That is an extreme claim (in the sense of surprising, remarkable, unusual, and one that needs a lot more support than ordinary claims).
It is inadequately defended here. The argument that it violates fair exchange is tautological.
Why should they get ownership of the business? When you get a mortgage for your house, the bank doesn’t permanently own part of your house after you pay it off.
Because the VCs are funding the startup on extremely favorable terms?
If the startup fails, the founders can just walk away. They are not personally liable for anything. They can (and often do) subsequently form another startup, often funded by the very same VCs who funded the one that just failed!
If, OTOH, you fail to pay your mortgage, the bank takes your house. And they make hard for you to get another mortgage from any bank by reporting the foreclosure to credit ratings agencies.
You absolutely can keep the equity (and surplus) for yourself… but you will need to personally guarantee the loan. You may need to declare bankruptcy if the startup fails, and all that entails.
VCs are happy to throw away money on 99 failed startups precisely because they are entitled to the continued surplus from 1 successful startup. Banks are happy to make failure to pay extremely unpleasant for you because they are not entitled to any surplus from business loans which lead to successful outcomes.
There's a subtle difference and it shows by how we even see wealth. We associate wealth with utility to society. That is, after all, why we create economies. We want to reward those who make society better.
But that's where there's been a disconnect. We figured out we could make money without pushing society forward. We'd historically refer to those people by different names... worse than that, we are focused on the short term. Silicon Valley has perfected the hype cycle. You get in cheap, pump up the price, sell, and do it all over again. It does not matter if it is vaporware, it matters that you can make a profit.
The problem is alignment. The economy is not aligned with its intentions.
Do we see much innovation these days? Is there even an incentive? No doubt there's innovation, but people are claiming it is accelerating. I'm unconvinced we're innovating faster than we did in the 90's. That decade changed society more than the 00's and 10's, even with the advent of the smartphone.
Unlike the author, I'm actually in favor of capitalism, yet I firmly believe that an economy still needs to by well regulated. There's very few economists who believe such regulation does not need to exist (we listen to partisans more than actual economists), and I've found even the most staunch free-market believers (often not actual economists) will have concessions. It's no secret that an unregulated market is not a free market. An unregulated market is a market regulated by the largest entities of the market.
It is probably no surprise that those who cannot think long term are unable to realize that the rise in popularity of socialism is due to the abuse of capitalism. Most people do not have a strong foundation in economics (why should they! They're spending years learning other skills than years reading textbooks, analyzing, and going to school). But people do know our system isn't working. Is it really more cost effective to build bunkers and buy private islands than it is to make the lives of the people better? I doubt it. But that's the same myopia I've discussed in my entire comment. The problem is how myopic we've become
So yeah, even though on first skim I think I agree with the thrust of this article, I think you're right it's poorly defended, assuming it's at all for an audience outside of people who already think this way.
I get that the status quo has huge issues, but can we have some new ideas maybe instead of continuing to try to revive late 19th century ones that have repeatedly and disastrously failed?
One could probably say that the privatisation of human communication is a form of "initial accumulation", or maybe just another step toward appropriation of culture, but that's apparently not the angle that the author decided to explore (can't be sure, I couldn't do better than skim that text which looked wrong in too many ways).
Obviously, nobody would take that kind of deal. But what if regular loans were just flat out not made available to you? Like, if tomorrow, banks as a class individually decided they would only accept payment in this sort of lifetime wage equity. Then it's not really a choice anymore. One of the options has been taken away from you. If I take a fair deal and have one of the counterparties flat out remove some of the negotiating options - even if they were not the ones taken - is it still a fair deal?
In other words, the argument that fair exchange has been violated is based on the idea that market power can be a form of coercion. If you don't agree, then you can argue that every possible counterparty deciding to only offer you a bad deal is perfectly acceptable and non-coercive. "Natural shorts[0] are not coercion", in other words. But why stop there? I mean, even in outright theft, where I'm holding a literal gun to your head and demanding payment, you could still choose to eat lead. We can redefine theft and coercion down to excuse any behavior we want on libertarian terms. The tautology is not with the argument, it's with fair exchange itself.
[0] As in, "thing you need to exist". You have a natural short position in food, drink, and shelter.
