If art has little value, why is the annual revenue for the global entertainment industry over $2 trillion? No one is being forced to pay for a Netflix subscription. The markets have spoken and have assigned it a large value. Whether you view art as frivolous is subjective, the numbers aren't on your side.
No, the author is saying the share of revenue the distributors (tech, music industry) are receiving is misaligned with the value they're adding. Compare content creators with a SWE. They both produce the product being sold, what percentage of the revenue should they receive?
This “people should be paid based on the value they create” myth comes up a lot on HN. Compensation is only tied to value creation as a maximum level. The actual compensation level is whatever people are willing to work for while doing good-enough work. If you want to price your work based on value, you need to run your own business.
Markets are how economic value gets defined. Trying to define it otherwise is fraught with often disastrous difficulty. This is one of the reasons central planning fails.
I think one of the reasons so many creatives feel cheated is there's far too much creativity, so the marginal value of more is low. In that situation of overabundance, some other step in the value chain will deliver most of the value, and reap the reward. This feels like exploitation, but it's just the market telling creatives they need to be producing something else.
The market is a system that finds a price within a given context. If conditions allow for price opacity, the market will find a different price than if price transparency is forced. Both numbers can be described as a “market price”.
If economic value is defined through markets, how then does one argue against markets' ability to assign value? What words should be used other than value?
Typical words for this include “monopoly/monopsony”, “regulatory capture”, and “necessity goods”. There are others, too, but they generally don’t apply to creative outputs.
While those words are used to critique market failings, none of then are necessarily about the value of something independent of market efficiency. They always assume that the market assigns value correctly as long as you just avoid monopolies. They start with the assumption that markets work at assigning value for all things.
How does a market determine cultural value. What is the value of a priceless family heirloom? What is the value of human connections? How do you communicate these thoughts without first assuming that markets correctly assign value?
Yes, and the only way to fix the monopsony is for creators to own their own distribution channels so they can sell directly to their customers instead of selling to middlemen who take the vast majority of the profits and pay them peanuts.
The problem with collective bargaining is that it either involves unmanageable transaction costs, or an unmanageable principal-agent problem. Either every single creator has to be directly involved in the bargaining, which can't realistically be done, or the creators have to empower some small subset of them as bargaining agents, which means the rest of the creators get screwed by those agents.
Majority of the so called creatives or influencers in the tech platforms produce sub standard material. There are cases of people like sssniperwolff etc whose entire content is rehashing on other peoples work and making money of it. And then there are people who produce life vlogs and shopping hauls. Are they worth more than a software engineer or a farmer who produces actual tangible assets for consumption?
And when you really get into it. What about factory workers producing high margin products? Don't they deserve larger cut as without them there would be no money coming in... Surely that is much more valuable than what is now paid?
Surely the robots doing all that work are worth way more than they are now sold for? Why should you take money from the robots and progress and give that to workers who didn't add that value? More money to robots means more progress.
See how easy it is to argue for the other side, that argument is so compelling that communists tend to focus more on robots over workers and keeping wages low than capitalist countries do.
You speak as if software engineers are different. Vast majority are nothing more than marketers who know python. In essence, the same value as shopping haul video makers.
Yet their compensation is very different. It should be obvious to most that what you are paid is nothing about value or efforts or risk.
Because the creative marketplaces have turned into effective monopolies or oligopolies at best (YouTube, Spotify), the market is broken. Note that an effective market has multiple vendors of similar commodities. Because the market is broken, value is payed not where it is due. This is intentional however, every big corp tries to break the market and lobbies for laws that allow that.
I wager that the share of revenue that various people in the industry are receiving is correctly aligned with the value they're adding. The bottom-line content creators are simply not adding that much value. Marketing, distribution, etc is worth the cost that they demand; otherwise people would stop using those services.
The deeper question is how much control labor has over its provision of supply (monopoly) and how much control firms have over their demand for labor provisioning (monopsony). Both can be inefficient operators in the Econ 101 view of the world.
A thought experiment for those without children approaching having one from a rational perspective. What is the value of your closest personal relationship; your mom, your spouse, your pet etc? Let's say you have a choice, for that relationship to have never existed, meaning all memories (good and bad), and everything you've gained (and lost) from that relationship would be erased unless you paid a price. How much money and time would you sacrifice for that relationship to still exist?
This misses the point that gaining a relationship and keeping a relationship are not at all the same. It also misses the possibility of having a bad relationship, and while a bad parent-child relationship is usually on the parent, it isn't always. It's also one of the few (possibly the only) relationship that you can't really bail out of no matter how bad it gets.
Case in point, you ask what the value of peoples close relationships are, but for some people those relationships you mentioned: mom, spouse, pet, actually have negative value.
Close relationships can having negative value and it's apart of the question (see parenthesis). Gaining and keeping a relationship are not the same but also not particularly relevant here since the purpose is to quantify the value of close relationships when making a rational decision. Parent to child, child to parent, spouse to spouse, etc relationships have very different value but if you've never had a child, then your estimations of value can only come from your own relationships or asking other parents.
Wrt to bailing on your child, many single moms and dads will tell you that's a thing, not a noble thing but it obviously happens. Also consider marriage, in the US divorce rates are around 40% and can cost more than half of your total assets, which is often far more than the cost of raising a child. In terms of expected value (depending on your income), more risky to get married than to have a child.
Increasing human prosperity/reducing human suffering is largely a function of technological advancement, wealth distribution and avoiding wars. All of these require a large population of educated humans to drive forward and since yours will likely be educated, probably net positive.
I think people are reading this line the wrong way. The author isn't implying Instacart is as important as the transistor, that would be ludicrous.
