Hacker News new | ask | show | jobs
by michaelochurch 5099 days ago
I've come to the conclusion that there are two essential commodities in any society. One is Property-- land, financial capital, social connections, reputation. The other is Energy-- talent, ambition, willingness to work hard, vision. Most social and class tensions are centered on the exchange rate between these two, which has historically favored Property except in times of crisis.

The reason societies have typically been pro-Property comes from religious superstition; consider that the concept of private land ownership emerged out of a perversion of ancestor veneration; "<dead chieftain> will rape your shit for breakfast in the afterlife if you don't honor his descendant's claim to this land". Eventually, these ancestors became legends or gods and those who claimed ancestry became the priests, and the rest (literally) is history. [Note: I'm not saying that all religion was born this way, but only that the desire to corrupt or abuse the religious impulse is as old as dirt.]

If you take a person's percentile-ranking on Property vs. Energy and compare the two, it determines what that person's politics will be-- not in a left/right sense, but in terms of how they view certain social justice questions. People who are Property-heavy (i.e. have a lot of connections and capital but low talent) tend to resist change and want to keep doors closed. People who have more Energy than Property want to shatter barriers and dynamite the doors keeping them out.

The reason it doesn't map easily to left/right politics is that both corporations and government can be corrupted to protect the entrenched (i.e. undeserving, Property-heavy people) so there are a lot of pro-Property types who are superficially liberal. Most HN-types and entrepreneurs, even the libertarians, tend to be pro-Energy. A source of our continuing frustration is that the world is still run (look at who actually makes major funding decisions, a few top incubators aside) by extremely connected people who have lots of Proprety and little Energy/talent.

There's another way to view this, which is more fundamental and equally correct. Property equals Past. Energy equals Future. Sadly, people tend to have more faith in an established (but rapidly becoming irrelevant) past than in an uncertain future.

5 comments

There's a lot that's correct about what you wrote, but a lot that isn't.

The fundamental dichotomy is: Property is by nature excludable, Energy by nature must be applied to something (usually either Property or the Commons) to do any work.

Markets run on excludability. If you can't fence something off and appropriate it as your own, you can't trade it, because someone else can just take it from you.

Here's a theorem: the more excludable something is, the more accurately markets value it. This is why Commons Goods and Public Goods are dramatically undervalued in a market system: they're non-excludable. Anyone can breathe the air or attend public schools, but someone has to keep the air clean and provide public schools.

Beyond this, I recommend reading Henry George's Progress and Poverty, as well as Das Kapital by Karl Marx.

But what it comes to is that in the great struggle between Capital and Labor, or Property and Energy, capital is by nature very excludable, while Labor (lacking organization into a guild or union) is not very excludable (workers cannot stop the capitalist from working for himself, even if only temporarily). Capital will thus be valued more on free markets than Labor, in general.

This actually maps exactly onto left-right politics, outside the United States. In most of the world, the Right represents Property/Capital and the Left represents Labor/Energy, and socioeconomic politics consists of trying to form a workable arrangement between the two.

But what it comes to is that in the great struggle between Capital and Labor, or Property and Energy, capital is by nature very excludable, while Labor (lacking organization into a guild or union) is not very excludable (workers cannot stop the capitalist from working for himself, even if only temporarily). Capital will thus be valued more on free markets than Labor, in general.

Excellent point. What I wonder is how excludable Capital truly is, though. Is it inherently excludable? Gold is, and electronic money effective is, but land isn't, and social connections definitely aren't.

This actually maps exactly onto left-right politics, outside the United States. In most of the world, the Right represents Property/Capital and the Left represents Labor/Energy, and socioeconomic politics consists of trying to form a workable arrangement between the two.

Great observation. In the U.S., we effectively have two political parties that represent Property. One is just more of a dick about it, and more willing to use cultural wedge issues to move useful idiots against their own interests, but they're both pretty rotten. I think, for what it's worth, that their uselessness is by design; an ineffectual government enables these parties' rich owners to get away with murder.

