I saw a post yesterday on HackerNews called "Why People are Sheep" - the thesis was that libertarianism, objectivism, etc. only worked for techno-libertarians (of which there are many in tech startup culture) because there was a shortage in supply of good computer talent in the dot-com era, and that they basically got lucky.
He seemed pretty thoughtful, though a little naive, so I had to leave him a comment. This turned into a little exchange between us that I thought I'd post. I love to get some feedback & comments!
My Response:
Yes, it's true that luck has a large part in success - perhaps more is
required than skills, however the foundation of your argument rests on
an "explosive growth with a limited supply of qualified people". Please
forgive me if I'm mistaking your argument, but it seems like you're
implying that people can only achieve great success by exploiting a
bubble (a la tech startups circa bubble-era). I think you'd recognize
that plenty of people make money in ancient businesses like: real
estate, transportation, etc.
In those industries, unlike the
tech bubble, there is not broad explosive growth - there are many small
opportunities that require time, skill & luck in order to profit
from them. Anyone who wants to work hard & has a good attitude can put
themselves in a position to do this assuming life hasn't dealt them a
very bad hand (psychological disorders, etc.).
If you'd like
to argue the points of whether people should be purely self-interested,
this is a matter for philosophy which can never be solved, however if
you'd like to argue against hard work being disproportionately
responsible for success you've got all the data against you.
Thoughts?
Squashed's Response:
In the tech industry, you'll find a lot more people who have done very
well without traditional credentials. You have highschool dropout CEOs,
for example. This is a fine thing--but it isn't going to happen in
finance or law or more traditional business. Building a company from
nothing takes much longer. Compare Google and, say, General Mills or
General Electric. Google's a relative infant. Of course, in the world
of the Internet, it's a respected elder.
Is hardwork
disproportionately responsible for success? Proportionate to what?
Connections? Intelligence? Good fortune? Creativity? Sure, hard work is
more likely to lead to success than laziness. But a lot of other things
play into it too. It also depends what you mean by success. If I win
the lottery, am I successful? If I inherit money, am I successful?
Suggesting that hard work alone is responsible for success is
convenient--because everybody has roughly the same opportunity to work
hard. But not everybody is as equipped to bring about their dreams as
others.
Me:
Of course - success can be measured differently, but we were referring
to the monetary variety based on your focus on comparing dot-com
success with other types, such as here: "computers would probably be a
better launchpad for a career than fixing cars or theater or multitrack
recording". The real issue here is what amount of wealth or income
makes you successful.
If we define that as the top .1%, then
yes you'll find a lot of technology guys, however, most people wouldn't
frame success as working class vs. Bill Gates. It's much closer to
whether you own the shop or work at it. I've run several profitable
small businesses, and I know that hard work can lead to this variety of
success with a little luck. Obviously, tech startups have higher risk
and reward. I'm working on one of those now, and we've been pretty
successful and luck has played a larger part, however if I didn't work
my ass off I wouldn't be down this path at all.
Rejecting free
markets / libertarianism based on inequalities produced is a valid
argument, but we're discussing whether it brings more success to those
who practice it. The truth is that hard work brings more to everyone in
aggregate than subsidizing poor performers - there's higher variance in
wealth though.
The question of whether to use distributive
policies then rests on your views of government coercion and the
ability to increase switching costs. I'm opposed, as a small "L"
libertarian, to government force used other than providing an equal set
of laws (human rights, contracts, etc.) and the curing of externality
effects (interstate highways are good government intervention because
of market failure).
This leads us to whether you define a base
level of sustenance to be a right & also whether your system can
produce better outcomes. The first question is for philosophy, however
the latter one should look towards the massive aggregate gains (of
course there are downsides) in quality of life in developing companies
due to capitalism.
Squashed:
I understand that we're talking about money--but do you have to earn it
(or do something that could reasonably be called "earn")? But this is
beside the issue. I agree. Hard work correlates with financial success.
The hard-working are not always successful--but it's a good plan.
Subsidizing
poor performers does not create wealth--it's simply a distributional
thing. I should mention that I'm not adverse to capitalism. I am not,
however, a libertarian. I think we need to use capitalism as a
tool--but beware of its limitations. Suppose, for example, we increased
the social safety net for people who started businesses. The cost of
failure would be reduced. Perhaps we would get more entrepreneurs?
Capitalism in other countries is a very complex issue--I would love to talk about it when I'm not stuck using IE6.
Me:
Okay, we're getting some where. I have to say that you're a very
thoughtful debater, and I appreciate this quality as it's quite rare to
find whether you're online or IRL.
Capitalism is definitely a
tool and must not be seen as some form of gospel. The market has
failures - those who don't admit this are probably either naive or
fundamentalists. This includes some libertarians who believe that the
government can do nothing right and that markets never fail. Such a
simplistic worldview is obviously incorrect.
I think
bankruptcy and the ability to form corporations are great government
allowances that function the same as safety nets. This issue with
having more elaborate safety nets is the concept of moral hazard. Most
of these "safety nets" are really either incentives to perform some
type of government endorsed action (to promote environmentally sound
practices) which is usually just a veiled attempt to support certain
interest groups (ethanol & corn farmers).
I'm not sure
what safety nets you'd want for entrepreneurs beyond the aforementioned
allowances. If you offered them some sort of unemployment or welfare
you'd at best encourage sub-par people to try businesses and at worst
allow people to game the system. In the end, it encourages improper
allocation of capital. How would you structure these incentives?
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