He's simply drawing an analogy between the output of laboratories like Bell Labs that produce breakthrough scientic research and "economic labs" like YC that produce breakthrough businesses.
Yes, AirBNB, Instacart etc are breakthrough businesses in the sense that they disrupted long-standing and deeply entrenched business models. The ideas themselves are not extraordinary but building and scaling a business from zero often against much better financed competitors is no easy feat and takes a unique amount of persistence (and often good timing) to succeed.
The similarities in my experience between big tech (FAANG) and big non-tech are heavy process/communication burden, deep tech debt and perf review driven culture.
The main differences in tech are:
Engineers seen profit centers instead of cost centers, therefore treated/compensated as "talent"
Many (but probably not most) big techs are bottom up, much less common in non-tech
There is at least as big of a process and cultural difference between small startups and big co's.
You seem to be implying "software engineers" require much more than a business degree, in which case I believe you to be a young person (< 30) and I forgive your naivety and the trolliness of your comment.
SWE is not a profession that requires deep education in math and science, like a physicist or neurologist. Having anything beyond a bachelor's in CS is not worthwhile outside of maybe ML..maybe.
A person with business degree who grinds toy problems on LC will almost always do better on FAANG coding interviews than a CS new grad with no grinding full stop.
The degree is just a stamp for junior engineers to get their foot in the door, which is no longer needed once you have a stamp from a reputable tech company.
Yes, SWE's require Computer Science, if you don't think so you've never done any real SWE work. Business majors do not teach you the problem solving ability required for even basic SWE work.
CS fundamentals can be readily learned without obtaining a degree. If you don't think so, then you've never met a self-taught programmer and are probably (no offense) someone with limited professional experience.
The website is NOT a power plant, it's just code. In software, "operations management" is basically infrastructure automation, incident response and build and release. All of these require some software development or at least code literacy and familiarity with software development practices. If there's large overlap in technical skill between the operators and the builders, then it makes more sense to see them as the same but focussing on different problems.
It's probably useful to talk about what Operations Management is first. It's a business discipline that touches on many parts of a business. It is defined as "the management of an organization's productive resources or its production system, which converts inputs into the organization's products and services". You can get a PhD in Operations Management.
In tech, software and data is the "productive resources", and the "production system" is the actual system you build out of those resources: the website, API, etc. You don't have to write any software to build and manage that production system. Maybe that's unusual to people in tech today, but it's a fact that you don't have to write a single line of code to build and operate such a system. Heroku, PagerDuty, DataDog, Splunk, Octopus, AWS, etc, all are products built with the sole purpose of enabling operations without the need to write code. You can assemble logging, alerting, monitoring, web server, networking, database, deployment, etc, without ever writing a single line of code, and have it be highly available and highly reliable.
The title will vary (Systems Engineer, Operations Engineer, DevOps Engineer, Site Reliability Engineer, Systems Administrator) but the job is the same: to use Operations Management techniques to ensure the products and services are productive. You can use software development practices for all of this, sure! But they are absolutely not a requirement to accomplish the goal. And many other roles in the company are involved in Operations (QA, PM, DM, etc) and may or may not use code. The business doesn't care about code, it cares that its resources are being used properly and the production line is operating nominally.
In terms of the distinction between builders and operators: you could say that a construction worker and a custodial worker are part of the same occupation because a lot of their skills overlap. They both need to understand how the building works and may need to build/repair parts of it at times. But they're still two different disciplines that require different training, experience, and day to day responsibilities, and as such we don't lump them into the same category.
THere's at least one big issue here, which is that you're pretending that a website is like a building or a dam. If that were the case, a company like Google would have a (relatively) small team of SWEs who "built" things, and a much larger team of SREs who maintained them over their operational lifecycle once the SWEs were done building the thing. But that isn't the case.
Software systems (at least in competitive consumer markets) are constantly changing and evolving. To use the dam analogy, there's constantly a team of people making the dam taller or wider or deeper, even while the dam is running and producing power.
All the SRE teams I've worked with have done a bunch of things that go beyond "operations". They are usually consulted at the design stage, to make sure that the thing is going to be built reliably. They're also responsible for ensuring ongoing reliability as all new features are added. That means that the features themselves don't impact reliability, and that the process of adding new features doesn't impact reliability. None of this work has a reasonable analogue in your dam analogy, except perhaps as some combination of consultant and regulatory body.
"You don't have to write any software to build and manage that production system."
It depends on the scale and complexity of your application. At some scale/complexity, it absolutely requires writing software because your IAAS provider doesn't provide you with automation that covers 100% of your operational needs and even they recommend using infrastructure as code tools to manage your infra.
If your production system is a CRUD service with 3 application nodes and a managed PostgreSQL instance then you do not need to write software to manage it. But if your application is that simple, then I'd suggest you probably don't need a software developer to build it (Wordpress, Wix).
Construction vs custodian is not a fair analogy because their training and evaluation doesn't really overlap. The training and eval for both "dev" vs "systems" engineers is very similar; most have CS degrees and have to do some leet coding to get the job. Devs generally need to be better at algos, systems engineers need better understanding of networking, os, system design.
Site Reliability/Infrastructure/Production Engineer typically have three focusses:
Managing and scaling "software infrastructure" (Kubernetes, cloud services, databases/caches, job/message brokers, etc). SREs tend to have expertise in these systems that generalist SWEs do not.
Incident response. Many production incidents are not caused by a bug in application code, but due to some cascading failure of some piece of the software infrastructure, often due to unexpected load, performance regressions or network/hardware outages. Because SREs have a broader picture of how the various pieces of infra fit together, they're best suited to start root cause analysis and determine whether it's an infra/code issue or some combination of the two.
Devops/developer productivity. Many SREs work on build/release systems, internal tools and enforcing best practices.