Being pro property, primarily in the form of land, in the US is linked to virtue. A republic eventually is founded on the virtue of its citizens, not laws or paper. So property owners, as steak holders in society, are thought to be better behaved. Yeoman farmers are independent and self sufficient which makes them less likely to be manipulated into abusing power. Moving towards a manufacturing/finance society changed that equation dramatically and now all the incentives are towards self-interested manipulation. Virtue has become a public facade, not a private goal.
Being pro property, primarily in the form of land, in the US is linked to virtue.

The US is a post-apocalpytic nation. Literally. The indigenous people and cultures were so badly wiped out by a variety of factors (some with European fault, some without) as to leave a sense of an untamed wilderness (actually, there were probably advanced agrarian societies over every inch of the US at one time) and an abundance of land. I think much of the appeal of zombie/apocalyptic fiction in the US comes from a longing for a future (like our semi-imaginary past) of open land.

When land was (or seemed) effectively free, the "obviously virtuous", positive-sum thing to do was to find unused land and bring it into productivity-- rather than to squabble for allocation of an existing resource as people did in the cities. Hence the association of the rural frontier with positive-sum virtue and urbanity (and Europe, at that time) with zero-sum congestion. So more specifically, it was a rural style of land ownership (in "new" land) that was associated with virtue.

Of course, the frontier closed, and over time we became urban (suburbia is extremely-low-density and often dismal urbanity) like everyone else.

Land doesn't matter as much as it did, except in major cities. A landed gentry has been replaced by an educated (sometimes in name only) and connected one, and urban land is only worth so much on account of the people it is (implicitly through locality) connected to. That's why Manhattan and Silicon Valley real estate are so ungodly expensive: because ambitious, smart people move there, so they're good places to set up a business and tap local talent. We are the reason for the value that justifies the price, and for thanks, we get royally fucked-over by the landlords for it.

I have no issue with small-time landowners and the notion of owning one's own home, and any land reform policy that I'd support would have to have an exemption (around $500,000 seems reasonable) under which it doesn't apply. However, I definitely don't think the association of land ownership with virtuous stewardship applies to large-scale urban housing ownership. It's classic medieval rent-seeking, nothing more.

"extremely connected people who have lots of Proprety (sic) and little Energy/talent."

It takes energy and talent to maintain connections. Money also helps [1]. With the exception of perhaps some outliers having a connection does little other than give you an audience and the ear of the person who might be able to do something for you. And in order to maintain that connection you have to be in their face and provide some benefit to them that is tangible. In general. [2].

Let's take an example. You did a favor for Paul Graham in college but haven't spoken to him since then. You will probably get his ear, he will listen to you, but how much more is that connection going to do for you without some other compelling value to Paul to help you (vs. what he has to give up to help you if he needs to get a favor off of someone else). "Paul sign my petition" (ok). "Paul get my son into YC" (hmm.)

Connections can also be made with energy. I've done multiple free consulting freebies for various people on the net. Ranging from nobodies to very well respected VC's. The VC's are now connections and in fact have taken the lead (w/o being asked I might mention) in referring paid work to me. I put energy into making that connection [3] and I also have to expend energy to keep in front of these people. If I don't, in 5 years the help I gave them will mean little.

Conclusion: Don't generalize with "connections" the way people do with "got lucky". Luck and connections are important and yes they are essential. But they also take energy to maintain as well. (Once again I'm not talking about connections that you might have because your father is super important or you're a Kennedy but achievable connections that are attainable to anyone with energy and talent.)

[1] (note all the charity events that allow you to mingle with connected people (say the Obama fundraiser recently in NY with Sarah Jessica Parker which was 40k to attend).

[2] (Remembering in college where my father had a connection to someone who had something to do with an Ivy League college. I met with that person who very clearly gave me the idea that my father wasn't important enough to him to do anything to get me into the particular school.)

