat the most establishment character ever because he had that support.
Sanders had a lot of problems as a candidate, and those are the real reasons that he lost rather than conspiracy theories about machinations by the elite.
Was "the democratic machine" casting ballots in the primaries? Were they controlling the minds of the people who did? The "republican machine" tried to stop Trump and failed, because at the end of the day people voted for Trump in the primaries. He was popular in a way that Sanders wasn't.
In the gatekeepers' perspective, it was to postpone discussions on policies that would be extremely difficult to implement well. If the Republicans had done their job as well like usual, we wouldn't end up in this awkward situation of having an unpresidential president, but here we are. Freedom has a funny way of getting what it wants, like water flowing downhill.
From the non-gatekeepers' perspective, the difficulty of policy implementation does not matter when the policies themselves are ineffective and only serve to maintain status quo financial structures, which benefit the wealthy often at the expense of the most vulnerable.
What specifically makes the president unpresidential as opposed to other presidents? Is it removals as a percentage of the estimated illegal immigrant population? The dramatic expansion of the power of the executive branch into the realm of national security? Number of U.S. citizens executed without trial? Those are all things which happened under previous presidencies.
> If the Republicans had done their job as well like usual
Is it really fair to argue that gatekeepers are effective if they failed to do what you view as their jobs? "If it wasn't for those meddling Republicans!"
My point was to illustrate that previous presidents have also done things which could be considered unpresidential depending on your opinion. Unless I'm missing some official definition of presidential, these are all things that you personally believe are unpresidential. I'm not saying I disagree with you, but things like "never takes the high road" sound a bit biased.
I agree that "presidential behavior" is a subjective term. Doesn't make it useless - just subjective.
Are you arguing the counter, that his personal behavior is in any way laudable? Do you think he's a good role model, and would want your children to emulate his behavior?
> Are you arguing the counter, that his personal behavior is in any way laudable? Do you think he's a good role model, and would want your children to emulate his behavior?
I don't have to think that he's a good role model to think that previous presidents have also violated human rights and eroded freedoms.
edmundsauto nailed it in the unpresidential comment.
I wasn't complaining about the gatekeepers failing, just trying to share their perspective for those who might not understand.
FWIW, I think the best outcome would have been to deny Trump at the gate, and instead find a candidate who could get those policies done without being a danger to democracy.
> FWIW, I think the best outcome would have been to deny Trump at the gate, and instead find a candidate who could get those policies done without being a danger to democracy.
The problem is that's anti-democratic because many of those gatekeepers are appointed rather than elected. At that point the gatekeepers may as well directly decide who the president is, because it has already been chosen regardless.
A capitalist blames a lack of demand for the deep socioeconomic flaws that disasters like this shine an ugly light on. By his logic, if people wanted these things, capitalists would be able to make a ton of money off of them, and so it's everyone else's fault for not creating the demand.
And I don't know the original quote, but the idea that "capitalism is how we take care of people we don’t know" is a hilarious feat of mental gymnastics to frame such a inherently self-centered economic system as some sort of inherent altruism.
He challenges the public sector to make better things than the private sector without even acknowledging the massive and growing asymmetry in the resources available in the private sector to accomplish these things.
And lastly he attempts deflect criticism like mine by writing off any counterpoint as "attacking" his ideas and instead asking we talk about what we would "build" and therefore take his deeply biased assumptions as axioms.
It's not the only factor, but to look at this problem without critically evaluating capitalism's role is like ignoring the elephant in the room. Now that we are in a point in time where the more wealth and power is being accumulated by an ever shrinking pool of people, capitalists like Andreessen have more power than ever to employ these kinds of changes. If the supposed demand is not there, then maybe take that one of many signs that capitalism is a dead end.
The most sorely lacking in self-awareness aspect of his post is that a16z is a primary driver of a flavour economic (and social) neoliberalism that is a 'root cause' of almost everything he lamented.
1) If non-college educated kids had a legit path into the market (like they do in Germany) then surpluses would be more evenly distributed and housing wouldn't be such a problem.
