This is one of the underappreciated benefits of the Nordic-style welfare state: everybody can afford to fail.
Unfortunately it's rarely discussed in society as such. The political parties that built these welfare states have traditionally been associated with worker unions, and entrepreneurship isn't high on their agenda. The Nordic right-wing parties got ideologically married to Thatcher-style neoliberalism and prefer to yammer endlessly about tax cuts instead of thinking about how the welfare foundation can help entrepreneurship.
Fortunately there are some successful people who talk about this. For example in Finland the Supercell founders (gaming company with $10B exit) have been emphasizing the importance of the welfare structures for enabling entrepreneurship opportunities.
As someone living in Finland, I would argue the cons balance out the pros. The welfare state also creates massive disincentives for entrepreneurs. There is no free lunch.
In addition to the psychological aspects mentioned below (why try so hard when you’ll be fine either way), there are bigger reasons.
While the safety net makes it less dangerous to fail, it also makes it harder to succeed.
The barrier you need to clear before the business can be successful is much higher, due to:
- 15-20% higher taxes than the US at every level. Cut your profit margin by 15% and you need roughly double the amount of revenue you’d need in the US to pay yourself a good salary.
- high cost of living (like living in NYC/SF but without all the opportunities)
- inability to hire full time employees until you get much bigger (they literally cannot be fired and if one goes on maternity leave you can be stuck paying someone without getting their labor for a year+)
-lack of funding/financing and risk capital (Europe is starting to catch up, but nowhere near the US, especially at the small business levels). There’s nothing like the SBA loans the US has.
-more severe penalties for failure in the form of bankruptcy, you cannot walk away relatively unscathed in the same you can in the US
-impossibility of building wealth by working a job to fund the business yourself (salaries are extremely low due to the massive social benefits overhead)
Unfortunately another component of the Nordic model that makes it work is that everybody trusts the government. This is what makes the Nordic model hard to translate to other settings in my opinion.
They're high trust societies in general, partially because they're small monocultures. As Robert Putnam's research shows, in multicultural societies, especially large ones, trust rapidly declines, surprisingly even within cultural groups. Trust in government falls even more rapidly as each group starts to perceive those in power as being more favorable to one group or another, even if those in power are from their own cultural group.
I've distinctly noticed this in my own life, being born and raised in the western US, but having lived throughout the US, my trust in my "fellow Americans" declines the further away from the mountain west I get. My spouse is Finnish, and we've lived in Finland for years, and have independently observed that their homogeneous society definitely makes their rosy politics possible. I bring this up when people try to compare US and Finnish domestic politics. There is often a "it works in <Finno/Scandinavia>!" rhetoric when discussing health care, schools, or whatever. Comparatively, Finnish politics are boring and uneventful.
"High trust" seems entirely contradictory to Danish society. Universal skepticism and a universal dislike for every other human in existence are the core ideologies here.
Maybe a tendency to not interfere with tasks assigned to others to avoid having to deal with people is being misinterpreted as trust?
No. My Norwegian colleagues trust that they will receive healthcare. They trust that their representatives in the government are acting more or less in good faith. They trust that money in the government is going towards protections and services and infrastructure. And if you look around in Norway, you can generally get the feeling that the government is taking care of things.
Go to America and it seems like the country is a decayed husk wrapped in gold. Roads are barely functional. Schools do not educate children. Each day there is a new story about a politician who is corrupt either through insider trading, being a pedo, or whatever. The government of America does not appear to do things for Americans.
Thus, it's easy to see why you can trust the government in Norway but not in America to me.
Americans really think their schools don't provide solid education, it's so weird. Look at your PISA scores, they're reasonable. Could be a lot better, sure, but so could almost everything. Especially if you take into account how most countries with better education systems have less than a 1/3 of the population, are mostly developed monocultural nation-states, so a lot more capable of standardizing public services nationwide.
Exactly... it's the mono-culture and relatively small population and distances that allow this to work relatively well. If the US actually reverted closer to the original Confederation it was started as, each state could possibly do these things, but as a whole, it's really hard... and becomes ever more divisive... At this point, largely, only corporate interests feeding both sides seem to get anything done.
But don't you know that the only reason people want to have more control over their own lives and influence state politics is to be racist? That is why we must entrust the federal government with more and more power to run everything (with the help of The Experts™, who all happen to go to the same few schools).
No it's not. Norway overall is 75% ethnic Norwegian with the rest being immigrants. Oslo the capital is only 50% ethnic Norwegian. It's very strange to me to identify Norway as monoculture. Usually i think the person has never been to Norway when they say that.
How many of those immigrants are allowed to vote? The US, by contrast has a massive amount of immigrant populations, multiple generations in with varied backgrounds, over a massively larger scale of both population and land mass. My high school didn't have a majority from any single racial group.
> No. My Norwegian colleagues trust that they will receive healthcare. They trust that their representatives in the government are acting more or less in good faith. They trust that money in the government is going towards protections and services and infrastructure.
This is not quite true in Denmark.
There's have been multiple cases in recent times with the government willingly taking illegal action. Trust in public health care is that it'll keep you alive, but that's getting a nurse to look at you takes half a workday and the majority of the staff is running away due to poor pay. Those needing psychological help have generally been neglected, and those with gender identity issues are borderline abused. Environmental policies are "revised" as we get close to the deadline and haven't made the progress needed.
So I would not say that there is trust in the government and its services - merely an understanding that as change is very slow, you can expect the same tomorrow as you do today. That the US is worse is somewhat of a different discussion to whether or not the Danish people is a "high trust" society.
I don’t think you can describe at least Sweden and Norway as monocultural. They’ve had waves of immigration since the world wars and I think Sweden had the most immigration per capita in Europe during the Syrian refuge crisis.
That’s not to say it’s a rosy picture of multiculturalism, there has been at least a building up of angst in the minority parties over immigration (and islam).
I don't really feel like there is a large number of parties in Norway when arbeiterpartiet wins 35% of the vote every time and Parliament switch between them and the conservative party. And this time around the farming party really decided to screw things up for the coalition. But I suppose this is better then the republicans and the democrats for (insert whatever reason you want here).
Absolutely, and this explains largely why most of the massively successful startups we all know comes from the Nordics and not from places with poor social security like the USA
Sarcasm noted. Seriously, though, this is somewhat easy to explain.
Much of America does have an amazing "safety net": generational wealth.
There's a reason why startups tend to spring from elite schools like Stanford, MIT, Yale, etc. Those kids have the brains, yes, but also the family connections and the parental safety nets and the connections to capital investment. These kids don't have to worry about food security or having healthcare.
If you're from that upper 10%/5%/1% or so of American society, that's GREAT!
It's an incredible primordial soup from which startups can spring. We are a big country, so we are still talking about perhaps 30,000,000+ people in this lucky category. That's more than all of Scandinavia's population combined. Goes a long way toward explaining why so many "big" startups come from the USA.
However, if you don't come from one of these blessed demographics in the USA, you have a much harder road. If you didn't go to an "elite" school and don't have a parental safety net it's very difficult... I fall into this category and simply didn't have access to healthcare for five years while I pursued my tiny indie business. It made money, but not enough to buy healthcare for a family, so I had to ditch it.
I grew up in a lower-middle class household and although my grandfather had money during his life, it wasn't passed down (swallowed by medical bills the last decades of his life). My parents were definitely working class. I'm doing okay, but that came from a lot of self-study and self-driven interests... I put my first computer together from parts scrownged up over the course of about a year... at a time where it was far more expensive to do than today (early-mid 90's), where today you can definitely find something usable for free.
Today it will largely come down to the investment of time... that doesn't mean you will succeed... I spent my time on knowledge growth, others will spend it on building a business. Most will simply waste it and complain that they spend too much time working.
I saw a lot of this when I was single in the last decade. So many people want a relationship, too few would actually take the time to make it happen. Most won't even take the time/effort to go out on a date on a work night.
No, it's not easy. There are no guarantees... but it's mostly laziness that stops people from getting things done in life.
But its not just an economic safety net that is required. (Although that's part of it). It's also the network of social connections, family connections and upbringing. A stable childhood and family life, I would argue, is probably even more important. In a lot of ways, welfare support (at least how its been done in USA) has driven a wedge into the stability of the family (by decreasing marriage incentives, removing the father from the home, removing incentives, etc.) Not everybody is born with the same ambitions as those that attend MIT.
While this may be true for individual cases. Statistically the argument is worthless. Frankly, it's a comforting lie that encourages harmful inaction by instilling a false sense of the playing field being close to even.