[3] I contacted the VC's with offers of gratis help which they accepted, thanked me for, and at least one wrote an unsolicited testimonial.

Most people have a number of small-c connections of varying strength. That's not what I'm talking about. On the other end, there's Connections, which most people don't have. Small-c connections require energy to maintain. They can dry up. Big-C Connections don't, unless you fall into disgrace to a degree that very few powerful people ever will. Big-C Connections mean that people will go out of their way to help you out, in the hope that you'll one day return the favor.

Just as there's money (in the sense of the $1.25 I might spend on a cup of coffee) and then there's generational wealth, the same thing exists for (c|C)onnections.

Having Real Connections doesn't mean that the VC will fund you. That much is true. It does mean that if you get rejected, you get a sit-down explanation of why, and what to do in the future to get funding, and probably an EIR position. If there's another VC who might be interested, you'll get an introduction. That's what having Real Connections buys you. No, you don't get funded if it doesn't make business sense for the firm to fund you, but you get all the assistance (including an EIR gig in which you can learn what is required to be a "real founder") you need toward getting there... and an unending supply of chances.

Without Connections: "We're not interested. Sorry. Our policy is not to discuss our reasons."

With Connections: "We like your proposal, but <A>, <B>, and <C> are our issues with it. We also think you need a couple more years of operational experience. Speaking of which, one of our portfolio companies is looking for a <executive-level role> and would like to have it filled by Friday. Can you interview on Thursday?"

Most people, of course, don't have kind of safety net.

The people in power in society, by and large, don't consider the rest of us to be their social equals. Nobility in the pejorative sense is very much alive in the U.S. If you think otherwise about that set of people, you don't really know them. I do, and they're not nice people and they're not interested in helping out outsiders. They want those doors to stay closed.

"If you think otherwise about that set of people, you don't really know them."

I don't disagree with that at all and I've experienced that behavior.

For me personally I'm happy with what I've achieved and how I am mainly responsible for it and that it wasn't handed to me. I did have advantages of course (I didn't grow up in the projects for example and had parents who were middle class) and I don't think I would be happy if I didn't have to work hard for what I have achieved. (No desire to marry rich or anything like that.)

Not saying you are "whining" by saying this but I don't feel there is anything productive about whining about the advantage that others have. It's a given like memory and hard disk space. Just do the best you can to your benefit given the game and any unfairness. After you achieve your goals you can work toward changing society if you want.

'After you achieve your goals you can work toward changing society'

Surely the most noble of goals is to change society for the better.

Regarding 'whining' I think it's important to have awareness of the different advantages and disadvantages people can have because government policy is directly influenced by awareness of these type of disadvantages.

* Disability

* Poverty

* Parents

* Surroundings

* Connections

The world is really complex but possibly we are going to be in a situation in the next few decades where society can look at really complicated problems and figure out really complicated solutions.

Way back in the day, Cicero wrote Des Republica, which is really belongs with Aristotle's Politics on the bookshelf.

Cicero argues that being pro-property (and anti-theft) is simply necessary for people to live together in cities. People can't live together in cities if the means they use to make a living can be taken by their neighbors and they have no recourse. That's a pretty good point, and it means that non-urban societies might have other arrangements but cities require property rights. So no, I don't think it's religious superstition.

Secondly I think that there are several essential commodities. These are land (where to have your office, or for production of food, etc), capital, tools, and labor. The first three we can group together as "means of production."

The fundamental question that has been so much in dispute since the days of Karl Marx is how we want to address means of production. Capitalism has the means of production owned by the wealthy, who then hire labor. Laborers, deprived of their means of production, are dependent on jobs which, if they are lucky, the capitalists will give them, The concentration of the means of production in the hands of the wealthy capitalists disempowers workers.

Communism attempts to solve this problem by taking the means of production from the capitalists and placing them in the hands of the state which, in theory, represents the workers. In practice, however, this creates a more powerful state, and the workers are even more disempowered. In essence you can't solve the problem of big businesses having too much control over the economy by centralizing that control further in the state.