But they don't have path because a) industry won't train and b) the US is an economically liberal place - there is no communitarian impetus (like Japan/Germany) to structure. The US doesn't really care that much about citizen v. non-citizen - the economic benefit in the short term is outsource/insource - there is no consideration for the population.
US Citizens are an externality to the business world.
2) On the college side, the US has already financialized the college race, arguably to a nearly corrupt degree. There are tons of kids going to Uni in the US, many of them ill-prepared, and then will be over-indebted.
3) Silicon Valley VC does not want longer-term risky bets, they want to make short term bits with big near term payouts, with long term outcomes again, irrelevant.
It makes much more sense to invest in something like Twitter/TikTok/SnapChat than most other things in this context.
4) And who exactly built those supersonic planes? Was it VC's? No! It was generally the government, with the impetus of war, specifically WW2 and the Cold War! Literally ARPANET.
5) 'Building here' would entail a coordinated national strategy that is anemic to free-market types they usually can't even contemplate it. It would take something like an economy-destroying epidemic (!) to realize the consequences of their lack of strategic investment at very least in things like specific manufacturing (medical, medicinal) and food production. All of a sudden those farming subsidies start to look a little different!
6) So what issue ties all of Marc's seemingly disparate points together? Why didn't he look deeper at Taiwan, S. Korea, Singapore as examples? What's actually going on there at a more fundamental level that's different from the USA?
I'm not necessarily advocating for some big 'state-managed' anything or huge governmental intervention. But I am certainly advocating for rational and specific nationalist intervention, with a communitarian attitude - or at very least the contemplation of it.
The fact someone so enormously intelligent and influential 'didn't even go there' I feel is because the language is literally lost in North America. They have no idea what it even means. Much like entrepreneurialism, especially 'creative destruction' is a really hard concept for many business circles in Europe to get. It's like a foreign language.
I don't disagree on the primary point you're trying to make, but I feel like you have a warped image of -at least- Germany. Germany has a housing crisis as well, rent is through the roof in the major metropolitan areas.
> The US doesn't really care that much about citizen v. non-citizen - the economic benefit in the short term is outsource/insource - there is no consideration for the population.
That's very true for Germany as well.
Germany's Nazi-past has left the political climate in a state of explicit denial of self-interest. Obviously, Germany very much has political and economical interests as any nation will. The main difference compared to the US, Britain or France is that it's a big no-no to say so in Germany. Concerns about the impact of decisions on Germany's citizens are considered nationalist and suspect of being far right.
I'm a non-German who lived in Germany, the US, and other places.
As you say 'it's impolite' to talk about the citizens in a nationalist way, yes, but Germany (and many other nations) are still deeply ethnocentric - it's by default. Almost everything about Germany is 'German' and when almost all economic, political and social concern on a broader level is about 'Germany'. It actually takes some intellectual effort to go beyond and think in terms of 'Europe' or even 'The World'.
'Not being so nationalist' is a social artifact of many nations these days, and I suggest it's just a healthy dose of self-awareness, but it doesn't change the definition of what the community is in the minds of citizens.
FYI I should point out that I don't think the US in a 'Germany model' would somehow result in the government building rocket-ships, but it would result in healthcare, better employment terms.
Possibly, though it's a cultural thing, so I don't believe you can simply say "we're switching to a Germany model". The US is very individualistic, Germany is more collectivist. Individualistic cultures are more unequal, have issues with high taxes, government regulations and so on. They are much more flexible, can react to changes and move fast. And, as the Facebook motto goes (or went), sometimes they break things.
As for the claimed anti-nationalism, I fundamentally dislike it because it's a charade from start to finish. When "I want A" becomes amoral, everything gets wrapped in fifty layers of misdirection and rationalization, and finding compromise gets even harder because nobody can admit to what they actually want. It's a pathological trait in individuals, and I don't believe it's healthy on a society level. I'm not saying "that's how it has to be", rather "that's how it is, so let's not pretend it isn't". At the first sign of trouble, it's becoming evident anyhow, but if our arrangements are built on different assumptions, the damage will be much larger.
