Extreme relative wealth creates a special kind of narcissism. It must come with the cognitive dissonance of being a normal person, lucky to accumulate massive wealth and then in an echo chamber. To the point where they are completely convinced that they are right, everyone else is so clearly wrong. And if they just put it out there, people will finally understand… the Emperor’s New Clothes - Modern Remake - without the realisation at the end…
Oct 19, 2023·edited Oct 19, 2023Liked by Dave Karpf
Yeah and I think the point that needs to be made is that this will happen to anyone who accrues the level of wealth and power that Andreessen has, including you or me or anyone on this thread. There are people who have the genuine, probably spiritually-gained humility that makes them more or less immune but those people never become billionaires let alone multi-millionaires and certainly none of them adopted gonzo California futurism as an ideology. This is a small part, but still a part, why billionaires should be taxed out of existence.
Agree! I think there is a point of “optimal utility” beyond which accumulation of wealth for the sake of it stops making sense (or just through influence of large numbers - eg once you have billions, lowest compounding interest still creates massive amounts of wealth alone). It seems similar to the whole monopoly topic - consolidation/and desire for consolidation/growth is beneficial to society up to a certain point/with certain conditions/in certain areas. Beyond which too much consolidation starts to have lots of negative externalities.
There is some Olympic-level balance beam contortioning going on with that word Optomist. It's an outlook, not a philosophy or even an idea. It's a repudiation of consequences and denial of responsibility. Same obfuscation with the word Technology. What, you're against indoor plumbing and electricity? The whole manifesto is packed with this kind of sophomoric cheese.
I don't think anyone claims that the free market reduces inequality. Free-marketeers don't care about inequality. Inequality, to them, is just the natural hierarchy of talent/brains being reflected in your wallet. If we want to reduce inequality we need more regulation and all the stuff they hate.
For the sake of one who probably doesn’t share your priors, could you please elaborate on what this comment means?
My understanding of inequality in a market context is that profits and wages are roughly set by supply and demand and how well we network together to solve each others problems. When one worker spends 15 hours a week doing a sloppy job at something others could do more efficiently, the demand for that wage goes down to that worker contribution — in other words it can and should approach zero. When another worker invests twenty years of dedicated education preparing themselves to create something of vast value for other humans, that their rewards (profit or wage) are vast. Hence huge inequality. A good doctor working 60 hour weeks makes a ton more than a lazy part time lawn clipper.
I certainly don’t think markets are perfect, but they act as imperfect rewards and signals for us to stop wasting time and start doing more of things in high demand and lower supply. IOW, more or less inequality isn’t necessarily a better or worse thing. The important thing in a reasonably well functioning market is that we signal and reward adjusting what we do to be more productive.
Historically, inequality has gone up and down. After the New Deal, with high marginal tax rates and high union membership, inequality was lowered. After the 70s, it started to rise.
Presumably, human nature did not change. What did change was workers' bargaining power and that more money was available for, say, the GI bill and mortgage guarantees among other tools for citizens to increase their earning potential. As unionization decreased, wages have stagnated. Did workers get lazier or less worthy? No, but their bargaining power decreased.
As inequality increases, the 0.1%'s ability to game the system to further increase their take also grows. The Carried Interest loophole only exists because beneficiaries (hedge-fund managers etc) contribute to campaigns so much that legislators are terrified of touching it lest they get primaried. This reduces the very very rich's tax burden, reducing funds available for tools to increase citizen's earning potential, such as scholarships, school lunch programs, early childhood education and so on.
Privately funded campaigns (see $$$=speech) thus contribute to inequality, without any change to who is lazy or industrious.
Not even dealing here with the related issue of social mobility, where Scandinavian countries surpass the USA.
As it should. When a price or wage changes it is sending a message. This is how markets work.
"After the New Deal, with high marginal tax rates and high union membership, inequality was lowered."
Pretty sure it plummeted in great part due to the depression and the war and automation and globalism too. Millions of reasons all mixing together to change supply and demand and marginal productivity. Kind of amazing how markets do that.
"After the 70s, it started to rise. Presumably, human nature did not change. What did change was workers' bargaining power and that more money was available for, say, the GI bill and mortgage guarantees among other tools for citizens to increase their earning potential. As unionization decreased, wages have stagnated. Did workers get lazier or less worthy? No, but their bargaining power decreased."