Distributism (think of this in terms of distributed computing) seems instead to distribute access to the means of production to the individual laborers. Worker owned and operated cooperatives, such as Mondragon, are economically distributist systems. Bossless corporations (WL Gore, Valve, GitHub) are distributist workplaces. Open Source is a distributist way of going about developing software. In this model the worker has a chance to own all the means of production needed to start a business sufficient to feed his or her family. If the worker chooses to work for someone else, that a viable choice, but it is more a choice than it is in liberal capitalism.

I mention this because despite the best efforts of lawmakers to regulate businesses into centralized control, I think our nation is moving more towards this latter solution. It may not be exactly what Belloc or Chesterton had in mind but it will be what serves us today.

So from a distributist perspective, social justice is an emergent property of the system in which we live (and to live is to work). We shouldn't need anti-discrimination law, for example, and to the extent we do, it's either to get a fresh start (as regards the problems that existed before the civil rights movement), or as a bandaid to keep a system from looking more broken than it is (regarding gender discrimination).

In the latter case, structural changes to our economy (a shift towards more bossless workplaces, flexible commitments, and ownership by the employees over the workplace) would go a long ways towards rendering these laws unnecessary. Aren't such structural fixes better especially if they add to our freedom rather than detract from it (as regulations do)?

Structural fixes are indeed better, but Chestertonian distributism has a slight difference from what you've been talking about: it prefers to actually minimize the size of enterprises and assign ownership to families. It's very British, in that way.

It does, however, seem to actually work, which is far more than we can say for state-socialism.

Chestertonian distributism is something I like to push too.

But I don't think it is the only model and I think that as we get more distributive systems working side-by-side we will see interesting network effects come into play.

For example, Chestertonian distributism places a large emphasis on guilds. But there isn't a reason why for-profit corporations owned in significant part by their employees can't function like guilds. Again, a business like WL Gore strikes me as very distributist in how it works on the ground. For example WL Gore is largely owned these days by the employees and the employees have tremendous freedom to work where they feel they add value. The organization provides mentoring for employees etc.

Just one more point on re-reading both of these.

The end-result of Chestertonian distributism is an economy of tradesmen and small farmers. In other words, it is an economy of the self-employed. The US still has 20% of the work force that is self-employed and only 1/4 of those are doctors, lawyers, and others offering professional services. Anything which enables others to become self-employed moves us in that direction.

Any distributist approach cultivates the possibility and mentality of self-employment. Whatever form that takes is OK with me, even if that is the paradox of self-employment as a member of a larger firm.

Your analysis prompts a bunch of knee-jerk reactions from me which I'm going to attempt to squelch. :)

First, property as a result of superstition? Really? This is the first I've ever heard of this. In fact, most primitive societies have no concept of property -- this is why they are primitive. "Culture Cult" does a great job expanding on this argument.

Second, a dichotomy between energy and property? Really? So you can't be somebody who has a lot of energy and wants to smash doors down and also somebody who likes to own stuff? Sounds like a conclusion you'd draw from various discussions on MPAA and BitTorrent, but not one that would work for much besides that.

Let's say it's fifty thousand years ago and I live in the forest with my clan. I take a flint and make a wood carving. At this point I own nothing -- so if it's nice, the alpha male or one of his females takes it from me. So I stop making carvings.

Somewhere down the line, at least in Western Civilization, I make the same carving and get to keep it. This is the beginning of civilization, the basis for all progress: both the naming of property as the product of somebody's energy and the common belief that they get to keep it. Property is stored energy (in your terms). Once it's stored we can trade it or pass it around without having to expend energy again. So progress begins to accumulate. Energy can either create property or not.

Of course I can't keep everything I make; the clan needs extra arrowheads or whatever in order to fight off another clan. So I share -- or I'm taxed. However you put it, I give up some of my property, some of my "stored energy" in order to benefit the greater good.