Weird analogy. It's more like "what if you borrowed money to buy something, didn't have to return it, but if you made money with that thing, you give the lender a cut, forever".
Because the point is: it's not a loan, you don't have to pay it back, and you're not on the hook for it if things go wrong. That's the big upside and why lots of people do that instead of getting a loan. Because loans are available, but people don't want that risk and are willing to give up some of their ownership to avoid it.
Any engineer today could start their own business. They could instantly become equity owners. Especially with AI. Many giants paid salaries and equity packages to the best, to keep them from starting competition.
En engineer can also leave a tech giant and in California, unlike NY, non-competes don’t apply. Tech work scales infinitely - so you can make a product for millions of users with your own two hands, unlike manual labor workers, who are limited by physics.
The evil not recognized is when the scalability of tech and AI is used to create and power up addictions that drain human brains, instead of giving them bycicles of the mind. Leaches on the brain. Industries where you can do well by the customers but you make a LOT more money if you do badly by them: Advertising (pumping ad impressions by refreshing pages, putting ads under common buttons to create unintended clicks that charge small businesses dollars per click, not delivering traffic or real audiences and making the small business pay even more thinking it’s their fault). Making gambling and games with horrible dark patter dynamics that wake users at night and expose them to chronic sleep depravation and wallet draining just to keep them addicted or with some status or in some league.
If you count human brain time and attention as the most valuable and sparse of resource - think about how much of it is killed by true evil. VC funding won’t be needed when AI is used to build things without the need for much funding anymore. What truly matters is not building evil things.
But it's not, though. Human brain time (just in general, with no additional conditions) is pretty worthless, that's why people piss it away in idle activities. Just look at services like Mechanical Turk. The so-called attention economy is not about the attention itself. It's about getting the brains that give the attention to spend money.
Correct me if I am wrong, I am open to ideas. My knowledge of economics is all from social studies class, my brother almost dying because insurance at first denied to pay for his surgery, and making money from yard work and fixing electronics because I am not old enough to get a legit job. I have never paid taxes, but I somewhat understand disdain towards taxation in an age where the cost of living is as high as it is relative to the amount of money one is capable of making.
This article (warning: obnoxious ads) is the only one I can find that claims to know who nvidea’s shareholders are and puts the number at 4.3%
https://capital.com/en-int/analysis/nvidia-shareholder-who-o...
I would not consider that to be employee owned (although I certainly wouldn’t mind the 25m)
The individual owes nothing to society: no limit to what I can own. Society owes nothing to me: my share of the wealth is my own fault. Might makes right. A deal is fair regardless of the terms: a deal is a deal. Workers don’t deserve a vote: they agreed to their servitude.
https://web.archive.org/web/20190204123209/https://notesfrom...
The preference for traditional corporate structures over cooperatives is not a conspiracy but an optimization for speed and scalability. Centralized decision-making allows startups to pivot rapidly in competitive markets, whereas committee-based governance often introduces fatal latency. Furthermore, employment is a voluntary exchange where engineers trade skills for compensation, often including equity to align incentives. Labeling this voluntary cooperation as "evil" ignores that this model has driven the greatest reduction in information costs in history. We are not victims of a theft-based institution but participants in a high-performance engine that rewards efficiency and problem-solving.
Comically though, it's also self-refuting, since it leads with how voluntary exchange of something for money is ok, even if someone gets a bad deal. Buy, you see, if you voluntarily exchange your labor for money - creating that something (notably your employer is not interested in your labor especially in the case of the startup, only that you give them the product); and then your counterparty voluntarily exchanges that product for somewhat more money with someone else, that is now theft, and also evil.
This is just propaganda. Collectivism is evil, startups are fine.
https://en.wikipedia.org/wiki/Beholder_(Dungeons_%26_Dragons...
One of these, is not like the others.
I’ve been writing software for Apple systems since 1986, and it was already a well-established company, by then.
I have watched people declare it dead, numerous times, since then.
That doesn’t excuse some of its behavior, nowadays, but it’s a very different creature, and lumping it in with them, seems like a cheap grab for Apple-haters.
