fhwang.net

What we mean when we say disruption

Chris Dixon:

It is true that new technologies often lead, in the short term, to lower wages and fewer jobs. Craigslist, for example, has about 30 employees yet, by replacing the classified ad industry, eliminated many thousands of jobs (local newspaper reporters, classified ad salespeople, etc). The same could be said for almost every popular website.

On the flip side, new technologies have driven down prices (Walmart and Amazon), led to massive increases in information productivity (Google and Wikipedia), and created new income sources (eBay and Craigslist). Greater productivity and lower prices at least partly compensate for part-time jobs and lower wages.

A few thoughts on this:

  1. When people in the startup system say something is "disruptive", that's often a synonym for "somebody else is going to lose their job". Entrepreneurship and technological innovation aren't entirely zero-sum, of course. But it's far easier to take money from somebody who's doing the same thing much less efficiently than to convince people to pay money for something they've never paid money for. I don't think that's something to individually feel guilty about, but it's something to think about in the aggregate.

  2. Economic worth is to a large point contingent on historical context and just plain old dumb luck. I have done immensely well because I'm significantly better than average at symbolic manipulation and I've lived my whole life in a stable, relatively mature economy that values such skills. If I'd been born 100 years earlier, or if I'd been born in, say, Rwanda and hadn't been able to emigrate, my relative economic worth would be far less. And it may be the case that 100 years from now, my intellectual prowess in such areas won't be nearly so exceptional.

  3. Historical luck also changes a person's career experiences, and in a few short years it becomes close to impossible to separate that luck from the more innate positive characteristics we all like to pat ourselves on the back for in the startup scene. So, if you're looking to maintain the fiction that capitalism is completely fair, you can look back on my work history and say I took a lot more risks and lived my life with an entrepreneurial spirit, and thus deserve my relative privilege. But I think it would be just as correct to say that, because I had the dumb luck of being into the right kind of work at the right time, I've had work conditions that made it much easier for me to take risks. I could advocate for cutting-edge technological and business practices because I've worked for companies that really worried about keeping me happy. I could even quit my job before lining up the next one. If I'd started out my working life as, say, a school teacher, my resume would look a lot less enterprising.

  4. People grow up in the context of long-standing accepted social arrangements, and they use those arrangements to consciously or subconsciously make choices about their careers and their lives. Most of these arrangements are implicit. Here's a big one: For generations after World War II, in the United States, you could have a modest but comfortable life working in a factory. You wouldn't be rich, but you would be dealing with the terror of poverty either. Many people planned their lives around this unspoken arrangement. And then, that arrangement no longer applied, but a lot of people weren't properly warned. That's not exactly the fault of the technocratic elite, I think, but it can go a long way to explain the resentment and the resistance.

  5. It is a crazy, deranged fiction to say that "yeah, well, you 50-year-old factory workers and shoe salesmen are just going to have learn to become web designers now". Regardless of whatever brand of technocratic determinism you may subscribe to, that isn't going to work. The vast majority of the planet does not think and act the way the startup world does, and even if that's going to be necessary eventually it'll take at least a few generations in the best case scenario. Displaced people are not going to cheerily learn Ruby on Rails and start hanging out in co-working spaces tomorrow. What is far, far more likely is that they will take what they believe is theirs, with varying degrees of legality and peaceableness. You can fight this if you truly want to go all Randian about this, but then it's worth asking, right now, how you feel about stepping over starving children in the street or ordering cops to shoot into crowds of protestors.

  6. Some people are just straight-up stupid. I'm not talking here about genuine moral or social character flaws, such as ignorance or selfishness or intolerance. I'm talking about people who work hard and are nice to their kids and are just still not very good at doing a lot of mental work. It's irrelevant whether such differences are genetic or environmental—they're with us today and will be with us until the Rapture or the Singularity or whatever. The moral question there is: If you naturally suck at law, computers, and finance, do you still deserve to have decent health care? I'd say yes. However, left to its own devices, capitalism probably isn't going to make that happen.

All of which is my extremely long-winded way of saying: Capitalism is pretty great at advancing net social wealth, but not very good at distributing that wealth in a way that most people would consider acceptable. As a society, we should work together to craft laws that curb the most vicious iniquities without dulling the speed of innovation. As a sector of the economy, those of us in the startup world should remember as we cheerlead each other that we're immensely fortunate. We work hard hours, sometimes eat ramen and live on our friends' couches, and deal with the terrifying stress of high-profile failure. But if we do fail, we can still go to the doctor, pay our mortgages and feed our children. We're the lucky ones.

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Tagged: economics, startups

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