The differential rewards and risks for capital, entrepreneurship, skilled labor and unskilled labor constantly adjusted. This doesn’t require a change in human nature. Certainly education can increase productivity. And certainly higher demand compared to supply increases the bargaining power for any factor, including lower skilled labor. Some people got lazier, some didn’t. Some stayed in areas without jobs rather than move to new areas with better opportunities. Some dropped out of the labor force altogether. Some invested more in their education. Women increasingly entered the workforce. Wages have not stagnated since the 70s. They are up significantly and have grown faster in the US than just about any developed country for past twenty or thirty years. But when inequality goes up that also often means the rewards got bigger for education and skills and entrepreneurial genius and productive investments. These are good things right?
I agree that unions will increase wages short term by about ten or twenty percent. That is what cartels do. That is their point. To extract excess rents over what people will voluntarily pay by restricting free access to jobs. Those with privileged cartel jobs can exploit those looking for a job (and willing to do it as well or better for less). Long term of course, this drives producers to move production facilities to non union locations or overseas or to mechanize the work. Usually all three. Eventually you end up with Detroit or some other rust belt city where everyone wonders who drove off the good jobs? (Answer is the union cartel). It sure helped with rising standards of living in developing nations though. Over a billion lifted out of poverty (global inequality has also decreased for that matter, and done so at a pace faster than we expected).
I am not arguing for tax loopholes for the rich, though even a casual look at the stats reveals that over the past 40 years actual income taxes paid have gone down for everyone except the top quintile, and that the US currently has one of the most progressive tax systems in the developed world. Seems fair to me that the majority of income taxes are paid by the top five percent. I salute them.
Back on point though, I fail to see any fundamental goodness or badness to a changing statistic of inequality. Inequality can go down and we can all be worse off, and it can go way up and still be a good thing. MA is correct that the people in the US (and other developed countries) are better off financially than at any time since the advent of agriculture over 10000 years ago. By a mile! The point of his tirade is in part that they could be even higher without all the pessimism and obstacles to growth and entrepreneurial activity
So the boy genius is still a boy at heart and never had to grow up or confront facts that suggest the world is more complicated than just another engineering problem.
Great, great article, Dave! This hits every gnawing feeling I had when I first heard about and then read the Manifesto. The problem is, they never will learn. They'll just loudly “pivot” to the next scheme to make more money and gain influence. Or the next one in line will. I hope you’re right that, in general, we’re becoming more willing to rebuff, but I still fear the clapping mob will drown out those voices. That’s the pessimist's take on this reality.
He should have realised that the <blink> tag was the apex of his career arc and retired to grow boutique avocados in Pismo Beach. He may be less overtly fascist than some of his contemporaries, but his accelerationist narrative is pure magical thinking.
(Humans always do technology - like clothes, shelter, pointy sticks for hunting animals. Netscape was just a very well compensated pointy stick. Our species is more rightly Homo Technicus than Homo Sapiens, though its manifest that you have a lot more wisdom than the tech billionaire class)
This is just a touch outside of my expertise...if a touch equals a universe. Still I love the concept of techno-pragmatism. Thanks for the introduction.
Excellent post, Dave. While Andreessen's self-unawareness and sometimes cringey prose is distracting, the sentiments he expresses are still worth repudiating. Even more so when you realize it is a legitimate expression of some people's posture towards the future of society. I would pay money to have you and someone like L.M Sacasas from the Convivial Society discuss further. Any chance of that happening?
I enjoy Sacasas's writing a lot, but we don't know each other personally. So there's a chance of it happening someday, but isn't likely in the near term. We'd likely have to find ourselves at the same event first, have a fun conversation, and then decide to build it into something or other.
Oh boy. There is so much naive belief in that piece.
Take "We believe markets are an inherently individualistic way to achieve superior collective outcomes".
From the 1980's on, a vision 'unfettered capitalism' has driven the world economy. The promise was that 'freeing almost everything' would in the end 'benefit almost *all*'. After almost a half century of this, can we finally conclude that this 'all' has turned out to be simply not true? In the US, for instance, where this movement has been strongest, productivity has doubled, but real wages have stagnated. The rich have become richer based on those profits, the rest has stagnated because they depend on wage-related income. The top 10% of US families now own 76% of wealth. The bottom 50% own just 1%.
