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Silicon Valley: A Reality Check

The nation has spoken: weird pointless $400 wi-fi enabled juicer company Juicero is the perfect symbol of Silicon Valley.

So says the Washington Post: Juicero Shows What’s Wrong With Silicon Valley Thinking. So says TechCrunch, which calls Juicero “the absurd avatar of Silicon Valley hubris”. So says Newsweek, which renames the area Silly-Con Valley in its honor. And of course there’s Deadspin, which calls it “the best story ever written about Silicon Valley… a stupid libertarian dystopia where investor-class vampires are the consumers and a regular person’s money is what they go shopping for.”

In case you missed it, Juicero was a startup that got $120 million in funding to manufacture high-end juicers which were supposed to be the bleeding-edge in juice-related technology. Then Bloomberg did some investigative reporting and found that you could actually make juice equally well by skipping the $400 juicer and just squeezing the juice packets with your bare hands.

This is, admittedly, pretty silly. But I want to take a step back and suggest a reality check.

While Deadspin was busy calling Silicon Valley “awful nightmare trash parasites”, my girlfriend in Silicon Valley was working for a company developing a structured-light optical engine to manipulate single cells and speed up high-precision biological research.

While FastCoDesign was busy calling Juicero “a symbol of the Silicon Valley class designing for its own, insular problems,” a bunch of my friends in Silicon Valley were working for Wave, a company that helps immigrants send remittances to their families in East Africa.

While Vox was busy writing about how Juicero “says a lot about the state of Silicon Valley right now”, Silicon Valley was leading a revolution in solar power that’s resulted in a 1500% increase in cell installations over the past few years.

While Slate was busy telling us that Silicon Valley companies “repackage familiar ideas and sell them back to us as exemplars of Groundbreaking Disruptive Innovation”, Silicon Valley was shooting a fifteen-story rocket a hundred miles into the air at 4,100 mph, then landing it gently on a 300 foot platform in the middle of the ocean.

While Gizmodo was busy writing that this “is not an isolated quirk” because Silicon Valley investors “don’t care that they do not solve problems [and] exist to temporarily excite the affluent into spending money”, Silicon Valley investors were investing $35 million into an artificial pancreas for diabetics.

While Freddie deBoer was busy arguing that Silicon Valley companies “siphon money from the desperate throngs back to the employers who will use them up and throw them aside like a discarded Juicero bag and, of course, to themselves and their shareholders. That’s it. That’s all they are. That’s all they do”, Silicon Valley companies were busy inventing cultured meat products that could end factory farming and save millions of animals from horrendous suffering while also helping the environment.

Or maybe we should try to be more quantitative about this. I looked at the latest batch of 52 startups from legendary Silicon Valley startup incubator Y Combinator.

Thirteen of them had an altruistic or international development focus, including Neema, an app to help poor people without access to banks gain financial services; Kangpe, online health services for people in Africa without access to doctors; Credy, a peer-to-peer lending service in India; Clear Genetics, an automated genetic counseling tool for at-risk parents; and Dost Education, helping to teach literacy skills in India via a $1/month course.

Twelve of them seemed like really exciting cutting-edge technology, including CBAS, which describes itself as “human bionics plug-and-play”; Solugen, which has a way to manufacture hydrogen peroxide from plant sugars; AON3D, which makes 3D printers for industrial uses; Indee, a new genetic engineering system; Alem Health, applying AI to radiology, and of course the obligatory drone delivery startup.

Eighteen of them seemed like boring meat-and-potatoes companies aimed at businesses that need enterprise data solution software application package analytics targeting management something something something “the cloud”.

And the remaining nine were your ridiculous niche Uber-for-tacos startups that we all know and love, including Cowlar (“FitBit for cows – it’s way smarter than it sounds!”); Origin (“Keurig for smoothies”), MoveButter, which compares itself to three different companies I’ve never heard of in its first sentence but seems to be grocery-related in some way; Mere Coffee, a better-tasting coffee machine for small businesses; and LitHit, a smart target for shooting sports. I’m sure somebody in the comments is going to tell me why FitBits for cows is actually a vital service that will revolutionize agriculture, but I’m trying to err on the side of caution here.

I’m concerned that Y Combinator might be so successful that they’re unique in going for status and do-gooding rather than being a real cross-sample of startups (and they also seem to recruit a lot of international startups from outside Silicon Valley). So I also looked at the first twenty startups in the portfolio of Andreessen Horowitz, a famous Valley venture capitalist firm. One of them seemed explicitly prosocial – some kind of science education partnership company. Four of them seemed high-tech or otherwise awesome – including the obligatory aerial-surveying-with-drones company. Twelve seemed to be some sort of enterprise data solution software application package analytics targeting management something something something “the cloud”. And only two of them seemed even a little vapid – eg this high-end photo sharing/printing site. Which is hardly that vapid – nobody would bat an eye at that if it were done by Kodak or Staples.

So although meat-and-potato business/software companies do outnumber really high-tech or altruistic ventures, there’s not a lot of evidence for silly Juicero-style startups being much of the Silicon Valley business community at all. So how come everyone thinks that they are?

Here’s my theory. If you’re an average well-off person, leading your average well-off life, consuming average well-off media and seeing ads targeted at the average well-off demographic, and going over to your average well-off friends’ houses and seeing their average well-off products, which are you more likely to hear about? A structured-light optical engine for cytological research? Or a juicer?

Or to put it another way: there’s a chapter in Unsong (spoiler!) where an archangel brings peace to the Middle East by splitting the Holy Land into two parallel dimensions. Any Jew who enters will find themselves in a united Israel; any Muslim who enters will find themselves in an independent Palestine.

And sometimes I wonder if the same archangel has gotten to Silicon Valley.

If a deeply good person crusading for a better world enters Silicon Valley, she’ll find herself surrounded by deeply good people crusading for a better world. She’ll see mobile apps that track tropical diseases, clean energy startups that fight global warming by directly sucking carbon dioxide out of the air, companies bringing microbanking to poor Nepalese villagers, and boutique pharmaceutical labs searching for cures for orphan diseases.

If a futurist enters Silicon Valley, she’ll find herself surrounded by futurists. She’ll see neural nets and deep learning, reusable rockets and flying cars, high-throughput genome sequencing and CRISPR, metamaterials and nanotechnology.

If a social-media-obsessed narcissist whose view of the world begins and ends with his own Instagram page enters Silicon Valley, he’ll find himself surrounded by social-media-obsessed narcissists whose view of the world begins and ends with their Instagram pages. He’ll see a bunch of streaming video services and Uber-for-hair-products apps and elite pay-to-play dating scams and people trying to disrupt the gymwear market.

And if one of those people who talks about “the cloud” all the time enters Silicon Valley, he’ll find himself surrounded by people who talk about “the cloud” all the time. I have no idea who these people are or what they’re doing, but they all seem really happy with each other and I’m glad they’re enjoying themselves.

They’ll all have their blind-men-and-elephant view of what kinds of things Silicon Valley “does”. And they’ll all be sort of right.

(thinkpiece writers: “Can you believe that Silicon Valley only makes products for shallow elites obsessed with the latest fads? It’s the strangest thing!“)

So I would recommend people stop talking about how Silicon Valley only makes ridiculous overpriced juicers. It’s not that it doesn’t make those. It does, just like everywhere else. A Facebook friend pointed out that QVC has been selling our parents ridiculous overpriced kitchen items since before we were born. Billy Mays pitched the EZ Crunch Bowl, which promised to “revolutionize your cereal-eating experience”. The unique thing about Silicon Valley isn’t that it’s got overpriced status goods designed to separate rich people from their money. The unique thing about Silicon Valley is that it’s got anything else.

I don’t want to downplay the problem. Anything remotely good in the world gets invaded by rent-seeking parasites and empty suits. Silicon Valley is no exception, and raising awareness of the infestation is certainly a public service. But for some reason, it’s hard for me to believe that – let’s say Deadspin – really believes in the spirit of Silicon Valley, really thinks that there was once somewhere that weird nerdy people could get together and produce amazing things for the good of everybody, and that to some degree this is still going on, and is a precious thing that needs to be protected. At its worst, some of their criticism sounds more like a worry that there might still be some weird nerds who think they can climb out of the crab-bucket, and they need to be beaten into submission by empty suits before they can get away. Or maybe that’s just paranoia. Fine, I admit I’m paranoid. But I still feel like people should lay off the criticism a little.

When Capitol Hill screws up, tens of thousands of innocent Iraqis get killed.

When Wall Street screws up, the country is plunged into recession and poor families lose their homes.

When Silicon Valley screws up, people who want a pointless Wi-Fi enabled juicer get a pointless Wi-Fi enabled juicer. Which by all accounts makes pretty good juice.

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507 Responses to Silicon Valley: A Reality Check

  1. meh says:

    Did anyone else have trouble figuring out which of those startups were real, and which Scott made up?

    Anywho, media extrapolates something to infinity. They’ve been doing this since our parents were buying ridiculous overpriced kitchen items,

    • Glenn says:

      … are they not all real? I assumed they were all real.

      • FranzPanzer says:

        So did I. Did not even consider he would smuggle fake ones in there. I’m still not sure I should seriously start considering it.

    • shmorg says:

      I don’t think Scott trolls so hard as to not notify readers when he’s playing that game?

    • wintermute92 says:

      Pretty sure he didn’t, though? Spot checks imply they’re real.

  2. jamienyc says:

    This part is hilarious: “save billions of animals from indescribable suffering” – yes, sure, those pigs and cows will finally roam free! Also, blaming Wall St. for the housing crisis is worth of a first grade media drone. I prefer to blame witches who put a hex on house prices back in 2008!

    • gbear605 says:

      I’m not sure about Scott, but I know some in the EA community would rather that factory animals not have existed in the first place than exist in their current conditions. If this product actually decreases the amount of meat eaten, and thus fewer factory animals are born, that’s a major plus in their eyes.

      • Hyzenthlay says:

        Yeah, I think that’s the idea. Less meat=fewer beings who are born only to suffer short, horrifyingly painful lives. I’d rather not exist than be born as a chicken in a factory farm.

        And there are the environmental concerns.

        • keranih says:

          Hyzenthlay –

          I’m trying to calibrate your preferences here. Which animals would you not mind existing as, rather than never existing?

          And on what are you basing this? Have you ever been to a layer house or a broiler barn?

          • Hyzenthlay says:

            @keranih

            Some beef cows have decent welfare, and are allowed a fair amount of space to roam, so depending on the farm I would not mind existing as a beef cow.

            I would probably not want to be a dairy cow, a chicken, or any animal which spends the majority of its time confined in a space too small to turn around in.

            I’m basing it on what I’ve read about the meat industry, including by people who actually work in the meat industry (like Temple Grandin).

            I’m sure there are farms that do it right and where the animals have great welfare, space, and are provided a variety of stimuli, but they’re not the majority.

          • I would probably not want to be a dairy cow, a chicken, or any animal which spends the majority of its time confined in a space too small to turn around in.

            The problem is that if you were such an animal you wouldn’t be you, wouldn’t have the same preferences you have, which makes it hard to judge whether those animals are unhappy in the ways you imagine yourself being. The obvious objection is that you would be bored stiff, but it doesn’t follow that they are. It seems reasonable to extrapolate pain as bad, since lots of organisms act as if they share that preference, but hard to go much beyond that.

          • Hyzenthlay says:

            The problem is that if you were such an animal you wouldn’t be you, wouldn’t have the same preferences you have, which makes it hard to judge whether those animals are unhappy in the ways you imagine yourself being.

            Animals have the same basic neurological structures and emotions as humans. They get bored when they have nothing to occupy them. They get restless when they can’t move around.

            When they are under stress (physical or emotional) they show physiological signs of being under stress. Animals who are confined or don’t get proper stimulation display repetitive behaviors (stereotypy).

            Temple Grandin’s written in detail on this in Animals Make Us Human, which cites a lot of studies. There’s plenty of evidence that animals in extreme forms of confinement have poor psychological welfare.

          • formid0 says:

            Sure. Everything looks like everything if you squint hard enough.

          • keranih says:

            @ Hyzenthlay

            So here you say:

            I’m basing it on what I’ve read about the meat industry, including by people who actually work in the meat industry (like Temple Grandin).

            And then you say:

            I’m sure there are farms that do it right and where the animals have great welfare, space, and are provided a variety of stimuli, but they’re not the majority.

            And I can’t make the two stand together. Because I’ve not just read Grandin, I’ve talked with her, and with the people who have taken her work and moved forward with it, and I’ve walked in commercial feed lots, modern dairy barns, broiler barns and turkey barns (plus the breeder barns for both), layer houses and swine farms – breeder, feeder, and nursery – and in “family farm” versions of the same, and I tell you, the idea that the majority of farm animals are kept in bad conditions – “horrifyingly painful” were your words – is just plain false. It’s wrong, it’s a lie, and you should look into this more yourself.

          • birdmanpdx says:

            Why do the barns have doors? I mean, if the cows were happy, they wouldn’t need them.

          • Hyzenthlay says:

            I tell you, the idea that the majority of farm animals are kept in bad conditions – “horrifyingly painful” were your words – is just plain false.

            I hope that’s the case, and perhaps things are getting better. I still routinely read/hear about unsettling things happening in the industry (a lot of it filtered through petitions trying to stop those things, which I guess you could say have the incentive to exaggerate in order to get more attention). And there are practices like beak-trimming, which can prevent chickens from hurting each other in close quarters but are still probably painful and traumatic. Ideally those practices shouldn’t be necessary because chickens who aren’t overcrowded or stressed don’t usually attack and cannibalize each other.

            Things would have to improve a lot more before I’d feel comfortable being reincarnated as a chicken.

          • John Schilling says:

            Why do the barns have doors?

            To keep the wolves out and the warmth in? And to make sure your cows hang out with your bull rather than the neighbor’s.

            Look, I enjoyed Chicken Run as much as anyone, but the idea that any great effort is needed to block the desperate escape attempts of farm animals is just not aligned with reality. It’s more a question of impeding brownian motion, which would otherwise occasionally cause a cow or chicken to flip between the attractors of one farmer’s feed trough and the next. And keeping the wolves out of the henhouse.

            To be fair, this observation alone is consistent with both the “livestock have generally pleasant lives” theory, and the “livestock are in constant horrible pain but are too stupid to escape” theory. But my observations at least strongly favor the former, and if you want to argue for the latter you’ll need a different approach.

          • Joe says:

            @Hyzenthlay

            I think hedonic adaptation largely nullifies our ability to determine the quality of someone else’s life by pondering, “How would I feel if I became them?”.

          • bean says:

            Why do the barns have doors? I mean, if the cows were happy, they wouldn’t need them.

            By the same logic, anyone with a two-year-old who keeps the door closed is a bad parent.

          • Nancy Lebovitz says:

            Temple Grandin has done research on animal preferences.

        • Deiseach says:

          The environmental concerns are a bit more complicated than that. It’s rather like all the earnest people in the 60s and 70s who went on about not having children, or at least only having two kids at the very most maximum, because there were too many people and the planet couldn’t support them all.

          And so we got a generation of people who had two children and then one child and hey look, the carbon footprint is still so massive, we are now discussing how to reduce it. The resources ‘saved’ by not being spent on children weren’t non-consumed, they went into nice progress technology and all the fun toys that we like to have and use (and need, to be fair). People weren’t living like monastics (or Third World villagers) when they were not having all those extra kids, they bought iPhones instead, and the resources saved were consumed by the market providing all the new shiny goods for purchase.

          So with the study mentioned above; people reducing meat eating in their diet made up for it in other ways. Alcohol is perfectly vegetarian and even vegan, but it contributes to the carbon footprint:

          However, the more complex and interesting finding was that those who ate the most red meat did not differ significantly in their carbon footprint compared to the group that consumed the least amount of red meat.

          Instead, the total quantity of food consumed was the important factor as was the quantities of processed meat, carbonated beverages, savoury snacks and alcohol within the diet.

          The conclusion of the research was that a holistic assessment of diet is required when making dietary recommendations based on climate change rather than focusing on one food group alone.

          • Besserwisser says:

            Is it really discernible that CO2 emissions would be the same if people didn’t decide to have less kids? I can get behind the sentiment that parents might buy luxuries instead of necessities if they remain childless. But those potential children would eventually grow up to be consumers in their own right and either have children themselves or just get more iPhones.

            Also, I doubt much of lowering birth rates is caused by a conscious decision to decrease our carbon footprint.

          • Hyzenthlay says:

            It’s hard to argue that the increasing human population has nothing to do with increased CO2 emissions. The more people there are, the more they consume. If the population were a fifth of what it is, there would probably be about a fifth as much consumption.

            Technology tends to march forward regardless. It’s not like the iPhone would never have been invented if earnest hippies had had more kids. Their kids would also have iPhones.

            Though most of the population explosion is not happening in the West anyway, as I understand it, so you could argue that people in prosperous countries deciding to have or not have kids is statistically irrelevant.

          • Also, I doubt much of lowering birth rates is caused by a conscious decision to decrease our carbon footprint.

            A few decades back, there were people who viewed having children as a bad thing because it led to overpopulation–that was before people were worrying about global warming. It’s hard to judge how much of an effect that had. It would at least tend to cancel out social pressures in the other direction, provide a way in which people who didn’t really want children could make their choice look altruistic rather than selfish.

            And, on the national scale, there was a very substantial effect–the one child policy in China and less extreme policies elsewhere.

            The actual events of the past fifty years were very nearly the opposite of what the people worrying about overpopulation predicted–rising per capita calorie consumption in poor countries instead of mass famine. But that doesn’t seem to have resulted in very many people concluding that they were wrong. It’s much easier to claim that overpopulation is producing a catastrophe, just a different one than predicted and one whose terrible effects are still in the future.

          • Deiseach says:

            If the population were a fifth of what it is, there would probably be about a fifth as much consumption.

            No, that’s exactly what I don’t think happens, happened, or would happen. When people had fewer (or no) children, they had some extra money and time. Instead of living as they would ordinarily have done if they had four kids, now it was “hey we have extra money and time, let’s enjoy ourselves”.

            Yes, technology marches on, but cheap foreign holidays, new consumer goods, getting bigger houses, etc. didn’t just “oh how did that happen?” People had a bit extra to spend, they spent it on goodies, and consumption of the scarce planetary resources went on just as if you had those four kids instead of one kid and we all go on a skiing holiday now every year.

            Or do you really think the standard of living in the West has remained at 1950s levels? That’s why “environmental impact” arguments do little to nothing to convince me; people may have been genuine about “more kids means more stress on Mother Gaia” but they weren’t content to live at a standard their parents had lived at and spare those extra resources. The cure for Anthropogenic Climate Change is touted as “reduce our carbon footprint” but basically the drastic changes needed mean industrial-scale emissions reductions, which means cutting down on consumer consumption; it’s the same argument basically as “too great a population increase” and relies on the same cure.

            And instead of saying “Okay, we will give up having mobile phones and go back to the old days”, people are instead advocating for “no more cows, we’ll all be vegans instead” (and the types of vegans who have a varied and interesting diet of all-year round available foods instead of a main staple crop and seasonal crops when they’re in season and whatever is locally available, not grown in California and transported by refrigerated containers across the country – or the globe).