Ah yes, the lack of success in our nation is purely the individual’s fault. Your fault, my fault. There are no structural issues, misallocations of capitals, disincentives. You should be working harder on bigger problems! Quit your job at Walmart, and start working on things that matter.
What the fuck Andreessen? Are you so out of touch with reality that you think if the working class just worked a little harder, a little smarter, then we’d have flying cars?
From what I have seen among silicon valley there are two realities:
1. Very wealthy folks who are very removed from society, talk big, but are afraid to invest their money on things that aren't "proven" business models.
2. Normal people who struggle to pay their landlords so much that "building things" is completely out of the question. The east bay, one of the last places where a lot of on-site manufacturing remains, is currently undergoing a "transformation" where the last of these small businesses are being squeezed out by rising rents and are replaced with one-plus-5 housing for google expats.
That's obviously not what he's saying. Would you please review the HN guidelines? They include: "Please respond to the strongest plausible interpretation of what someone says, not a weaker one that's easier to criticize. Assume good faith."
> There are no structural issues, misallocations of capitals, disincentives.
Who created the structure? Who allocates capital? Who creates incentives?
These are not natural phenomena that arise without human intervention. Someone made the decisions that created them and someone has the power to make different decisions. Yes, even decisions that you personally make might contribute in some way.
Instead of throwing up your hands and blaming everything on "structural issues" look for something you can do that makes a difference. Maybe it's a small difference, but large societal change can often be the result of an accumulation of small actions.
It is interesting to see Marc Andreessen in 2020 to quote Mencius Moldbug from 2013 almost word to word.
To quote Mencius directly -- " One pathology of our age is a childlike credulity in the magical efficacy of complaint. Don’t complain, build. We have done well at complaining; so what? What have we built?", which is basically tl;dr of Marc's article.
Curious question: how come Horowitz does not address the successes of Taiwan or Mongolia?
These countries did far better than the West. They also acted quickly. So, it is obvious that to have done better with COVID-19 we simply needed to "build" a Taiwan.
Oh, but that's right, Taiwan has zero trust in the CCP (or their WHO lapdog) and shut out the Chinese way before anyone else ... I mean that could have been the solution too.
> What do you think we should build? There’s an excellent chance I’ll agree with you.
Great! Then let's start generating that anti-CCP propaganda sooner than later!
But for the screwed policies/priorities of Politicians, #Covid19 could have been prevented in Rest of the World if ALL International Passengers were screened in Airports from January 22 https://archive.vn/mlTxnhttp://archive.vn/Z0pzQ
What was needed for the West was to just get serious about the disease and Lockdown. As early as January or February. A country as populous as India (with 1.3 billion people) has been under lockdown for well over 27 days and counting. Will be under lockdown till May the 3rd (and might get extended too if the curve has not flattened). We went in early unlike Italy or the United States. And it was a complete shutdown and not partial.
Even before the Lockdown commenced, we were testing all travelers as early as January and isolating those who were showing any signs of sickness. The Western countries did not do any of it. These two things alone helped slowdown the spread of the virus. There was no need for large amounts of ventilators, masks or PPE. Just common sense.
What the West got wrong was not "lack of ability" to build things. It was "lack of agility" to respond to the emerging crisis. The West should have gone in for a complete lockdown. The West should have tested (no contact thermal testing would have been sufficient) all travelers at the entry point. This slackness cost so many lives!
I remember having a discussion [1] about this almost a month ago when the first major destructive potential of this pandemic was still unravelling in the West. Many were skeptical about how India would respond and that it was a disaster waiting to happen. But no such disaster happened because of how proactive the Government of India had been since January. This proactiveness has allowed India to have really low number of positive cases compared to the West. This also doesn't put pressure on the medical system.
The lesson to learn here is that you should use common sense. A lot of it. First control the spread of the virus and then work on a cure. You can't let the virus wreak havoc and then expect a vaccine or a cure be available immediately to tackle it. It puts unnecessary pressure on scientists who need crucial time to figure out a cure. But I guess it is too late now and the West will just have to ride the wave. Unfortunately a lot of lives will be lost in the process. Very sad.
