[whimsicalism]

> So your hypothesis is that VCs put their class interests ahead of making money

It's much simpler than this and it is about making money.

Whether unions impact the ultimate success (in terms of ability to build) of a company or not, they certainly shift the share of money that is going towards labor as opposed to owners who want a profit.

This lowers the expected return of company equity which means people will be willing to pay less and you will be able to raise less money while you are trying to scale up. A non-unionized competitor will be able to raise more money and if there are positive returns to scale, outscale & outcompete.

[astrange]

That’s mostly the US corporate union system (which of course you’d be using as a US company).

European approaches like sectoral bargaining and codetermination don’t have these problems; a single company isn’t disadvantaged vs its competitors and the employees on the board are motivated to grow the company. Europe doesn’t have VCs and the culture doesn’t support failure like Silicon Valley, but that’s for different reasons.

[whimsicalism]

> Europe doesn’t have VCs and the culture doesn’t support failure like Silicon Valley, but that’s for different reasons.

No, it is the same effect I am describing but inter-national as opposed to inter-firm. Capital allocation is transnational.

[astrange]

There isn’t an issue with starting companies in Europe as much though - Skype, Nokia, Booking are examples. The issue is they don’t stay European owned. US companies buy them out because they run out of ability to grow.

FAANGs have European offices with work councils and all and aren’t considered unproductive, but they’re not the corporate headquarters because they didn’t start there.

Certainly some European countries prefer having a few old large companies because it’s easier to regulate. Asia has the same problem; it’s an everywhere except Silicon Valley thing.

edit: actually, ASML is an example of a European headquartered tech company where all the value is “actually” American. Not sure how that happened. Video game studios also seem a lot more international than other tech companies.

[whimsicalism]

None of this is contradictory to what I am saying. The fact that companies have been started in Europe does not contradict the fact that it is harder to raise in Europe.

FAANG companies having EU offices with work councils is completely irrelevant to what I am saying.

[eldavido]

Absolutely it is, and anyone in denial about that can look at European GDP growth, GDP per capita, youth unemployment, firm valuations, or about 20 other economic metrics to back it up.

You can't start a company there because all this social spending makes it super hard to get going. I think the US is heading this way too now, toward lots of big companies with fat required benefit packages the little guys can never match (even if they eventually go on to become huge).

I wish people who would being so starry-eyed about Europe. One of the 10 biggest companies in Italy is the post office. Lots of industrial power, that.

[Apocryphon]

Well, perhaps labor relations in the U.S. are just so acrimonious- its history is literally soaked in blood and violence- that it's just one patch of grass of Europe that seems greener on the other side. Certainly the idea of more cooperation between labor and management, perhaps the German model of labor unions, wouldn't be so bad.

[astrange]

It’s a similar problem to universal healthcare and the US government structure in general.

The US actually got there first, and hasn’t collapsed in any wars recently, and as such we’re on the old version of all government software so it all sucks yet nobody is willing to risk upgrading. Starting from scratch is a lot easier since there’s nothing to lose. (And of course, having the country collapse is bad too.)