            Sure, do away with the cows and the chickens. But people will still want to fly to the city instead of taking the bus or train or driving or even worse, never getting to go to the big city. We don’t like giving up what we’ve become accustomed to having, and we are never going to go back to a low-impact lifestyle. Up-and-coming Third Worlders, sorry, you can’t aspire to all have a car each when you get a good (by relative standards) job in the big city and don’t have six kids each anymore, we did that first and now it’s too dangerous for the planet so we keep our personal transport and you never get to that stage. For the sake of the planet.

          • Hyzenthlay says:

            No, that’s exactly what I don’t think happens, happened, or would happen. When people had fewer (or no) children, they had some extra money and time. Instead of living as they would ordinarily have done if they had four kids, now it was “hey we have extra money and time, let’s enjoy ourselves”.

            It’s equally possible that they would just choose to work fewer hours and relax more in ways that didn’t involve spending huge amounts of money. I mean, this argument seems to rely on a stereotype of CF people being high rollers who take expensive trips and eat out at expensive restaurants every night. Those people certainly exist, but there are also those who are use their extra time and money to stay at home and read a book, or rent a movie, or go for more long walks in the woods.

            I mean, really, how many people take a skiing trip every year? I don’t know anyone who does this.

            And even if we assume that people are spending more on luxuries than they would if they had kids, whatever extra they were spending on stuff like gadgets and fancy meals would have to outweigh the money they would’ve potentially spent on their kids. Kids are really expensive. And it’s not like people stop doing things like going on vacations and going out to eat once they have a family. If anything, it seems like they do it more (though, again, probably depends on the individuals).

            But setting all that aside…I deliberately used an extreme example when I said “reduce the population to one fifth of what it is” so I’m very surprised that you think that would make virtually no difference in the amount of consumption.

            I mean, how far does this line of argument go? If the human population were reduced to one million, do you think those one million people would find ways to consume just as much as the seven billion or so are currently consuming?

          • @Deiseach:

            The fundamental mistake in your argument is that you forget that people are productive. You are implicitly assuming that the amount of consumption is constant, with more people meaning less consumption per person. But what we consume someone produces–were aren’t living off some constant rain of mana from heaven. With more people more is produced and so more is consumed.

            Whether increasing population reduces consumption per person, as a lot of people assumed fifty years ago when they were worried about overpopulation, or increases it, isn’t clear. But there is no reason to expect it to leave total production and total consumption constant.

      • davidweber2 says:

        As one of those EA’s, I endorse this. The world would be a better place if all of the factory farmed chickens, cows, and pigs didn’t have kids.

      • Nathaniel Bude says:

        That’s not the relevant comparison though. You want to compare factory-farmed animals to what would otherwise exist. This goes both ways, because people who think that these animals have negative net utility might think that wild animals have it even worse, due to hunger/cold/predation. But people who place less emphasis on the downside, and think “hey, at least factory farmed animals get to live”, might also see a lot of value in the “struggle for life” of wild animals, characterized by cycles of frustration/desire, effort, and relief/reward.

        And yes, domestic animals will tend to come at the expense of wild animals, because the sun only produces so many bio-available calories through photosynthesis. And only a fraction of the calories we feed to beef cattle become human fuel (though milk is far more efficient), so the choice to eat animals rather than plants directly is a choice to “spend” calories that could have gone to wild animals on farmed animals.

        Looking at it through this lens of opportunity cost, I think that meat consumption creates a sizable negative externality, and we should all support taxes on meat to internalize that externality. In the meantime, the ethical thing to do is to reduce our consumption of meat, as if this disincentive already existed (e.g. giving to charity when you buy meat, to artificially increase the “price” you pay for it).

        • Besserwisser says:

          The question that would interest me then would be how many calories would be used to produce artificial meat. And if you value the life of a farm animal above zero, what would be the netgain if we replace factory farming with wildlife and labmeat production? We would probably not have as many animals in the wild as in the farms the former might replace if we need to expend ressources on labs.

    • Scott Alexander says:

      You can probably reconstruct my position on this from a combination of http://slatestarcodex.com/2016/06/28/survey-results-suffering-vs-oblivion/ and http://slatestarcodex.com/2015/09/23/vegetarianism-for-meat-eaters/

      Also, was the whole subprime mortgage thing a weird dream of mine, or am I missing something?

      • ashlael says:

        It’s obviously a topic on which there’s a lot of room for legitimate disagreement, but I’m persuaded by the Scott Sumner/market monetarist argument that the subprime crisis was a symptom of the underlying cause (excessively tight monetary policy) rather than a primary cause itself.

        • baconbacon says:

          Scott Sumner* thinks that easy monetary policy first caused the problems followed by correct monetary policy for a brief period of time during the crash, followed by tight monetary policy choking off the recovery.

          *ie a Scott Sumner who uses the same analysis for pre crash as he does for post crash.

          • simon says:

            I don’t think so. Even if he’s biased about what should be neutral monetary policy, he’s pretty pro-market efficiency so his analysis wouldn’t suggest that a loose monetary policy would lead to a bubble.

          • baconbacon says:

            @ simon

            This is because Sumner is inconsistent. When he looks back at a time period he does one of two things.

            1. Notes that NGDP was going smoothly, therefore the Fed was doing its job.

            2. NGDP was going not smoothly, therefore state teh Fed didn’t do its job and go hunting for numbers that show the Fed should have done X at time Y.

            If you use the same metrics in healthy NGDP times that SS uses in unhealthy times you get an incoherent story.

          • albatross11 says:

            Figuring out the ultimate cause of the financial crisis is hard enough that people who spend their whole lives thinking about macroeconomics can’t come to agreement on it. But there was certainly a fair bit of bad behavior that became visible in the aftermath of the housing crisis and subsequent financial crisis.

            For example, it looks to me (as a non-expert) like the rating agencies were doing a crap job evaluating the risk of some complicated financial products, probably because they were being paid by the people whose products they were rating.

            Similarly, there really were a lot of crap mortgages being written, where a prudent person looking at the situation would have said “this is going to end in tears.” My understanding from talking to some people in the busines was that there was a pretty lively adversarial process there, between the companies bundling together mortgages into CDOs (who wanted to avoid crap mortgages) and the ones who were writing the mortgages and then selling them (who got paid even if the mortgage was doomed).

            And there was this weird document fraud thing that went on once there were lots of foreclosures, where many mortgage companies hadn’t done some required paperwork to save money, and so created back-dated affidavits that retroactively made the required documentation appear. (This doesn’t seem to have been done with an intent to cheat anyone, but I’m pretty sure a normal human in a foreclosure case who was found to be forging documents would end up in prison, rather than being told to go back and produce some better documents.)

            And then there were the bailouts, which were pretty secretive and arguably exceeded the legal authority of the people carrying them out. Many of these appear to have benefitted some very powerful and well-connected companies, and often those companies had been involved pretty heavily in creating (and profiting from) the preconditions of the financial crisis. I doubt any actual laws were violated here, but the whole thing looked smarmy as hell–exactly like a bunch of politically-connected and powerful companies called in some favors to have the government make sure they’d be okay.

          • simon says:

            @baconbacon

            Can you give any examples of such metrics that Scott Sumner uses that give incoherent results?

          • baconbacon says:

            @ simon

            SS has 3 basic tenants that he repeats.

            1. CBs should strive for smooth NGDP growth, when NGDP overshoots their target they should cut back and undershoot to even it out, and vice versa.

            2. CBs should use futures markets to gauge their actions. Specifically he pines for a robust NGDP futures market, but says as a 2nd best TIPs spreads should be used (and this is what he uses for the most part to gauge NGDP expectations).

            3. Independent CBs control NGDP and are thus responsible for it.

            All numbers/Dates that follow are from memory, they won’t be perfect, but I should be close enough to avoid serious discrepancy.

            Summer argues that in August/September/October 2008 futures markets (specifically TIPs spreads) indicated a weakening but stable economy going into specific Fed decisions and coming out of those decisions substantially weaker (ie lower future expected inflation via the TIPs spreads). He also argues that NGP was fine in 2007-2008, because actual NGDP growth was ~3%, so the recession due to subprime that started Nov/Dec 2007 was only taking a little bit out of the economy but things would be fine as long as monetary policy stayed sensible.

            However what he never notes is that by his preferred available metric (TIPS spreads) monetary policy was not sensible from 2004-2008. From 2004-2008 10 year TIPs spreads fairly consistently implied future inflation of 2.4-2.5% range, notably over the Fed’s 2% target. I believe (but would double check if I were you) that they never fell below 2% in this span, only hitting ir (or coming close) late in 2007 when the recession technically started. The federal reserve started lowering interest rates and Bush signed a stimulus bill into law in Jan or Feb (~ 100 billion in spending) around this time. TIPs spreads increased to a peak of ~2.9% in the late spring/early summer.

            If we apply SS’s views on monetary policy at this point without giving him the benefit of knowing what happens in the late summer/early fall he would have been arguing for tighter money (and not just tighter, a sustained tightening to make up for the 3-4 year run of excessively loose policy).

            SS blames passive tightening in mid/late 2008 (ie fed not loosening enough) on the bulk of the crisis, but if he had been an honest Fed chair in early 2008 he would have been actively tightening (ie raising rates) a few months before the crash that he blames on not lowering rates enough.

            SS splits the two time frames as if he knew in real time what the Fed was doing wrong, but in actually is doing it in hindsight (his blog archives start in Feb 2009). He speaks only of actual NGDP prior to the crash, and of expected NGDP through TIPs spreads after the crash, but both of them are written about in the past tense.

        • Wrong Species says:

          I don’t think that’s his argument. I think it’s more like the housing crisis was caused for whatever reason. But the housing crisis only turned in to such a deep recession because of the Feds tight monetary policy.

          His argument:

          I see three separate crises. A “misallocation of resources into housing crisis,” a “federal bailout of banks crisis,” and a high unemployment crisis. Who’s to blame for each?

          1. The private banking system and the GSEs[Government Sponsored Entities] both played a major role in causing too much housing to be built in the mid-2000s. The errors of the private banking system were due to both misjudgment (they did lose money after all) and bad incentives (moral hazard due to various government backstops.) Pretty much the same is true of the GSEs, although their role has always been a bit more politicized, and Congress must accept some blame for pushing them to boost the housing market. But this was a modest problem, as the first graph shows. It’s not the “real” issue that the left and right is debating so vigorously.

          2. The GSEs are far more to blame than the banks for the bailout problem. And the banks most to blame are often smaller banks that made loans to developers, not the more famous subprime mortgages. Last time I looked the estimated losses to the Treasury from the GSEs was a couple hundred billion, from the smaller banks (i.e. FDIC–which is financed by taxes, BTW) was over a hundred billion, and the big banks was near zero (depending on how much they lose on Bear Stearns.) That’s all you need to know about where to apportion blame for the bailout crisis.

          3. As far as the high unemployment crisis, the proximate cause is low NGDP, which means the Fed is to blame. Then we can apportion some blame to Obama for not putting more of his people on the Fed, and not doing it sooner. But ultimately we macroeconomists are to blame, as both the Fed and Obama take their lead from us. We were mostly silent on the need for vigorous monetary stimulus in the last half of 2008, and many have remained silent ever since.

          • ADifferentAnonymous says:

            EDIT: Sumner’s argument is more complex, so the below only really applies to this summary version.

            This lets the banks off the hook a little too much on part 3. Even if Sumner is right about monetary policy, it was still the case that given the policy in place at the time, crisis 1 caused crisis 3.

            Though if we’re focused on how to avoid a repeat rather than assigning moral blame, the analysis makes sense.

      • alwhite says:

        @Scott

        The subprime mortgage crisis was a scheme concocted after Nelson Mandela died in prison by the Berenstein Brothers.

        • John Schilling says:

          FWIW, this is the Berenstain universe. If your local university physics department can’t help you get home, you may want to look up Eliezar Yudkowski.

    • suntzuanime says:

      The credit-rating agencies, at least, were pretty clearly derelict in their duties. Everyone else you can argue whether they should have known better, but for the credit raters it was very clearly their job to know better.

      • pocketjacks1 says:

        The credit-rating agencies, at least, were pretty clearly derelict in their duties. Everyone else you can argue whether they should have known better, but for the credit raters it was very clearly their job to know better.

        CDO’s were a new financial instrument at the time – they’ve been around since the 80’s but were never issued on a mass scale until the 2004 mortgage runup – and to be fair to the credit agencies (and the regulators) it was difficult to know what they were dealing with.

        The real issue is that any economy dependent on housing is going to suffer through endless asset price inflation-crash cycles. The post-dotcom bubble recession recovery was almost entirely dependent on housing. And the blame for that lies with those who have transformed the US economy into a bifurcated mass of financial wizards, lawyers, waiters, and interns, and assured us that that was just as good as what America had a generation prior. Nay, better!

        Which brings me back to the OP. Silicon Valley is one of the lone beacons of the economy, where smart, hard-working people cooperate to actually produce new, useful things and ideas. Deadspin and online media, by contrast, represent everything wrong with the political economy today. A labyrinth of unpaid internships and nepotism where quality is subjective and cost-cutting and mergers are the only source of growth.

        One thing I will say that it is much easier to raise seed and Series A funding in Silicon Valley than pretty much anywhere else due to the high concentration of very well-heeled VC’s there, who can afford to take risks and are only looking for the next “unicorn”. Everywhere else, with the possible exception of Cambridge/Boston, operates much more by the rule of “in order to secure our investment, you must first prove that you don’t need it”. Frankly, a lot of the people who get torched on shows like Shark Tank could pretty easily raise a million dollars or more, were they in Silicon Valley (though maybe the purveyors of more mundane products like a more efficient sponge could stand to find a way to slap “cloud”, “Internet of Things”, or a “subscription-based model” a dozen times in their business plan somehow). That is both a blessing and a curse. So absurdly high valuations of sillier startups will likely make up a higher proportion there. But this distribution along a spectrum of risk is a good thing. It “diversifies” the nation’s total “portfolio” of new ventures.

        The type of progressivism that is anti-Silicon Valley and pro-Deadspin is my least favorite type of progressivism. It is, unfortunately, seemingly the predominant strain today.

        • suntzuanime says:

          to be fair to the credit agencies (and the regulators) they didn’t really know what they were dealing with

          That is the specific duty they were derelict in, yes. They had a duty to know what they were dealing with before rating it as solid AAA good-as-gold bet-the-farm-on-it bonds.

          • pocketjacks1 says:

            I re-worded it slightly before your response, but I suppose the gist remained the same.

            The senior tranches of even some of the riskiest streams are generally pretty safe. What was really novel was that the riskier junior tranches with subprimes were themselves pooled into structures with their own senior and junior tranches. Investing in junior tranches can itself be a worthy investment as part of a balanced portfolio; there’s nothing wrong with junior tranches in themselves. And generally, credit ratings are done in the senior tranches of fixed-income instruments such as CDO’s. Analyzing this system of tranches-upon-tranches was and is a genuinely difficult and novel problem.

            What’s the solution? Outlaw risk pooling when it gets to some nth degree? I don’t favor that solution. Structured financial products are useful ideas that help people raise capital. (Something like reinstating Glass-Steagall, I’d be more in favor of.)

            The reason I’m stressing this is to avoid placing the blame on individuals and more on the general structure of the US economy at the time. It seems as if blaming banks is the left-wing thing to do, blaming government is the right-wing thing (and as my link below shows, wrong), so credit agencies are a diplomatic middle ground. Well, diplomatic or not, is it accurate? The structure of the US economy in the years prior was just begging for a calamity. If it wasn’t CDO’s, it would have been something else. And while the caged Bolshevik in me does blame banks a bit, I worry when it morphs into this demonization of “financial wizards” that becomes awfully similar to the demonization of Silicon Valley that the OP is about, though I do hold aspiring Silicon Valley types in higher regard than aspiring investment banking types.

            It’s bad that the US economy was running on financialization on the high end and cost-cutting on the low end. All that stuff about the hollowing out of the middle class is true, much truer than the economists who preached cheap labor policies insisted, and it gave us Trump. Better mortgage rating agencies, or the US-economy-circa-2004-with-better-individuals-in-key positions, would have only dented the problem. And if it wasn’t mortgages, it would have been student debt. And actually, of course, that’s still very much on the table.

            And yes, it’s not necessarily an either-or. But still. Narratives that anomalize the problem serve to defend the conditions that led to the problem in the first place.

          • suntzuanime says:

            You don’t have to outlaw high-depth risk pooling, you just have to rate it conservatively. Ok, figuring out how safe this grotesque financial abomination is might be a hard problem. That’s why, until you have solved this problem you say “well, for all I know it’s junk, so junk is the rating”.

            Perhaps, as you say, the structure of the US economy in the years prior was just begging for a calamity. Certainly the incentive is always there to pass shit off as gold if someone will buy it. But when the US economy comes begging for a calamity, it is the job of the responsible adults to say “no, you may not have a calamity, eat your vegetables”.

          • pocketjacks1 says:

            I have a feeling we’re not fundamentally disagreeing on much, as it was certainly not my intention when I started reading this article about Silicon Valley to defend Moody’s circa 2003 to the last man. Rather, that was part of an overall point that is getting lost. So this will be the last I’ll say on this particular thread.

            (1) I wonder what “until we solved this problem” would entail in practice. How would you do that without real world data? The whole point is that we had no historical data to value these risk spreads, and the vast majority of funds will never buy junk-rated stuff in the first place, and so we would continue to lack historical data.

            (2) Isn’t there a Moloch problem here? If a particular bank didn’t do this, it’d get outcompeted by others who did. How do you get around that problem without government regulation? Outlawing certain forms of risk pooling is something I said I disfavored, but I think it would work better than just relying on multiple, uncoordinated banks to forgo profit by altruistically deciding to wait it until which time they’ve solved the problem.

            My take home point is that we shouldn’t aim for a 2004-style economy with better regulators, we should aim to not have a 2004-style economy in the first place. New financial innovations will always come. Sometimes they will cause market crashes. Overall, these innovations are still a net positive to the economy. Most market crashes don’t even lead to recessions. Don’t have your economy in a state where financialization is all that’s keeping it going, and these periodic dips won’t lead to generational crises. The thing that led to this state where financialization is all that’s keeping it going, is average American workers losing ground for decades with appreciating home values their only salve.

            I hope I’ve made sense.

          • lycotic says:

            Ok, figuring out how safe this grotesque financial abomination is might be a hard problem.

            I would say it’s fundamentally intractable. That is, if tools are produced to make a particular instrument, say the CDO, relatively transparent and ratable, then a new instrument will be created to fleece the rubes.

            Sigh.

            I say this as someone who lead a team making a damn fine easy-to-use CDS pricer only to have it killed because it would “make the market too transparent.” CDSs are simpler than CDOs but are complex enough to get the job done.

            It was at that point that I realized I was actively harming the world by doing my job and went and found another. I’m a little slow, I know.

          • wiserd says:

            “average American workers losing ground for decades with appreciating home values their only salve. ”

            You might have said that Americans circa 2003 put savings into their homes rather than into the bank.

          • 6jfvkd8lu7cc says:

            Re: «until we solve it»: banks told regulators they used sound theory to value the instrument; the theory explicitly assumed that the volume of the trade in the instrument is (like in the 80s) is much smaller than the underlying commodity market (this reduces some of the risks because of a large pool of liquidity). Banks continued to use the obviously obsolete model because they really liked the answers, and the results were accepted by the regulators for risk regulation purposes.

            The perverse incentives in the system on all levels were explicitly documented in textbooks printed in early 2000s.

            So even a theoretical model including the liquidity risks would be a step forward.