The children of the top 1% make up 14.5% of the admissions to these schools. The chart of students by parental income[0] speaks for itself.
The children of the bottom 20% make up a mere 3.8% of the student body. I'm not sure how anyone can look at the current situation and suggest there's nothing wrong with it.
Perhaps these people are inherently inferior? Instead, I would suggest that we should do something about the talent that we're intentionally wasting.
No, what was said is that ~15% of the student body is in the top 1%. The top 5% by income make up 42% of the student body. I'm not sure about your own definition but I wouldn't qualify that as middle class.
I don't view 95% of the population making up 58% of the student body as an indicator that we're doing things particularly well. Especially when you don't ignore the fact the bottom 20% make up only 3.8% of students and the bottom 60% of the population only account for 18%.
These statistics fly in the face of any belief in meritocracy, social mobility, access to education, academic achievement etc. They imply either the children of the top 5% are genetic superhumans or that, as a society, we're failing spectacularly at living up to those goals.
> There's a reason why startups tend to spring from elite schools like Stanford, MIT, Yale, etc. Those kids have the brains, yes, but also the family connections and the parental safety nets and the connections to capital investment. These kids don't have to worry about food security or having healthcare.
Yeah, and then go on to create things like Theranos, Alameda and FTX... never mind the obscene amount of these kids who end up in banks and hedge funds because of their connections that end up destroying the global economy thorough their grift.
I'm a former boot-strapped founder and a strong believer in entrepreneurialism, but you have to be brain-dead levels of naive to not know the odds are entirely against coming in you but to then think you're on the same playing field as the children of the privileged makes it clear one really doesn't have the slightest skill-set it takes to make it in that World: if your discernment is woefully inadequate to see the reality of being wealthy, how can you ever see, build and ultimately profit from market or paradigm shifts?
> However, if you don't come from one of these blessed demographics in the USA, you have a much harder road. If you didn't go to an "elite" school and don't have a parental safety net it's very difficult... I fall into this category and simply didn't have access to healthcare for five years while I pursued my tiny indie business. It made money, but not enough to buy healthcare for a family, so I had to ditch it.
I think these are the untold stories that really should be more widely known and perhaps even celebrated: when something doesn't reach unicorn level, but still does what it sought out to do but cannot grow/scale in order to justify it's immense effort is more honest and real to the reality of how most small startups go and end up.
Personally speaking my end-goal was to ultimately challenge Federal Law to make hemp legal in order to serve as a much needed cash crop to help offset climate change via carbon sequestration and possibly aid in the decrease use of opioids for pain and provide more usecases for something I feel incredibly passionate about: Bitcoin and Farmers.
After the Farm bill was passed in 2018, nearly 4 years since launch, I realized 'we won' as I saw all the signs in front of my face I saw no point in working 90+ hour work weeks and having no Life what so ever because I dissapointed my partners and family so I just leveraged my acquired skill-set in various private Industries and continued to travel the World for new opportunities.
Ultimately the money I made, in BTC, could have made me a millionaire several times if I never spent it and just held on to it over the years, but as mentioned before I was also not of the privileged class and needed those funds to ever rising rents, food, or the rainy day funds use in between jobs.
I don't regret it, but like JB I had to exit and focus on other priorities when I realized the reality that it was never going to be much more than it was, profitable but not b much, never mind ever being a unicorn.
I've since did corpo life and to be honest, their is a reason former startup founders are preferable over most candidates, the harder part is actually getting your foot in the door to be able to prove why that is.
I think it’s cultural. The US places a lot of value on striving out and doing new things. It’s a frontier culture. Older cultures tend to be more conservative.
You can see this effect inside the US. The most “business friendly” states often do not lead in entrepreneurship because they’re culturally more conservative.
Texas has no income tax, very little government owned land, no zoning in some places, etc. It’s laughable that you try to put it in the “bit lower than California” category. Texas is basically the opposite approach to governance than California.
Flip side of the welfare state is the heavy tax burden.
Heavily progressive income tax makes it harder for individuals to accumulate capital for enterprenial endeavours, be it their own or investing in others'. This limits early stage investments and growth.
Also, there are limited incentives in investing in careers and productivity as net income is surprisingly similar in lowest 10% and highest 10% income earners.
Burden?
If the substrate/infrastructure you're playing in is maintained by our tax money, count your blessings and work to build trust in a system that, as others in this thread have already said, helps set everyone up to more-safely fail and grow.
No one person is so important that we need to cultivate philanthropists. I'd far rather we collectively decide what to do with wealth generated from natural resources (all the way up to human resources). We can do better than the relatively few wealthy people with the means and inclination to give back.
The question is, how do we build a stronger representative government in the United States (where I live) when we're so divided and distrusting? Having a common enemy might work, but it can't be another group of people to go to war with. Might need to be the metaphorical devil(s) on our shoulders, and for that we need good mental health training from a young age, which now, given how broken and dispersed so many family groups are, requires tax money guided by science and wisdom.
You and I are here but a moment. The bleeding edge of life will quickly pass us by, and the positive impact I am most proud of is the love and care I give to future generations, human and otherwise.
The taxation part is a burden no matter the outcome. It’s not optional, it’s a duty as a citizen to give a chunk of your money to the government. That is the load we are obligated to bear - a burden.
Also, you’re romanticizing what happens with tax money. When a major portion of it is going to a military I have no say in, I don’t get warm fuzzy feelings contributing my portion to the feds.
> how do we build a stronger representative government in the United States (where I live) when we're so divided and distrusting?
You’re assuming the conclusion here. Many people want a much weaker federal government and your question can be rephrased as “how do we make the anti-government people go away?”
He's saying the heavy tax burden drains capitol accumulation. Too generous benefits prohibits the filtering mechanism built into markets that stops a society's resources from being drained into unproductive resources. Not ideal, but advocates of near universal welfare support do not seem to have a good answer to this problem.
Their tax rates are only a few percentage points different from ours. I think the difference is that we funnel 20% of it to the military (2% for Norway) and their tax code probably has fewer loopholes for the rich to exploit.
Their total tax burdens are much higher than US citizens' tax burdens unless you're making 7 figures of W-2 income. The top marginal tax rate kicks in an order of magnitude lower in those countries, and hits most of the middle class. In the US, it hits very few people.
Also, the military is 20% of the discretionary budget, but 10% or less of the total budget.
When I at one point considered moving to the US, I did the numbers for UK and Norway, because I'm from Norway and live in the UK, and while Norway certainly came out higher in terms of tax than some US states, comparing with places I might be prepared to consider, like California, the difference was small enough it'd be more than eaten up by health insurance before considering the other costs of a reduced welfare system (e.g. needing a far bigger cushion in case of unemployment, far higher childcare costs etc.)
Your mileage will of course vary a lot depending on specifics, and especially which US states you compare with.
Yes, it is remarkably hard to come up with a US tax rate, because in single-payer healthcare countries your healthcare is covered. Here, how much do you pay? I couldn't even begin to guesstimate.
While you could probably find cheaper places to live in the US than California, and therefore find much more agreeable tax rates, it's not that easy. Culture varies a lot in the US. I love the South, but a some folks would rather drink poison than live there.
And you can't forget property taxes. These vary at the county or city level and can be quite significant. And, just for fun, they generally pay for the public schools, which depending on where you are may be abysmally awful, so now your "tax rate" includes stumping for private school, which could be the equivalent to a year's salary in some Nordic countries.
Health care in the US is effectively a corporate tax and should be labelled as such.
If you want to compare the real costs and benefits of starting a business you need to compare like for like, which includes all national, state, and privatised taxes and other indirect costs.
When you include those the reality-based answer is that the US fares relatively poorly.
Which is why the US has a more aggressive VC sector. Whether by accident or design start-ups are forced to look for outside funding far earlier, and bootstrapping is far harder.
The result is more of a monoculture that chases unicorns and less of a vibrant sector of independent small and medium businesses, some of which will grow into unicorns naturally.
For a full picture factor in outgoings for world class health and education per person (and other benefits that are free | much cheaper than US); these are very low cost for individuals and offset higher taxes by offering better value for money.
"World class" health and education brings you some of the worst maternal mortality rates in the developed world[1]. Doubling Canada's rate and adding a bit more really screams world class.
You do pay out the ass for it though so good job making someone rich I guess? Shame about all the dead babies though[2].