It's fine to make a substantive objection, such as by pointing out which governments handled it well. But please don't toss nationalistic flamebait into HN threads. It leads to nationalistic flamewars, and those are nasty, boring, and dumb.
This reeks of Hypocrisy. After years of VC companies investing in bat-shit ideas they now cry about not having solutions for bat-borne illnesses. Oh "failure of imagination" when they poured billions into the lack-of-imagination ideas such as WeWork, Uber, AirBnb, and others.
Oh now we need imagination when companies with potential solutions for these problems over the past few decades couldn't get these investors attention, who would much rather throw more money to the same set of well-connected entrepreneurs than ignore the innovation happening all around the world in small cities and mid-sized towns, coming out of universities that aren't in the Silicon Valley / SF are or NYC or Boston.
So, the chickens are coming home to roost. We have societal problems that Silicon Valley VCs haven't done anything to solve. Am I surprised? Hell no. Do I believe this woah-is-us "let's build" BS from the same VCs that have built what we have so far. Hell no.
We need new imagination for investors too. The same class of investors will give us the same class of solutions to the same class of problems. Let's look elsewhere for ideas and inspiration. The solution is not Silicon Valley VC. The solution is not the same profit-driven health care institutions. The solution lies elsewhere. And that's what we really need imagination for.
This comment breaks the site guidelines. Most importantly this one: "Comments should get more thoughtful and substantive, not less, as a topic gets more divisive."
But note also: "Please don't use uppercase for emphasis. If you want to emphasize a word or phrase, put asterisks around it and it will get italicized."
It's generally better to wait to cool down before posting. That makes it easier to follow the site rules. In addition, you'll think of better points to make your case with, and will be more likely to notice anything untrue or unfair in what you are inclined to say.
> Why aren’t we building Elon Musk’s “alien dreadnoughts” — giant, gleaming, state of the art factories producing every conceivable kind of product, at the highest possible quality and lowest possible cost — all throughout our country?
Because we have few of the industrial titans which are required to spearhead that and round up (or possess) the necessary capital. This sort of outcome does not magically self-assemble, it starts with one person that takes action. You actually need hyper competent, hard charging, ambitious, skilled people of all sorts to go after the extreme challenges represented by such a huge re-industrialization. These people and their talents no longer exist in such high numbers among the population as they did prior to the gutting of the US industrial age. They are now rare and the capital that desires to fund them is equally rare.
If you want to produce them, you need to completely alter the incentive structures we arrange our economy around.
We should have 0% corporate tax rates for all domestic manufacturing concerns, to get started. Tax individual income at a higher rate.
Implement a robust system of income tax credits and abandon the minimum wage as it exists today. This is not my idea of course, Warren Buffett is probably its loudest supporter and he is absolutely right. Set the income tax credit system such that it guarantees a higher minimum wage of at least $12. By removing the strict front-facing minimum wage we have today (which blocks labor from the market), all businesses would immediately aggressively seek to hire anyone and everyone they can get their hands on. The workers would be guaranteed a minimum wage by the redistribution income tax credit system and there would be no labor-value blocker (aka the minimum wage) keeping businesses from hiring people.
If a state has a $12 minimum wage, and your labor is only worth $9, you're screwed. This solves that.
It's about absorbing max lower skill labor (where the unemployment problems tend to be over time) into the workforce. You make labor artificially cheaper, while simultaneously paying that labor a fair wage: we subsidize the outcome we want. They produce, they earn a good wage, they build savings and can start to become asset owners. They also start learning new skills (and later might start production of their own based on the accumulating of experience at making goods; an important catalyst in re-industrialization). The combination would unleash epic common-goods manufacturing output the likes of which the US hasn't seen in half a century.
It would make it economical to manufacture low-margin, lower value goods in the US again. It becomes a de facto subsidization for employment and manufacturing.
This would instantly change the US economy for the better.
How would that minimum wage replacement work? Wouldn't every minimum wage employer just switch to paying $1/hr or whatever, and let this system pay the rest? That would mean such companies couldn't give their workers a $1/hr raise without paying $12/hr more. I seem to be missing something.