          • lycotic says:

            @6jfvkd8lu7cc

            …banks told regulators they used sound theory to value the instrument…

            The problem wasn’t *primarily* capture of the regulators, it was capture of the rating agencies.

          • 6jfvkd8lu7cc says:

            @lycotic I thought the worst problem was the fact that the complete capture of every counterbalance in the system was achieved simultaneously. I think the bogus valuation theory they were selling to rating agencies and to regulators was the same anyway.

            And yes, you are right: I have put the emphasis wrong w.r.t. to who was the primary target of capture.

          • keranih says:

            @ Pocketjacks1

            This isn’t my field – can you explain how The Big Short (the book, not the movie) got it wrong (where it appears at least three different investment groups did the actual research and knew that the CDOs were undistilled crap as investment, and tried to tell a lot of people this) and that it wasn’t as simple as people just not doing the base line actuary work?

            (In smaller words, please. As I said, not my field.)

          • lycotic says:

            @6jfvkd8lu7cc
            Fair enough. It’s interesting to look at how that worked, though. Because the regulators had largely delegated the specifics of oversight to the ratings agencies (hold X% of AAA securities, without getting into the messy business of figuring out what AAA means), capturing the ratings agencies was sufficient to capture the regulators as well.

            And none of this would have worked without the line of marks coming in the door. (Where “marks” means pension fund directors, random corporates, etc.; most of us are too poor to be ripped off quite that badly.)

          • vV_Vv says:

            It’s interesting to look at how that worked, though. Because the regulators had largely delegated the specifics of oversight to the ratings agencies

            I’d say that the fact that the regulators had largely delegated their oversight duties to private rating agencies, and specifically to three of them which operated in a regime of legal oligopoly, was itself the result of regulatory capture.

          • albatross11 says:

            If your job is rating things, you probably shouldn’t give a rating at all to things that you recognize are too complex or too poorly-understood to rate.

            Imagine if some architect somewhere proposes a radical new technique for building a skyscraper, and takes it to a structural engineer for some kind of approval, and the engineer realizes he simply doesn’t have the right knowledge and tools to decide whether this building will fall down or not. Perhaps he comes to realize that the relevant tools aren’t even available. Should he sign off on the building anyway?

          • lycotic says:

            @albatross11

            … the engineer realizes he simply doesn’t have the right knowledge and tools to decide whether this building will fall down or not … Should he sign off on the building anyway?

            Obviously not. And, strangely enough, mostly they don’t, I think. Hmm.

            You see, I was all set out to argue that game theory should show that the ratings agencies would *always* wind up doing this, because the banks’ incentives push them toward more complicated instruments, and agencies incentives push them toward accepting them (yay money).

            Perhaps the difference here is that the ratings agencies don’t actually promise anything, but engineers are negligent if they seal a poorly-vetted design. That would suggest an obvious fix.

        • Nebfocus says:

          The real issue is that any economy dependent on housing is going to suffer through endless asset price inflation-crash cycles.

          Yep. Government incentives to own a home (Mortgage deduction, Fannie/Freddie) exacerbate the issue.

          • pocketjacks1 says:

            Hey, you started off by agreeing with me, so I’m going to be try to be diplomatic, which is something I struggle with. (The Internet is for arguing!) But here goes.

            For some value of “exacerbate”, perhaps, but generally, that’s not true. Beyond the link I provided below, there’s many sources I could pull up that debunk the right-wing myth that GSE’s were the source of the problem, if I were more inclined to go link-hunting at 1:30 AM with work tomorrow. (Though I can do so later if pressed.) It was private banks that grew the monster, sold the vast majority of these instruments, and more critically, underwrote them, while Fannie and Freddie mainly dealt with the aftermarket in the later stages of the crisis.

            And government incentives to own a home were responsible for supporting broad-based prosperity from the Homestead Act to the GI Bill.

            Now, it is perhaps true that fetishization of home ownership for its own sake could be a problem (recall Scott’s post on Tulip Subsidies), though I’d disagree that that, or alleged government actions geared to that end, were anything close to the main problem in the mid-2000’s. The problem as I see it is that (a) their home is the only valuable asset that average Americans aspire to, but (b) putting all your financial worth into a single asset is stupidly risky. I wonder if putting the equivalent amount of wealth in a diversified portfolio of investments while renting cheaply wouldn’t be a better option these days, though it would probably require some re-organization of society and our laws to accomplish. People want to own their homes for reasons beyond the financial. (But everyone investing in everything rather than sinking all their money into a house 20 km from where they work, could have salutatory effects beyond the financial, as well. There would be positive political effects if, collectively, regular people owned the nation’s most valuable private assets as stock owners and creditors.)

          • Brad says:

            And government incentives to own a home were responsible for supporting broad-based prosperity from the Homestead Act to the GI Bill.

            Now, it is perhaps true that fetishization of home ownership for its own sake could be a problem (recall Scott’s post on Tulip Subsidies), though I’d disagree that that, or alleged government actions geared to that end, were anything close to the main problem in the mid-2000’s. The problem as I see it is that (a) their home is the only valuable asset that average Americans aspire to, but (b) putting all your financial worth into a single asset is stupidly risky. I wonder if putting the equivalent amount of wealth in a diversified portfolio of investments while renting cheaply wouldn’t be a better option these days, though it would probably require some re-organization of society and our laws to accomplish. People want to own their homes for reasons beyond the financial. (But everyone investing in everything rather than sinking all their money into a house 20 km from where they work, could have salutatory effects beyond the financial, as well. There would be positive political effects if, collectively, regular people owned the nation’s most valuable private assets as stock owners and creditors.)

            I think you are missing the cause and effect here.

            The “broad-based prosperity” was an unsustainable illusion engineered by the government. The government specifically set out to create a situation where huge numbers of families had the lion’s share of their financial worth tied up in their homes and then manipulated the market so that those homes generally rose in value.

            This looked like “broad-based prosperity” and made those homeowners really happy. Even more so because they were somehow able to trick themselves into believing they were all hardworking self made people who never got anything from anyone rather than the beneficiaries of a set of collectively massive government programs designed to make them rich. These distorted market conditions over a few generations created the fetishization, it’s not some intrinsic feature of human nature.

            But like all ponzi schemes it wasn’t sustainable. No matter how many clever new tactics various parts of the government come up with, housing prices can’t continue to rise at a faster rate than wages forever. Eventually someone buys the asset that only ever increases 10% annually and can’t find someone able to buy it.

            And pop it did, but because no one wants to hear bad news and politicians certainly don’t like to give it, Americans collectively pretended that there’s no underlying rot at all. The problem was instead something, something greedy wall street. And all the clever technocrats went back to the drawing board to figure out how they could reinflate the bubble for a few more years.

        • Deiseach says:

          Back in 2008 this is the best explanation I understood of the problem at the time.

          As for Deadspin, it’s a stablemate of Gawker (I looked it up and it’s supposed to be a sports news site, why is it sticking its spoke in here?). Gawker may have had to bite the dust, but the other entities under the Denton umbrella are all continuing after being taken over by Univision.

          Besides that, it’s a stablemate of Gawker. Being snarky and nasty about high-profile individuals/institutions in an inside-information, informed source, knowing smirk way was their whole gimmick. All those who defended Gawker while it was being taken down by Hogan and Thiel, did you expect gratitude from these guys? Biting the hand that feeds them is their entire selling-point!

          • wysinwygymmv says:

            Biting the hand that feeds them is their entire selling-point!

            Uh, “biting the hand that feeds them” is not really a good description of the news media’s relationship to the tech industry. “Biting the hand that starves them,” maybe.

          • Deiseach says:

            “biting the hand that feeds them” is not really a good description of the news media’s relationship to the tech industry.

            The whole Gawker stable was New Media, which depends on precisely the innovations that the tech industry introduced which permits the kind of online always connected here’s the live feed direct from my phone cycle they live and die by. It may be a bit uncouth for one tentacle of the octopus to be sneering at Silicon Valley while another tentacle reviews and rates all its latest gizmos, but Denton’s model didn’t care about being uncouth or two-faced, it cared about being the first with the inside gossip and the one everyone was talking about at their dinner parties.

            Gawker’s maudlin “we were a high-quality investigative journalism source that was deliberately murdered by a scheming billionaire” departure may have played to their self-image, but it wasn’t the case all too often in reality.

          • wysinwygymmv says:

            @Deiseach:

            No, I mean the fact that web technology basically killed the revenue model for print media, throwing all the writers and editors into the tentacled maelstrom you describe so vividly.

          • BBA says:

            (I looked it up and it’s supposed to be a sports news site, why is it sticking its spoke in here?)

            Most of the writers on Gawker.com moved to Deadspin’s “sports guys talk about things besides sports” sub-blog The Concourse when the Univision deal happened. Now The Concourse is basically Gawker without Denton or the name.

            There was always a lot of sharing of content and writers among the Gawker network blogs, and this is just an extreme example.

            (They used to have an official “sneering at Silicon Valley” blog, Valleywag, which went under around the same time.)

        • Longtimelurker says:

          The type of progressivism that is anti-Silicon Valley and pro-Deadspin is my least favorite type of progressivism. It is, unfortunately, seemingly the predominant strain today.

          It is the easiest type of progressivism to follow. After all, has no ideology besides pure ressentiment as compared to a desire to actual policy. A platform based off of pure animus can last forever because emotion can lest forever.

        • SpaghettiLee says:

          I’m not a Silicon Valley superfan, but I’m gobsmacked that Deadspin thinks they’ve got a right to pipe up here. Every fourth or fifth post there is some third-party ad selling ridiculous crap for people with too much money. Today, for instance, there was an ad for $180 adjustable dumbbells. They know their audience, and it isn’t the proletariat.

          • poipoipoi says:

            The $180 adjustable dumbbells sure beat buying 4 or 5 different weights of dumbbells at $1/pound, especially if you live in a small apartment.

      • birdmanpdx says:

        well, two of the largest and oldest brokerage houses on the street went belly up, so I’d argue it was their job to know better. Morgan and GS were saved by Japan the US govt respectively or they were gone too. And the largest insurance business in the US was also bailed out or dead. It wasn’t their job to know better?

    • Nornagest says:

      Man, fuck witches.

    • pocketjacks1 says:

      Also, blaming Wall St. for the housing crisis is worth of a first grade media drone. I prefer to blame witches who put a hex on house prices back in 2008!

      Perhaps banally true in the sense that the deregulated private sector loans that caused the crisis came from all over, not just from the physical location of Wall St. in Manhattan. But I suspect you were insinuating a different, false claim.

      As for the animals, what gbear605 and Hyzenthlay said.

    • Wency says:

      I suppose there’s a point to be made that Wall St. is not to blame for that crisis in quite the way GWB is to blame for Iraq. But even if you think Wall St. is blameless, it’s safe to say it screwed up, by any definition of the phrase. Or at least that Bear Sterns, Lehman, and Merrill screwed up, and this ends up being a pretty big slice of Wall St. And those failures surely exacerbated the crisis.

    • Quixote says:

      Yeah. That one sits squarely on the gov. Bush II’s ownership society initiative directed a lot of government agencies and a lot of regulators to push rapid expansion of home ownership, even among people who couldn’t afford it. This obviously drove up prices.

      If you want to understand this look up “down payment assistance” and the Bush II administration’s efforts to promote it.

    • Nathaniel Bude says:

      > “sure, those pigs and cows will finally roam free!”

      No, but if we stop raising animals, then we could restore most of the land used to feed those animals back to nature, so that the animals currently confined to factory farms would be replaced by free-roaming animals. You’re making the wrong comparison: (suffering animals vs. oblivion) rather than (suffering animals vs. what would otherwise exist). But this is understandable, because most people arguing against meat-eating make the same mistake, and this comment thread is a perfect example.

      Looking at if from the economic perspective of opportunity cost makes animal agriculture look worse, not better. The energy input from the sun only supports so much life, and right now we’re directing a huge chunk of that energy into a dismal, wasteful agricultural process. I think most people have at least an aesthetic preference for meadows and forests where you might go camping, over endless repetitive rows of corn and filthy warehouses packed with animals leading bleak pointless lives.

      Even the most painful parts of wild animals’ lives are at least exciting and fun to watch (lions chasing gazelles), compared to say, chickens pecking each other’s eyes out because they’ve gone crazy in a crowded environment so unnatural for them they can only be kept alive with a cocktail of drugs. In the same way that AIs keeping humans blissed out on opiates would be a bad outcome for humanity, animal agriculture would be worse than the natural habitats it replaces, even if we could keep the animals from suffering.

      Although I care way more about humans than about animals, and my true preference is to do away with both animal agriculture and as much nature as we can spare, in order to efficiently feed as many humans as possible. Unfortunately, it’s a moot point, because humans are voluntarily restricting their own reproduction, so food availability isn’t the limiting factor for population growth anyway.

      • Deiseach says:

        we could restore most of the land used to feed those animals back to nature

        No, we’d continue to use it as farmland to grow crops to feed ourselves, because when we stop eating meat as a food, we need to replace it with something else, and that something else is industrial-scale crop production. Roaming for berries and roots is not going to cut it to feed seven billion people. Grassland and pasture will be turned over for Monsanto’s latest supercrop and mass pesticide and herbicide spraying and usage of fertiliser will be the rule.

        Sorry, no nature preserves.

        (I’m not claiming current farming practices aren’t deficient in many ways, but no more livestock does not mean flower meadows and back to nature and camping trips, it means we need to eat and if we’re eating plants, we need land to grow those plants).

        As to what you say about free-roaming animals, there is one strain of thought that says wild animals live short, nasty and brutish lives of suffering and pain and fear due to disease and predation, so the most humane thing to reduce total suffering – once we’ve done away with factory farmed animals – is to euthanise wild animals (or at the very least render them sterile so they all die out in a couple of generations). Another strain of thought is to more or less domesticate these animals, intervening to make sure they are vaccinated against disease, have enough to eat, do not reproduce beyond the numbers that can be supported, etc.

        We can have pets (because they will no longer be wild animals) or nothing is the choice there.

        • HeelBearCub says:

          @Deiseach:
          Animals have to eat too. Each calorie of meat produced take many calories of upstream feed, so I think your barking up the wrong tree there. The total amount of acreage in crops would likely go down if we stopped producing meat altogether (in addition to the acreage devoted to the animals being freed up). Grass fed cows might be an exception there (although usually their feed is also supplemented, I believe)

          But I agree that I don’t think we can simply assume that those acres revert to wilderness.

          • bean says:

            There are quite a few areas which are suitable to produce food for cows in the form of grass, but which are not suitable to grow food for humans. Montana is a good example. It might be a good idea ecologically to cut back on animal consumption until we’re sure we’re only using animals to capture the calorie streams we can’t use directly, but if we’re talking about efficiency in agriculture, we should go after the biggest current culprit, organic farming. It’s much less efficient per unit area than industrial agriculture, and people will always choose to eat instead of starving. Getting rid of organic farming means more land for the animals. (Assuming we don’t euthanize them all.)

          • Nathaniel Bude says:

            Organic farming is a huge waste, but not nearly as bad as animal agriculture. Wikipedia says organic requires 84% more land, and less than 5% of farmland is organic, meaning we’re wasting maybe 2% of farmland on organic.

            Whereas about 1/3 of crops go to livestock which convert to human fuel at about 1/3 efficiency. So we’re wasting about 25% of farmland on animals.

            Efficiency for animals ranges from 40% (milk) to just 3% (beef) compared to 54% (= 1 / 1.84) for organics. So animal foods cause about 10x more waste overall than organic plants. And, for the individual consumer, choosing grain-fed beef over organic soy is about 10x more wasteful. These numbers can be off by a lot without changing the qualitative point.

          • Besserwisser says:

            If we’re talking about area, industrial farming is far from the most efficient method. It’s just that other methods need a larger workforce. But if you’re worried enough about feeding the world, you want traditional farming methods supplement with some advances of modern science. And you want to produce mostly plants, as already explained. Sure, you would have problems about needing more farmers and cut down on consumption because we will produce less but if you see a high enough value in area-efficient agriculture, this is the way to go.

        • Nathaniel Bude says:

          If the human population actually increased enough to eat all the food we could grow on the land currently used to grow food for animals, that would be great! Feeding plants to animals to feed to humans is a less efficient way of converting sunlight into human fuel than feeding plants directly to humans.

    • Null42 says:

      From reading both sides of the aisle, I get the sense it was a bipartisan problem; the Dems made the banks lend to more people who couldn’t pay it back and the GOP had deregulated the banks so they wouldn’t have the reserves on hand.

      • John Schilling says:

        With the caveat that in neither case were the banks “made” to engage in risky behavior; they were merely allowed to do so in a environment where this would result in substantially greater profits and the taxpayers would insure them against any catastrophic downside.

    • Yosarian2 says:

      Also, blaming Wall St. for the housing crisis is worth of a first grade media drone.

      Wall Street didn’t cause the bubble, but they were at least partly responsible for inflating it so badly and making the inevitable burst so catastrophic by reselling bad loans in complicated financial products and then not accuratly estimating the risk involved in those products.

      You can argue that a lot of people on wall street made an honest mistake or you can argue that a lot of people intentionally made deceptive financial products to rip off investors, or maybe the truth is in between, but I’m not sure how you can claim they weren’t at fault.

  3. Jacob says:

    I actually think those stories are doing a public service. People in Silicon Valley live fun lives doing interesting work in a hub of culture and innovation. Everyone else (including me!) is jealous, and it makes jealous people feel much better when they hear about how “Silly-Con” valley is stupid and imagine themselves superior. In the meantime, people who actually have the skills and ideas to contribute to the Waves and SpaceXs probably don’t give two shits what WaPo thinks.

    I work on Wall Street (at a pretty boring job whose goal is to make Wall Street screw up less often). The last thing I care about is what outside magazines think of my industry, I only care what Matt Levine does.

    • Reasoner says:

      I think it’s better for the world if different subgroups don’t unnecessarily antagonize one another. It’s not a good thing if everyone outside of Silicon Valley is clueless about how Silicon Valley works and everyone inside of Silicon Valley knows this and writes them off as a result. It’s not good to have that kind of us vs them mentality.

      Maybe I can illustrate:

      This Juicero story is an absurd avatar of journalistic hubris. And it’s not an isolated quirk. Journalism is a stupid leftist dystopia where blogger-class zombies are the consumers and a regular person’s brains attention is what they go shopping for. This story says a lot about the state of journalism right now. These awful nightmare trash parasites are only interested in solving their own, insular problems: driving traffic to their websites by repackaging old stories that weren’t accurate to begin with and selling them back to us as exemplars of Front Page Breaking News.

      If any journalists are reading, how did that make you feel?

      On second thought, it seems like most of the nastiest quotes come from Deadspin (a Gawker subsidiary?) Makes me wonder why mainstream publications don’t do more to distance themselves from Gawker. E.g. lots of publications wrote pieces defending Gawker during Thiel’s lawsuit.

      • Jacob says:

        You’re right, of course, in an ideal world people all around would throw less verbal punches. But as long as people are punching, at least journalists making fun of Juicero is punching up.

        In the end, it’s all just people, and it’s mostly people like us. I don’t like “the media”, but I have journalist friends, and “the media” is just a bunch of them trying to do their jobs and not thinking too much whether it’s a net positive or negative for civilization. Same for Wall Street, Silicon Valley, Capitol Hill…

      • SpaghettiLee says:

        “Nasty” is kind of their house style. Sometimes it works (Magary), sometimes it doesn’t (Burneko, who wrote the article in question.)