Regardless of this being a bad or a good thing (that is an ethical choice: is it actually important to have a fair society?), can we finally simply conclude that the theory (that *everyone* profits from unfettered capitalism) at least has definitely been proven dead wrong? How much more data do we need to accept this?
People get sold 'lower taxes' and 'more freedom', but the weaker the collective side of the economy (including government), the more unfettered predatory practices become, and the fewer people get those benefits in a *real* sense. If we really want more people to have real — and not just the marketing of — freedom (i.e. '*all* benefit') what needs to be done? And — given globalisation — can something be done at all?
Andreesen quotes modern capitalism founder Adam Smith. I find it ironical that if you read Adam Smith's "The Wealth of Nations" he actually warns for the fact that entrepreneurs are not to be trusted with the advise they give on what is best for *all* (i.e. society) as they are in the end singularly focused on what is good for *themselves*.
"We believe the ultimate moral defense of markets is that they divert people who otherwise would raise armies and start religions into peacefully productive pursuits." First, entrepreneurs do everything to make a profit. Period. Including lying to sell more arms (Eisenhower's Military-Industrial Complex). Or lie to sell more tobacco. Or lie to sell more oil. Or lie to sell hyper-addictive opioids. They even may start religions (i.e. Scientology) to make a profit. In fact, the key lie that unfettered capitalists tell themselves and are convinced of is this lie that unfettered capitalism is by definition good for *all*.
"Our enemy is speech control and thought control – the increasing use, in plain sight, of George Orwell’s “1984” as an instruction manual." *Cough*. Surveillance capitalism. *Cough*. Google dropping "don't be evil" as it is bad for profit. Letting evil types manipulate elections for profit.
The free market is absolutely a good thing for innovation. It is important, nobody believes we can plan everything. But ignoring the (moral and collective) downsides or the conditions for it is hyper-naive.
And Kelly? Kurzweil? Really?
And nuclear fission and fusion to give us all 1000x as much energy to use? Fine (but realistic?). And suppose that works after several decades, does that mean you're going to forbid fossil fuels? Or is that against the maximally free entrepreneurial dogma?
Techno-optimism is not necessarily bad. I like technology. I like innovation. How can we be against improvement? But religious 'free marketism' is *very* bad. A free market is an essential part of what I would think is the ideal society. But one thing it is not in any way is 'moral'. That has to come from somewhere else.
I am reminded of Bonhoeffer's analysis that stupidity is much more dangerous than malice.
"Against stupidity we are defenseless. Neither protests nor the use of force accomplish anything here; reasons fall on deaf ears; facts that contradict one’s prejudgment simply need not be believed- in such moments the stupid person even becomes critical – and when facts are irrefutable they are just pushed aside as inconsequential, as incidental. In all this the stupid person, in contrast to the malicious one, is utterly self-satisfied and, being easily irritated, becomes dangerous by going on the attack." It is not a lack of intellect he is talking about: "There are human beings who are of remarkably agile intellect yet stupid, and others who are intellectually quite dull yet anything but stupid."
Terrific takedown.
I don't know which claim was most absurd, but my 2 favorites were
1) "markets prevent monpolies", almost comical in its proven failure, and
2) those in "ivory towers...are disconnected from the real world, delusional, unelected, and unaccoubtable".
Talk about a self-confession.
I read that the same! The empower-has-no-clothes awareness.
That ivory tower quote caused me to let out a nice, hearty chuckle. Talk about (lacking in) self-awareness...
Extreme relative wealth creates a special kind of narcissism. It must come with the cognitive dissonance of being a normal person, lucky to accumulate massive wealth and then in an echo chamber. To the point where they are completely convinced that they are right, everyone else is so clearly wrong. And if they just put it out there, people will finally understand… the Emperor’s New Clothes - Modern Remake - without the realisation at the end…
Yeah and I think the point that needs to be made is that this will happen to anyone who accrues the level of wealth and power that Andreessen has, including you or me or anyone on this thread. There are people who have the genuine, probably spiritually-gained humility that makes them more or less immune but those people never become billionaires let alone multi-millionaires and certainly none of them adopted gonzo California futurism as an ideology. This is a small part, but still a part, why billionaires should be taxed out of existence.