That would be true for the absolute lowest value labor. Only about 1% of the labor force earned the minimum wage in 2019. Maybe that would increase to 3-5% under this scenario, with higher real wage compensation covering more people.
The competition for labor - which exists at all times in some form - will continue to force businesses beyond the floor of the income tax credit line for the extreme majority of labor. A person that now earns the minimum $12/hr via the tax credit system, a business can offer them $12 + their own $3 cost ($15/hr total to the employee), and steal them away for relatively inexpensively versus the old minimum wage costs. The business might have been paying a $10/hr min wage in their state previously, for example; so paying $3/hr for that labor is still a net savings. You could gradually eliminate the tax credit as you step up the income scale (maybe every combined dollar above $12/hr the person earns, one dollar in the credit vanishes; so someone earning $20/hr total, that employee loses $8/hr of the credit, so $16/hr of that has to come from the business; or half that rate of vanishing; you get the general idea). It's entirely plausibly this would massively boost income levels for the bottom half of workers, as businesses would offer over the $12/hr line to lure the best lower skill workers (it would still be net cheaper to the business than the old system, which is why they'd do it). It would also make a lot of small businesses solidly profitable and encourage higher rates of business formation again (most mom & pop businesses operate at very thin margins; would have to implement some new fraud checking and minimum revenue requirements perhaps; have to avoid various fraudulent employment schemes). Also, the credit should apply to lower income waiters also, they can keep tips on top of that (if they yield enough combined income, it would be taxed; a person earning the minimum $12/hr pays zero income taxes, over that we'd have to decide where income taxes begin and how they climb).
We would continue to tax normal corporate income outside of manufacturing (and we could begin by just experimenting by dropping manufacturing taxation to half the normal rate, test the outcomes it generates). The increased personal income taxation pays for the new redistribution model. We would want to reform our personal income tax system further to optimize, maximize it (including treating all income equally for tax purposes).
We could entirely exclude high wage employees from the income tax credit system, so those employees are not subsidized in this (if your engineers are making $125,000 they don't need the $12/hr income tax credit underneath them).
We simultaneously could alter some welfare benefit programs that are no longer as necessary as a larger share of the population is working and earning higher wages (you rebalance the system in other words).
We should instead move the tax burden to land, since holding land is completely unproductive, and as opposed to working for an income, which is productive.
Holding land isn't unproductive. Existing is a pre-requisite to working for an income. Having shelter is a pre-requisite to existing. Shelter is extremely productive in fact and is necessary. That's like pretending that the factory roof isn't productive because all it does is provide shelter from the elements, so it's unnecessary. It can make a lot of sense to be a land owner, which is why people seek it out so strongly. Being able to say: this is mine, this is not yours, this is not the tribe's land, this is where I shall raise my family for the next 20 years, this is my private space to do as I please; that's extremely enticing (for most non-robots).
Eating food at home is productive. Raising children under a safe roof is productive. Learning in the comfort of your home is productive. Resting is productive. A good night's sleep is productive. And so on.
Further, factories exist on directly productive land. It often makes sense to own that land for all sorts of good reasons.
There's a fair argument for land tax adjustments, however it should go with increased income taxes on the top 1/3 regardless. Although it has to be very technical. Taxing people that own $10m houses in SF at the same elevated rate as a homeowner in a poor rural region would be economic assassination.
Of course this all needs to go hand-in-hand with demolishing our healthcare system and remaking it into a system with per capita costs 50% lower than they are today (which gets us close to the rest of the developed world). Doing that is how we finally get universal coverage, until then all properly universal systems will remain blindingly expensive. The economic benefit to the new system having a lower cost, universal healthcare system would be very far reaching.
That's why I said land instead of property. Land can't be created or destroyed, so there's no need to provide incentives for it, or worry about disincentivizing it.
> Taxing people that own $10m houses in SF at the same elevated rate as a homeowner in a poor rural region would be economic assassination.
I'm not sure this would be a problem. Increasing the land tax brings down the property value, since the value reflects some multiple of the rents you can extract from it, and so the tax would naturally be corrected. Of course, all this depends on having a good system to assess land.