    • Jon S says:

      +1 to the Matt Levine love

    • brandizzi says:

      Scott’s post made me get a way more positive opinion on Silicon Valley but it was counterbalanced by your comment because “Silly Con Valley” is just a too good pun.

    • Longtimelurker says:

      First, good job so far.

      Second, it is probably due to the belief among journalists that they and only they should be the tastemakers. So when they see someone like a Jobs or Musk, they see them as people that a stealing what should rightfully be theirs.

      But “That’s our job, dammit!” doesn’t sound as good on the newspapers.

    • wintermute92 says:

      I would feel much better about this if I didn’t see monthly calls to regulate Silicon Valley in absurd and unproductive ways.

      There’s a steady trickle of articles, sometimes from pretty influential people, explaining that SV is bad and therefore the government clearly needs to intervene. Variously: by cracking down on what startups can do without government licensing, by creating complex ethical guides for programmers and demanding everyone sign on to them, or by creating elaborate licensing programs for software developers on par with what civil engineers have to do.

      My general sense is that these things are somewhere between “stupid” and “evil”. Especially that last one, where we ensure that only rich people with college degrees and licenses can get programming jobs without going into massive debt. We already have that everywhere else, lets not spread it further.

      This isn’t a direct consequence of mocking Juicero, obviously. Juicero is stupid. But I worry that “Silicon Valley is parasitic” doesn’t just make everyone else feel amused and superior, it feeds a much darker urge to do something about that feeling.

      • John Schilling says:

        My own concern is not so much the “Juicero stupid, therefore regulate Silicon Valley” urge, but the “Botnets intolerable, therefore regulate Silicon Valley” urge. Because that one is much more sensible, and calls to Do Something will be harder to realistically oppose.

  4. Doug S. says:

    When Silicon Valley screws up, your bank account gets stolen by Russian hackers.

    • Scott Alexander says:

      Has that happened to people? Other than with Bitcoin?

      • Michael Watts says:

        Yes, that happens all the time. People don’t experience it as a problem because there are other systems, external to Silicon Valley, that make the bank rather than the account holder responsible for the losses.

        Compare this recent attack based on intercepting SMS messages from banks to people whose accounts were being hacked.

        • wintermute92 says:

          Has this happened from anyone tied to Silicon Valley, though?

          The in-Valley view seems to be that banks are humiliatingly bad at security and would do much better if they actually hired any of the experts in the Valley. My Google accounts are substantially better protected than my banking accounts, and my bank won’t let me get any safer.

          • Douglas Knight says:

            Google has better security than banks, but Google is not representative of the Valley. Banks have better security than most of SV. Maybe they are a little worse in technical ways, but they have defense in depth because they assume that they are going to get hacked.

            And most of the hacking against banks is taking over a home computer, monitoring how it logs in to the bank website, and taking control of the session. The weak link is the computer, not the bank. This could be used to hack any site, but it is used against banks because that’s where the money is.

      • Fossegrimen says:

        I was recently at a security seminar where the speaker showed credible evidence that a substantial part of the North Korean state income is from hacked bank accounts and that banks prefer to take the cost rather than having customers lose confidence in the bank/banks in general.

      • MostlyCredibleHulk says:

        To people, sometimes, but US personal finance system is largely geared towards putting most of the responsibility on the merchants and banks. So, for example, rampant credit card fraud may hurt consumers less directly, and more indirectly via merchants shifting their additional spending to consumers. Identity theft is worse because identification system in US is super-insecure, name + birthday is frequently enough to identify a person, if you add SSN (which you have to give to hundreds of people if you ever want to have bank accounts, credit cards, job, loan, car insurance, etc.) that is widely considered ironclad identifier enough to do basically anything in your name. And fraud there happens all the time.

        Then of course there’s the whole sad story about passwords, which still nobody can get right. Two-factor auth kind of helps, but most people don’t even use it, and it’s a bit annoying, and as noted by previous commenters, not ironclad either. And again, people get their accounts broken in all the time. Some people lose money, some – presidential elections.

        And then there’s the whole crypto-locker industry. Which I am only surprised why we don’t see more of it, with current state of security. This is just modern analog of highway robbery or robbing trains, and unlike the old one, the criminals don’t even risk being shot.

    • suntzuanime says:

      See also the proliferation of Internet of Things devices that get hijacked for use in criminal botnets. And of course at some point Silicon Valley may screw up hard enough that we all end up as paperclips.

      • Gazeboist says:

        “Penis pill emails from some idiot hipster’s juice machine” is a funny enough concept that I can almost accept the end of the war against the Internet of Things. Almost.

      • MostlyCredibleHulk says:

        Most IoT things, especially bad ones, aren’t developed and made in SV (even taking the term broadly). They may use components or technologies developed in SV, but these are commodities by the time they get to cheap webcam makers.

        Of course, one can still fault SV for not finding a generic solution for the problem. But it may be not easier that finding a drug that would “cure cancer”.

    • rsj says:

      Are you also going to blame the VW scandal on silicon valley as well? That was also bad software.

      You are conflating an industry with an occupation. When *programmers* screw up, your bank account gets stolen. But these programmers are employed by Banks and are part of the financial sector. VISA is the only big fintech company in the Valley, and their software is pretty good, and when your VISA card is compromised, it’s pretty much always the case that some other store you did business with had poor practices for protecting your financial information.

      When the website of your local bank gets hacked, that’s not a silicon valley screw up. That’s a screw up of your bank. It’s their website and their in-house IT security department that dropped the ball. There are also programmers working in Detroit and when they screw up, your car gets hacked.

      • 6jfvkd8lu7cc says:

        Internet of Things is a Valley thing (Juicero has WiFi, not non-routable and therefore somewhat more secure Bluetooth), with its «S in IoT stands for Security».

        Ad Tech lead more or less by Google is a Valley thing, and a non-negligible part of bank-account-stealing trojans are distributed via malicious JavaScript in the ads mediated via Google AdSense (you don’t need to click on anything, just visit the page with AdSense where an unfortunate selection of ads gets displayed; the attack JavaScript is there).

        I am not sure if MongoDB is Silicon Valley enough (it is from New York), but it is a part of the industry — and an example where industry makes explicitly harder for the profession to keep up (I mean all the story with MongoDB listening on the public IP and not requiring a password to access data). Maybe they have only screwed up the documentation that doesn’t make clear you need to reconfigure that, but they did screw up the documentation and this did lead to a lot of «profession-not-industry» leaks and a few leaks inside what you call industry.

        • rsj says:

          You are describing *technologies*, but it’s the responsibility of whatever company that builds a website to decide to include third party javascript in authenticated pages that contain financial information, or to not have separate trust zones in their back end infrastructure.

          The products listed have legitimate uses. But I wouldn’t load AdSense from Google’s servers on a trusted origin in which I am collecting payment information, for example. I would use it on a public facing site, on a different origin.

          There are ways to do all of this correctly, but hiring people who know how to design this stuff is expensive, and it requires a commitment from leadership to take security seriously and make these investments. Very few companies can do that, but the ones who do are concentrated in the valley.

          • 6jfvkd8lu7cc says:

            How exactly would all the origin separation help if AdSense by Google on your public site has loaded JavaScript exploit that breaks Chrome by Google on your user’s computer to install a keylogger that was used against your secure workflow?

            And the MongoDB example is an example where the industry actively (if accidentally) makes it slightly more expensive to implement a secure system.

            As for Valley being better on average — well, large insurance firms are on average better in calculating and mitigating risks, but when they fail, everyone suffers.

        • MostlyCredibleHulk says:

          I mean all the story with MongoDB listening on the public IP and not requiring a password to access data

          I don’t put blame on Mongo here. It’s known upfront it doesn’t do much of security. So if you deploy it, you should deploy external security layer – or use a different solution if that one doesn’t work. It’s not a consumer commodity like juicer, it’s an infrastructure product (like cylinder block in your car) and should be installed and maintained by a person who knows how to do it. If that doesn’t happen, its a screwup of the management of the particular install.

          The problem with IoT is that it burdens consumer market with decidedly non-consumer considerations of internet security, which consumers can’t handle. MongoDB is not a consumer product, and as such should not be required to have consumer-grade safety.

          • 6jfvkd8lu7cc says:

            In the Mongo case I explicitly acknowledged «Maybe they have only screwed up the documentation that doesn’t make clear you need to reconfigure that, but they did screw up the documentation».

            If you do not require authentication to access, it is a reasonable expectation that you only listen for local connections; if you violate _that_ expectation, you must document it.

            IoT is just horrible, let’s make this remote management capability that most people would never benefit from, and make it obligatory so that when your connection is broken you cannot switch on the lights or open your garage door. Let’s _also_ make it insecure. Then let’s enter the markets where expected product lifespan is longer than our company’s expected lifespan with a product that depends on our servers’ existence — and never mention that cloud management is obligatory before the sale.

      • albatross11 says:

        Alternatively, when there are weaknesses discovered in TLS or other crypto standards, or in your OS’ security, that’s often not literally SV, but it’s at least kinda close.

      • soreff says:

        @6jfvkd8lu7cc

        IoT is just horrible, let’s make this remote management capability that most people would never benefit from, and make it obligatory so that when your connection is broken you cannot switch on the lights or open your garage door. Let’s _also_ make it insecure. Then let’s enter the markets where expected product lifespan is longer than our company’s expected lifespan with a product that depends on our servers’ existence — and never mention that cloud management is obligatory before the sale.

        Nice summary!

        I’ve being treating smart appliances as analogous to pet rats that feature
        bubonic plague.

    • 6jfvkd8lu7cc says:

      And when your blood pressure data collected by one-more-fitness-band gets destroyed in a sudden shutdown without any way to export it, it doesn’t even count as a screw up.

    • Virbie says:

      TL;DR: Hoo boy, there’s so much wrong with this it’s hard to know where to start.

      It’s a gross misunderstanding of how technology (and a whole lot of other stuff) works to lay that at the door of “Silicon Valley”. The structures underlying the Internet are full of security holes relative to what they’re currently used for, but Silicon Valley didn’t create those standards and if anything, the efforts of Silicon Valley companies in the last 10-15 years have made things infinitely _more_ secure (through their positions on standards committees, etc). Seriously, your backed-up pet photos and
      chain emails and political FB posts have been a decade ahead of your bank accounts in security since forever. The fact that the Pakistani government can accidentally take down YouTube globally because of well-known flaws in DNS routing has nothing to do with Silicon Valley and everything to do with standards written 35 years ago in a university research lab. This is not what SV does, but the environment they operate in. It would be roughly as ignorant to blame Wall St for the fact that we have fiat currency (if you’re so inclined).

      I don’t know if you saw the tweetstorm linked here (or in the subreddit?) that had a detailed analysis of the Podesta attack[1]: it’s beyond me how you could lay any of that at the feet of “Silicon Valley screwing up”, however you choose to define it. It was a pretty classic “rely on people not paying attention to what they’re clicking” social-engineering attack. If you answer a scam call and give someone your social and bank account info, did Wall St fuck up if your account gets cleaned out?

      Even the big vulnerabilities that have been found that were actual bugs (like Heartbleed) aren’t even within an order of magnitude as significant as things like the financial crisis: the fact that you probably can’t name a single consequence of the most widely-spread, well-publicized vulnerability in recent history is a pretty big warning sign that your comparison is ludicrous. On top of _that_, OpenSSL is open-source and maintained by a single guy, not even as his full-time job. Again, laying that at the feet of “Silicon Valley” is just twisting the term beyond having any meaning at all.

      [1] Found it, it’s pretty fascinating. https://twitter.com/pwnallthethings/status/816621553643294720 If you think myaccount.google.com-security-settingspage.tk is the Google security page, you’re an idiot (like John Podesta!). Even if you think that’s a reasonable mistake to make, it’s on the back of ICANN, not anyone in Silicon Valley. Hell, Google has been trying different ways to display URLs to make them dumbass-proof for like half a decade, and always to a chorus of complaints from power users.

      • 6jfvkd8lu7cc says:

        OpenSSL is open-source and maintained by a single guy, not even as his full-time job. Again, laying that at the feet of “Silicon Valley” is just twisting the term beyond having any meaning at all.

        Given that Silicon Valley depends on TLS implementation existence more than it currently invests in its continued existence, it creates good incentives to actively blame them for not hiring this person to make maintaining OpenSSL an actual full-time job.

        Also, GMail has had its own share of CSRFs (including creation of unwanted email forwarding rules by mere visiting a malicious page while logged in into GMail), and not all banks are worse than that.

        I am not sure why you are talking about DNS hijacking for Pakistan-Youtube case: wasn’t it a BGP leak? Still about failure to make ISPs make attention and not an SV failure, of course.

        • rsj says:

          Things like TLS and SSH are good examples of free rider problems. They are also examples of the generosity of the software development community, which unfortunately is not matched by the generosity of the business community. But I don’t think it’s the responsibility of tech companies alone to fund these projects. And to the degree that there is corporate funding, it is almost exclusively by tech companies, even though these tools are used in all industries.

          • 6jfvkd8lu7cc says:

            …and I wouldn’t exclude that a large part of these other industries would actually prefer the tools to fail catastrophically, so not using them becomes acceptable practice again…

          • Paul Brinkley says:

            Probably a good time to note that such low-level free rider tools like these are being attended to by ICEI.org. They accept donations.

      • MostlyCredibleHulk says:

        It is partially SV fault because SV industry trains users to behave like this. If every site sends you mails with HTML buttons and long incomprehensible links you are supposed to click on to make it work, if somebody sends you the same you won’t find anything out of ordinary, and expecting from a non-professional to known what is the difference between accounts ending in .ly, .io and .tk is completely unrealistic. You have either to go full-scale paranoid and never click on anything – thus being unable to work with majority of newfangled SV-made sites – or go with the flow and risk being tricked because you do not have any way to distinguish legit link and fake one. The users can’t solve it. Therefore, it’s on SV industry to solve it, there’s nobody else to do it.

        • Gobbobobble says:

          You have either to go full-scale paranoid and never click on anything – thus being unable to work with majority of newfangled SV-made sites

          “And nothing of value was lost”

    • Quixote says:

      When silicon valley screws up the AIs turn us all into paperclips.

    • Squirrel of Doom says:

      Do you count everything bad that happens with computers as “Silicon Valley screwing up”?

  5. bobpage says:

    a16z invested in https://anki.com/, not the Anki you’re thinking of.

    • Scott Alexander says:

      What, you don’t think consumer robotics got me though college?

      Okay, thanks, corrected.

  6. ksvanhorn says:

    “If a deeply good person crusading for a better world enters Silicon Valley, she’ll find…
    If a futurist enters Silicon Valley, she’ll find…
    If a social-media-obsessed narcissist… enters Silicon Valley, he’ll find…
    And if one of those people who talks about “the cloud” all the time enters Silicon Valley, he’ll find…”

    Notice a pattern here?

    • gbear605 says:

      When I have to use an unknown person and I’m choosing a gender, I flip a coin. Obviously I can’t do this in a conversation, but in writing a blogpost, that’s what I would do. If I remember correctly, Scott does this as well, but I could easily be remembering someone else.

    • Yeah, Scott is an anti-semite obviously.

    • Scott Alexander says:

      Originally it was he-she-he-she, but later I switched those parts around because it flowed better.

  7. TheWackademic says:

    Where does Theranos fit in to your view of Silicon Valley?

    • Scott Alexander says:

      A company with an extremely innovative product that would have been world-changing if it wasn’t a fraud, which unfortunately it was. Doesn’t seem to fit into the “Silicon Valley only produces juicers” narrative.

      • apv says:

        Theranos is a good example of what can go wrong if Silicon Valley *doesn’t* fund an ambitious tech startup. Theranos had a good Silicon Valley VC in their initial seed round but went on to raise primarily from sources with little/no experience in tech (e.g. Rupert Murdoch).

        • That’s too forgiving in overlooking their blatant scientific fraud. You don’t need Andrew Gelman to figure that one out for you.

          • apv says:

            Hmm, not sure I was clear. Blatant scientific fraud and non-Silicon Valley* investment goes hand-in-hand. Investors incapable of proper technical due diligence can be conned by a persuasive entrepreneur, as was the case with Theranos.

            *I’m overloading this term to include reputable biotech investors

          • wintermute92 says:

            But isn’t the idea that Silicon Valley started to whisper about fake data after round one, and therefore refuse to fund them? Their large funding rounds had basically no one knowledgeable or VC-famous involved, just rich people outside the Valley.

      • TheWackademic says:

        LOL, the above articles aren’t advancing the narrative that Silicon Valley produces only juicers. The problem is that many high-profile Silicon Valley companies are worthless. One reason they’re worthless is because they’re creating products for problems that don’t exist (e.g., unneeded juicers). Another reason is that they’re actually fraudulent, like Theranos. The institutional structure of SV (startup accelerators, VCs, SV-focused media) does a piss-poor job differentiating between worthwhile and worthless.

        It’s tough reading contrarian SSC posts so clearly built around beating up a strawman. Sometimes, the non-contrarian POV is worth seriously engaging with.

        • albatross11 says:

          I suspect the startup world is more susceptible to fraudulent or fundamentally unworkable stuff than other places where people invest money, because startups are trying to do something fundamentally new. That means it’s harder to decide whether they’re fraudulent or not–there’s not an existing set of best practices and industry standards you can refer to, your common sense isn’t always a great guide, etc. I mean, a couple of the biggest recent startups (uber and airbnb) were basically founded on “we’re going to ignore a bunch of local laws to build up our business, and count on being successful enough that we’ll eventually either be too popular to ban or rich enough to fight it out in court.” In a world where that can work and can be a good strategy, due diligence is probably pretty hard.

        • humeanbeingblog says:

          You’re missing the point.
          “The problem is that many high-profile Silicon Valley companies are worthless.”
          The modifier “high-profile” really is doing all the work in that sentence. Scott listed many SV companies that are not worthless. The modal SV company is not worthless, if Scott’s survey is indicative. But the SV companies that are covered relentlessly in the media and are therefore “high-profile” are worthless.
          Might this say more about media coverage of SV than it does about SV itself?

          • The Nybbler says:

            The modal Silicon Valley startup is worthless. That’s not at all surprising. The problem is that some of those which are “obviously worthless” get funding anyway. But most of them are only “obviously worthless” in hindsight. For instance, anything described as “Fitbit for X” seems “obviously” worthless, but that applies to Fitbit itself as well.

          • BBA says:

            One high-profile “worthless app gets funded” story was “Yo!”, an app whose entire functionality was sending the word “Yo!” to friends. It got $1 million in angel funds, which was certainly much more than it was worth and a lot of money for a person, but it’s a tiny amount of money for a venture fund or an operating company. The motive behind the “investment” wasn’t to expand the app into something less stupid, it was publicity or wanting to flip it into an “acqui-hire”, a word whose very existence shows how very strange the SV start-up ecosystem is compared to normal concepts of how business works.

  8. 75th says:

    Juicero was a startup that got $120 million….

    Silicon Valley investors were investing $35 million into an artificial pancreas that would allow diabetics to live normal lives without insulin monitoring.

    I’d be interested to see an analysis of these sorts of companies weighted by the amount of money VCs have invested in them.

    Also, “We’re going to make a smartphone app to reduce poverty” is kind of a punch line, and applies to some of those altruistic examples, though I definitely don’t think all such examples are necessarily uniformly bad.