Indeed! Forgive me, I misinterpreted your earlier post to be claiming that the "low cost" of US healthcare offsets the "high taxes" of comparable countries.
US total government spending is officially 34% of total GDP, Germany is 43.7%. With much of that covering healthcare and collage education which more than makes up the difference for the median family. In the end, the US’s extreme defense spending and horrifically inefficient healthcare system is a massive drag on the economy.
What the US does differently from most of the EU is to hide as much spending as possible in the form of targeted tax breaks. From a cash flow perspective little changes but from a political standpoint it’s not spending.
US military spending is 4% of GDP. When a warmonger is president, that goes up to about 6% of GDP. The NATO commitment is 2% of GDP. It is not particularly extreme.
The real drag is the US healthcare system, which effectively finances most of the medical R&D for the US, India, South America, and Europe, and also provides ridiculous levels of treatment for people who are about to die (in comparison to other health systems). There is also the US social security system, which seems to be very inefficient at best...
Officially it’s $1.64 Trillion in 2022 on defense vs ~23.4 Trillion GDP or 7% GDP. https://www.usaspending.gov/agency/department-of-defense?fy=... You can see different numbers based on if you include stuff like the DoE spending on nuclear weapon ‘stewardship’ or only parts of the coast guard, national guard, VA etc.
US healthcare spending hardly subsidizes the rest of the world. Paperwork and insurance overhead don’t magically turn into R&D money. Litigation, malpractice insurance, excessive testing etc is just waste.
At best ~12% of US healthcare spending is for retail drugs, but it’s not that relevant globally when you consider how much US companies are spending on advertising vs R&D. Which is then compounded by how much more expensive US drug trials are.
The only way outlays are under 1 Trillion is if you ignore a great deal of defense spending. A classic trick is to hide future obligations like pensions and other benefits from current spending numbers, but if you need to hand out a pension to get people to work for you then obviously you should include either current spending in past obligations or the amount of additional obligations your adding this year as spending.
So yes, you can get imaginary defense costs to ~4%, but I ask you where is the coast guard, national guard, DoE, or VA’s budget here? “The budget funds five branches of the U.S. military: the Army, Navy, Marine Corps, Air Force, and Space Force.” https://en.wikipedia.org/wiki/Military_budget_of_the_United_... Some might argue the national guard isn’t defense spending but we sent 250,000 guard members to Iraq and the guard is fielding F-35’s.
I will acknowledge some some outliers like the United States Border Patrol, while it’s job is literally defending the border it probably shouldn’t be included in defense spending.
PS: It gets even sillier, not that long ago we where hiding the cost of the Iraq war from defense spending numbers.
For comparable benefits per citizen, the US are prohibitively expensive.
The argument that other countries might be technically higher in taxes will remain moot so long as in the US, needing an ambulance could mean years of financial hardship if you're not sufficiently well off. The same goes for lodging, food safety, etc.
The US government provides retirement benefits, including healthcare at retirement. You are not required to pay for college, and you can go to a cheap school if you want.
Early stage investment is usually paying below-market salaries of entrepreneurs — that is, doing exactly what the government would, except the government doesn’t take a big cut of your startup.
Additionally, the government doesn’t require you to network with the right people, come from the right subculture, etc.
Do you want your “taxes” to go to the needy or the wealthy? Because in startups angel investors are capturing bigger percentages of the capital from your labor than the government.
In Finland, Denmark, The Netherlands, and Sweden, the income distribution ratio[0] of the total income earned by the top 20% of earners vs the bottom 20% of earners is about ~4x. Denmark has a personal income tax rate of 56% [1]
Best data I could find[2] after a quick google on USA puts income distribution ratio around 5.2x, so not much of a substantial difference in gross income disparity vs USA at the 20th/80th percentiles. Personal income tax rate is about 37%[3], so certainly USA lets you keep more of your paycheck than Denmark.
So high earners in US are making ~20% more than their peers in Denmark relative to the bottom 20% in their respective countries, and folks in the US pay ~20% less tax as well.
Certainly it's a notable difference but we're not talking orders of magnitude here, especially since the above math doesn't account for all of the benefits that higher tax rate brings, both tangible and intangible.
However, when we're talking in absolute numbers, most Danes out-earn most Americans. The median wage in the US is ~$52k [4] vs Denmark at ~$72k [5], which closes the gap even more.
I suspect there are significant differences and outliers at the extremes however, and that is likely where most of the VC money lives - whether we're talking about angel investors dropping >$100k or VCs spending millions on pre-revenue companies. I'd wager we're well into the top 1% of earners in the US doing the funding. This is the most likely explanation to account for the differences in early stage investments and growth opportunities you described above, imho.
I come from the game development world and this is one of the reasons (in my opinion) why there are so many solid independent game makers that come from the Nordics.
> This is one of the underappreciated benefits of the Nordic-style welfare state: everybody can afford to fail.
That is a false romantization. The reality is if you live in Copenhagen you need a full time job to to pay for expensive rent, food, and of course tax. That is not true in Berlin where rent, food, and taxes are cheaper. On average the price level in Berlin is half of that of Copenhagen.
I started my first couple of companies in Norway, and it certainly makes a difference to the feeling of risk to live in a place where the risk of failing just didn't enter my mind at all.
In fact, I'd almost certainly have gotten more a month in welfare support if I'd been unable to find a new job if we'd closed my first company down than what we paid ourselves.
There's a flip side to this argument in that more failing endeavors would be allowed to exist for longer, thus draining productive resources from more worthy endeavors.
I don't think so. It's not cheaper to run a company in Norway than the US, and cost of living is high, and the fact we could've shut the company down and get more money meant we only kept running it because we were hoping to make more money rather than out of fear of where we'd be if it failed.
The benefits if anything serves as an incentive to give up failing ventures sooner.
I don't know that I agree. As much as I lean towards a Libertarian, anti-establishment PoV for the US, I do think social systems can work in smaller communities/countries. It's much harder with a more diverse (distance and politic) country because there's much more "other" that will disagree and see favoritism and corruption. It also becomes a cycle.
I've worked in/around govt that I'm not a no government mindset, but definitely feel that more government tends to be worse than a very limited one at the scale of the US... and would favor letting states/counties have more independent creativity in solutions.
And that is why, in the USA, health care is not a given (or at least extremely affordable). As long as that is then - especially if you have a family - taking risk that might lead to failure is a no go.
Instead, the no risk route is to assimilate into the status quo, become a cog in The System's wheel. Providing foundational First World "human rights" would allow more professional / career freedom.
> taking risk that might lead to failure is a no go.
For certain personality types. Let's say with some high conviction, the typical technology / engineering personality is already highly risk adverse.
Thus - they need all the risk avoidance as possible. Entrepreneurship is a risk game. It is defined by risk; those that won't start without safety nets will probably never start at all.
I know enough family men who built startups for years with young kids - earning nothing. It's not the situation, it's the person.
Not to get off-topic but startups are risky. On the other hand - at least in my book - entrepreneurs are actual risk-adverse. That is, where others see too much risk, entrepreneurs see opportunity. They are actually risk blind to some extent.
But like I said, this another discussion for another day :)
I think the reason why welfare is irrelevant here is because the people going into entrepreneurship tend to be skilled enough to find a good-paying job even if their startup fails. Suppose that you're a good product manager or a good developer that's going into the startup world and you don't get lucky with your startup, you'd still be able to find a good job as soon as you're done... in fact, you might even get a higher-paying job because of this experience you've had.
Except in years like 2022 when it seems harder than ever to get a job, even with a solid 10 year working history. I'm convinced it's a more competitive market than ever, and that means more rejections.
I'm being sort of picky, focused on quality over quantity of opportunities, but it doesn't mean your statement is true.
And you have the Federal Reserve right now with that as their stated objective to try to keep a lid on inflation. Not saying this is the right more or not, but that's the unfortunate position we are now in.
But those skills are still getting diverted from more productive means. Those pursuits are allowed to exist for longer for the dream that they will someday be massively productive. Look at the blockchain space to see all the companies that are about to go under, if they haven't already.
It's easy enough to get SMB loans in the US without risking anything. Banks are asking to sell $100,000 loans without people even applying! Not to mention grants, and yes, literally welfare is available in the US to pretty much everyone. What exactly are you afraid of? I think the bigger issue with entrepreneurship here is that most people aren't willing to put in the effort to solve a problem that people need solved. Instead they put in the effort to solve a problem that they feel like solving and then blame "the system" when their attempt at entrepreneurship doesn't pan out.
