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[blog] Shut Up, Paul Graham: The Simplified Version

As often happens when you say something controversial, there have been some very adventurous interpretations of the essay I just wrote about economic inequality. I thought it might help clarify matters for the undecided if I tried to write a version so simple that it leaves no room for misinterpretation.

I wrote a LiveJournal post so preposterous that even Hacker News didn’t swallow it. I’m painting this as ‘controversial’, which only makes sense if you accept that I am roughly as important as the entire rest of the Internet. Rather than step back and wonder if I might be wrong, I wrote this patronizing Playskool edition, to give the unwashed masses a second chance at appreciating my brilliance. Please admire my generosity.”

No doubt even this version leaves some room. And in the unlikely event I left no holes, some will say I’m backpedalling or doing “damage control.” But anyone who wants to can test that claim by comparing this to the original.

It is literally unthinkable that my ideas are bad.”

Lots of people talk about economic inequality. Nearly all say it is bad if economic inequality increases, and that it would be better if it decreased.


But economic inequality per se is not bad. It has multiple causes. Many are bad, but some are good.

This seems akin to suggesting that skin cancer is not bad per se, because it’s caused by the sun, and the sun is good. Where would we be without the sun? Attacking the sun is a bad idea. So stop trying to fight sun-related skin cancer. Also, I own a large share of the sun.

For example, high incarceration rates and tax loopholes are bad things that increase economic inequality.

I do wonder what Silicon Valley’s richest and most powerful have done to fight tax loopholes.

But startups also increase economic inequality. A founder whose startup succeeds will end up with stock worth a lot of money.

This is tautological, unless you have a definition of “success” other than “be worth a lot of money”.

Which raises the question of whether that should be the measure of success. A great many creators are scraping by on merch sales and now Patreon, devoting themselves to making the things they love full-time. If they do it consistently and garner an audience who loves their work, is that not success? You might even call them small businesses… and yet, they don’t have stock worth a lot of money.

But the investment model doesn’t leave any room for that kind of success, because the primary thing investors want is to get richer. You provide an incredibly useful service that everyone uses and loves? Great. How much money does it make? How much money do I make? Did you try putting ads on it?

Which is why Twitter is now 30% ads. It makes the service that much more annoying, but to the investors, it increases “success”. Twitter is now stuck trying to balance “success” against “not pissing users off so much that they leave and render the site worthless”. A strange state of affairs.

Slack would be amazing if it were an open protocol, like IRC. Instead it’s a tool targeted at other startups that you can rent for six bucks a month per user. Because that’s how you pay back the investment loan.

Startups increase economic inequality because venture capital trains them to do so.

And unlike high incarceration rates and tax loopholes, startups are on the whole good.

Are they? Lately we’ve had several that are frivolous, universally reviled, or seemingly outright jokes, yet they still get millions of dollars in investment cash. (I’m starting to wonder if Silicon Valley is running Producers scams on venture capital.) Even darling Uber is, to put it charitably, controversial.

Of course, if a hypothetical person made a lot of money from successful startups, they might have a material interest in convincing the world that startups are good, so they’ll be valued more highly and be worth more money.

Some startups are good, certainly. But for every startup that brings drinking water to Africa, there’s a smart luggage and valet dry cleaning and weed delivery service.

During its last round of funding, YC invested in five different career websites: WayUp, Gradberry, HigherMe, Bright Network, SmartHires. How many of these do we really need? I count at least half a dozen more startups that offer services only useful to businesses. These aren’t improving the world — they’re just making running a business more efficient for other startups, so the investors can make more money!

Since economic inequality per se is not bad, we should not attack it. Instead we should attack the bad things that cause it.

Yes. The bad things like Yo. Like how a great amount of wealth is concentrated in the hands of a small number of people, and they are choosing to use that wealth to fund ridiculous novelties in the hopes that they will ultimately accrue even more wealth. And for what? Just to have.

For example, instead of attacking economic inequality, we should attack poverty.

Perhaps someone with millions of dollars could give more of their money to organizations fighting poverty rather than investing in a premium coffee subscription service.

Attacking economic inequality would be doubly mistaken. It would harm the good as well as the bad causes. But even worse, it would be an ineffective way to attack the bad causes.

This sounds suspiciously like it’s okay to move the bottom quintile upwards, as long as we don’t also move the top quintile downwards.

We will not do a good job of fixing the bad causes of economic inequality unless we attack them directly.

Much like we will not do a good job of curing the bad causes of skin cancer unless we attack them directly. The bad causes, of course, are skin. Speaking of which, have you heard of this new YC-backed startup that lets you order entirely new skin from a smartphone app and have it delivered by drone within an hour? It’s only available in a ten-block area of SOMA, but check back regularly to see if we’ve expanded to cover your startup’s headquarters.

But if we fix all the bad causes of economic inequality, we will still have increasing levels of it, due to the increasing power of technology.

I always thought the dream was that technology would make everything cheaper and more accessible. It sounds like your dream is for technology to make everything more efficient, so investors can get rich more quickly.

This post is bad and shortening it didn’t make it less bad. Please stop.

If you like when I write words, you can show your appreciation — and force me to write more often — by throwing a few bucks at my Patreon!

(illus. by Rumwik)