Agree! I think there is a point of “optimal utility” beyond which accumulation of wealth for the sake of it stops making sense (or just through influence of large numbers - eg once you have billions, lowest compounding interest still creates massive amounts of wealth alone). It seems similar to the whole monopoly topic - consolidation/and desire for consolidation/growth is beneficial to society up to a certain point/with certain conditions/in certain areas. Beyond which too much consolidation starts to have lots of negative externalities.
"Optimists" tend to make shitty Engineers, tbh.
Would you fly on a plane, designed and built on "Optimism"? (Or... an imploding sub?)
There is some Olympic-level balance beam contortioning going on with that word Optomist. It's an outlook, not a philosophy or even an idea. It's a repudiation of consequences and denial of responsibility. Same obfuscation with the word Technology. What, you're against indoor plumbing and electricity? The whole manifesto is packed with this kind of sophomoric cheese.
Those only exist because of the optimism to envision, start and improve them. And some don't exist because of that same function.
>Economic inequality does not solve itself.
I don't think anyone claims that the free market reduces inequality. Free-marketeers don't care about inequality. Inequality, to them, is just the natural hierarchy of talent/brains being reflected in your wallet. If we want to reduce inequality we need more regulation and all the stuff they hate.
Great article, thanks!
For the sake of one who probably doesn’t share your priors, could you please elaborate on what this comment means?
My understanding of inequality in a market context is that profits and wages are roughly set by supply and demand and how well we network together to solve each others problems. When one worker spends 15 hours a week doing a sloppy job at something others could do more efficiently, the demand for that wage goes down to that worker contribution — in other words it can and should approach zero. When another worker invests twenty years of dedicated education preparing themselves to create something of vast value for other humans, that their rewards (profit or wage) are vast. Hence huge inequality. A good doctor working 60 hour weeks makes a ton more than a lazy part time lawn clipper.
I certainly don’t think markets are perfect, but they act as imperfect rewards and signals for us to stop wasting time and start doing more of things in high demand and lower supply. IOW, more or less inequality isn’t necessarily a better or worse thing. The important thing in a reasonably well functioning market is that we signal and reward adjusting what we do to be more productive.
So why is it we want to reduce market inequality?
Historically, inequality has gone up and down. After the New Deal, with high marginal tax rates and high union membership, inequality was lowered. After the 70s, it started to rise.
Presumably, human nature did not change. What did change was workers' bargaining power and that more money was available for, say, the GI bill and mortgage guarantees among other tools for citizens to increase their earning potential. As unionization decreased, wages have stagnated. Did workers get lazier or less worthy? No, but their bargaining power decreased.
As inequality increases, the 0.1%'s ability to game the system to further increase their take also grows. The Carried Interest loophole only exists because beneficiaries (hedge-fund managers etc) contribute to campaigns so much that legislators are terrified of touching it lest they get primaried. This reduces the very very rich's tax burden, reducing funds available for tools to increase citizen's earning potential, such as scholarships, school lunch programs, early childhood education and so on.
Privately funded campaigns (see $$$=speech) thus contribute to inequality, without any change to who is lazy or industrious.
Not even dealing here with the related issue of social mobility, where Scandinavian countries surpass the USA.
"Historically, inequality has gone up and down. "
As it should. When a price or wage changes it is sending a message. This is how markets work.
"After the New Deal, with high marginal tax rates and high union membership, inequality was lowered."
Pretty sure it plummeted in great part due to the depression and the war and automation and globalism too. Millions of reasons all mixing together to change supply and demand and marginal productivity. Kind of amazing how markets do that.
"After the 70s, it started to rise. Presumably, human nature did not change. What did change was workers' bargaining power and that more money was available for, say, the GI bill and mortgage guarantees among other tools for citizens to increase their earning potential. As unionization decreased, wages have stagnated. Did workers get lazier or less worthy? No, but their bargaining power decreased."