I'm in agreement about healthcare; too much time is spent on discussing single payer vs private etc., and not enough on bringing down the costs, that would be there regardless of the system we use.
The core problem is too much regulation and the associated bureaucracy and legal percussions that come with it.
Regulation is always presented as a tool to 'protect the public' but usually just serves to protect the wealth of the leading players.
Anything that is regulated moves into a state of deadlock and now most industries and our society as a whole are in this state. Most don't dare to do anything entrepreneurial, because there are legal percussions waiting for almost any meaningful economic activity you could initiate.
A highly mobile free market capitalistic system is a threat to those in power. They don't want more bold entrepreneurs who could compete and potentially endanger them. They want people who do their jobs 9-5 and then go home and watch TV.
If we want to move out of this society-wide paralysis, we need grassroots political movements who systemically disassemble the regulatory walls that have been built over decades and centuries.
People need to wake up to the fact that regulation isn't meant to serve them but is intended to keep them at the bottom. Because when the current market leaders of an industry rose to power, there was no regulation yet, which made their success possible in the first place.
If you argue that this is how things should be, namely that industries should only be unregulated in the beginning and then become regulated once you have a few dominant market players, it creates a big problem: It means that we carry a long tail of highly inefficient industries with us, because regulation makes new competition so much harder in these 'older industries'.
I think we can see that today with industries like mobile carriers for example. Basically an oligopoly which dictates prices and creates huge shareholder profits year after year.
Each industry is a pillar of society and we need to break open these 'older industries' which were heavily regulated and have them catch up to the status quo through new competition. That means going head to head against a lot of people who have a lot of capital at their disposal to prevent that from happening.
> New York City has put out a desperate call for rain ponchos to be used as medical gowns.
Yeah, NY also put out a "desperate call" for "40000 ventilators" in spite of needing only 6000. So that's really not a good indicator of anything.
Not to disagree with the core premise of the article, of course. We must be able to manufacture all critical equipment and supplies on US soil, with significant surge capacity.
> In the U.S., we don’t even have the ability to get federal bailout money to the people and businesses that need it.
False. Our family of 3 received $2900 because my wife and I took 2018 off so to the IRS it looks as though we need help. From which I conclude that everyone who made below cutoff threshold (which is unusually high for this) got money directly into their checking account, even though most people haven't been laid off yet.
And small businesses so far got $350B, with more blocked by austere scholars of pork in Congress.
> We should have gleaming skyscrapers
The utter devastation high density living is causing in NY would suggest otherwise. We need to spread the fuck out.
You might be right, but your tone is quite unpleasant and I think you give people an easy out to ignore you.
> not a good indicator of anything
One was a projection of eventual scarcity (vents), the other is a response to current scarcity (ponchos).
If you believe that we should ignore this on "boy who cried wolf" grounds, we can go ahead and dismiss the rest of your comment, since you also got something badly wrong and are therefore "not a good indicator". (But of course you and we and the world don't REALLY dismiss people in the way you're suggesting!)
Cuomo, like all the folks in leadership roles at the moment, is looking at data and analyses from a variety of sources. The specific claim he made was that the apex could require 30,000-40,000 vents. It seems likely that some version of the bullwhip effect is in play here, but either way given that the US national stockpile is reportedly c.8000 ventilators, any reports which peg the need at 4x the maximum national availability ought to be treated with seriousness. Suspect you would do the same!
> False. Our family...
You are drawing a generalisation from one datapoint. CNET and others are reporting that cheques are weeks away from going out, and that direct deposits have started happening. The original post is sweeping, but I don't think many would disagree that to be 3 weeks into a lockdown before stimulus arrives is slow. It might be fast compared to the normal speed of government, but it's slow to those in need.
Folks like you have some really great insights both into the optics and realities of government, but like Trump, they are often ignored and maligned because of aggressive rhetoric.
You can always find a crazy example of something or other and choose to blow it out of proportion, while ignoring positive developments on the ground. Blood and gore sell newspaper subscriptions. In the meanwhile I'm glad Trump ignored the political damage Cuomo was inflicting, and did not send the entire stock of vents to NY. Doing so would be utterly disastrous to other hotspots.
