Paul Graham Is Still Asking to Be Eaten
<i>Wall Street is full of dirty rent-seekers whose recklessness has destroyed the American economy over and over again ever since Reagan deregulated Wall Street. The comic wealth that came as a result of that deregulation has allowed Wall Street to chokehold politicians in campaign finance and squeeze out from them financial policies that can only be fairly be described as federal handjobs.</i><p>Such shameless and misguided populism. Ostensibly, &quot;Wall Street&quot; are an evil cabal and not at all subservient to incentives granted by the state? Interesting. You could certainly critique the financial sector on basis of Hyman Minsky or even on basis of credit-driven boom-bust cycles, but this simplistic narrative of deregulation is insulting.<p><i>What actually happens is wealthy people like Paul Graham fund startups because they think these things are valuable. Through venture funding, rich people legitimate startups. Thus, they confer value upon the startup.</i><p>No shit. Value is subjective. Or perhaps you&#x27;re still stuck in the political economy of Ricardo, I take it?<p><i>We, as a people, determine what is and is not of value mostly through what we believe to be legitimate and worthy of significance. And in late capitalism, we have all basically agreed to allow the market to dictate what is and is not of legitimate value. (This is what social critics recognize as Neoliberalism.)<p>But what the market deems valuable is not necessarily aligned with what is ultimately good for us as a society or even what we want. Because under conditions of extreme inequality, the market is biased towards people who have lots of money, at the expense of virtually everyone else.</i><p>What does this person think &quot;the market&quot; is? Some being existing independently of humans? Markets consist of exchanges, valuations and schedules of human participants, constrained by the institutional framework of governance in a particular jurisdiction.<p>That&#x27;s not what &quot;neoliberalism&quot; is, either. Neoliberalism has two different meanings in the field of international relations, and in political economy. Neither of them have to do with the fallacious reasoning expressed above.<p>And just what, pray tell, is this mystical &quot;social utility,&quot; some objectively measurable quantity of what is &quot;good for society&quot;? Demagogues always love to speak of it, and almost always it is a coded phrase for making humans subservient to whatever state policies they envision. There might be &quot;social utility&quot; in some theoretical metaphysical sense. In practice, one <i>cannot</i> do interpersonal comparisons of utility, hence the famous &quot;utility monster&quot; paradox illustrated by Nozick. Thus to speak of any greater societal good without taking into account that every individual has preferences that they reveal, is a folly.<p>Now, the question of money. What is money? It can be many things, most notably a medium of exchange. But it&#x27;s also an accounting device for settling debt obligations and coordinating exchanges through time. One of the key insights of the mutualists and later heterodox monetary reformers like E.C. Riegel is that there is no reason for the latter accounting function to be monopolized by a state. Having groups of people issue their own debt instruments to intertemporally coordinate their consumption and production on coarse-grained collective levels, perhaps through a mutual credit bank, would be a great boon on many. This is not the fault of capitalism that it&#x27;s so rare. It is the monetary monopoly of the state doing this. It is an unrelated issue.<p><i>That is not the future I want so I really have no choice but to insist that we resist and come to terms with the fact that the Market we call god is a sick and twisted god, indeed.</i><p>The market is not our god. Not even close.<p><i>People like Paul Graham need to write essays like this so you don’t question how undemocratic a market system is under conditions of extreme wealth inequality.</i><p>&quot;Undemocratic&quot;. Another baseless buzzword. The market is not undemocratic. Its democracy operates on a more fine-grained level, and moreover for market participants to form a collective body of action to pool resources (like a corporation) requires unanimous approval on part of these people. A state only needs a thin majority (if at all).