The differential rewards and risks for capital, entrepreneurship, skilled labor and unskilled labor constantly adjusted. This doesn’t require a change in human nature. Certainly education can increase productivity. And certainly higher demand compared to supply increases the bargaining power for any factor, including lower skilled labor. Some people got lazier, some didn’t. Some stayed in areas without jobs rather than move to new areas with better opportunities. Some dropped out of the labor force altogether. Some invested more in their education. Women increasingly entered the workforce. Wages have not stagnated since the 70s. They are up significantly and have grown faster in the US than just about any developed country for past twenty or thirty years. But when inequality goes up that also often means the rewards got bigger for education and skills and entrepreneurial genius and productive investments. These are good things right?
I agree that unions will increase wages short term by about ten or twenty percent. That is what cartels do. That is their point. To extract excess rents over what people will voluntarily pay by restricting free access to jobs. Those with privileged cartel jobs can exploit those looking for a job (and willing to do it as well or better for less). Long term of course, this drives producers to move production facilities to non union locations or overseas or to mechanize the work. Usually all three. Eventually you end up with Detroit or some other rust belt city where everyone wonders who drove off the good jobs? (Answer is the union cartel). It sure helped with rising standards of living in developing nations though. Over a billion lifted out of poverty (global inequality has also decreased for that matter, and done so at a pace faster than we expected).
I am not arguing for tax loopholes for the rich, though even a casual look at the stats reveals that over the past 40 years actual income taxes paid have gone down for everyone except the top quintile, and that the US currently has one of the most progressive tax systems in the developed world. Seems fair to me that the majority of income taxes are paid by the top five percent. I salute them.
Back on point though, I fail to see any fundamental goodness or badness to a changing statistic of inequality. Inequality can go down and we can all be worse off, and it can go way up and still be a good thing. MA is correct that the people in the US (and other developed countries) are better off financially than at any time since the advent of agriculture over 10000 years ago. By a mile! The point of his tirade is in part that they could be even higher without all the pessimism and obstacles to growth and entrepreneurial activity
So the boy genius is still a boy at heart and never had to grow up or confront facts that suggest the world is more complicated than just another engineering problem.
Great, great article, Dave! This hits every gnawing feeling I had when I first heard about and then read the Manifesto. The problem is, they never will learn. They'll just loudly “pivot” to the next scheme to make more money and gain influence. Or the next one in line will. I hope you’re right that, in general, we’re becoming more willing to rebuff, but I still fear the clapping mob will drown out those voices. That’s the pessimist's take on this reality.
He should have realised that the <blink> tag was the apex of his career arc and retired to grow boutique avocados in Pismo Beach. He may be less overtly fascist than some of his contemporaries, but his accelerationist narrative is pure magical thinking.
Just spit-balling here but many appear to be narcissists high on their own supply & interests.
Dave. This is just SO good.
(Humans always do technology - like clothes, shelter, pointy sticks for hunting animals. Netscape was just a very well compensated pointy stick. Our species is more rightly Homo Technicus than Homo Sapiens, though its manifest that you have a lot more wisdom than the tech billionaire class)
I'm going to go re-read Andrew Feenberg to rinse all the Andreessen out of my brain.
That was my reaction too.
https://johnquigginblog.substack.com/p/retrofuturism
I really liked this piece. Your points about naive market ideology and nuclear fission as a bygone future were right on target.
There is an emerging dialog starting on the blog itself via annotations. I took some of the red meat when WOHanleycalled Marc a fascist. https://hyp.is/go?url=https%3A%2F%2Fa16z.com%2Fthe-techno-optimist-manifesto%2F&group=__world__
Heh. I’ve been looking forward to this since I saw your exasperated skeet the other day. Well done.
This is just a touch outside of my expertise...if a touch equals a universe. Still I love the concept of techno-pragmatism. Thanks for the introduction.
Excellent post, Dave. While Andreessen's self-unawareness and sometimes cringey prose is distracting, the sentiments he expresses are still worth repudiating. Even more so when you realize it is a legitimate expression of some people's posture towards the future of society. I would pay money to have you and someone like L.M Sacasas from the Convivial Society discuss further. Any chance of that happening?
I enjoy Sacasas's writing a lot, but we don't know each other personally. So there's a chance of it happening someday, but isn't likely in the near term. We'd likely have to find ourselves at the same event first, have a fun conversation, and then decide to build it into something or other.