There is a tension here, and it's a good tension. Where you come down on most political issues boils down to whether you're a "sharer" or a "creator/trader" You can be both, of course, but your answer to this tension defines your sensibilities. Not some kind of energy/property thing.

I love ad-hoc analysis. Your comment strikes me as an informed comment of somebody who has kind of floated along in the various property discussions we tech heads have without taking much time at all to dive deeper (apologies if that sounds condescending.) Might want to up your game a bit. Using your terms, energy without persistent property is a fool's game. Yes, you can trade MP3 tunes all day on the net and it doesn't hurt the economy much. You can participate in the FOSS movement, providing somebody else a bigger piece of property down the road for less effort -- a great cause indeed. But the reason you can act in such an idealized manner is that you're resting on other more fundamental principles of property. They don't come and take your house or computer any more, and the things you create you get to either choose to share or not. Because we rest so solidly on the foundations of property, we begin to forget they are there.

Seriously, this property rights equals don't-change-things and religious superstition is way whacked.

I don't think "creator" goes with "trader". Every creator I know enjoys having people enjoy their work, but would also like to eat. However, as soon as their basic needs are covered many prefer to give their work away because it isn't being created to make them rich, it is being created to be useful to people.

This is why open source works.

The tension, I believe, is scarcity versus sufficiency. In a scarcity society you have to horde everything. Life is a zero sum game, and you benefit most when you are better off than people around you. If you ask an MBA how they would feel if a friend bought the same car they had just bought they will tell you it cheapens their car a bit. In a sufficiency society, we stop trying to beat the people around us and start collaborating with them, forming communities of discovery and creation. If you ask working class people how they'd feel if a friend bought the same car as them, they say it makes them feel better: now they both have great cars. People are happier, more satisfied and more contented when they feel like there is enough to go around. They are also more productive, creative and innovative. There isn't the wasted effort of geniuses stuck trying to figure out where their next meal comes from.

The rich in a scarcity society are better off (though still less happy): both because they are richer and because they are richer than people around them. Humans use comparative status, not absolute status as their measuring rod, and it's a rush to know you are more powerful than the people around you. However, in a world of nothing but scarcity life is incredibly miserable, lonely and riddled with anxiety.

"...most primitive societies have no concept of property -- this is why they are primitive."

Could you elaborate on that a bit? I'm having a bit of a problem with it, I think mostly because

"...I make the same carving and get to keep it. This is the beginning of civilization..."

doesn't seem to match what I know of the history of civilization.

"Property" is quirky word, and I now wish I could think of a better word to represent what I'm talking about, because the points you've raised are valid. Property rights are a great thing in moderation. There's a social need for people to have the right to own the products of their own labor. Where property becomes a systemic disease when property relations persist for longer (and allowing larger concentrations than are reasonable) than serve any purpose. If a person who works hard gets rich, great. If his moronic, undeserving, spoiled great-grandchildren are rich and powerful and still call the shots in society, not great.

There needs to be a way of storing Energy, as you said, but it needs to be limited and kept reasonable. Infinite transferability of property rights is a demonstrated disaster.

For example, private land ownership (at scale, in non-agrarian settings) is pretty much illegitimate. I'm not saying that it's illegitimate for a person to own a small house in the woods on an acre of land. That's fine. I'm talking about what happens at scale. Private land ownership was necessary at one time because it gave people an incentive to use the land properly, but the senseless wealth transfer we see in, e.g., Manhattan is just perverse. People like me (hard-working, ambitious, energetic, talented) are the fucking reason people want to live (or work, or employ people) here... we fucking make cities... and yet, instead of thanks for making this place great, we get the obligation to pay immense sums of money in rent.

I would actually support a government solution to the urban land problem. Since the total price is going to be high anyway (because of the high demand for housing) I'd rather see it go into taxes that make the place better-- better schools, more and nicer parks-- than into the already bloated coffers of multimillionaire real estate owners.

