Suppose you own a beat-up old car. Instead of sitting on your butt next summer, you could spend the time restoring your car to pristine condition. In doing so you create wealth. The world is-- and you specifically are-- one pristine old car the richer. And not just in some metaphorical way. If you sell your car, you'll get more for it.
In restoring your old car you have made yourself richer. You haven't made anyone else poorer. So there is obviously not a fixed pie. And in fact, when you look at it this way, you wonder why anyone would think there was.
I'm guessing Paul Graham has never restored a beat up car to pristine condition. Your pristine condition car that will fetch you less than the new parts you put in when you sell it at what the market will pay for it. Restoring beat up cars to new state is a losing game unless someone pays you to do the work, except for some rare collectibles, which I am assuming are not your personal beat up car. And even then chances are just about even that you'll end up losing money on it. It's fun to do, you'll learn lots but please do not think you will make money this way, especially not if you put any value on your time.
I think it’s coincidental. Are you suggesting that attempts to create value almost always consume more value than they create? The entire economy is proof this is false.
No, but in the case of fixing up an old car, it is not just a poorly chosen example. Fixing up older equipment when the industry of parts has moved on, is fundamentally more expensive than going with what the industry is currently manufacturing. It's easy to see a product in isolation and see that it needs a "$3 part" to be "as good as new", without taking into account that products are part of an elaborate, dynamic, evolving ecosystem that no longer makes said part for any price.
It makes me wonder, if we were to go full on Jurassic Park and clone some creature from 100mya, would it be able to thrive in today's environment? Would it have sufficient immunity, and be able to digest meat/plants from the present day? Even the alligators have evolved a bit since then.
It makes me wonder, if we were to go full on Jurassic Park and clone some creature from 100mya, would it be able to thrive in today's environment? Would it have sufficient immunity, and be able to digest meat/plants from the present day? Even the alligators have evolved a bit since then.
Historically, the atmosphere was thicker and had a higher percentage of oxygen. Those dragonflies with two foot wingspans could not survive in the current atmosphere. Insects don't have lungs per se and the current lower atmospheric pressure and lower oxygen levels means you would need to basically give them their own pressure suit.
My general understanding is the same would be true for dinosaurs: Their lung design and large size would mean they would need life support to survive at all.
...unless you just want to drive an older car instead of buying a new replacement for the old clunker.
I've never restored a car to pristine condition but have kept quite a few on the road as daily drivers and they were certainly cheaper than buying a new car every three years or so by a huge margin. My current "clunker" is an '87 Goldwing that should be on the road in perfect driving condition with a few hundred invested in parts once I get around to working on it. Heck, might even get the neighbor to give it new paint since he offered "a good deal" a while back and still be ahead on resale value.
after having seen a few shows, at one point I was sold on the idea of driving around in a restored, older car. But the truth is, my new, tiny run of the mill car has bluetooth, AC, 10 airbags, great fuel economy and is much more quiet and turns off when idle. Oh and starts reliably - I haven't had a single day of downtime in the 5 years that I own it. So much nicer for daily driving.
I interpret it the opposite from you. Sure you probably won’t make a lucrative living restoring an old car but over time the value will go up. The lesson is more about putting in work that builds value, self actualization and doing something gratifying. I do this with land/property. Sure I could hire a dozer operator to clear it all but the time I’ve spent manually as well as renting a mini excavator for a small price has supplied tremendous gratification and perhaps added $50k in value by opening up a nice view of the mountains that nobody ever thought existed.
Unless the car is a very rare make / model, you will nearly always lose money on it. You won’t suddenly discover a rare carbuerator buried in there that, with some elbow grease, add $50k of value to the car.
I realize this is missing the point, but this is why one should pick metaphors carefully.
Can't speak for other places but in my city many have made a business out of doing this. They buy and soup up old cars. There's a trust factor because they've been in the business for more than a decade. Also, they have a reputation for selling at comparatively higher prices -- and they don't seem to be running out of business.
It's likely. Plus, most cars here are likely to be scratched or dented. The state of UP recorded the highest rate of road accidents in the country which also indicates the recklessness of the drivers.[1] I attribute this to a poor bureaucracy, widespread corruption[2], and careless drivers.
My driving test was literally just accelerating and reversing the car once.
Personally, when I park my car somewhere I assume it might be a little scratched when I am back. Perhaps that's what most people do and therefore we are content with not-so-pristine vehicles.
An analogy by definition requires strong similarity to explain the position. Being a poet is about expressing your emotions having the reader transported to the place, like a doctor explaining the condition and cure, err
But if it does not work he should have a better example.
Still remember the paper about the externality of bee farm and apple farm. Obvious issue of apple not paid the bee farm but no such issue - all paid and in fact have contract what kind of bees etc.
There's a famous economics paper by a guy called Meade that gives some examples of externalities (i.e., situations where what one person does affects another in ways not represented by market transactions); one example is of a region where some people keep bees and some grow apple trees, and the bees get food from the apple trees and/or the apple trees are pollinated by the bees. The beekeepers' productivity may be affected by the apple farmers' choices, and the apple farmers' productivity may be affected by the beekeepers' choices, but (in Meade's hypothetical situation) they don't trade with one another so the market doesn't do anything to push them towards making choices that work well together. (In which case, e.g., you might want the government to step in somehow -- regulating those choices, or arranging taxes or subsidies that encourage mutually beneficial behaviour, or whatever.)
But allegedly it turns out that in at least some cases where you have beekeepers and apple farmers near to one another they do trade with one another -- with e.g. contracts stipulating what sort of bees the beekeepers are going to keep -- and the market does do its thing, and the result is efficient allocation of resources.
Here's a paper by Steven Cheung about bees and apples in the Pacific Northwest. It claims (I haven't checked any of its empirical claims or its theoretical analysis): https://www.jstor.org/stable/724823
Oops! I accidentally the last sentence. It should say something like: "It claims (I haven't checked any of its empirical claims or its theoretical analysis) to find the effects I described in the paragraph above: there are contracts, the market does its thing, and the result is efficient resource allocation."
I think you’re correct. It’s an easy-to-grasp metaphor, but cracks appear when you look harder, especially with the specific detail of “restoring to pristine condition”. Illustrative as a fable of value-add, though.
The business creates value by organizing thousands of software developers together, giving them PMs and EMs to manage them, using data analysts to determine the success or failure of a product launch, and having a legal team to navigate regulatory hurdles.
The business also takes on risk for paying software developers to develop products which may not be successful.
> Uh huh and who are these artisans multiplying value (not just selling but literally adding value) of software systems by 14x?
Selling is adding value. If you make something great and nobody uses it, how is that different than never making it in the first place? It would have no effect on the world and nobody would be better off because it exists.
Software adds value to the users and the users need to find out about it and be convinced to purchase it in order to realize that value. That's the case for any category of product.
Code doesn’t make a business. Go look at the millions of failed startups and side projects that software developers have created and failed with. You need more than the ability to just create software systems. Code is a commodity.
The ones finding the customers. The ones staffing the help desk and providing support to users. The ones writing good user documentation or making how-to videos about using the software.
