Hacker News new | ask | show | jobs
by gonehome 2119 days ago
Arguably wealth creation is never zero-sum, but businesses also do cause money to transfer which is - but I get what you're trying to say and won't dispute definitions.

By wealth creation I mean something like this: you buy parts to build a house on land you've purchased. After you're done building the value of that house is worth more than the sum of its parts. The time you invested created something more valuable without taking anything from someone else (you now have more 'wealth' than you had when you had some land and a pile of house parts). This doesn't take wealth away from anyone else, but if you were to sell someone may choose to buy your newly created house when they might have otherwise chosen the neighbors house which is slightly older. That's a bit of a different thing.

There are definitely some industries where a lot of the cut-throat nature is a result of stagnation and groups fighting each other over what profit is available via competition. (Thiel talks about this in Zero to One and why businesses in competitive markets are a bad idea).

That said, the uber/lyft example is interesting.

Some points:

- Prior to uber and lyft a lot more people would just drive drunk, taxis were unreliable and expensive - if you had to take a taxi somewhere people would just opt not to go.

- Taxi companies were pretty corrupt and (at least in NYC) relied on a medallion model that expressly limited growth and empowered organized crime groups. This led to a worse experience for everyone except the medallion holders who could extort drivers and riders (while providing bad service).

- A lot of people that drive for uber and lyft were not driving for taxis before, the market maker effect of uber/lyft and people that need a ride created a much larger market for people hiring taxis. This creates wealth - both for the drivers that did not have that ability before and for the riders that would not have previously bothered to call a taxi (and clearly all the people that work at uber/lyft generally). It might also have knock on effects where people go out more which might benefit local businesses more, but that's fairly speculative.

Are there people that get screwed in this? Probably - taxi companies that provided bad/expensive service are not competitive with uber/lyft. A smaller amount of people at those companies that were making more are probably making less. Is that worse for society generally? My personal view is that it's not.

Anyway - on a meta note, I also appreciate the back and forth and engaging with me. I'm open to being persuaded otherwise. I've read a lot about this stuff and have tried really hard to understand the underlying truth away from politics. This is where I've currently landed.

1 comments

You fail to note that the medallion system existed partially to limit traffic, pollution, car accidents, pedestrian accidents and all the other externalities caused by massive amounts of additional cars on the road. You can argue if it's a net benefit or not but you failing to even note it is telling.
Most bad policies have at least some reasonable sounding (often well-intentioned) justification for their existence, but that's not really relevant to the point I was making.

Well-intentioned bad policies usually just fail to account for unexpected outcomes, or they create perverse incentives that quickly overshadow the original goals and make things worse. In particularly nasty cases the reasonable sounding justification was never the goal (or even initially well-intentioned) and it's just a cover for the some other motive.

I'm not sure which was the case for medallions originally, maybe it's what you suggest - or maybe some people were just trying to lock in a monopoly they could exploit. The number of cars on the road would likely have been moderated by what the market could support without them. The creation of monopolies locked in place via legislation was not a good outcome and created lots of problems.

Now with Uber/Lyft operating, suddenly the taxi service in NYC has improved (they'll actually take you where you need to go, the credit cards machines are no longer mysteriously broken).