My intuition is that effective entrepreneurs generally have a strong conviction that they won't fail, and in any case wouldn't want to fall back on taxpayers if they did. They will also disproportionately be averse to paying social democratic tax rates once they, in their mind, inevitably succeed.
Oasis (and lots of other British bands) got dole money while honing their craft. I think it's one of the reasons Britain tended to hit above it's weight in the 80s/90s.
This doesn't strike me as something inherently part of entrepreneurship in a world-wide context, but rather something particular to anglo saxon countries, and especially Americans which are big on neoliberal ideology. Americans are also the most anti-government of any people I know.
The Netherlands is split in this I think, but the entrepreneurs I know are nothing like this. They appreciate the safety net and often happily pax taxes, its more that they hate the labour involved. And everybody I speak to has acutely aware of the possibility of failure. Maybe its my circle though, there are also more radical libertarians in my country, but they are a rarity.
My view, from the U.S., is that most founders want to make it on their own and keep the returns close to the vest (aka "low taxes).
The risks are too high to found a company for little payoff.... and most founders that exit already pay a significant tax on exits (even when they are structured to reduce tax). Entrepreneurship is too hard of a game to put up with the mental and work grinding for a decade for small returns. Everyone focuses on the "money" a founder may make (with heavy survivorship bias) - but don't focus on the high probability of losing years, or a decade, of lost revenue and social life if a company fails.
HN is filled with want-trapreneurs who are mis-guided about the game they're entering.
It's funny, I read that as a retelling of John Steinbeck's "temporarily embarrassed millionaires" quote, not as a Randian Just So story. Being averse to paying tax isn't a desirable quality in a person.
I personally think being opposed to high rates of taxation is a desireable quality in a person but that was orthogonal to my hunch, which I was trying to present as neutrally as possible, with no value judgment. The parent comment is unnecessarily inflammatory.
It's also easier with a largely mono-culture in a relatively small population/area that is inclined, socially and historically, to work. Contrasted by say USSR, China or other communist societies where it's largely forced and the people are largely, effectively slaves. Although that work first culture is coming at the cost, to an extent, of a waning family unit.
It's a bit of a mixed bag that's much harder to implement at a larger scale. If the US split up into separate states, much more loosely joined like the EU or original confederate structure before the constitution, each state would stand a better chance at such a system.
Conveniently forgetting some decently sized ones that actually came from the Nordics.
At least in Finland, most of the stuff that would be big is sold early, the founders take the 10M and retire to their cottages in the middle of nowhere (edit: I don't mean this the bad way, I'd probably do it too).
Not so much lately. There are a ton of success stories in the making. I was at Smartly and we didn't settle for 10M.
Then you have the likes of Supermetrics, Yousician, Aiven, Eficode, Oura, Iceye, Varjo, Wolt, Supercell, Rovio, NextGame, Enfuce, Ultimate, Swappie, Singa, Sievo, Framery and many more...
This is ridiculous. If anything, California tends to be liberal - nothing to do with Socialism (let alone Communism). What does being a "woke" State (whatever that means) have to do with Socialism?
California has very little in common with Nordic social-democracy. Even when looked at relatively to the rest of the US. And this is particularly true when one looks at the subject at hand, which is social safety nets. The "relative" approach has its limits.
Sorry if I gave the wrong impression, that wasn’t my opinion, I was referring to how some other parts of the US perceive California.
You’re right it makes no sense but I think it’s undeniable California is used as an example of failed policies around social welfare and taxation by, say, Texas and Florida politicians.
Nordic countries have the safety net countered with a mentality that is borderline entrepreneur-hostile and the law of Jante on top of that so safety nets may be the few pro-entrepreneurship things they have. Finland of the lot is also capital poor so no huge investor funds or such.
Off the top of my head; UK startups that have grown and been successful (although many have now been bought out - which I guess is the exit plan for many founders anyway)
Just Eat, Deliveroo and The Hut Group; Monzo, Starling and Revolut, from another era, there's ARM.
I'm sure there's fintech ones (not a sector I know much about) and the guy who sits near me in the office, who has an AI-healthcare startup, says the Britain is very good at those too.
>I'm sure there's fintech ones (not a sector I know much about) and the guy who sits near me in the office, who has an AI-healthcare startup, says the Britain is very good at those too.
The UK has an advantage here over the US in that the tech and finance sectors are both based in London whereas in the US they are split between California and New York.
The issue is who pays for the welfare state. Finland got a lot of its wealth through off sea oil I think. Not easy to replicate in almost every part of the world. If you make the population pay for the welfare state, you are essentially robbing Peter to pay Paul. The people you rob (the ones paying the bulk of taxes) have a lower incentive to produce.
This is one reason the energy Windfall taxes being proposed everywhere seem ludicrous to me. If you tax energy producers at a high marginal rate, they will actually be disincentivized from producing a lot of energy. This is basic economics/human nature.
That’s easy. The hugely successful entrepreneurs that have been able to start their business due to the welfare state contribute back by paying taxes on their success. I’m a decently successful saas-founder, and I don’t mind paying taxes on my profits. I don’t view it as being robbed. I view it as contributing back to the system that backed me.
Also, banks should chip in a lot more than they do. They’re basically printing money and should be taxed harder.
Bezos would not have kept Amazon in the US if it adopted Nordic welfare levels of taxation.
The fact of the matter is that the EU has a staggeringly low output when it comes to tech innovation compared to the US. Their policies and regulations shape this.
Can confirm. Lived a very frugal early retirement lifestyle in Austria because it was practically impossible to build wealth (high taxes, comparatively very low tech salaries, little entrepreneurial support/incentives).
Moving to the US I was able to 5-6x my income (from what I could have realistically made) , while reducing my tax burden by 15 percentage points, and so I've been happily living a workaholics' lifestyle since.
Looking back, it really boggles my mind how much engineering potential is squandered in Europe. You'd have to be an idiot to want to work hard given how raw of a deal you are getting (work for almost 2 decades as an engineer just so you can afford the average one family home - what a joke!) and people understand that intuitively (hence pushing for ever fewer work hours or even days because what else is there if your salary is essentially capped and you quickly hit a 50 % tax rate (when combining income tax and social security) for every additional hour worked).
> (work for almost 2 decades as an engineer just so you can afford the average one family home - what a joke!)
I really don't understand this take. Why so many engineers feel entitled to have more than the average working Joe? If you are employed, our work is not risky, doesn't consume all your energy or your time, and so on.
I fully understand the _economics_ behind our salaries, but I am more than happy to give 45% of it to the society as a whole, so also who cannot afford the economy of scale (e.g., nurses, teachers), can still have a decent life.
I really cannot grasp the individualism about "I know how to write code, I deserve a better life than 95% of the population".
> I really cannot grasp the individualism about "I know how to write code, I deserve a better life than 95% of the population".
You're missing something here. You can omit the first sentence. People already believe they deserve a better life than 95% of the population, even without being able to code specifically.
But I don't think it's sad. The desire to have more for ourselves and our children (why else would they be talking about buying a family home?) is a large part of the reason why living standards keep rising.
If everyone desires to be above average and strives to produce more, earn more, then over time the average will rise. This is good.
And this is why I say that I understand the economics behind it.
Still, it doesn't mean I _deserve_ a high salary: I totally get why I get it, but I don't work harder, or studied harder, or really did anything more special than 95% of the population.
So, while I am able to earn more, I am happy to share part of it with the society as a whole, and this is why I am happy about my level of taxes, compared to the services provided.
There are wastes? Of course there are! So many! But the solution to "governments waste money" is not "less money to the governments", is "more accountability".
This is of course my view of the world, but I still haven't found anybody that explains why my job deserves to be in the top 5% earner in my country, apart from being just a consequence of the fact that my job scales to billions of users due its very nature (that is completely inconsequential from the choices I have made), while other jobs have physical limits and they don't scale.
On a practical level you probably did work/study harder, do something more special, had more resources, been luckier than the vast majority of the population; that's why you're in the position you occupy.
On a more ideological level it feels like you're looking for some sort of moral or "greater truth" behind the economics, but I'm not sure it's there. You've shared your personal beliefs and motivations, and seem to have lots of conviction to guide yourself, so why ask someone else to convince you there's a deeper cause? Just use your results to act how YOU want to impact the outcomes of others.
>Still, it doesn't mean I _deserve_ a high salary: I totally get why I get it, but I don't work harder, or studied harder, or really did anything more special than 95% of the population.
I don't think any other (widely popular) work occupies so much of a one's mind as software engineering.