    • Douglas Knight says:

      It’s a punchline, but it’s a different complaint.

    • VivaLaPanda says:

      Perhaps, though I think that mainly has to do with skillset. As a programmer, my main options to contribute to improving the world are donating my income and “making a smartphone app to reduce poverty”. To be fair, there might be innovative paths outside that, but it’s not reasonable to expect those to be common. Another example might be that if you are naturally skilled as a Geologist, it’s gonna be hard to have a big positive impact through your work directly. I’d rather people make smartphone apps for poverty than apps like Yo (setting aside the EA side of this regarding app profitability).

    • sohois says:

      Worth bearing in mind that Juicero has already released, so 120million is the total funding they received from silicon valley VCs. I’m guessing that the artificial pancreas and other more ambitious start-ups described have a long way to go to get to the market and their funding amounts are merely early rounds; they’ll probably end up raising a lot more if they are in any way viable.

    • Saint Fiasco says:

      What is so punch-liney about making smartphone apps for poor people? Lots of poor people have smartphones, especially in the third world, where you can buy those cheap Chinese phones that an American consumer wouldn’t even consider.

      • Besserwisser says:

        People consistently underestimate falling prices of electronics. Mobile phones used to be only bought by business people who either needed to be available or otherwise wanted to signal wealth with those giant blocks. It took people a while to realize, no, having a mobile phone doesn’t make you rich. Now this extends to smartphones and their increasing availability.

  9. knockknock says:

    Now the NSA can watch you through your juicer

    • Svejk says:

      When Silicon Valley screws up, we get an advertising-supported Panopticon. One of the better criticisms of Silicon Valley is that we’ve become used to obscured costs and obfuscated prices.

      Following the Effective Altruism model, if I wanted to create pro-social innovations, would I be better off working/ investing in Silicon Valley, or in some boring old R1 university or research hospital system or old-economy sector (see the Thiel quote below)? We may be massively overstating the Innovation produced by Silicon Valley writ large relative to its importance as a sink for capital in search of a return in a low-interest regime.

      • VivaLaPanda says:

        Even if you work in some old-economy sector and use your money to fund pro-social innovations, someone actually has to be making the pro-social innovations. Thiel has criticized Silicon Valley, but he has made similar (and sometimes stronger) criticisms of the rest of the country for being unwilling to innovate. Silicon Valley has problems, but I don’t see any other areas where people are even trying to find new solutions for fundamental problems and showing close to the level of success.

        • Svejk says:

          I think that we are actually underestimating the innovations coming from the old economy relative to the more conspicuous ones found in SV.

      • mindspillage says:

        Glad the point in the first paragraph was made. Silicon Valley screws up a lot in this regard, and magnifies the impact of screwups on Capitol Hill by giving them the tools to put some of their worse policies into practice *because* we’ve all given away the data that can be used to do it.

    • Svejk says:

      If Silicon Valley is not significantly more innovative than an equivalent old economy sector, but produces and attracts excess hype as a consequence of its business model, that could neatly explain the seemingly excess criticism it receives.

  10. suntzuanime says:

    I think it’s important to distinguish between “explicitly prosocial” and “explicitly branding themselves as prosocial”. There’s an opposite failure mode to Juicero where everyone just keeps doing the stuff that looks good on their college apps forever and nobody does the unglamorous work of running civilization. There’s a lot to be said for the prosociality of enterprise data solution software application package analytics targeting management something something something “the cloud” in the right context, even if it doesn’t have the pizzazz of the Uber of Indians borrowing money off each other.

    • drethelin says:

      Yeah, stuff like “Make-a-Wish” foundation is explicitly prosocial.

    • VivaLaPanda says:

      Agreed, though I think that enterprises that are pro-social in a generally capitalist sense are more the norm, and not something we seem to be at risk of losing. I work at a company that makes really expensive Oscilloscopes right now, and they are incredibly profitable carrying out a business that is pretty unsexy. However, they aren’t likely to ever produce something world changing, and someone does need to be doing that work.

    • cbv says:

      The real problem with Juicero is that they think they’re prosocial.

      > The journey from Coca-Cola to carrots to Juicero’s rainbow of fruits and vegetables has let me connect my work to my personal mission and passion: solving some of our nation’s nutrition and obesity challenges

      > As I said, this is a long-term vision and we’ll encounter bumps in the road, but our team and our investors understand the important problem we’re trying to solve, and they’re committed to helping us get there.

      This is why they deserve scorn. I don’t think all of SV does this, but I think it’s important to enforce some norms about what are actually important, pro-social causes.

      • BBA says:

        One of the better running gags in Mike Judge’s “Silicon Valley” is how every single company, even the enterprise cloud data something something, claims to be “making the world a better place.”

    • Jacob says:

      What you are saying is true but beside the point of the post. The Juicero is pointless on the face of it, and people are trying to hold it up as typical of Silicon Valley when it’s more like the exception than the rule.

  11. blacktrance says:

    That I’m living in a libertarian dystopia is news to me, considering everything from anti-development urban regulations to taxes on soda and sugary beverages.

    More to the point, I think that while there’s some value in pointing out all the stuff that tech companies are working on, the more central problem with the Juciero-type criticisms is – why do these people care so much? Someone thinks there’s money in juice squeezing, and some investors agree. You might think they’re wrong and their business is bound to fail, that it’s funny that someone would pay $400 for a juice squeezer, and it’s fine to say so. But it’s quite a leap from that to the kind of mean-spirited article that suggests that having crackpot ideas for products makes you evil.
    And it’d be one thing if it were random people on Twitter or Tumblr, but it’s shameful that respected journalistic institutions like the Washington Post and Newsweek are participating in this.

    • suntzuanime says:

      Yeah, it’s kind of reminiscent of The Fountainhead. It’s their money, if they want to blow it on an excessively high-powered juice engine or a grotesquely ugly piece of architecture, that’s their prerogative and fuck you if you have a problem with it.

      But if you want to know why people care so much, it’s because the media thinks it’s their job to portion out status, and use that to guide society. It’s their mission to make fun of rich people doing the things they don’t want, to try to encourage rich people to do the things they want.

      • VivaLaPanda says:

        I mean, I think it’s fine to criticize spending money on stupid wasteful things. Isn’t that at least in part what EA is all about? Spending piles of money on pointless stuff has real costs. Taking a step back, I’m not advocating we ban spending money on stupid stuff, but I do think it’s fine to have a cultural stigma against it, just like I think it’s fine to stigmatize having 10 gold plated Lamborghini’s.

        In other news

        • suntzuanime says:

          Yeah, well, I’m no fan of the EA community. Spending piles of my money on pointless stuff has real costs, to me, because it’s my fucking money. Don’t you cry your crocodile tears over it, I can handle myself.

    • 6jfvkd8lu7cc says:

      Let me play a devil’s advocate: the valuations of SV companies are so crazy that even entire venture funds are hard to evaluate. So, a large sector of economy has high-risk investments packaged in aggregates that are still hard to evaluate properly. Didn’t go well last time.

      Not sure that the articles like the one discussed make situation better and not worse, but that is a different story.

      • omegaxx says:

        Just curious: How much of the financial sector is, directly or indirectly, tied up in the VC sector funding these startups? Are the common mutual funds that an average Joe (or my parents) at all backing these VCs?

        • Brad says:

          VC as such are a tiny part of the financial sector. Your parents probably have no exposure to most startups. In recent years however several large actively mutual fund have taken late round stakes in pre-IPO companies. So they could have some exposure to Uber or AirBnB, though probably not much.

    • herbert herberson says:

      why do these people care so much?

      Because it’s hilarious.

    • Jacob says:

      >why do these people care so much? Someone thinks there’s money in juice squeezing, and some investors agree

      They have to bait for clicks, that’s why. I think Scott is just feeding the clickbait machine here. I doubt the authors even believe their articles much less the inflammatory headlines.

    • Jiro says:

      TheWackademic above suggests that the problem that is really being pointed out is that Silicon Valley is unable to figure out that a company is worthless. Juicero-type products are a subclass of worthless, but not the whole thing; frauds are covered too. I can readily see why people might care so much about the larger category that includes both worthless-useless and worthless-fraudulent.

    • Nornagest says:

      If you want Ayn Rand heroes, you have to deal with Ayn Rand villains.

    • Loquat says:

      Juicero isn’t just getting mocked because it’s $400, it’s getting mocked because they made a big deal about their $400 juice squeezer that can generate 4 tons of force with its “precision-forged” components but it doesn’t actually do a better job than squeezing by hand.

      You have to admit that’s pretty hilarious.

    • Drew says:

      It’s especially weird when you realize that many of the critics see themselves as socialists. And that most of the VC money goes to salary.

      “Oh no! Silicon Valley is just a giant scheme to extract capital from VCs and transfer it to workers! The VCs will never see a return. Clearly, this is terrible.”

  12. Paul Zrimsek says:

    Renown awaits the startup that can deliver enterprise data solution software application package analytics targeting management something something something “the cloud” in an evenly-spaced rectangular grid.

  13. Azure says:

    I don’t mind the Juicero. At least, I don’t mind the idea of a somewhat silly, overengineered juicer. The Juicero itself is an evil product in that its internet connection exists, as far as I’ve been able to tell, solely so it can phone home and refuse to juice unapproved fruits and vegetables. (Or vegetables that are more than n days old, I guess.) I don’t really blame Juicero for this, I blame the government for passing the DMCA when they should have instead passed a law giving the FTC power to, metaphorically, beat any corporations that use customer control tactics and DRM over the head.
    My main gripe with Silicon Valley (at least the ‘startup’ culture) is with the ‘meat and potatoes’ projects, and that only because the backers have got so short-term in that domain they refuse to back any sort of serious research, engineering, and infrastructure work and instead try to see how fast someone can stick a glossy web interface on top of Free software infrastructure. At least if the startups get big enough they’re forced to do some engineering work just to support themselves, but it’s a general trend in how resources are allocated that’s bothersome. Particularly since universities have jumped on the outsourcing bandwagon rather than hiring research programmers to develop interesting infrastructure. (Many of the basic protocols in use today, including many commercial projects, were built by students and research programmers at universities, which biased them strongly toward being open and interoperable.)

    • VivaLaPanda says:

      I think that there are plenty of people in support of nonprofit research on infrastructure, but I think it’s unfair to compare the situation now to the situation in the 90s. “Basic Research” or infrastructure or whatever you want to call it is much more complex that it used to be. It’s significantly harder for a college student to develop some universal chat federated protocol and have it be accepted now compared to in the 90s. I mean, plenty of fundamental parts of the internet are built that way because someone happened to do that first, and there wasn’t really competition at the time (DNS for example). There are more CS students than ever, but how often do you hear about undergraduates coming up with revolutionary ideas? However, I am with you in that I wish the culture would change back to being more supportive and interested in meaningful research and free and open software. Part of that is probably just the proportion of people in it as a passion vs as a career has swung in recent years.

      • 6jfvkd8lu7cc says:

        And it is more complicated to develop a federated chat protocol exactly because there is a lot of money in fighting for network effects and maximizing lock-in.

        I have seen a lot of small technical things done by a single PhD student each that would make my life as a programmer better if they didn’t fail to catch the hype and then fall behind the bit rot with all the library API changes etc. We fail hard at timely discovery of useful tools, and the business of Silicon Valley includes making us fail at discovery even harder.

        • Svejk says:

          The centrality of network effects/moats/Metcalfe’s Law in many prominent Silicon Valley startups and businesses can create negative externalities for those who do not wish to consume the service. I might prefer to chat on Mastodon, a decentralized service created by one guy in Germany, but Twitter and FB have a huge monetary advantage in retaining users and developers. I might not use Facebook, but they have still created a shadow profile for me to fill the interstices of their ad targeting model. I might prefer not to upload data to 23andMe, but if they can entice a cousin to do so, I’m still in their database.

          Silicon Valley practice is also shaping the wider tech market: I might prefer to pay cash for services rendered, but I cannot compete with investors willing to bid higher for a service that generates valuable user data.

          I’m not certain that SV deserves especial scorn in this regard, but its broad public-facing surface seems to be especially intrusive.

        • beleester says:

          There seem to be a few places in Silicon Valley that are producing useful tools as a side effect of whatever business case they’re pursuing. React came from Facebook, and Polymer came from Google.

          (And both of those exist to fix problems with Javascript, which was one of those things that appeared in the early days of the Internet with no competition, and now we’re stuck with it.)

          • 6jfvkd8lu7cc says:

            On the net, I am not even sure React is a useful tool in vacuum. It is only «a useful tool» because SV and others have sunk a ton of money into breaking the original idea of «a page contents text, and maybe images, and JavaScript is for adding minor extras».

            It is not useful in principle that a page with 10K letters of text and 1KiB of font size/margin size style choices and nothing else of any use doesn’t show anything at all without loading ten time its content size of scripts.

    • TrivialGravitas says:

      I don’t think SV is quite so unwilling to do long term big projects. Transatomic is good example of something that’s going to need an awful lot more money and another decade or two before it has any chance to make its first dollar.

    • grendelkhan says:

      If it helps, after Heartbleed scared the hell out of everyone (I mean, especially so), Google’s been running something called Project Zero to investigate commonly-used software, even if it’s not directly related to the company. (See this fantastic bug report, or the writeup of the CloudFlare incident, or these long technical articles about remote firmware exploits in wireless SoCs.) It’s security-response stuff, not design, but it’s quite civically virtuous.

      • Brad says:

        Just want to flag that third one (remote firmware exploits). It is the clearest explanations of the nuts and bolts of an exploit I have ever read. It is so well written that you can even manage to fool yourself briefly that you could have figured it out yourself.

  14. manwhoisthursday says:

    Man do I hate lefties who complain about capitalism while decrying the lack of spending on social programs, even to the point of deficits. All of the wealth necessary to keep that spending going comes from the ultracapitalism, with its attendent high degree of inequality, they descry. Not to mention the fact that social liberalism is itself something entirely enabled by wealth and technology.

    I don’t have any problems with people who really really love equality wishing we could go back to being ultra-egalitarian hunter-gatherers. Our host here has expressed similar sentiments too, and even I, cackling evil socon that I am, sometimes sympathize. But if you’re going to wish for a state of equality only possible among foragers, it’s your obligation to bloody say you want to go back to being foragers.

    • haltingthoughts says:

      >Man do I hate lefties who complain about capitalism while decrying the lack of spending on social programs, even to the point of deficits. All of the wealth necessary to keep that spending going comes from the ultracapitalism, with its attendent high degree of inequality, they descry. Not to mention the fact that social liberalism is itself something entirely enabled by wealth and technology.

      Wealth!=hypercapitalism. You’ll always be able to argue that produced your wealth. That doesn’t mean we should remain there. We already have the technologies/wealth to enable social programs and social liberalism. We don’t need to retain that economic system if we think another is better.

      • manwhoisthursday says:

        The debt these guys always want us to get into requires continual growth to work, and that means hypercapitalism. You never bloody hear lefties talking about living more equally within our current or even diminished means. For all their faults, Clintonites and other economic centrists are aware of this dynamic.

        • wysinwygymmv says:

          Less than 25% of 2015 federal spending was on the sort of programs you hate, and money is fungible. You should consider the idea that “we should spend some reasonable percentage of our tax take making the world a nicer place to live rather than a scarier one” is not actually a good reason to hate lefties.
          https://media.nationalpriorities.org/uploads/discretionary_spending_pie%2C_2015_enacted.png

          You never bloody hear lefties talking about living more equally within our current or even diminished means.

          Uh, I hear it all the time — the left is constantly criticizing unconstrained consumption, arguing that the resources consumed through extravagance would be more justly spent making the world a better place. That’s kind of their deal.

          • grendelkhan says:

            This is a bad graph; that’s discretionary spending, i.e., spending that’s allocated every year, rather than being mandated over the long term, as most social programs are. The National Priorities Project even has the right pie chart. We’re an insurance company with an army, and that army’s not even as big as it used to be.

            (Also, on a state and local level, pension obligations are going to be a problem. It seems that when the Great Recession hit, it killed our pension projections and punting the ‘you’re screwed!’ ball down the road was the most palatable option, so either we’re going to gut our services or stiff the workers, neither of which is appetizing.)

            the left is constantly criticizing unconstrained consumption, arguing that the resources consumed through extravagance would be more justly spent making the world a better place

            But still spent. The left may be all ‘keep it in the ground’ when it comes to carbon reserves, but you won’t hear much ‘keep it in the market’ from them.

            (I’m being a bit uncharitable; the brand of environmental leftism that I subscribe to makes heavy use of markets. Hell, that one is even designed to wind itself down once it’s done its job. But that’s hardly the entire left.)

          • wysinwygymmv says:

            This is a bad graph; that’s discretionary spending, i.e., spending that’s allocated every year, rather than being mandated over the long term, as most social programs are. The National Priorities Project even has the right pie chart. We’re an insurance company with an army, and that army’s not even as big as it used to be.

            My take on it is that people already payed into social security and medicare so that money is already owed back to them. That’s why it’s not discretionary.

            And what’s relevant to spending decisions is what is discretionary not what’s already owed.

            SS is also an incredibly old program (and Medicare is a fairly old program) and you can’t blame the demand for Social Security on the leftists that @manwhoisthursday is trying to get off his lawn. You can blame a certain amount of it on a lot of people who tend to vote Republican and decry “entitlement spending” even though you’re very quick to identify them as recipients of “entitlement spending”.

            Which is to say that “this is a bad graph” and “this is the right graph” is very much begging the question.

            I’m a little irritated I had to spell all that out — I thought it was obvious.

            Also, on a state and local level, pension obligations are going to be a problem.

            Oh, I don’t disagree that SS, medicare, and state and local pensions are problems, I just don’t think they can be blamed on modern day leftists.

            The left may be all ‘keep it in the ground’ when it comes to carbon reserves, but you won’t hear much ‘keep it in the market’ from them.

            First of all, this doesn’t really seem to have much to do with what I was talking about, which was not so much “keep it in the ground” as “this kind of executive compensation makes no sense when 10% of the world lives on less than a dollar a day.”

            Secondly, when you give money to poor people they tend to spend it. So no, “keep it in the market” is not the sort of rhetoric employed by leftists, but it’s functionally equivalent to their actual suggestions.

          • manwhoisthursday says:

            Cmon, stop bullshitting. You never ever hear the left talking about how the government should live within its means. You never hear a word against deficit spending. Never.

            the sort of programs you hate

            How do you know what programs I, allegedly, hate? I’m fine with a welfare state.

          • grendelkhan says:

            My take on it is that people already payed into social security and medicare so that money is already owed back to them. That’s why it’s not discretionary.

            Social Security and Medicare do not work like that. They’re much more like insurance; you don’t get your money back. You get the next guy’s money. And in any case, the payments into it were used to offset income tax cuts a generation ago with a promise to even things out later, honest, really. And none of that paying-in reflected cost inflation, especially medical cost inflation down the road.

            (I will point the finger for a chunk of medical cost inflation at the right, though; the most obvious, low-hanging, win-win cost-containment option we had was end-of-life counseling, and that got tarred as ‘death panels’, so we still waste a ton of money making sure people die as unpleasantly as possible even when that’s not what they’d prefer. Bleah.)

            you can’t blame the demand for Social Security on the leftists that @manwhoisthursday is trying to get off his lawn

            Says who? These are hardly decisions that were made decades ago and have hardly been touched since. We revisit them all the time, and it’s extremely contentious when we do.

