Web dev at the end of the world, from Hveragerði, Iceland

Why did Paul Graham argue against equality?

He has, in a very short space of time, written two different essays that argue in favour of economic inequality.

I won’t link to them because they are more agitprop than argument.

While the reasons why he has written them are obvious, I haven’t seen anybody state them outright.

Endemic economic inequality isn’t caused by startups and hasn’t been caused by startups in the past. Their effects on inequality tend to be more localised.

The massive economic inequality we face today was created through deregulation of the finance industry and a refusal at the part of the authorities to punish finance industry malfeasance.

That’s it. Deregulation and the decriminalisation of financial misconduct is the cause of most of the economic inequality we face in the West.

Trying to fix economic inequality without reversing deregulation or addressing finance industry malfeasance is like trying to resurrect a corpse with a low-sodium diet.

Then why is Paul Graham arguing so vociferously against pro-equality rhetoric? Why is a guy who is a startup guy through and through, building up an argument against economic equality?

Because, with Uber, startups have become proxies for extra-legal deregulation. The value Uber creates for its investors isn’t in technical innovation but in its ability to capture the market, at higher margins, by circumventing regulations and regulatory bodies.

Which might be a net improvement in places where regulatory bodies are completely captured, corrupt, and under the control of the market incumbents they’re supposed to regulate (like most US regulatory bodies, for example). But it is disastrous in countries and sectors where deregulation has met with resistance following the crash of 2008.

Startups in the style of Uber are vehicles for deregulation and deregulation, by letting the financial class grab more of the economy, directly causes economic inequality.

Ergo, if Paul Graham wants to continue to be a successful venture capitalist while maintaining a public presence, he has to come up with a plausible argument against restoring economic equality.

His first and second attempts failed miserably—only rallied more people to worry about inequality, if anything—but his won’t be the last.

Odds are that we’re going to see a lot more leaders in the tech industry come out against equality over the next few years. They have to because the tech industry is becoming an inequality industry.

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