Because we are the gateway to exponential free work. Program once, run on x machines, supply all 8 billions with a service, for defacto nothing. From these hands flows cornucopia..
Just because the nano machinery is invisible, doesent mean it cant spin great things from nothing. Half the giants you see today, were nothing one generation ago.
Not OP but I think if you're gonna earn an average salary then tech is a pretty bad choice due to the constant shifting base of knowledge, lack of security (dot com type bubbles) and ageism prevalent in the industry. Being something like a government worker or teacher makes much more sense then.
And unsurprisingly, in Europe a huge part of GDP is created by the government. Software developer roles in Europe are dominated by immigrants for much of the same reason - locals don't see these jobs as such a lucrative career path.
The average Joe in the US earns $60-70k, same as an average software engineer in the EU.
The difference is not that US workers earn more on average, but that being an engineer doesn’t make you automatically rich in Europe like it does in tbe USA.
I agree with your point about Europe squandering engineering talent.
Overall, it's a trade-off, though. You are right about the US opportunities, but there are downsides, too:
- crime (you get crime everywhere, but the US has a particularly and unnecessarily high level of serious crime like gun crime - e.g. school shootings happen pretty regularly);
- not everyone has good healthcare & social services (I am aware you will not personally be exposed to that, as you will have private healthcare; but it even bothers me if people around me are ill and cannot afford to get cured. I don't want to live somewhere where I can get a regular check at the Mayo clinic and my neighbor cannot afford their emergency dentist);
- low average education level (people generally don't know much of the world, history, literature).
- cultural life (theater, classical music etc.) is very uneven distributed.
Also, US taxation isn't that low in general, it dramatically depends on the state you live in (TX 0% state tax versus NY, MN etc. >40%).
There are places in Europe that have small tax rates (CH, LU), but they are not the best places to live for everybody. Everyone needs to weigh their priorities and match with the overall "package" (e.g. Canada is a good compromise: near-US salaries but Europe-like education of the general public) - and in any case, not everyone is free to leave where they currently reside.
Austria in particular has rather low salaries (but also low rents) - but places like Vienna have a magic feel to it that just doesn't exist on other continents. In comparison, in neighboring Switzerland are very high (anyone with a tech Master's degree would be on a six digits salary), but with a huge salary gap between locals and expats for doing the same job.
All the problems you listed as US-specific problems exist in my corner of Europe too, except gun violence. And on top of that we have fewer jobs, lower salaries, higher taxes and high unemployment.
I love Europe: its history, its music, its art, its architecture, its legacy - yes! the good and the bad -, its food, its cultures. But from my point of view we are killing ourselves, choked in an endless decay, metastasizing bureaucracy, and never-ending hopelessness.
I'm sure the Nordic Country are happy though, and that's the problem: American tend to compare the worst of their country with the best of our continent.
> American tend to compare the worst of their country with the best
Everyone does that. There seems to be a type of bragging that works by emphasizing how much more dangerous one's own country/state/town/village is than someone else's.
I'll be lucky if I can afford a single family home after 20 years of software engineering in the US. halfway there now, we'll see. Moving to a senior position has helped but I feel like a lot of people forget that the compensation in SV is not normal in other places.
SV is an outlier in both income and housing costs.
Here in DC metro, a mid-career developer should be able to afford a home without much trouble. Many of the best jobs are well outside the city (Tysons to Ashburn corridor) where housing costs aren’t terrible.
> and so o I've been happily living a workaholics' lifestyle since.
That is one key aspect. I'm not a workaholic and most other people aren't either. I do somewhat enjoy my work, but I work to pay for my live, not the other way around. I make a decent salary and work 35h/week with 36 days of vacation. I do pay a lot of taxes, but I live in a city with pretty good and affordable public transit, I got my university education for free (okay, I admit, I paid a total of 600€ for my bachelors), etc.
In a well governed country, you don't only pay taxes but also receive something in return.
> work for almost 2 decades as an engineer just so you can afford the average one family home - what a joke!
This isn't necessarily a result of high taxes, its also a result of Europe being much denser populated than the US (or Australia), limiting the supply side for construction land. The kind of the construction also plays a role, the average newly built European home is substantially more solidly constructed than the reference in the US.
> hence pushing for ever fewer work hours or even days because what else is there if your salary is essentially capped
Have you ever considered that many people would much rather have more free time than more money? Beyond a certain level, increased income doesn't correlate with increased happiness/wellbeing. Where this level is certainly depends, but it is much lower than many people anticipate.
Not all of Europe runs on a 50% tax rate though. My tax rate as company director in the United Kingdom is somewhere around 25%, and I can afford higher salaries than the rest of Europe while still enjoying the basic safety net of public health care.
But I'm originally from Italy, and the tax rate is exorbitant down there as well, with ridiculously low salaries.
You do you, but there is more to life than gross income from your employer. This is why I'd rather stay in this continent.
>work for almost 2 decades as an engineer just so you can afford the average one family home - what a joke!
If you're lucky. The salaries in my country are so abysmal that nobody in my generation can buy a house: the only one with houses inherited them or have rich parents.
It has nothing to do with taxation - or else the Arab Gulf or Cayman Islands would be entrepreneurial hubs, not California or the Toronto area. It’s all about the price of quality labour. It’s about access to long-term risk capital (aka venture funds) + high quality labour at affordable prices. As in, entrepreneurs having cash to fund projects and being able to actually hire people that will help build them. Try hiring a hundred software engineers in Norway: your hourly cost would probably blow up. The low-tax destinations are the place billionaires go to park their wealth, not create it (for example, outside of Tech Nordic billionaires move to Switzerland after they get rich)
Also you get really great engineers in norway, something about the lack of light, cold, snowy eternal night, produces excellent devs. Lots of fantastic open source projects exist due to the vikings no longer using boats..
You can get 100s of SWE in Poland (or Ukraine pre-war) way cheaper than US, yet extreme cases of tech startups like FAANGs will never happen because market is too small.
You need to look at the entire spectrum of direct, indirect and near-taxes. A couple of examples: VAT of 15-25% on almost everything. With social security contributions a maximum marginal tax rate on labour of more than 50%. Norway is actually pretty efficient and by far the best of the region compared with other countries but also massively subsidized with north sea oil money.
I know a lot of founders whose companies are allegedly worth a lot on paper, but cash on hand is very limited.
I wonder how the wealth tax actually works. Do I want people to invest in my company if that's just going to increase the valuation and my tax bill? Surely there must be some exceptions...
The US is prized because of its large market… not because it’s a tax dodge. The US dan cut off access to any company unwilling to pay local taxes just like how China forces any foreign company wanting to tap into its large market to give majority control to a local entity.
It's all relative isn't it? Singapore is a tax dodge, but I would't characterize low corporate income taxes as a tax dodge. How does one get money out of a corporation if not via marginal personal income tax rates?
They started with an American focus, holding doors open for others and once things were running expanded more actively. Also they were acquired after 1.5 years when not even having a Android app, which is more spread in Europe than US compared to iphone
"Consumer tech" like social media. And the reason is 30+ different smaller markets, because this business makes little sense if you can't capture 100s of millions of users.
Amazon doesn't make profits and thus doesn't pay taxes. Bezos doesn't sell much and thus doesn't pay taxes either. Changing rates wouldn't change anything. Tax rates only affect the middle class, and as @jliptzin has pointed out, those tax rates are quite similar.
The EU has a lower output because there are fewer investors. One successful startup creates wealth in the hand of knowledgeable people who can create the next startup. There are simply not thousands of millionaires and billionaires who can successfully pick the next round. There is also less of a network effect where venture capitalists can offer their portfolio as leads for the sales teams of their new investments.
The Nordic welfare levels can turn out to be the path to European success. It's easier to start an idea when failure doesn't end in an existential crisis.
the UK (used) to have a reasonably comprehensive welfare net, and has a larger number of companies per capita compared to the USA.
One of the things that are never really discussed in these kind of things is that you are already paying for welfare, its just not even. Poverty leads to crime, which costs you, either in lost property, crap neighbourhoods, or in insurance.
This comment distorts what is happening by using the word "robbing".
Why not "supporting"?
Perhaps Peter has earned his cash by working really hard. But perhaps not, perhaps he just exploited other people to hustle his way up some corporate food chain.
This type of thinking is pure toxin because it essentially reinforces exactly what you don't want.
If Peter did in fact work hard and now he's stripped of the results of his labor while being told that probably he only managed to accumulate capital because he was just exploiting others, what incentive landscape does that create.