> You can always find a crazy example of something or other and choose to blow it out of proportion, while ignoring positive developments on the ground.
So to be clear, you believe: Cuomo deliberately ignored credible data from his people suggesting that the state would not need 30,000 - 40,000 ventilators in order to attempt to do political damage to Trump?
> In the meanwhile I'm glad Trump ignored the political damage Cuomo was inflicting
A notable feature of Trump's response to the crisis has been his inability to ignore criticism from others. One could argue that the silly video he aired last week was a byproduct of his total inability to ignore political damage from folks like Cuomo!
> Doing so would be utterly disastrous to other hotspots
I agree, in hindsight. But it would also have been far fewer than New York said it needed. Cuomo believed he needed 30,000. The national stockpile is around 9,000.
From The Guardian on 2nd April: "[New York state] has 2,200 [ventilators] in its stockpile and Cuomo said 350 people severely afflicted by the virus are coming into hospitals every night needing such breathing assistance."
Ummm. Yeah? Politics is certainly not be the main reason why he did it, but are you going to argue that it did not factor into Cuomo's initial, confrontational tone? He (and Newsom) seems to be pretty pleased with the federal government now. Trump aired a clip of Cuomo today during his presser which you will never in a million years see on CNN. You should watch it. They at first botched it in the live stream, but then played it again a little later. Had I not told you about it, you wouldn't even know it exists. Think about that for a second before you read further.
> One could argue that the silly video he aired last week
You people still don't see that he does this on purpose. He's not speaking to you, anything-but-Trump voter. He speaks to his base, and swing voters, and he successfully penetrates the confinement the mainstream press tries (unsuccessfully) to put him into. He really has no other choice.
Look, I'm not a fan of his public speaking skills, and I wish he tweeted less, but I can see that it works 100% of the time. Whether you like it or not, this is why he won, and this is why he's going to win again. You can't deny that whatever it is he's doing is effective, even if you don't understand it.
Shit, the dude maneuvered the DNC into nominating a gaffe-master with dementia and a closet full of extremely damaging skeletons before the real race even starts, while dealing with impeachment (successfully) and then with a country-wide disaster (also, so far, successfully - see the projected vs actual casualty counts).
I agree with WSJ, Trump is rewriting the book on responding to country-wide disasters. This is the biggest disaster the country has ever faced, by any reasonable measure. Instead of responding with centralization and authoritarianism (like pretty much all previous presidents), Trump responds with decentralization and constitutionalism. Even DPA is not used willy-nilly. This is what an experienced manager does: he delegates. It wouldn't even occur to a lawyer to do this. We'd get Stalin-style "prodrazvyorstka" (https://en.wikipedia.org/wiki/Prodrazvyorstka) bullshit with that. It'd all be on manual control, and fucked up beyond any recognition because manual control does not work at this scale.
> inability to ignore political damage from folks like Cuomo
There's punching back (which Trump will do 100% of the time) and being guided by political pressure. Those things are different. Watch what he does, not what he says.
I'm sorry to see you're being downvoted. I think (hope!) it's an unhappy byproduct of your tone not your opinion.
> Yeah? Politics is certainly not be the main reason why he did it, but are you going to argue that it did not factor into Cuomo's initial, confrontational tone?
Cuomo's original criticism of the government came on March 8th, when he said "they've been slow and they continue to be slow". After this, on March 16th, Trump singled him out as a governor who "needs to do more". On March 25th, Trump said Cuomo was "happy with the job we're doing", which prompted Cuomo to reply that he was not happy.
> Trump aired a clip of Cuomo today during his presser which you will never in a million years see on CNN. You should watch it. They at first botched it in the live stream, but then played it again a little later. Had I not told you about it, you wouldn't even know it exists. Think about that for a second before you read further.