            The intricacies of federal budgeting–these programs are authorized annually by Congress and their continuity is traditional, but these programs are authorized long-term by Congress and their continuity would be harder to affect–don’t make it reasonable to point to a graph of discretionary spending and call it “2015 federal spending”. It’s not obvious that discretionary spending is hard-headed dollars that we should care about, whereas mandatory spending is fully funded on its own and isn’t real spending.

            when you give money to poor people they tend to spend it

            As I understand it, the critique from the right is that attempts to help the poor rather than removing barriers to them helping themselves will fall to cronyism; money will flow to whoever the politicos like, sometimes for causing actual harm, sometimes just wasting money, but generally being much worse at helping poor people. Hence a UBI.

            You say that “the left is constantly criticizing unconstrained consumption”, but have you ever seen someone on the left talk about how we need to cut back on pensions, how government spending is too high, how we need to provide less healthcare, build less infrastructure, or fund only the important research (‘but it’s all important!’ isn’t an answer)? It comes off as “you need to give back those scraps whilst I gorge myself”. I don’t have a solution for that, but we should be honest about it.

          • herbert herberson says:

            Cmon, stop bullshitting. You never ever hear the left talking about how the government should live within its means. You never hear a word against deficit spending. Never.

            Contra the right which talks about deficit spending when its out of power but increases the deficit via tax cuts and “defense” spending whenever it is in power.

          • wysinwygymmv says:

            @manwhoisthursday:

            Cmon, stop bullshitting. You never ever hear the left talking about how the government should live within its means. You never hear a word against deficit spending. Never.

            I don’t think I…ever claimed this in the first place. Maybe you meant to put “government” somewhere in here and didn’t?

            You never bloody hear lefties talking about living more equally within our current or even diminished means.

            If so, I don’t think it’s really fair to accuse me of lying for misinterpreting a statement that literally has the most important word missing from it.

            @grendelkahn:

            Social Security and Medicare do not work like that. They’re much more like insurance; you don’t get your money back.

            “Banks do not work like that. You don’t literally get your money back, your money is loaned at interest and you get someone else’s money back.”

            This is bullshit nitpicking.

            And in any case, the payments into it were used to offset income tax cuts a generation ago with a promise to even things out later, honest, really. And none of that paying-in reflected cost inflation, especially medical cost inflation down the road.

            Well, then that’s wrong and I disagree with it. Did I say I supported it?

            Says who? These are hardly decisions that were made decades ago and have hardly been touched since. We revisit them all the time, and it’s extremely contentious when we do.

            Do these fiddly details have a material impact on the appearance of the graph? Please explain to what degree.

            It’s not obvious that discretionary spending is hard-headed dollars that we should care about, whereas mandatory spending is fully funded on its own and isn’t real spending.

            The contrary isn’t obvious either. There are lots of good reasons to bracket social security and medicare in any discussion of government spending, and any reasonably charitable interpretation of my comment would have taken these reasons into account.

            I’m not especially inclined to continue this with you since I do get the strong impression you are not giving me a reasonably charitable reading. But to finish what I started:

            As I understand it, the critique from the right is that attempts to help the poor rather than removing barriers to them helping themselves will fall to cronyism; money will flow to whoever the politicos like, sometimes for causing actual harm, sometimes just wasting money, but generally being much worse at helping poor people.

            Well, obviously this is arguable. But strangely enough, social security is so popular that many of those “on the right” must also seem to really like it. So even though it’s arguable, not many people actually argue it in the specific case of social security. Which is one of those good reasons for bracketing it I mentioned it above. Otherwise we’d have to keep saying “Republicans’ reluctance for social spending (except for SS)” and similar.

            http://www.pollingreport.com/social.htm

            You say that “the left is constantly criticizing unconstrained consumption”, but have you ever seen someone on the left talk about how we need to cut back on pensions, how government spending is too high, how we need to provide less healthcare, build less infrastructure, or fund only the important research (‘but it’s all important!’ isn’t an answer)? It comes off as “you need to give back those scraps whilst I gorge myself”. I don’t have a solution for that, but we should be honest about it.

            No, because people on the left tend to think that:
            1. Not letting old people starve is more worthwhile than naked pursuit of wealth.
            2. Helping sick people is more worthwhile than naked pursuit of wealth.
            3. Infrastructure building and maintenance is actually an important component of the engine of wealth creation in the first place.

            Leftists tend to think that a lot of wealth is created that is either wasted or used in ways that only marginally improve human well-being whereas it could be used to reduce a considerable amount of human suffering as well. This may be untrue or incoherent on further analysis, but I don’t think that’s obvious and I don’t think making the case for it is unethical.

            At any rate, I am a leftist who does argue against infrastructure and healthcare* and against social security, though in this case I’m not inclined to concede any points because I feel you are being a bit of a dick.

            *Not against pensions, because if these people were basically promised a paid retirement, and as a result spent a lot of money they wouldn’t otherwise have spent that contributed to economic growth that all of us benefited from.

            Edit:

            @Brad:

            Fair point on Medicare, though I’d still want to bracket it because it’s another instance of “social spending that’s broadly supported even on the right”.

          • Brad says:

            I disagree that Social security amounts to people getting back what they are owed, but it is at least arguable. But for Medicare it makes no sense at all. Eligibility for Medicare is not conditioned on the recipient or his spouse(s) having ever paid a cent in Medicare taxes.

          • manwhoisthursday says:

            Here’s the original comment at the top of the thread:

            Man do I hate lefties who complain about capitalism while decrying the lack of spending on social programs, even to the point of deficits. All of the wealth necessary to keep that spending going comes from the ultracapitalism, with its attendent high degree of inequality, they descry.

            It was fucking crystal clear from the beginning I was talking about government spending. Jeez.

          • manwhoisthursday says:

            Contra the right which talks about deficit spending when its out of power but increases the deficit via tax cuts and “defense” spending whenever it is in power.

            Hey, if you want to praise the Clintonistas for being the ones who actually balance the books, knock yourself out. But then don’t complain to me about their “austerity” policies.

            I have my problems with Clinton-type economic centrists, but I’m not criticizing them here. I’m going after the left left.

          • Less than 25% of 2015 federal spending was on the sort of programs you hate, and money is fungible.

            The graph you link to shows discretionary spending, which was 1.11 trillion. The total federal budget for 2015 was 3.7 trillion.

            You may want to argue that discretionary spending is for some reason what matters for your argument, which I haven’t been following in any detail. But what you wrote was false, you now know it was wildly false in a direction that supported your argument, and yet your response is not to apologize for misrepresenting the evidence in defense of your point but to defend doing so.

            And you complain that people who didn’t interpret your claim about federal spending as a claim about the fraction of federal spending that you think is most relevant to the argument are not giving you a reasonably charitable reading.

    • VivaLaPanda says:

      Do most “lefties” propose hunter gatherer levels of equality? Maybe I’m just misinterpreting you, but are you saying that the only acceptable level of wealth transfer is 0%? If not, than you and the people on the left you are talking about just disagree on what level of wealth transfer is acceptable. I do agree that the massive villanizing of capitalists is harmful and misinformed, but I think the idea that society should have programs that prevent those who are less productive from being unable to live doesn’t need one to believe that the rich are evil.

      From a realpolitik perspective, if we had no wealth transfer at all, we would probably have riots in the streets as large portions of the populace lost access to food and healthcare. Income inequality is a real problem even if you are just talking about it from a keeping society stable perspective, not a moral one. Also, I think part (but not all) of the reason we have wealth inequality isn’t because of capitalism itself, but because of social and governmental structures in the US that make upward mobility pretty hard. I.e. stupid licensing and educational requirements.

      • bbeck310 says:

        There’s a very big ideological difference between “capitalism plus a welfare state is the best system because capitalism generates the wealth needed to fund the welfare state” (Bill Clinton, Sweden, Germany) and “capitalism is evil because the wealth should be distributed to end poverty.” (Sanders, Venezuela).

        • wysinwygymmv says:

          I strenuously disagree that if you look at “political economy space” you will see two tight clusters, one of which is “Sanders, Venezuela” and another of which is “Clinton, Sweden, Germany”.

          It would be much more defensible (though still not true or especially useful) to say those five things are on a spectrum. In that case, I’d argue that the spectrum looks something like:
          Clinton —– Germany — Sweden – Sanders (he explicitly cites Scandinavian political economies as the model of what he advocates) —————————- Venezuela.

          But again, I don’t even think trying to put these things on a spectrum tells us very much useful. Venezuela was kind of a special case of an incredibly unequal country where a(n irresponsible) socialist government got into power and reduced inequality by heavily redistributing their considerable oil revenue, and which turned into a failed state when oil prices dropped precipitously due to an oil glut.

          • Aapje says:

            Venezuela […] turned into a failed state when oil prices dropped precipitously due to an oil glut.

            They also engaged in a lot of involuntary nationalization, running foreign investors out of the country. And they failed to invest in new wells.

      • wysinwygymmv says:

        Also, I think part (but not all) of the reason we have wealth inequality isn’t because of capitalism itself, but because of social and governmental structures in the US that make upward mobility pretty hard. I.e. stupid licensing and educational requirements.

        I think the opposite is also quite arguable, though, i.e. if there were no licensing and educational requirements beyond those strictly needed then there would be more competition between workers for jobs, which by supply and demand would drive wages lower, reduce upward mobility, and exacerbate income and wealth inequality. In other words, if the middle class actually had to compete with the lower class in the labor market, the result might very well be more lower class wages rather than more middle class salaries.

        • humeanbeingblog says:

          This is unconvincing. First, there’s no reason to assume that a price equalization would pull down middle class wages more than pulling up lower class wagesture. Second, if it is the case that everyone’s wages would be low without licensing requirements, then licensing requirements are even more indefensible. Why should those worth licenses get to enjoy higher wages just because they were able to successfully lobby the government to serve as a protection racket for their business?

      • manwhoisthursday says:

        I think there is a certain kind of person for whom equality is the absolute overriding good. Freddie de Boer is an example of this. I don’t think Freddie has thought this through enough to explicitly come out and say it, but, based on his statements, people of that type seem to think we can keep something like post 1950s levels of wealth, maybe even current levels of wealth, with radical equality too. I think that’s risible.

        I’m also saying that the level of equality that people of that type will be satisfied with is only available in hunter gatherer societies, and it would be better to come out and say that that is what we should be aiming for.

        —–

        I’m going off of memory here, so if anyone wants to correct me on Freddie, feel free.

        • I think it’s helpful to distinguish the kind of equality where no one is very poor from the kind where no one is very rich.

          • That works if your standards of rich and poor are absolute–but then we are already pretty much there, since very nearly nobody in a modern developed society is very poor by the standards of most of human history. Even in the inner city you don’t see people who look as though they are starving to death.

            In practice, our definition of poor moves up as a society gets richer. So if a lot of people become very rich by our old standards, the people who were neither rich nor poor then are now poor.

      • manwhoisthursday says:

        I’m not arguing against welfare state capitalism. I’m arguing against the revival of actual socialism.

        • grendelkhan says:

          Like, Scandinavian-style welfare-state socialism, or nationalizing-the-mines, collectivizing-the-farms, expropriating-the-kulaks scaling Corpse Mountain socialism?

          • Tibor says:

            Scandinavian countries do have an expansive welfare state and collect a lot of money on taxes, but they seem to be fairly liberal otherwise, at least judging by the Heritage foundation economic freedom index. Btw, I feel that Norway should be compared to any country which does not sit on oil, Sweden and Denmark can be.

  15. manwhoisthursday says:

    Anything remotely good in the world quickly gets invaded by rent-seeking parasites and empty suits.

    It’s particularly risible to suggest that really terrible people don’t invade government bureaucracies aimed at alleviating social problems or socialist political movements. And the latter seems to have a nasty habit of turning places into human rights hellholes like the USSR or China, or at best Venezuela. You might go for something like Sweden, but it’s hardly outside of the capitalist system.

    • doubleunplussed says:

      Scott said “anything good”. That would seem to include both government and private things getting invaded by parasites. I think the statement was just emphasising the fragility of good things in general, not having a go at capitalism specifically.

      • manwhoisthursday says:

        I wasn’t suggesting that Scott was suggesting only private things get invaded by parasites.

        • rahien.din says:

          Scott: Anything remotely good in the world quickly gets invaded by rent-seeking parasites and empty suits.

          manwhoisthursday: not so fast, public entities get invaded by parasites too!

          doubleunplussed: “anything remotely good” includes both private and public entities

          manwhoisthursday: I never tried to suggest that Scott said only private entities get invaded by parasites

          …is how I interpreted this exchange.

        • wysinwygymmv says:

          The “particularly risible” part made it seem like that’s what you were saying — like it seemed you were saying Scott’s statement was “particularly risible”.

    • Tatu Ahponen says:

      Soviet Union or China aren’t the result of “terrible people invading government bureaucracies aimed at alleviating social problems”. Lenin, Mao and pals basically took over the reins of actual government and left much of those bureaucracies (from the Czar/Kuomintang era) in place, from what I gather. Of course, their functions then began changing rather radically.

      • 6jfvkd8lu7cc says:

        I am not sure how much of old bureaucracy as in structure was left in Russia after the revolution. The declared idea was to demolish then entirety of the old government and build a new, significantly different one. And it wasn’t just a theoretical proclamation.

        • bintchaos says:

          Maoists basically destroyed academe and culture. See Cultural Revolution and Struggle Sessions.
          Anyone thats been watching The Handmaids Tale can imagine that happening in say…..Berkely, with the Proud Boys, Oath Keepers, and Identity Europa standing in for the Republic.
          Quite astonishing levels of hatred aimed at university students and professors.

  16. sandoratthezoo says:

    I don’t know.

    I work in the Silicon Valley, as a software engineer and now a software engineering manager. I’ve worked here for my entire career, starting in 1999.

    My standards aren’t high: I don’t need to be doing something that’s explicitly prosocial. I’m happy with just “produces a product that people would like.” When I need a new job, I typically work with recruiters who pitch me companies. I’ve had two job searches in the last five years, and like most software engineers, I get regular cold pitches. I’ve also done some research into companies on Angellist and other job sites.

    I have to say, for every one company that strikes me as at least I could imagine wanting to work there given the right position & coworkers & salary & physical location, there are at least 20 companies that either do social advertising, advertising big data, or (less so now thankfully) social video sharing. I’m not prepared to say that these companies are… completely evil, though when you put “advertising” and “data” anywhere near each other, they probably aren’t angels, but jesus christ they are boring as shit and at best you could say that they enable other companies to enable other companies to try to put out a product that someone actually wants with a business model that works. At worst, they’re just parasites. They definitely aren’t innovative and they aren’t advancing technology. There are a LOT more of these than the SpaceX’s of the world.

    PS: SpaceX is not located in the Silicon Valley.

    • Scott Alexander says:

      “PS: SpaceX is not located in the Silicon Valley.”

      Neither is Juicero, if you want to get technical about it.

      • bean says:

        SpaceX is also mostly staffed and run by people who did not come out of Silicon Valley. Musk is definitely the person who put the pieces together, and the work environment is more Silicon Valley than Normal Aerospace, but it’s not the same people doing the work.

      • John Schilling says:

        (Juicero’s) corporate headquarters seems to be in San Francisco, which is within spitting distance of Silicon Valley and nowhere near any hub of the fruit-packing industry. They seem to have a factory in Los Angeles, FWIW.

        SpaceX, by comparison, put its headquarters and production facility three hundred miles from Silicon Valley but within walking distance of several other major aerospace corporations. The cultural distance between SpaceX, Silicon Valley, and Traditional Aerospace is over on the other thread, but I don’t think there’s any metric by which SpaceX can be simply lumped in with Silicon Valley without a conspicuous asterisk at the very least.

        • sandoratthezoo says:

          San Francisco is officially a part of the Silicon Valley now (by “officially,” I mean “I have decreed it to be so”).

          That was arguably not true pre-2010 or so, but it is definitely true now.

    • Slocum says:

      +1. I don’t doubt that Scott has found some ‘worthwhile Silicon Valley initiatives’. I guess it’s debatable how representative they are or whether they’re actually in SV or just have SV venture capitalists as investors. But either way, relative to what Silicon Valley used to be, they’re boring. No, they’re not all producing useless goods and services (though many are), but none have even a slim chance of becoming the next Amazon, Google, or Facebook. As time slips by, it’s looking more and more likely there won’t be any more Amazons, Googles, or Facebooks coming out of SV. Ever. Can SV make the shift to more sober, smaller niche companies that are never going to have massive IPOs? Or are the high costs of SV going to push VCs to put more money into companies located where burn rates are lower?

    • grendelkhan says:

      I have to say, for every one company that strikes me as at least I could imagine wanting to work there given the right position & coworkers & salary & physical location, there are at least 20 companies that either do social advertising, advertising big data, or (less so now thankfully) social video sharing.

      In other words, “I saw the best minds of my generation optimizing ad clicks, caffeinated paleo gamified, Ubering down 101 at midnight pushing a new stack to engage more eyeballs”?

    • shenanigans24 says:

      Making stuff that people want is all there is. There’s no objective reason why Juicero’s are inferior to electric cars or IPhones, just that people have subjectively decided so. Most of the criticism seems to be that “they’re making junk” which is equivalent to saying “they’re not making stuff I want.” Obviously some products will be so unwanted the investment isn’t recouped but I don’t think you could get rid of such an outcome anymore than you could ban answering math problems incorrectly.

      • romeostevens says:

        People’s actual objection is their instinctive aversion to products with low perceived positive flow through effects.
        So it isn’t just ‘stop liking what I don’t like’, but ‘stop liking things with no positive externalities for me.’

      • GodspeedYouBlackEmperor says:

        Isn’t one of the main issues with the Juciero is that for a 400 dollar juicer you can get the same result by ordering the bags (at around 8~10 bucks per serving) and squeezing them by hand?

        Do the additional wireless features constitute an additional (let’s be generous) 100~200 dollar up-charge?

        I don’t know if it can even be argued that it makes for less mess since the company still expects you to cut open and rinse out the bags to mail back to them for recycling.

        200 to 400 dollar noncommercial cold press juicers are already a thing. They do the same thing as the Juicero, with roughly the same amount of cleaning (cleaning out bags versus running some water through the juicer), and you’re not locked into buying produce from one source so you could save some cash, and they’re actually capable of… you know… juicing better than most people can do by hand.

        Are the wifi features really worth it?

        I mean, if electric cars and IPhones managed to perform worse than conventional alternatives without any sort of ameliorating factor than those items would be objectively worse than the competition no? I think we can hold the Juicero as a product up to those same standards.

  17. eh says:

    Cowlar seems genuinely useful. I haven’t lived near dairy farmers for a decade, but if I remember correctly,

    – disease could render an entire tanker of milk unfit for human consumption, and farmers often resorted to dosing an entire herd with penicillin, which also rendered that farm’s milk unsellable

    – calving season was absolute hell, featuring extended sleep deprivation, dead calves in sad little heaps because nobody got to them in time, occasional dead cows, and regular 2am tramps through frigid paddocks with a torch

    – some of the cows wouldn’t even conceive, which was a massive waste of time and feed

    – every summer, stock would die during heatwaves

    – at regular intervals bulls would break out and go traipsing around the countryside, attacking passers-by and playing chicken with traffic

    You’re dealing with livestock weighing hundreds of kilograms, selling for close to a thousand dollars. If you can stick a cheapish reusable collar on that thousand dollar investment and increase yields/decrease losses, then that’s a pretty good deal. In fact, there’s already a pretty congested market out there for cow wearables. “Fitbit for cows” is arguably one of the more conservative YC picks.

