Posts Tagged ‘Paul Graham’

A venture capitalist’s argument for inequality

January 20, 2016

Paul Graham, a venture capitalist and essayist, thinks economic equality can be a good thing, not a bad thing.

Since the 1970s, economic inequality in the US has increased dramatically.  And in particular, the rich have gotten a lot richer.  Some worry this is a sign the country is broken.

Graham-cover3I’m interested in the topic because I am a manufacturer of economic inequality.  I was one of the founders of a company called Y Combinator that helps people start startups.

Almost by definition, if a startup succeeds its founders become rich.  And while getting rich is not the only goal of most startup founders, few would do it if one couldn’t.

I’ve become an expert on how to increase economic inequality, and I’ve spent the past decade working hard to do it.

Source: Economic Inequality

He goes on to write about how rich rewards are necessary to motivate people to found start-up companies, and how successful start-ups are good for everybody.  I think that is true as far as it goes, but I don’t think it addresses the real driving forces behind today’s increasing inequality.

I’ve written a good bit on this web log about economic inequality, but my concerns have been less about successful business founders and more about the following:

  • Wall Street speculators who get rich at the expense of the public, sometimes by breaking the law, and not only go unpunished, but shift the burden of their losses onto the general public.
  • Executives of business corporations, government agencies and so-called non-profits who milk the system to increase their own incomes and the incomes of their cronies, while imposing austerity on those who do the actual work.
  • Crony capitalists whose wealth is based on personal connections, especially with politicians and government officials, rather than creating value.
  • Rich people whose share of national wealth, as documented by Thomas Piketty in Capital in the Twenty-First Century, tends to grow automatically, all other things being equal.

All this is made worse by rich people who turn their wealth into political power, which they use to destroy the social safety net, starve public services, weaken labor unions and subsidize corporations..

That said, Paul Graham raised a fair point, which I want to discuss.  He pointed out that there is a difference between those who get rich by playing zero-sum games at other people’s expense and whose who get rich by creating value.

I agree.  I think there also is a difference between those who participate in zero-sum games with each other, such as those who participate in high-stakes poker games, and those who participate in zero-sum games with the general public, such as the sub-prime mortgage speculators.

People who create value deserve to be rewarded.  People who make a maximum effort and an important contribution to society deserve more than people who make a minimum effort and a routine contribution.  But I don’t think the rewards system should be structured so that the former get virtually everything and the latter virtually nothing


Do mean people tend to fail as entrepreneurs?

January 4, 2015

Paul Graham, a computer programmer, venture capitalist and wise essayist, wrote recently that mean people almost never succeed in starting successful businesses.

There is some evidence that some types of business, such as financial speculation, attract psychopaths, but the types of business Graham had in mind are those that create something new and valuable.

Graham-cover3The reasons why, in his experience, mean people rarely succeed are (1) a focus on crushing the enemy keeps you from focusing on the long view, (2) talented people don’t want to work for mean bosses and (3) creative entrepreneurs often have a vision of doing something that benefits humanity.

Successful creative entrepreneurs, in Graham’s experience, are more like great artists, writers and scientists than they are like great warriors, and, in a post-scarcity society, their qualities are more important than the warrior qualities.

I think there is some truth in what he wrote, and I would like to believe in it more than I do.  But I can think of examples of successful and creative entrepreneurs who were nasty human beings.

One example is the late Steve Jobs, the founder and CEO of Apple Computer, probably the premiere creative entrepreneur of our time.  Jobs had the perfectionist artistic temperament that Graham wrote about, and yet he was a bully, a liar, a manipulator, an exploiter of Asian sweatshop labor, a deadbeat dad, and an ungrateful son to his adoptive parents.  He was a great man, but he was not a good man.

Another example is Jeff Bezos, the founder and CEO of Amazon.  His brilliant innovation has revolutionized the retail industry to the benefit of many, and yet he is using the power of his innovation to squeeze book publishers, authors and suppliers in the same way as Wal-mart does.  He also is a terrible employer.

Al Neuharth, the former CEO of Gannett Inc., entitled his autobiography, Confessions of an SOB, which I think was accurate.  Yet it was his vision that created USA Today, a successful innovation in journalism, at a time when printed newspapers were starting to fail.

I think Paul Graham may suffer from selection bias.   As a decent human being himself, he is predisposed to invest in businesses started by other decent human beings.  And many decent human beings do succeed in business.  But so do bullies and SOBs, just as they sometimes do in the arts and sciences and other endeavors..


Paul Graham’s greatest hits

August 17, 2014
Paul Graham

Paul Graham

PAUL GRAHAM is a computer programmer, venture capitalist and essayist in the Boston area, who publishes his writings on his web site.

Most of his writing is about start-up companies and why they succeed or fail, but occasionally he writes on subjects of general interest, and I find these essays both interesting and wise.  Here are my favorites.

Why Nerds Are Unpopular

What You Can’t Say

Made in USA

What You’ll Wish You’d Known

How to Do What You Love

Is It Worth Being Wise?

Two Types of Judgment

You Weren’t Meant to Have a Boss

Lies We Tell Kids

The Top Idea in Your Mind

The Acceleration of Addictiveness

The Top Idea in Your Mind

July 28, 2010

Almost everybody has had the experience of struggling with a hard problem, then doing something else and suddenly having the answer come into your mind almost of its own accord.  You were thinking about the problem on some level without being aware of it.

Paul Graham

Paul Graham, a writer, entrepreneur and designer of programming languages, has an interesting essay about this on his web site.  At any given time, he writes, there is a “top idea in your mind.”  The problem is that you don’t necessarily determine what it is.

You can’t directly control where your thoughts drift. If you’re controlling them, they’re not drifting. But you can control them indirectly, by controlling what situations you let yourself get into. That has been the lesson for me: be careful what you let become critical to you. Try to get yourself into situations where the most urgent problems are ones you want to think about.

You don’t have complete control, of course. An emergency could push other thoughts out of your head. But barring emergencies you have a good deal of indirect control over what becomes the top idea in your mind.

I’ve found there are two types of thoughts especially worth avoiding—thoughts like the Nile Perch in the way they push out more interesting ideas. One [is] … thoughts about money. Getting money is almost by definition an attention sink. The other is disputes. These too are engaging in the wrong way: they have the same Velcro-like shape as genuinely interesting ideas, but without the substance. So avoid disputes if you want to get real work done. …

This is true of me.  Sometimes I find it hard to concentrate on the things I need to think about.  And sometimes thoughts come into my mind about arguments and grievances over extremely trivial things, very often from years and decades ago.  I will rerun some conversation in my mind where I got the worst of it, and imagine humiliating the other person.  If I did not make a conscious effort to free myself from these thoughts, I would literally go crazy.

As Paul Graham wrote:

Turning the other cheek turns out to have selfish advantages. Someone who does you an injury hurts you twice: first by the injury itself, and second by taking up your time afterward thinking about it. If you learn to ignore injuries you can at least avoid the second half. I’ve found I can to some extent avoid thinking about nasty things people have done to me by telling myself: this doesn’t deserve space in my head. I’m always delighted to find I’ve forgotten the details of disputes, because that means I hadn’t been thinking about them. My wife thinks I’m more forgiving than she is, but my motives are purely selfish.

I suspect a lot of people aren’t sure what’s the top idea in their mind at any given time. I’m often mistaken about it. I tend to think it’s the idea I’d want to be the top one, rather than the one that is. But it’s easy to figure this out: just take a shower. What topic do your thoughts keep returning to? If it’s not what you want to be thinking about, you may want to change something.

via The Top Idea in Your Mind.