I watch his entire press conference every day, and you're right that they did include a clip of Cuomo saying that he was happy with how the response had gone. If I recall (apols if wrong - a lot of these clips are blurring into one!) the same clip outlined the basis for his requesting 30,000 vents. Something he has done elsewhere, too: ""I hope the President's right. I'll go better than what the President said -- I hope I don't need any ventilators. But I can't govern that way -- I govern on the data and on the numbers and on the science," he said, adding that if "you count the numbers and the trajectory, we're looking at 40,000 possible ventilators, 140,000 possible hospital beds -- those are the numbers."
And it doesn't really have anything to do with whether Cuomo was right to go public with the ventilator need.
> You people still don't see that he does this on purpose. He's not speaking to you, anything-but-Trump voter.
I see what he's doing. Every time Trump appears like a moron to me I know that he's engendering support and approval from his constituents. I call that video silly because it was an extremely clear manipulation of events. You might argue (and you might be right) that his misrepresentation of his actions as being perfect is a necessary correction to the media's presentation of his every action as moronic. But you cannot escape that the President was for several weeks comparing COVID-19 to the flu (he's now done a 180 on this) and pushing a dangerous drug cocktail ("What have you got to lose?") which resulted in at least one person dying.
The damage to his credibility is done by his attempt to whitewash his response. The man clearly isn't prone to intense self-reflection, but he has missed a spectacular opportunity to win over moderates by saying, "You know what? I got these things totally wrong." Nobody expects him to be perfect, and doing so would show everyone a contemplative side of himself. (By most accounts he has the capacity to change his mind when wrong privately, and he listens to expert advice.)
> He speaks to his base, and swing voters, and he successfully penetrates the confinement the mainstream press tries (unsuccessfully) to put him into. He really has no other choice.
The way I see this, and I might have bias here, is that his language is so vague and imprecise that he leaves himself room for misinterpretation at every step. The counterpoints he has presented -- what I think you're referring to as the confinements the MSM puts on him -- are not "you said X, but the truth was Y" disproof by counterexample. They are "you guys are nasty and I'm doing a very good job and here are videos of people saying I am doing a good job".
If he was an employee of yours or mine, you'd say that there is an optics issue. He is, in his opinion, maligned and misunderstood and misperceived so frequently that it becomes incumbent on him to take steps to be, if you'll excuse me, "unimpeachable".
> Look, I'm not a fan of his public speaking skills, and I wish he tweeted less, but I can see that it works 100% of the time. Whether you like it or not, this is why he won, and this is why he's going to win again. You can't deny that whatever it is he's doing is effective, even if you don't understand it.
The public speaking skills are, by the way, one further area which builds the composite image of Trump as a man who is not smart. There might not be a correlation between coherence and efficacy as a leader, but to the >50% of voters who did not vote for Trump in the last election, his rambling is a signifier of his being ill-equipped for office.
You could put it another way: part of his job is to be good at communicating to the public, and it seems like the best anyone can say about him is "he talks to his base".
> Shit, the dude maneuvered the DNC into nominating a gaffe-master with dementia and a closet full of extremely damaging skeletons before the real race even starts, while dealing with impeachment (successfully) and then with a country-wide disaster (also, so far, successfully - see the projected vs actual casualty counts).
Whilst I am largely convinced that there is interference in US elections, I'm pretty sure that the DNC did that to themselves :) Biden is not a strong opponent to Trump, I agree.
I don't disagree with your views on decentralisation. I think that Trump's strategy has been fine. I think he has been negligent and it has cost thousands of lives.
It seems to resonate a bit here, when Marc speaks of things like regulatory capture. I heard a few years back that a US health insurance startup had to provide on the order of 6000 pages of documentation to be approved. No wonder that there hadn't been another provider for twenty years or so. It seems like some things are hard to build mostly because some people want it that way.
I can't help but think that there's a fundamental flaw in the American regulatory approach. From the European perspective, the US is sometimes viewed as some time of free market haven, but in practice it often turns out that the regulatory burden is much higher. The framework imposed on financial markets by the SEC and related authorities is on a whole different level in the US, and with higher complexity you a also get a larger surface area for special interests to make their mark.
Point being, why not write simpler laws and regulations and leave it to the courts to interpret what adheres to the spirit of it? With the barriers of entry gone, I think we'd see a renewed vitality to many ossified sectors.