Is a lot of profit a function of factors much less commendable than creating value for others? Sure. But by lumping in the productive people with the parasites, you are undermining those people who deserve your protection the most.
I can tell you what kind of incentives such a system promotes: different ones!
In particularly a welfare system gives incentives to people who want to create something out of intrinsic motivation, not because of financial motivation. Many of the things the most profitable companies use are actually but on tools and mathematics that were created without any financial freedom.
So I would rather reserve the word "toxic" rather for the current system consisting of purely financial motivation to hoard money that your are so vigorously defending.
Nobody, at least in the US system, gets very wealthy just by working hard.
At the very least, you have to start out with wealth or a strong support system (which is down to luck in your input conditions), or get fantastically lucky in your first(-ish) attempt at starting something.
Then, if you want to make the kind of money that, say, Bezos or Musk makes, you have to make the kinds of decisions that many of us simply would never make, because they're morally reprehensible. I wrote another comment about this [0] on an article about a week ago, but basically, in the very best case scenario, once you're past the point where more money would make no material difference in a healthy lifestyle (which is going to happen, at the very latest, somewhere in the millions), if you're using the excess to make yourself more money, rather than help improve other people's lives, you are being selfish at a level that makes you effectively indistinguishable from evil.
Nobody anywhere gets very wealthy just by working hard. Otherwise the world would be filled with millionaire janitors.
> if you're using the excess to make yourself more money, rather than help improve other people's lives, you are being selfish at a level that makes you effectively indistinguishable from evil.
If you're using your business to create value for millions of people, you are in fact improving millions of lives by the amount of value created. If you capture a little bit of that value for yourself and become fantastically rich, good for you and good for the system that enabled this whole thing. Even better for you if you decide to give some of it away, but to call you evil if you don't? I suppose your own belt could be tightened a bit more so that you could give more away?
Other than what arises from rent-seeking behavior, profit is not inherently immoral.
If you use your business to make life easier for millions of people, that's good.
If you take enough profit to make billions of dollars for yourself, that's bad.
Because no one person (or family) can ever realize anything resembling a proportionate benefit from that money, all you're doing is raising your dollar-denominated high score, at the expense of all the other people you could be helping more if you invested that money back in your business, or paid it in taxes, or invested in other local businesses, or any of a thousand other ways to make it work for the world instead of just being a selfish Number Go Up for you.
When someone becomes rich through this path, they aren't rolling around with a billion dollars in a vault Scrooge McDuck style. Almost all of their wealth that isn't taxed is already tied in their own business or in investments in other businesses, so they're already doing the things that you say will make it work for the world. Even the little bit of liquid money they keep in the bank is loaned out to other profit-seeking entrepreneurs.
Once again, profit is not immoral. It serves as an important signal for capital to be directed in the value-creation cycle that ends up producing wealth for everyone. In the words of Isabel Paterson: "Production is profit; and profit is production. They are not merely related; they are the same thing. When a man plants potatoes, if he does not get back more than he put in, he has produced nothing."
You are saying that if a man who planted potatoes harvests them and keeps some for himself above and beyond what he needs to subsist, he is evil. I'm really not sure how you justify that position.
> You are saying that if a man who planted potatoes harvests them and keeps some for himself above and beyond what he needs to subsist, he is evil. I'm really not sure how you justify that position.
I don't, because that's not what I'm saying.
If you actually read my post, I did not say that taking any profit was evil. I said taking enough profit to make you a billionaire was evil.
The scale of what it takes to become a billionaire is absolutely mind-boggling. I might, if I am lucky, make enough in my lifetime to have a million dollars saved up.
I would have to work a thousand of those lifetimes to get a billion dollars.
And yes; someone who is a billionaire keeps that money in stocks and things, and it's true that it's not just a pile of cash...but that doesn't actually mean that it's usefully "in the economy". It's still theirs. (And remember, unless you buy it as part of a direct issuance from the company, buying stock doesn't actually put more money in their pocket.)
1. Finland doesn't have oil, you're mistaking it for Norway.
2. Progressive taxation is the basis on which the best places to live were built. This is an empirical observation, make of that what you will, but it's strange to give your gut feelings of "basic economics / human nature" more weight than objective reality.
3. Why do is the word "rob" applied to taxation? Without the state to at least enforce laws, enforce property rights, and physically protect you, there wouldn't even be any wealth creation. Your current life is only possible because you are inserted in a society, it's only far you have a debt to pay society back.
> Your current life is only possible because you are inserted in a society, it's only far you have a debt to pay society back.
Sure, but at some point it starts to sound abusive, like a narcissistic parent telling their child that they and not the little child owns their accomplishments, because without them the child would not have existed.
The state, at least in the US, is supposed to work for you, the people. The burden of proof is on the state if it wants to tax more and expand itself. It needs to justify every penny of the taxpayer's money it spends. It simply cannot take the position that everyone's output is by default a debt owed to it, and by its grace alone are the people allowed to keep some of it. That's the talk of the divine right of kings.
That's not what arbitrary means. The fact that someone is spending on something non-essential doesn't make that spending arbitrary. Lipstick is non-essential but that doesn't mean the spending on it is arbitrary.
I'm quite confident that a lot of thought goes into pretty much all government spending, even if a proportion is misguided, counter productive, and non-essential.
it seems to me people outside countries with decent welfare have all of the issues?
something like give me private jets or let me starve by the side of the road, nothing in between must exist.
i actually enjoy paying for people playing video games all day while smoking weed and getting drunk while businesses scream how they cant find employees. Specially the combi self centered and assholes really cant find anyone anymore.
You have to pay what it costs to hire people. If the offer isn't competitive with not working you are going to have to pay more.
Long term employees are also leaving for better jobs.
If the likely financial outcome were the same between making music and writing software for banks or insurance companies, I sure as hell wouldn't go anywhere near a computer.
Do you think people do Office Space style work out of the goodness of their own hearts?
The world is full of software that people built because it’s interesting and/or useful. Linux for example was created as a hobby project during college.
People love to create. Just because YOU wouldn’t touch software doesn’t mean it’s true for everyone.
>writing software for banks or insurance companies
Look at Gimp. It's the software that people like to write but not the one designers like to use.
There was this submission: 'Ask HN: How might HN build a social network together?' [1]. With Mastodon, people create a social network, but one that is unnecessarily inefficient. Why hasn't that submission led to a better social network?
Ford is quoted with saying: 'People would have asked for faster horses'.
How do you give the people with new ideas the power to implement them?
You empower people by making sure their basic needs are taken care of so they have the freedom to fully pursue these projects.
It’s no wonder projects like GIMP don’t take off because these developers work on it in their spare time. They don’t have the time or energy to fully commit to it because they’re busy being forced to write someone else’s software.
Linux, for example, was built over the course of 8 years while Linus Torvalds was in college. He was able to do so because his college in Finland provided room and board and the freedom to pursue his interests alongside his studies.
>You empower people by making sure their basic needs are taken care of so they have the freedom to fully pursue these projects.
This is interesting because you look at the situation from a different point of view. I was wondering how somebody can influence others to create change and you focus on how to remove influence to create change.
I believe that you can never supply enough resources for people to feel free to implement change. What are the basic needs that have to be met? I would like to say that they are already met. Every software developer can reduce their working hours to a minimum and have ample time to pursue whatever they want.
People are already empowered but they lack motivation. Compared to the global south, the north has plenty of resources. But most citizens don't invest them. Instead they spend them on vacations, clothing, cars and houses because they want to match their peers.
With that perspective, what could incentivize people whose basic needs are met, to spend their time on innovations?
Most people spend the best part of their day pursuing their employers interests instead of their own. It's no wonder people want to relax during their time off! Clothing, cars, and houses become coping mechanisms for dealing with their situation. This is a very real reality for a lot of people.
Reducing your hours is a risky proposal. Even asking your boss about it can be a big risk. Becoming a contractor is a big risk too. The reality is that, for most people, their boss owns most of their lives, and trying to go off on their own is very risky. Plus you risk messing up your resume and having to explain yourself which is yet another thing working against you.
So yes, being employed might put food on your table and a roof over your head. If your a software developer it'll even let you buy gadgets and take vacations. However, the current system prevents people from reaching farther up Maslow's Hierarchy of Needs, because taking that next step to pursue your own interests in very risky and expensive.
So to answer your question, I don't think you need incentives. You need to enable people to pursue their intrinsic motivations.