The Playbook is always the same: Run global Propaganda (ads/PR), while behind the public's back extract the capital from the general public into the private hands of a select few and "socialise" the costs (health, mental-health, polarisation, extremism, populism, ...) to the state (taxpayer).
Basically: screwing the public and letting them pay the bill, but hidden by X-layers of obfuscation.
From the article:
> And I’m talking to you now, fellow workers of the Valley! If you really want to do no evil, to be good, disrupt the status quo and make the world a better place, then don’t create a capitalist firm: it’s a top-down dictatorship, where the dictators steal the money. There’s nothing progressive about this kind of social institution. Founding such a startup is deeply unethical, represents institutionalised theft, and is a prime cause of diverse social ills.
Businesses are "people" now, according to the US Supreme Court, so it's our job to make them face consequences if they refuse to behave like actual "humans" bound by laws. But it's only if we elect representatives who are not corrupt grifters.
===
i'm told "Almost none.
The only concrete mechanisms mentioned are:
Founding worker-owned cooperatives instead of equity-based startups.
Raising capital as loans rather than selling equity.
“Creative ways to solve the political problem of capitalists’ monopoly on capital.” This is referenced but not elaborated.
No operational steps, no policy proposals, no institutional models, no financing frameworks, no examples of working co-op ecosystems, no strategy for scaling co-ops, and no plan to change investor incentives."
===
Dear author, please come back with more specific recommendations. I'm curious what you think early stage startup founders and funders should be doing instead of what they're currently doing. I think you want founders and funders to effectively make massively unilateral economic concessions to early employees, since they are "labor". And then you want those early employees to in turn make massive unilateral concessions to later employees because those are "labor" too.
But what about the rest of labor in society?
Why not instead have massive tax rates on the gains, so that all of society's labor can get in on the fruits, rather than the startups relatively few employees?
None of those reasons are related to Marxist bullshit. Grow up.
What is disturbing is how the hype-machine around "startups" and the unicorn myth encourages people to believe they can be the next big thing. But basic arithmetic makes that impossible: you can't have an abundance of unicorns when the attention economy, capital, and market share are structurally limited.
Woz and the nerds were making machines at home, later hooking them up to one another with the janky telephone service as the interconnect. And this kid, just getting a taste of BBSs in Kansas in the mid 1980's, was so envious of the outrageous number of BBSs in Sunnyvale, Mountain View, Cupertino, San Jose…—all strange names to me. But I saw that they were all in California.
When a job offer got me to move out to the Bay Area in the early 90's there was still a kind of soft echo of those times. Plenty of electronics recycling warehouses you could wander through (and recognizing some of the same faces, often older men, as you moved through your morning circuit to the next warehouse). Disk Drive Depot, Computer Literacy Bookstore, etc.
I had a career there, raised a family there. I watched the dot-com boom/bust, the rise of the internet, Google, and the slow decline of the hardware focus of "The Valley".
When the last of my daughters left the nest, the wife and I sold the house and I retired back to the Midwaste where the two of us grew up. Weird Stuff Warehouse had recently closed up shop and that seems now as fitting a time as any to have said goodbye to The Valley.
To put the scale shift in perspective: Apple sold only a couple of million Apple IIs in that entire era. Today, the iPhone sits in the multi-billion range since 2007. Once a technology ecosystem expands by three orders of magnitude, its culture cannot remain the same.
The early Valley wasn’t "good" in an absolute sense, it was simply relatively small, intimate, and guided by shared values. As growth, global competition, and finances took over, the culture changed in ways that were probably inevitable.
That bargaining power came from our ability to surf the crest of the wave that was over and over crashing through existing industries, turning them on their head with the promise and practice of automating via computation. In many cases deskilling the jobs of other workers.
We could play the part of magicians who knew these arcane arts and get paid accordingly.
There is precisely zero guarantee that any of this will continue. In the latest wave it seems like it is we ourselves who are being submerged beneath the wave.
But hey, without this, our public schools wouldn't get funding from lottery tickets! So I'm forced to conclude it's a good thing.
I'm not talking about UBI or forced austerity, but about developing smarter ways to live frugally without feeling deprived. That mindset would relieve a lot of the pressure that the "you must win the startup lottery" narrative creates.