    EDIT: also, they’re from Pakistan and doing trials with local farmers’ herds, which both puts them in the developing world category and runs counter to the “decadent Americans buying useless shit” narrative

    • Janet says:

      Yes (although I’m disappointed that I didn’t get to post that first, given a direct challenge in the OP to do so) 🙂

      It’s also not quite as new as they’d probably like it to be. Electronic cow collars (and ear tags) have been around for quite awhile. They have geolocators to track wandering/stolen animals, or with a shock-collar to keep the animals penned without fencing. (Satellite and cellular-based systems are available, and interact with a smartphone app for the farmer.) Another use is to identify individuals automatically– this would be paired with an automated feeding machine, which would customize the feed provided to each animal, based on its personalized data (e.g. a cow that gave X liters of milk today would get Y milligrams of calcium, etc.). Also, this data would be given to the vet, if the animal got sick, and to identify estrus in females and (ahem) “efficiency” in males.

      There are other variants which are a pill form (and sit in the cow’s ruminant stomach for its lifetime) that are coming out, I understand. They also herd cows with drones now, and do remote monitoring for theft, scare off predators, etc. They have automatic fence/barn doors (opens/closes for particular cows), automatic milking stations, and so on. Geo-info is incredibly useful– you can track now where each cow went, as it grazed, which tells you about all kinds of soil and plant issues before they become a problem. Mapping from drones reduces overuse of pesticides and fertilizer and catches problems early enough to fix. And so on.
      Farming is super-high tech; there’s almost no limit to the usefulness of R&D in this sector.

    • keranih says:

      Thank you for posting this!

      As you say, farmers are already using electronic measures to help manage cows better – and by “manage cows” I mean “figure out what the most healthy and profitable cows are doing, and help them do that.”

      Managing the interface between the most instinctive animal behavior and the most instinctive human behavior is the trickiest part of agriculture, and anything that makes it easier for people to understand cows helps the cows. (And the people.)

      A bit of clarification/tweeking:

      disease could render an entire tanker of milk unfit for human consumption

      Much more likely in the third world, which doesn’t have a handle on TB and burcellosis (and others) the way the West does. Modern vaccination, quarrantine, and testing keeps modern US & west Europe dairies pretty free of zoonotic disease.

      What can still degrade milk to unsaleable quality is wide spread infection in the udders, but that’s not a single cow issue.

      and farmers often resorted to dosing an entire herd with penicillin, which also rendered that farm’s milk unsellable

      Treating one cow for an infection then putting her milk in the tanker with the milk of hundreds of others can result in the rejection (meaning, dumping in the storm drain) all that milk. (At least in the USA. Standards vary widely in the world nation by nation.) Farmers have to obey the withhold time for treatment – same as meat chicken, pork and beef farmers have to hold treated animals for a period before they can send the animals to slaughter.

      calving season was absolute hell, featuring extended sleep deprivation, dead calves in sad little heaps because nobody got to them in time, occasional dead cows, and regular 2am tramps through frigid paddocks with a torch

      This highlights the wide scope of dairy operations – some calve year round, some (esp grazing operations) calve out the whole herd – hundreds strong – in three weeks. (And if you think one can do that without hormone manipulation of the cows – either breeding, delivery, or both – think again.) Either way, accurate record keeping is a must, and there are always cows that don’t read the manual, 2-5 cows out of a hundred who have calving issues (it’s higher in first calf heifers) and random emergencies that keep Hank the farmer at the barn for five crucial hours instead of making sweeps of the pen.

      – some of the cows wouldn’t even conceive, which was a massive waste of time and feed

      Yes. Exactly. This. Electronic monitors/tags serve two main purposes now – first to track which cow is in which milking stall so that her personal milk out put is recorded, and secondly, how much pacing and walking she is doing. Cows in estrus do laps, and the activity spike is generally easy to catch. (It’s also possible for an experienced cowman with 10 + years experience to beat the electronic records…but the trick is getting the cowman with 10+ years experience.) Things like body temp, heart rate, time at the feed bunk, time spent ruminating – all that is extra gravy right now, but it’s the next step in figuring out which cows need extra human attention right now.

      – every summer, stock would die during heatwaves

      Not as much of an issue in the American South, but mostly because of infrastructure and management patterns. It’s a lot cooler in the barn with the fans and sprinklers going than out in the pasture, and if you look at the cows, you can tell. Still, being able to id overheating cows would help.

      – at regular intervals bulls would break out and go traipsing around the countryside, attacking passers-by and playing chicken with traffic

      God-bless-America, yes. Or some idiot would leave a gate open.

      You’re dealing with livestock weighing hundreds of kilograms, selling for close to a thousand dollars.

      The cost varies widely. (And fluctuates year to year.)

      But for the most part, absolutely yes – cow behavior will tell you a lot, and an electronic measurement (vs eyeballs) helps to better monitor the cows. You can get too married to the read outs, and there’s always a bad monitor or eight. But every bit that helps recover time, and every bit that helps take the guesswork and experience out of the equation, makes things better for the cows.

  18. tcheasdfjkl says:

    There’s also the thing where silly consumer products are more likely to be seen by consumers than boring-cloud-companies and social-impact-companies, because of advertising. I get Facebook ads for silly-sounding startups pretty often, and I’d be pretty surprised if others didn’t too, and even e.g. BART is full of gig-economy-startup ads. Since I am not a business or an investor or the type of person people make social-impact-things for, I’m not gonna see those other things.

  19. foomanchu says:

    If I were to push back a little, the criticism one can lay against Silicon Valley isn’t that the pro-social or technologically innovative companies don’t exist but that they have no impact.

    Besides SpaceX (which isn’t in Silicon Valley unless you meant to use “Silicon Valley” as metonym) where are the success stories? There certainly aren’t many examples and the ones you can find aren’t clear cut winners. The Silicon Valley solar innovation you linked to is a *financial* innovation (and isn’t actually innovative, it’s just a lease); Tesla might not make it. Etc.

    • Scott Alexander says:

      I think of Uber/Lyft as really prosocial; transportation is one of the biggest problems for poor people who can’t own cars.

      As for innovative, lots of people use 23andMe these days.

      • Svejk says:

        Foomanchu has a good point about financial innovation.
        From a prosocial point of view, the most innovative aspect of Uber was not the ride-hailing app (there were several contemporaneous apps and possibly at least one earlier app in Europe), but the business model of getting VCs – and then Saudi Arabia – to subsidize the rides. This is what allows low-income individuals to use it for daily activities. Very few industry observers expect this aspect of Uber to survive as/if Uber matures (see e.g. here).

        The media may not be treating Silicon Valley especially harshly, but rather applying the same dark lens it uses on the financial services industry, since much of SV innovation is in financialization. Whether this treatment is appropriate or well-informed in either case is an open question.

      • Svejk says:

        As for 23andMe, it amazes me that people are willing to upload a precis of their genome into a conveniently-subpoenable database held by an advertising company. I think one of the most innovative tech subcultures is the privacy/security/decentralization sphere, and it may not be a coincidence that they are among the nerdiest.

        • Squirrel of Doom says:

          “Advertising company”?

          Are you confusing 23andme with Google?

          • bintchaos says:

            23andMe is a genomics company that grew out of the old hap-map project.
            and while u guys are squabbling abt Silicon Valley intentions
            China has launched a Manhattan Project on genomics
            https://infoproc.blogspot.com/2017/04/cngb-china-national-gene-bank.html

            so what works better d’ya think?
            free enterprise capitalist innovation or narrowly targeted Manhattan Project style programs?

          • Svejk says:

            Advertising company”?

            Are you confusing 23andme with Google?

            Alphabet is a large investor in 23andMe, and most of their revenues derive from advertising.

          • bintchaos says:

            That still doesnt make 23&Me an advertising company.
            Again, its a commercialization of the old hap-map project.
            It would be great for cognitive genomics research if 23& Me can sell their data.
            Vast quantities of un-silo’d data would be a dream come true for researchers.

          • Squirrel of Doom says:

            A bank may invest in a hotel. That doesn’t make the hotel a bank.

          • Svejk says:

            The 23andme business model is centralizing and monetizing data on the Alphabet model. There are tradeoffs inherent in this model that the customer base may not be fully aware of. There are better models for genomic data collection that would resolve some of these issues and allow consumers to benefit more from their data.

      • rsj says:

        Despite the creepiness of Uber’s leadership, they have become a de facto Job Guarantee employer.

        All you need is a driver’s license and not have any felonies in your record (Uber will set you up with a car lease).

        Many, many people who need a job can instantly get one now. The pay isn’t very good — there is no gatekeeping and wages are allowed to fluctuate with demand, but the jobs are available. Uber is basically putting to test the neoclassical economic ideas about supply and demand for labor, and I wonder if this isn’t the core reason for why they are hated so much.

        I have had friends and relatives that would have been in real trouble (evicted, bankrupt) if Uber wasn’t available for them when they were in between jobs or in living situations that didn’t allow for regular work. When I take Uber, many of the drivers have kids they need to pick up at 3, or another job such as being a part time caretaker, that prevents them from having regular hours or even the full 40 hours. They can work with Uber whenever and for how long they want to, and the job is always there waiting for them. I can’t overstate how huge and socially positive this is.

        Whatever happens to Uber, I hope something is always there to provide a similar service. On demand, at will employment that will accept all comers with very basic skills, no capital, and will let them work as long as they want at market-set wages.

        • wysinwygymmv says:

          How many of those people were really making money long-term factoring in upkeep and wear-and-tear on the vehicle? I feel like Uber employees are not really making money through Uber so much as stripmining the value of assets they already own (their cars).

          Uber drivers who have their shit together seem to confirm this, saying that the only way they can actually make money long-term is by owning a low-depreciation vehicle with great gas mileage, i.e. a vehicle that is already not affordable to people who would most benefit from driving for Uber.

          In other words, it seems like Uber really provides a way for middle class people to get back cash they invested in their automobiles on a 1-for-1 basis or at a slight loss rather than providing a way for poor people to actually get ahead.

          On demand, at will employment that will accept all comers with very basic skills, no capital, and will let them work as long as they want at market-set wages.

          Umm, you realize that in this context cars are a form of capital?

          • random832 says:

            Just out of curiosity, how much money do pizza delivery drivers make relative to Uber drivers (particularly in tip-credit states)?

            If it’s about equivalent, isn’t this just an expansion of the market for shitty jobs for people with cars, rather than a new concept?

            I feel like Uber employees are not really making money through Uber so much as stripmining the value of assets they already own (their cars).

            If this is true, then “Uber will set you up with a car lease” is either impossible or involves defrauding the car finance companies, since lease payments are supposed to cover depreciation, including extra depreciation from commercial usage.

            I feel like saying “by owning a low-depreciation vehicle with great gas mileage” is smuggling in some assumptions. No matter what car you start with, once it’s done depreciating, it’s going to be low-depreciation and might still have mostly okay gas mileage. The costs you have to be concerned about long-term are maintenance (the minimum level of maintenance to keep the car driveable and keep its gas mileage from deteriorating); depreciation is finite.

          • rsj says:

            They can always lease the car from Uber and still make money. Many choose to use their own cars because they prefer more cash up front. You are saying that they are making a bad decision, but it’s their decision to make — if you are short on cash and can borrow from a payday lender or from your own capital depreciation, I would recommend doing the latter as well. But to say that they make *no money* after taking into depreciation is false.

            Here in San Francisco, people drive all the way from LA to work for Uber for a week, renting a hotel room in the process. They still make money.

          • rsj says:

            Now I read this, it sounds like you skipped the part where drivers can lease a car from Uber and don’t need to provide their own.

            https://www.uber.com/drive/vehicle-solutions/

          • baconbacon says:

            i.e. a vehicle that is already not affordable to people who would most benefit from driving for Uber.

            Like a used Corrola?

          • wysinwygymmv says:

            If it’s about equivalent, isn’t this just an expansion of the market for shitty jobs for people with cars, rather than a new concept?

            I didn’t argue that it’s a new concept, I argued that the commenter I responded to was heavily exaggerating the benefits of working for Uber.

            You are saying that they are making a bad decision, but it’s their decision to make — if you are short on cash and can borrow from a payday lender or from your own capital depreciation, I would recommend doing the latter as well.

            Yes, it’s their decision to make. You are arguing that it’s a good decision, and I am arguing that it is not necessarily such a good decision.

            But to say that they make *no money* after taking into depreciation is false.

            The situation is almost certainly that some people make money and other people lose money (even if just the subset who have traffic accidents or flat tires) and a lot of others pretty much break even.

            Now I read this, it sounds like you skipped the part where drivers can lease a car from Uber and don’t need to provide their own.

            I didn’t realize this was the case. I didn’t intentionally “skip it” if that’s how it came across.

            I’d suspect that Uber can offer more affordable leases than dealerships tend to offer individual drivers, which — empirically based on what I’ve seen Uber drivers say — do not seem to be affordable enough on average to make leasing your own car and driving for Uber a winning proposition. (Again, one can still lose the driving lottery and end up losing money overall, so there still seems to be a lot of risk involved.) If Uber is helping drivers lease cars at rates that make Uber driving a definite source of income for at-will employment then that’s a real step forward.

          • orangecat says:

            The situation is almost certainly that some people make money and other people lose money (even if just the subset who have traffic accidents or flat tires) and a lot of others pretty much break even.

            This is literally true in the sense that there will be a nonzero number of Uber drivers that break even or lose money, but from everything I’ve seen the overwhelming majority do much better than $0/hour. Even critical pieces like this find that it’s at worst around minimum wage. And considering the the often inflexible hours of other low-paying jobs (including BS like “you must be available to come in on short notice if we call you, but we won’t pay you unless we do”), it really is a better option for lots of people.

          • neciampater says:

            If you click on my name, you can see my analysis.

            I reckon it’s about $5/hr.

      • foomanchu says:

        I like Uber and Lyft and am glad they exist but I wouldn’t categorize them yet as clear wins since we still don’t know if they are economically sustainable.

        As for 23andMe, what is the innovation? That you can mail-in a genetic test? Is that really the best demonstration of innovation that Silicon Valley can supply?

        But even if we accept these examples the point remains that do-gooder and technically innovative companies are extremely rare even when compared to the already extremely small set of successful companies.

        That doesn’t mean that what Silicon Valley produces has no value, only that it is less exciting and endearing than what SV makes it out to be.

        • albatross11 says:

          The only way to get big improvements in the world is to let people try a lot of stuff, some of which sounds weird or goofy or offensive or whatever. Or at least, that’s the only way to reach a big part of the space of possible improvements to the world–the ones nobody powerful already knows about.

          • foomanchu says:

            Sure, but eventually you have to actually provide the results that you claim would arise from that process.

            Historically it seems that most transformative innovation comes from government or direct or indirect government subsidized research and is then brought to the public by industry. The problem might be that the number of things you have to try is staggering and the only entity that has the resources to absorb the cost of all the failures is the government.

        • rsj says:

          Uber has a bit of the WebVan smell. I think the business model is sound, and this is an area ripe for socially-enhancing disruption, as government-taxi company patronage system — at least in the big cities — are universally hated and massively corrupt.

          However, Uber’s management, cost-discipline, and general anti-social attitudes make it a really flawed champion. It’s an unfortunate reality that the forces of patronage align themselves as maintainers of social order whenever their rents are threatened, but Uber is making it easy for intelligent people to defend the corrupt system of extraction, which is really unfortunate.

          The available pool of people with adequate navigtion and driving skills — especially in the era of GPS — is huge. It’s many orders larger than the legally restricted number of medallions in the big cities. Moreover transportation is really important to people.

          When there is such an opportunity of highly elastic labor supply and relatively inelastic demand, insiders join with government to extract rents, at least as long as there is enough political cover for them to do so. Initially, the political justification is usually about safety and competency — this is too important a job to let anyone do it! Once the system is entrenched, defenders can cite stability of the social order and disruptions to the lives of workers, even though workers are not the primary beneficiaries.

          It’s no accident that both Uber and AirBnB are portrayed as enemies of the social order. Governments historically have viewed taxi passengers as tourists and have no issues with levying extra taxes on them just as they levy extra hotel taxes. It’s a tax paid by outsiders — rich businessmen coming in from the airport on expense accounts. That creates further opportunities for campaign contributions and systems of patronage in the awarding of monopolies to local businesses. The businesses turn around and charge an exorbitant amount ($200-300 per day) to lease the car to the taxi driver, who has no other place to go. Banks get it on the action by lending money to purchase medallions, which are then rented out to the taxi companies, earning a cut of interest for investors. Even the dispatchers get a cut by demanding bribes from the drivers for lucrative airport fares, which then creates a system of bribes and patronage for becoming a dispatcher.

          At the end of that, the cabbie got paid.

          But at least for the transportation business in large urban areas, times are changing as cars become more expensive, parking becomes more expensive, and car usage is decreasing. Taxis are becoming less of a travel luxury for tourists and more of a important service for locals to use, especially poorer locals. The amount of social good that could be accomplished by trashing the whole system of rent extraction increases. San Francisco, which has about 2000 medallions went from 0 to over 45,000 ride share drivers. 45,000 more people are working and the costs of moving around the city have fallen. I used to have to wait *hours* trying to catch a taxi on a Saturday night. Sometimes you waited and they never showed up. You would have to call and call, and they would put you on hold, and often dropped the call, and then you call back and wait some more. The dispatchers were rude. They would hang up on you. The taxi drivers were rude. They would routinely refuse to drive you if they didn’t like where you were going. I had taxi drivers stop for me and then refuse me entry when they saw a hot girl wave for a cab a few feet away. Many skipped over minorities hailing cabs. The cabs were not well maintained. There was no effective feedback system for racist, creepy or aggressive cabbies that would remove them from the labor pool. Similarly there was no feedback system for passengers, so the cabbies had strangers getting into their car with no information about their prior behavior.

          And there was absolutely nothing that the passenger could do and no incentive for this system to reform. You would call up the cab companies and go through a phone tree maze to find customer support, at which point the line would often drop. They had no functioning website to submit complaints or talk to a representative online. This was 2010.

          Now, any time I can get a ride in a clean, modern car with a driver that bathes and doesn’t yell at me for wanting to go to a location that they don’t like. Even the taxi companies were forced to improve their customer service, create apps, and be responsive to customer complaints.

          • orangecat says:

            Fully agreed. Uber is a terrible company run by sociopathic jerks, and I would encourage anyone thinking of working for them (as a corporate employee, not a driver) to run screaming in the opposite direction. Still, their pursuit of profits has caused them to take actions that benefit society. It’s a perfect example of Adam Smith’s invisible hand.

      • j1000000 says:

        I find things like Uber and Lyft anti-social in that they blatantly undermined commonly understood and widely known laws by creating a gypsy cab service. But that’s just me, and I know I’m naive.

        • suntzuanime says:

          Just because something undermines the law doesn’t make it anti-social. Think of, say, Sci-Hub, which is vastly wonderful and also basically just a piracy ring. Sometimes the laws have anti-social consequences and it’s pro-social to undermine them.

        • Edward Scizorhands says:

          There are some cities where Uber operated illegally.