You can go to town here repudiating and then bring others into the mix to debate. Annotate where you disagree and build the argument. (You will need to signup to play but it is free and OSS) https://hyp.is/go?url=https%3A%2F%2Fa16z.com%2Fthe-techno-optimist-manifesto%2F&group=__world__. I don't know L.M Sacasa personally but I'll invite him to the debate.
Oh boy. There is so much naive belief in that piece.
Take "We believe markets are an inherently individualistic way to achieve superior collective outcomes".
From the 1980's on, a vision 'unfettered capitalism' has driven the world economy. The promise was that 'freeing almost everything' would in the end 'benefit almost *all*'. After almost a half century of this, can we finally conclude that this 'all' has turned out to be simply not true? In the US, for instance, where this movement has been strongest, productivity has doubled, but real wages have stagnated. The rich have become richer based on those profits, the rest has stagnated because they depend on wage-related income. The top 10% of US families now own 76% of wealth. The bottom 50% own just 1%.
Regardless of this being a bad or a good thing (that is an ethical choice: is it actually important to have a fair society?), can we finally simply conclude that the theory (that *everyone* profits from unfettered capitalism) at least has definitely been proven dead wrong? How much more data do we need to accept this?
People get sold 'lower taxes' and 'more freedom', but the weaker the collective side of the economy (including government), the more unfettered predatory practices become, and the fewer people get those benefits in a *real* sense. If we really want more people to have real — and not just the marketing of — freedom (i.e. '*all* benefit') what needs to be done? And — given globalisation — can something be done at all?
Here are some facts about the last half century in the US: https://www.epi.org/publication/decades-of-rising-economic-inequality-in-the-u-s-testimony-before-the-u-s-house-of-representatives-ways-and-means-committee/
Andreesen quotes modern capitalism founder Adam Smith. I find it ironical that if you read Adam Smith's "The Wealth of Nations" he actually warns for the fact that entrepreneurs are not to be trusted with the advise they give on what is best for *all* (i.e. society) as they are in the end singularly focused on what is good for *themselves*.
"We believe the ultimate moral defense of markets is that they divert people who otherwise would raise armies and start religions into peacefully productive pursuits." First, entrepreneurs do everything to make a profit. Period. Including lying to sell more arms (Eisenhower's Military-Industrial Complex). Or lie to sell more tobacco. Or lie to sell more oil. Or lie to sell hyper-addictive opioids. They even may start religions (i.e. Scientology) to make a profit. In fact, the key lie that unfettered capitalists tell themselves and are convinced of is this lie that unfettered capitalism is by definition good for *all*.
"Our enemy is speech control and thought control – the increasing use, in plain sight, of George Orwell’s “1984” as an instruction manual." *Cough*. Surveillance capitalism. *Cough*. Google dropping "don't be evil" as it is bad for profit. Letting evil types manipulate elections for profit.
The free market is absolutely a good thing for innovation. It is important, nobody believes we can plan everything. But ignoring the (moral and collective) downsides or the conditions for it is hyper-naive.
And Kelly? Kurzweil? Really?
And nuclear fission and fusion to give us all 1000x as much energy to use? Fine (but realistic?). And suppose that works after several decades, does that mean you're going to forbid fossil fuels? Or is that against the maximally free entrepreneurial dogma?
Techno-optimism is not necessarily bad. I like technology. I like innovation. How can we be against improvement? But religious 'free marketism' is *very* bad. A free market is an essential part of what I would think is the ideal society. But one thing it is not in any way is 'moral'. That has to come from somewhere else.
I am reminded of Bonhoeffer's analysis that stupidity is much more dangerous than malice.
"Against stupidity we are defenseless. Neither protests nor the use of force accomplish anything here; reasons fall on deaf ears; facts that contradict one’s prejudgment simply need not be believed- in such moments the stupid person even becomes critical – and when facts are irrefutable they are just pushed aside as inconsequential, as incidental. In all this the stupid person, in contrast to the malicious one, is utterly self-satisfied and, being easily irritated, becomes dangerous by going on the attack." It is not a lack of intellect he is talking about: "There are human beings who are of remarkably agile intellect yet stupid, and others who are intellectually quite dull yet anything but stupid."
https://www.linkedin.com/pulse/stupidity-versus-malice-gerben-wierda/