The religion aspect: private land ownership pretty much emerged out of ancestor veneration. Land "ownership" started at the ability to defend land, which was usually the job of the chieftain or king or alpha male. However, being people, they died. If their descendants weren't strong or persuasive or wily enough to defend the land claim through ordinary means, they started using supernatural claims, based on the idea that the ancestor still existed and could enforce those claims supernaturally. (Over generations, these ancestors became gods.) This was almost certainly not the only religious impulse, and it's far from true that all religion was borne of this desire, but it's a strong and consistent strain of the impulse to corrupt religion toward political aims.

You seem to be getting at the distinction between possessions and property. Proudhon would be proud.

Possessions are things you own (in the sense of being the exclusive user) because you made them and you're the one who uses them. You make a flint and then a wood carving, these are your possessions.

Property, however, is what we get when you start having exclusive usage rights to things you don't actually use. So a feudal landlord has the property rights to a manor. However, he only actually uses the bit of land occupied by his own castle. So what's the problem? He still "owns" the rest of the land, particularly the productive farmland, and he "rents" it to the peasants who actually work it.

He is engaging in the fundamental economic crime: rentiering, demanding that other people pay him forever to use something without their ever acquiring actual ownership over it. This can only be done because he has a property right over something he never productively uses (in fact, cannot physically make full use of: no one person can farm an entire manor or village worth of land). The creation/acquisition of property titles that can be rentiered upon is the usual historical mode of what Marx termed "primitive accumulation" or "the original accumulation", the first initial step that creates a capitalist class capable of living without working.

Note that we can use this definition to arrive at formulations of other great economic "crimes". Usury, we can now say, is the rentiering of money: the debtor never actually acquires ownership over the investment he borrowed, he just rents it for a while in the hope of generating enough return to make a profit for himself even after paying the "money-rent" of interest.

This, it is worth noting, is why modern capitalism really took off when we started forming joint-stock corporations. (Start-up guys, start reading here!) Equity investment routes around rentiering by actually trading the start-up capital for a share of ownership in the business. Ownership of one thing is exchanged for ownership of the other thing. This is why it's harder for venture capitalists to earn money than for, say, Goldman Sachs to earn money: venture capitalists are trading, Goldman can rentier (in fact, investment bankers in general are rent-seekers on their exclusive professional access to the broader capital markets) and commit usury.

Interestingly, the distinction was actually common among the founding generation of Americans, before even Proudhon, though Proudhon turned it into more of a fully worked out theory of property.

Benjamin Franklin, for example, wrote this:

"All the property that is necessary to a man for the conservation of the individual and the propagation of the species is his natural right, which none can justly deprive him of; but all property superfluous to such purposes is the property of the public, who by their laws have created it, and who may therefore by other laws dispose of it whenever the welfare of the public shall demand such a disposition."

(Elsewhere he clarifies that what he means by "necessary to a man" is essentially personal possessions, work tools, and shelter.)

Thomas Jefferson made a similar distinction in some of his letters. There's some speculation that Jefferson+Franklin's view that property isn't a natural right, but a social convention, is why the Declaration of Independence discusses "life, liberty, and the pursuit of happiness", rather than the formulation, "life, liberty, and property" that was otherwise more common at the time.

One useful thing would be an excise tax for land rentals. This would drive up the cost of renting (but probably not the price, since rentals are competing with purchases) in comparison to owning in terms of both one's own home and productive property (farmland, office space, etc). This means less incentive to be a landlord. Ideally the home should be productive property but all too often it isn't.
This is exactly the conclusion Henry George came to when he investigated these phenomena: a land-value tax. I, personally, would couple it with a rebate/"prebate" for a certain value, as society's way of saying, "If you use less than $X in land/commons value per year, that's fine." The X would be set so that the fat middle of the bell curve of single-family residences would fall within X.
The terms you're probably looking for are "land rent" and "money rent". Both of which are well discussed in Adam Smith's The Wealth of Nations. The text may be old, but it is remarkably thorough.