How much can be accomplished by somebody who isn't willing to take as much risk for their idea as women take for having a child? Of course, paternity leave shows that most men need an incentive to take time off for their children.
But that's kind of the point. In a world where there is no majority to give people the space for their intrinsic motivation, who is going to pursue innovative ideas? People could make it socially acceptable to take time off or to work less, but they don't. If you have to nudge them to make that change, you are back at square one: 'How do you give the people with new ideas the power to implement them?'
If it is work itself that inhibits people from pursuing their intrinsic motivation, how could you make it economically viable to give everybody the space for their intrinsic motivations? If it is not viable, doesn't that leave us with incentives?
I think you’re missing the point. I’m not interested in a business relationship with you. The point is that I need certain things to get done, and it’s not feasible to sit around and hope that enough people decide to take on my specific problems as their passion project. And if taking care of someone’s basic needs is sufficient, why would they work on my software when they could do anything else that is more enjoyable?
The fact that you think I have any interest in working with you is amazing. I have negative interest in that.
You proved my point again. Everything in your responses is about YOU and YOUR software and what people can do for YOU.
If you want someone to work on your project you should have to convince them that it’s worth their time. Instead they rely on you for insurance and a livelihood. If you think your employees would still work for you if they had the freedom to pursue their own interests then I have a bridge to sell you.
> Why would I spend my time on your specific project?
That's exactly my point.
I work in a field that is really very important, but it's not interesting enough for you to work on purely for your own amusement. That's why there needs to be a financial incentive.
Dude I don't know you, I don't know what you do. All you did is link a Haskell SQL library. Sorry I don't care about that particular project.
You seem to be under the impression that unless people are coerced they'll only work on projects that entertain them in some way, like a child playing with bubbles.
I feel sorry for you that you have such a poor opinion of humanity. Personally, I think humans are curious, collaborative, and like to build things. Yes they like to build things they find interesting but interesting is a wide concept. If my Mom got cancer then I'd probably be more likely to work on cancer software.
I want to live in a world where people can voluntarily work together to build things based on shared interests, whatever those interests might be. A world where people aren't forced to submit to business owners like you.
I’m aware that people like to create things, but that depends on what those things are. Your offer to work on cancer software to help cure your mother’s hypothetical cancer only comes with intrinsic motivation. If we relied on that, we would not have made the progress in that field that we have made, and many more people would be dead.
My mother has cancer. I’m quite glad the scientists working on researching better treatments are actually getting paid.
> A world where people aren't forced to submit to business owners like you.
It’s curious that you have such contempt for entrepreneurs on a website themed around entrepreneurship and published by a venture capital firm.
---
I get the feeling you’re no stranger to the words “anarchist”, “ancap”, and “communist”, so I’ll just leave this here:
Sure, the rich have more advantages than the poor. Always been that way and always will.
In our culture there is an immense preoccupation with the unfairness of this but the reality is that if you don't come from wealth and privilege, you need a different playbook. Dwelling on the inequity neuters you. If you want to win you need to figure out what the playbook is and then do the right things.
I found a playbook that worked by reading all the self help and business books I could (preferably from the public library because that was free and I was poor). My playbook ended up being: move to a country with a lower cost of living, and get good enough at freelancing online that I essentially had a safety net and a long-term runway for other pursuits.
I then tried a few different business models, each failed a bit less than the last until I hit a winner which bankrolls about a dozen people on my payroll.
A rich guy wouldn't have had to go through all that but I don't care. It's totally irrelevant to the requirements for success in my reality. Which were build my own baseline from scratch and then fail until I succeeded.
People born into easier paths than mine have sneered at many many elements of what I did over the years (living in a "shithole" country, working with a "shitty" tech stack, taking "shitty" Elance gigs that didn't pay enough, etc. etc.). Other people who were able to tolerate remaining victims of the system tuned out my story and focused on other things, like bitching about politics. I'm worth more than most of the people in both categories now and I feel like this is just the beginning. I haven't had children yet but if I do they will have fewer disadvantages than I did.
There are different and easier playbooks than the one I used. If I was starting again I would probably go into a more conventionally profitable vocation and save for 15 years, studying business and coding on the side, and then start a business.
But either way the point is your playbook if you start poor needs to be different. It's not as easy as the one the rich guys have but that fact is a distraction. You should be too busy figuring out your plan to care.
Class mobility is generally regarded as a good thing for economies. It increases competition.
What you’re saying is that the only way for you to get ahead is by exporting your own lack of class mobility to another nation. This is akin to shipping trash to other shores so we don’t have to deal with the repercussions of landfills in wealthier nations.
If that’s considered a sane way to get ahead, home is not economically well.
It's ironic you should mention Bangladesh because there's a guy on my payroll who lives in Bangladesh and I'm flying him to an international conference soon. It does indeed take more paperwork than usual, it will be a unique opportunity for him and probably not his last with me, he's a great employee.
So they have open doors to be wildly successful entrepreneurs?
My point is that the OPs “model” is a strategy for a limited population and not very generalizable. Within those caveats, I have no issue with their suggestion.
The US has 18 large cities with a higher homicide rate than Guatemala. 50 with more than half of Guatemala's. The difference between the two countries from a violence perspective hardly constitutes "fleeing."
Edit: country level is 6.5 for the US vs 17.5 for Guatemala, which is also not a difference consistent with war vs peace. But since "refugees" end up mostly in cities, and hundreds of thousands end up in the very same cities that are more violent than Guatemala, the city data is perfectly sufficient to show they aren't all fleeing violence.
Edit 2: I would continue this discussion, but somehow my original reply to you got flagged and my commenting privileges suspended, even though I had net three upvotes at the time.
It's probably for the better, I shouldn't even be bothering with someone who complains that I "cherry pick" 50 city homicide data and then replies to me with El Paso.
It certainly shows how strong your facts are (i.e. "the data is wrong") that you get me suspended instead of engaging them.
This is the definition of cherry picking data. If you are comparing rates between countries, use the country data.
I have personal experience with refugees from Central America and Mexico. I can assure you, many are fleeing violence.
Edit: Dismissing 2.7x rate does not make for a strong point. You are jumping through hoops to not be wrong. E.g., one of the cities that receives the most refugees from Guatemala is El Paso, TX, which is consistently one of the safest cities in the U.S.
Your choice of metrics also does not paint a full picture. Many people are fleeing to avoid being conscripted by a cartel. That type of violence does not show up in homicide statistics. You're demonstrating a superficial understanding.
Edit 2: El Paso is the opposite of cherry picking; as I already pointed out, they are relevant because they take in a disproportionate amount of refugees. So, of the U.S. cities that you point to with higher per-capita homicides, can you point out if any absorb more refugees than El Paso? Because that was central to your point that refugees are jumping from the frying pan into the fire.
I did not get you "suspended". You got your own post removed because you weren't following HN guidelines. I tried to point that out to help, but you were too busy arguing to notice. Not everything is a personalized attack.
I mean you're not wrong but you missed my point. There's always an angle. That's how everyone succeeds. You find your angle and you exploit it. Everybody has at least one.
You choose here to focus on the fact that some people have more angles available to them than others. You call them privilege and believe them to be unjust. If you do that too much, you'll defeat yourself and destroy your own agency.
Maybe you're right, maybe they are unjust, I do have opinions on that sort of thing, I also think the best places to indulge those opinions are at the ballot box and at my desk writing checks to nonprofits. I mean I do screw this up and focus my time/energy/attention on them at inappropriate times. But I know it is a screw-up when I do it. No one is serving the greater good by wasting time.
I acknowledged your point. I also agree that the individual should focus on what is in their power to exploit. But I think it's also important to recognize and work to fix systemic issues if we value a just system. Both can be true at the same time and I think it's sometimes a mistake of the hustle-porn mentality to focus exclusively on one while ignoring the other.
Says the person who attacked a commenter for being "privileged." I'm just helping defend him against your irrelevant accusations of privilege (even though you know nothing about him) while he's attempting to discuss ways to become successful without being a trust funder. He has given us a very helpful and insightful perspective, and since you cannot add to his useful discussion, you instead interrupt by him being the privilege police, because you think it will get you internet points.
He laid his heart and mind out for our benefit, and you rewarded it by attempting to bully him. Don't tell me I'm being uncivil.
Nobody was "attacked". Saying that having specific options that aren't afforded to everyone is an acknowledgement that neither negates their point or is an attack on a person. It is, as you say, adding to the perspective, based exclusively on what they said; I'm not jumping to conclusions as you allude. Contrast that to your snarky reply. The fact that you thought that comment was an attack demonstrates a lack of the HN guideline to read the strongest possible interpretation and avoid snark. Your approach is not conducive to discourse.
No, you absolutely bullied him. And now instead of apologizing, you're doubling down. He never claimed to be a starving African child. He told us what he had to do to make up for his limitations, and instead of working with that conversation, you chose to denigrate his efforts.
You're right that I'm not adding to his discourse. I'm just trying to hush the people who are attempting to bully him.
Honestly I’m probably more inclined to land on the same side as you regarding this particular case regarding the suggestion or assumption of privilege. That being said, no, you’re being ridiculous. There was no attacking or bullying.
Most startup founders work other jobs while building their project - if they can afford to fail, it's because they have that other job. But they're spending those four hours (and many, many more) on labors of love.
Sure, there are some trustfund kids who get to play founder and have the odds stacked in their favor, but that's neither the soul nor the joy of starting your own project. In my experience most of those types are miserable even in success.
Jeff Bezos, for example. Amazon was well on its way to product market fit and full validation that its gonna work by the time he quit his dayjob.
Same for Zuckerberg and school.
You don’t hit a billion dollars while having a dayjob. You validate the idea and approach work and can get you there.
Anthony Bourdain famously quit his job only when it had become absolutely impossible to keep alongside his public persona work because interviewers/journalists kept disrupting restaurant operations at his job.
If you have a billion dollar company there are better sources of entertainment than binge watching tv.
I would assume half literate serfs are watching the most tv.
> if they can afford to fail, it's because they have that other job.
Citation needed. I’m quite sure that working a second job does not go down well with VCs. In most cases the networking required and high risk of failure is only achievable through having well-off parents.
Citation: I started two failed startups while working day jobs... and could afford for them to fail because I had solid work, despite the thousands of hours I had invested in them over years.
You can't really tell if something's possible if you begin by simply complaining it's impossible. Is the world rigged toward helping rich kids? Sure. But fools and their fortune are quickly separated. Using inequity as a basis for complaining and giving up before even trying is really the fastest road to bitterness... and it's not even a fair or knowledgeable take, since it doesn't come from true personal experience or personally failed attempts which are, if nothing else, highly educational.
I had a friend/colleague build a successful startup.
I didn't know him on day one of his startup, but I knew him from very early on. He had some initial customers, and was making progress, but slow.
Early on, through connections, he landed a remote contracting gig that paid a full 40 hours/week, but usually didn't consume more than 10-15 hours of his time per week, and that went down over time. It was supporting a legacy system, so there wasn't a whole lot of new dev/work, but it was seasonally important, and had to be up/maintained/etc. That was, IIRC, something like $60/hr. So, early on in his startup, he ended up having a 'side gig' that was paying $100k/year, but only taking up ~12 hrs/week most of the time.
That left plenty of time to focus on building out things the initial handful of customers wanted. It also gave him a lot of time to just... grow slow. Ended up getting to .... $30k/month in recurring revenue while employing just a couple of folks (part time, IIRC), and... then one of his larger competitors decided to close up. He had a few months of non-stop working building data migration tools to convert competitors to his platform. But that took him to another level.
Getting a remote consulting gig paying guaranteed base while not consuming much time was very... lucky. He didn't look for it, but knew it was a good deal when it arrived, and he jumped at it. This was crucial to the 'afford to fail' part referenced above (apologies for the long post here - that was the trigger phrase).
That second part was very 'luck' based as well, but he was prepared to capitalize on that luck. This was years in to the journey, and the startup was already comfortable with respect to revenue/profit/etc.
But... he built that over years, very slowly. No amount of 100 hour weeks could have landed him any of the competitors' clients early on, because he wasn't known.
During that build, he could 'afford to fail' because of that remote contract. And now... he can try new things and afford to fail for the rest of his life (assuming the gamble isn't too big!)
A lot of word of mouth, a lot of slow growth, a lot of initial luck, a lot of patience. It worked out for him over about ... 8-9 years, but any of those pieces missing early on would have resulted in much lower growth, or stalling, or he might have given up and moved to something else.
When people see "luck" they often miss "set up to capitalize on getting lucky." That is the component of skill (and background) in most entrepreneurial success stores. Mark Zuckerberg, Elon Musk, Bill Gates, and most other mega-entrepreneurs were very good at exploiting their lucky circumstances. People who don't notice this think it's all luck because they wouldn't be where they were without the luck - they notice that the luck was necessary. They don't notice that the luck wasn't sufficient. Lottery winners are a great example of the insufficiency of luck to create wealth.
It’s like a baseball game. Most people have no at-bats. They are stuck on the bench. They have no capital and no way to build up enough capital to try a business.
Some people have one at-bat. They save some capital, take their swing, and maybe get a base hit, maybe strike out. If they are lucky, they hit a home run and end up set for life.
The rich get an infinite number of at-bats. They can just swing and swing until they hit their home run, then swing again. Then they write books about how hard work and hustling can make anyone a millionaire.
I understand that to mean that your income was enough to keep (at least) both of you fed, housed and clothed.
Maybe you also had some savings/family support to use as a Kickstarter for her business and possibly to help pay the bills but maybe you didn't.
If both of you had to work 40+ hours a week and there is still too much month left at the end of the money, it's really hard to afford so much as a car repair not to speak of starting a business.
Is it possible to be an entrepreneur in that case? Yes but it's an enormous gamble and needs for all the stars to align just right. The consequences of failure are immediate (there are no 5 years to get started) and dire (homelessness/ no ability to get to work).
It's a much worse bet than for someone from the middle class who might have to move in with their parents again. Not pleasant but endurable.
Someone well off suffers not even that and is, at worst, a little bit embarrassed in front of their family. They can also try again and again.
Yea. I was a programmer working for a stable telecom company at the time. We didn't have kids yet and lived in a low cost of living area where it was possible to live off of my income. It wasn't a huge sum of money by any stretch, but it was enough while we limited expenses.
There were a lot of trials. We were close to having to file for bankruptcy 6 different times during a particularly difficult 2 year stretch. Our exit plan was always that she just go back to work with the potential to have to sell our house to pay of debts or lease agreements.
Starting a business is hard with a lot of risks and that's before you actually hire staff. The moment that you have to consistently make payroll on time, your stress level goes through the roof with the combination of obligation to financial consistency and the knowledge that you are responsible for other people (and their families in many cases).
What I have seen from others (I have not been able to do so) knowing that you can afford to fail beforehand is one of the biggest factors to succeed:
- Objectively is not an issue to fail and you know it
- It gives you the security to take risky decisions and at the end it is a matter of expectation, bet and see if you win. To me this goes along with the mantra that failing is not bad and you have to do so few times before you succeed. Obviously, the more you try the more chances you have. If you are not a casualty.
This is why societies should strive for more “inequality” (as in, more families with large fortunes). The rich have a safety net that allows them to take risks that ultimately benefit all of society. Let’s say with the best execution, a startup still only has 10% chance of success - so then the only thing to do is have more and more people “roll the dice.” And no, a strong welfare state is not a substitute - the danger is not starvation, but loss of your life savings or comfortable lifestyle provided by a decent career. Welfare does nothing to mitigate that risk (except maybe for the people with no wealth or good employment prospects, but they are probably not the primary talent pool for startup founders).
You really don't think there is already more than enough inequality?
I get the case for some capital accumulation. Capital does make for an amazing economic engine that we all benefit from. Capitalist countries are richer than non capitalist countries. Easy to understand. But there is a point where more capital accumulation and inequality just makes the rest of us become serfs to oligarchs.
Funny, I’d cite Elon Musk level capital accumulation and his decisions on how to allocate his capital over the last year as a perfect case study of the theory that, while capital accumulation can be a good thing, we also don’t want all our eggs in too few baskets.
Actually it’s quite good - because he spent $40bln we got to see detailed evidence of government agencies working hand-on-glove with corporations to censor information and shape political outcomes (a few years ago it was trendy to refer to this as arrangement as “fascism”).
If you can make one heap of all your winnings
And risk it on one turn of pitch-and-toss,
And lose, and start again at your beginnings
And never breathe a word about your loss:
If you don't risk destitution after your startup fails, you can try and fail many times, learn and try again.
It's like continuously rolling two dice, and you only need to get double sixes once, and after that it's private jets until you die.
One of the many reasons the rich get richer and the poor, well you know how it goes.