          However, in most cities they generally obeyed the “commonly understood and widely known laws” about car services, which are not cab services, even though they compete for the same customers.

          • BBA says:

            I think that’s just NYC, where cabs can’t take advance calls and car services were a mature, regulated market long before Uber showed up. In much of the rest of the country, Uber started out operating illegally and eventually forced regulators to create a new “transportation network” status just for them. And there are a few places, like Austin and seemingly half of Europe, where they’ve simply pulled out rather than comply with regulations they find overly restrictive.

          • rsj says:

            “I think that’s just NYC, where cabs can’t take advance calls and car services were a mature”

            Huh? These are the rules in every major city. Why do you think car services only exist in New York? Other cities have rich people too, who like to order things like Limos or have drivers for hire, who don’t need a taxi license to drive. We also have meter maids, towncars, and traffic lights. Even traffic jams, and “well established” laws saying that taxis are what you hail on the street, but a driver for hire is someone you can’t. It’s not just a New York thing.

            Now, in other countries, I don’t know what the difference is, but Uber is legal in the U.S., and far from strong arming american regulators to create a special status for them, it was the taxi companies who strong-armed legislatures to change the law and exclude Uber, for example what happened in Austin. In the U.S. at least, Uber has consistently been a defendant, trying to roll back laws to outlaw it as it threatens established incumbents, rather than trying to get laws passed to legalize itself.

          • BBA says:

            In most other cities I’ve looked into, taxi companies have phone numbers so you can call a cab in advance and taxi-equivalent “car services” like Dial7 and Carmel don’t exist. There are limousines, sure, but those are for corporate expense accounts and kids going to prom, and they’re often restricted to charging hourly rates so they don’t compete with the authorized taxi cartel.

            UberBlack competes with that business. UberX, the one everyone uses, is a competitor to taxis, and started out with non-commercial licensed drivers and cars, claiming it was “sharing” so they didn’t need to spring for the commercial licenses (and if they did, it’s the driver’s responsibility). This didn’t fly in court, but by that point they already had enough market clout to twist the regulators into giving them their own legal category.

          • rsj says:

            Yes, taxi companies have phone numbers that let you order a cab. Most cities don’t try to protect the unlicensed industries from competition by the licensed industries, but rather the other way around.

            What’s regulated is hailing a car on the street, which only a cab can do. If New York bans taxis from competing with car for hire services in some way (I can’t imagine how — banning pre-arranged trips?) then that’s something I didn’t know about, but in any case it has no bearing on the legality of Uber.

            If you are not picking people up on the street but are booking the car for hire over the phone and having the car meet you at a pre-arranged spot and time, that doesn’t require a taxi license.

            Uber started out exactly this way, as a high end (e.g. limo) service. But the market demand was for cheaper rides, so they launched UberX. It was with UberX that the cost was low enough to compete with taxis and people started switching over. Nevertheless you still cannot hail an Uber on the street, you need to book it over the phone, and Uber drivers can’t use lanes reserved for taxis.

          • Edward Scizorhands says:

            What rsj said. Every major city had a “car service” market, which was regulated in some way, but nearly always different than taxi cabs are. Taxi companies were also players in this “car service” market, which is fine, but it doesn’t mean other people who enter the “car service” market have to obey the taxi company rules.

        • Drew says:

          I find things like Uber and Lyft anti-social in that they blatantly undermined commonly understood and widely known laws by creating a gypsy cab service.

          As I understood it, there have always been 2 sets of laws.

          You have really restrictive rules for street-hail cabs. And really lax laws for other kinds of private-hires.

          This is by design.

          Street-hail cabs are profoundly vulnerable to scams.
          They’re one-off interactions between strangers. The people involved don’t have records of each other’s names. And they’re not likely to see one another again.

          The value of a “ride” is difficult to measure and often not known in advance. And people are using oral, rather than written, agreements.

          Imagine being a cop who’s called to resolve a dispute about fares for an unregulated cab.

          The driver says that the distance was 4 miles. The rider says it was 2 miles. The driver says the price was $40 flat. The rider says it was $3 / mile.

          This would be a nightmare.

          So cities forced cabs to use meters and a standardized billing rate. Suddenly it’s practical for cops to resolve disputes.

          Private-hire services are way less vulnerable to scams. They’re repeat interactions. The parties know each other. And everyone has a billing address.

          Cops don’t need to resolve disputes on the spot. They can just tell people to take their issues to court, or to stop doing business together.

          Uber, despite being convenient, has all of the scam-reducing traits of any other private-hire service.

          So, their use of private-hire laws seems well within the spirit of things.

      • Deiseach says:

        Uber may have started off as a ride-sharing/ride-hailing service, but now it’s a mini-cab company. There’s nothing prosocial there about the bottom line, and how many poor people use it as a form of transportation? Most of the references to using it I see come from hip young things doing media articles or people who work in the city but not as, say, waitresses and blue collar jobs.

        According to this survey, Uber etc are most used, known and popular amongst “urbanites, young adults, college grads”. Maybe college grads fall under a specific definition of “poor people who can’t own cars”, but not from the viewpoint of “I always took the bus to work and I’ve never been to college” poor people.

        This is what allows low-income individuals to use it for daily activities.

        Depending on your definition of “low-income”:

        26% of Americans with an annual household income of $75,000 or more have used these services, while just 14% have never heard of them. For those living in households with an annual income of less than $30,000, just 10% have used these services and 49% are not familiar with them at all.

        ..And as is the case among the population as a whole, certain demographic subgroups living in urban areas – such as young adults, or college graduates – use ride-hailing at especially high rates. For instance, fully 39% of urban college graduates have used ride-hailing services at one point or another, as have 35% of urbanites earning more than $75,000 per year and 34% of 18- to 29-year-old urban dwellers.

        • Edward Scizorhands says:

          Prior to Uber, there was a technical requirement that cabs accept all fares. This was rarely enforced. Poor parts of town had no taxi service. You could call and request one, but they didn’t have any strict time limit to get to you, even if they said they would be there in half-an-hour.

          With Uber/Lyft, there is now a market that serves people. You can request a ride, and the vendor will enforce this. Not perfectly, as you can see in stories about drivers who cancel on black passengers, but there is at least an enforcement mechanism that is being exercised.

          This is not without any downside ever for consumers; it might turn out that you were on a route that was good in the old system that is less good in the new system. That often happens when you replace a centrally-designed system with a market.

          • albatross11 says:

            Outside of any other thing, a change in the world where you go from “this system lots of people use works pretty badly” to “this system lots of people use works pretty well” is a substantial improvement. That’s true even if some incumbents get hurt or some laws are violated. It’s true even if the people behind Uber aren’t very nice, or the corporate culture is toxic for women, or whatever else. Independent of all those other things, having stuff work better is a win.

    • Reasoner says:

      Google seems pro-social and technologically innovative.

      • rlms says:

        lol

        • grendelkhan says:

          Less content-free edginess, please.

          Google has a giant money hose from their ad business, some of which they use on pro-social things, like Project Ocean and Project Zero. And some of it, like self-driving cars, is either wonderfully pro-social (preventing all those deaths from car accidents) or horribly anti-social (all those truck drivers out of work), but it’s certainly innovative.

          • bintchaos says:

            In a way its a test of free market enterprise v authoritarian control–
            for example theres an AI arms race between Google (self-funded by profit) and Baidu (funded by Chinese gov AND self-funded by profits).
            Interesting to see which side gets there first.
            China also has a Manhattan project of sorts in cognitive genomics– also with significant gov fundage.

          • suntzuanime says:

            Responding to “Google seems pro-social and technologically innovative” with “lol” is no more content-free than asserting “Google seems pro-social and technologically innovative” in the first place.

          • Reasoner says:

            @suntzuanime

            lol

          • shenanigans24 says:

            How are people defining pro-social? Because it just comes across like some bologna excuse to inject a personal opinion and pass it off as an objective standard.

  20. psmith says:

    Seems like an opportune moment to post this:

    What’s very striking is that on some level I think fracking represents a bigger economic form of progress for our society as a whole than the innovation in Silicon Valley.

    -Peter Thiel

    Which is the elevator pitch for the serious, informed version of the Juicero outrage, in my opinion.

    • pdbarnlsey says:

      I feel like we should take that claim seriously, but not literally.

    • suntzuanime says:

      Fracking is incredible though. I’m old enough to remember the horror stories people would tell about Peak Oil and the collapse of civilization, you don’t hear those stories much anymore.

      • psmith says:

        In fairness, peak oil discourse is still around, just a bit more esoteric (energy returned on energy invested is negative, the books are cooked! Or the notion of demand destruction, which strikes me as potentially pretty apt.).

        But yeah, I don’t think anybody was predicting the apocalypse if we didn’t get Alexa, nor would an apocalypse (or, if you prefer, stagnation, decline, dark age, …) ensue if Amazon pulled the program.

      • Scott Alexander says:

        Yeah, “less great than another fifty years of cheap oil” is kind of damning with faint praise.

        I think it probably won’t be true, just because of AI. And probably even apart from AI there are other things I can’t predict that would make it false. But it’s a useful meta-reality check.

      • wysinwygymmv says:

        I think that’s more because they’re too horrible to think about rather than because they’re not still true. Fracking bought us some time, but you can go look at the decline rates, the decelerating deployment of new drill sites, the fact that supply didn’t increase even in response to historically high prices, and most of all the extremely worrying decreases in investment and exploration by the major oil companies and come to a pretty easily justified conclusion that we’re still on borrowed time.

        Couple this with the fact that analyses of renewables tend to be waaaaaay too optimistic and uncritical of the drawbacks of the technologies.

        @psmith’s point about “EROEI is negative, the books are cooked!” is unfair to the peak oil case. There’s good reason to think that we’ve gotten to the point where fossil fuel EROEI is low enough that there is no price simultaneously low enough for consumers to buy the big-ticket items that drive economic growth (houses and cars mostly) and high enough to make producers profitable, and that the only way we’ve been able to kick the can so far down the road is a huuuuuuge increase in global debt through Quantitative Easing. Really, EROEI is a pretty limited measurement and can’t give you apples-to-apples comparisons of fossil fuels versus solar, e.g. because solar is intermittent and so requires natural gas or oil peaking plants, but at the same time solar has nearly zero marginal cost and so cuts heavily into the profitability of running the peaking plants required for its own viability. So there are complicated market effects that have led to incredibly high prices in every market where solar and wind have been implemented at any kind of scale. And Germany and Denmark are still buying dirty energy from their neighbors to balance their loads, preventing the renewables from actually preventing much carbon dioxide production, from what I understand!

        Also, fossil fuels are heavily, heavily taxes — something like 60% as I understand. This is good and bad — good because it gives us more runway by allowing us to decrease these taxes, but bad because that decrease in taxes will most likely accompany a decrease in quality of life as government services are necessarily rolled back and new political compromises have to be made.

        • random832 says:

          because solar is intermittent and so requires natural gas or oil peaking plants

          My understanding was that there had been significant progress on thermal storage as a way to smooth out the intermittent aspect.

          • wysinwygymmv says:

            I’d love to learn more about that if you have any links. Obviously I’ve seen white papers about the possibility, but I haven’t seen anything about large-scale deployments.

            Empirically, places with high penetration of intermittent renewables have incredibly high energy costs despite massive subsidies. Also, the growth curve of renewables seems too slow so far to offset the failure of fossil fuel-based energy supply to grow since 2005 or so. (Overall production has remained largely constant with conventional plays drying up at about the same rate that tight plays are being exploited via hydrofracking in the US.) Even if it isn’t too slow, we’re trading a form of energy that is extremely cheap and versatile despite being taxed at something like 60% with forms of energy that are not very versatile and are very expensive despite being heavily subsidized rather than taxed.

            That’s not to say that there won’t be any technological innovation to mitigate these problems, but I think there’s a real question about whether they’re actually ultimately solvable. It’s a question of whether we have enough runway to launch a self-sustaining infrastructure of non-fossil fuel infrastructure — and the law of diminishing returns will apply since we’re talking about energy efficiency.

            Personally, I’m somewhat pessimistic and favor risk mitigation strategies over the Hail Mary approach. I think it’s better to figure out ways to live well with less energy and wealth than to burn through our limited energy supplies trying to maintain our current standard of living.

          • random832 says:

            Sorry, I don’t really have any more concrete information than you do.

          • grendelkhan says:

            I’m not exactly an expert, just a fan, so take this with some salt, but…

            The grid as built doesn’t handle intermittency well; it’s built to be extremely flexible on the demand side at the cost of being extremely inflexible on the supply side. There are several ways to address this, but it does need to be addressed.

            – Non-intermittent renewables. Really speculative; see estimates involving enhanced geothermal systems; assuming the DOE doesn’t get shut down, a lab is going online next year.
            – Energy storage. You’ve mentioned thermal storage, but there are a variety of possibilities (see p. 21). The cost curves on lithium-ion batteries look promising–much as laptops and cell phones enabled electric cars, electric cars seem to be enabling stationary storage–and it’s possible to build storage much quicker than you can build a power plant. (ARPA-E runs some storage projects.)
            – Demand response. If you have demand that’s shiftable (e.g., run my dishes at some point during the night, or run my water heater whenever, since it has a tank) or dispatchable (e.g., generate electrofuels when there’s a surplus), you can absorb a lot of those peaks and troughs. (Regulatory changes, standards.)
            – Geographic diversity. Build HVDC lines or the like to balance generation; locally, it’s chaotic, but it’s much smoother in aggregate. Some simulation work in that direction, but the NIMBYism is a potential blocker here.

            None of these things are impossible, exactly, just largely uneconomical. Many of them are getting cheaper; the eventual solution will likely be a combination of these factors, depending on the exact path we take to get there.

          • wysinwygymmv says:

            @grendelkhan:

            That’s a great rundown, thanks.

          • random832 says:

            Could stuff like a dishwasher/water-heater look for low-demand periods by monitoring for frequency changes, without any sort of digital/smart grid? Or would that result in “everything turns on at once”?

          • grendelkhan says:

            Could stuff like a dishwasher/water-heater look for low-demand periods by monitoring for frequency changes, without any sort of digital/smart grid? Or would that result in “everything turns on at once”?

            Short answer, I don’t know. Longer answer… you can do this sort of thing with no smart grid at all with time-of-use pricing, e.g., electricity used from midnight to six AM is half price, so charge your electric car then and set a timer on your dishwasher. It helps flatten out the diurnal curve and all, but it’s not very responsive.

            I’ve worked with distributed systems before, and I think monitoring for frequency changes (which I think indicate high load on the system?) could lead to thundering-herd problem (or something analogous) where you have asynchronous feedback loops… but that’s still going to be a problem with more-sophisticated smart-grid systems if you’re trying to act independently of the central grid operator.

            I flipped through the OpenADR spec; it’s more of a framework which can either have the utility telling a customer to shed a certain amount of load, or simply provide updated price signals which users can react to as they wish. Coming from a software background, it looks like a lot of straining and complexity for some really straightforward results, but I guess working with high-reliability systems in the physical world makes change a bit tougher.

            (I’d like to emphasize that I don’t know much about this; I still can’t tell how the physical layer of smart-grid communications is supposed to work in general. Long-range wireless of some kind? Networking over power lines?)

          • random832 says:

            AIUI a frequency drop indicates demand exceeding supply and a frequency increase indicates supply exceeding demand. Apparently this sort of detection is done at the grid level to implement rolling blackouts (you’d need very precise frequency measurements to detect “normal” changes in frequency, so my suggestion might not be practical.)

          • The Nybbler says:

            An end user can’t use frequency to determine low-demand periods precisely because the grid operator is actively attempting to keep frequency near-constant.

          • CatCube says:

            Coming from a software background, it looks like a lot of straining and complexity for some really straightforward results, but I guess working with high-reliability systems in the physical world makes change a bit tougher.

            I’m only tangentially involved with power production on the hydroelectric side, but one consideration here is the extremely long life of system components. We don’t have the absolute largest powerplants in our neck of the woods, but they’re up there, and hence are critical for grid stability. Up until (I think) last year our units in our second-largest plant were run with electromechanical governors–the kind with the little spinny weights. They were the best technology 1938 had to offer. Phone calls from the grid control room to the plant control rooms scheduled bringing whole units on- and off-line as needed to match load to demand.

            These systems were designed to maintain stability with no communication whatsoever; they purely operated by maintaining the speed of the turbine. When the frequency of the grid dropped, the turbine would slow down a little bit so the governor would open the wicket gates until things came back up (I’m sure with some control to prevent hunting).

            We’re also replacing some of our governors from the early 50s. I was in one of our plants back in September and got a chance to look inside the governor cabinet and saw the spinning-weight electromechanical system, and when I went back in there to inspect the headgates in March they had just brought the new digital governors online. So we just replaced 65 year old technology early this year.

            So why might things be more complex than they need to be? It’s possible the complexity is to ensure that the new system works with the old non-communicative systems and be forward looking so that you don’t box yourself into a corner when this exact same system you’re installing into a powerhouse is in use 80 years from now. The plant with the 1938 governors I mentioned had its turbine runners replaced for the first time relatively recently. I say relatively, because although the last of 10 turbine runners was installed a few years ago, the first one was installed in the late ’90s, and the new turbines were designed in the early part of that decade. Things have a *very* long capital life in this business, and lead times of 5-10 years for replacement of large end items (including control systems like governors!) isn’t uncommon. We are working on construction schedules right now that have to account for the fact we’re expecting to take delivery of a transformer in March of 2023 (and another the month after, etc.); we have to work other things around that because we really can’t move that delivery date without causing chaos for us and for the supplier.

          • grendelkhan says:

            CatCube, thank you so much for bringing some insight from someone who’s actually seen the gear!

            It makes a great deal of sense to have components fail sanely when disconnected from their control systems; I can’t imagine that any sanely-designed Smart Grid system would leave that out.

            I can definitely imagine it being particularly difficult to integrate all of those legacy systems. I wonder if the grid has been designed more like the telephone system than the internet–the smarts are in the middle rather than at the edges, so it’s easier to design and control, but it’s much, much harder to upgrade.

            If I were designing this, which I’m grossly unqualified to do, I’d make the edge devices, especially the major capital expenses, as straighforward to control and monitor as possible, and put thin layers of internet-age controls atop ancient electromechanical systems. I’d enable the grid-control room to send signals not just to large generators, but to large consumers and even, once things are automated, to small consumers and generators. The more controllable devices are on the grid, the more flexible it becomes, and legacy sources and sinks still function as they once did–the whole thing is backwards-compatible. (I think of Alon Levy’s description of “organization before electronics before concrete” in the field of transit.)

        • psmith says:

          @psmith’s point about “EROEI is negative, the books are cooked!” is unfair to the peak oil case.

          For what it’s worth, I didn’t intend that to be mocking; it was a fairly close paraphrase of a menaquinone4 line, and as far as I can tell he is both sincere and reasonably well-informed.

          the only way we’ve been able to kick the can so far down the road is a huuuuuuge increase in global debt through Quantitative Easing.

          This strikes me as a serious worry.

        • suntzuanime says:

          Somehow they weren’t too horrible to think about back then, I dunno what’s supposed to have changed. I guess maybe the narrative is still as alive as ever and I just spend less time hanging around Communists than I used to? Now that I think about it, it does seem a little naive to expect this sort of narrative to disappear in response to mere disconfirming facts.

        • wysinwygymmv says:

          @suntzuanime:

          Somehow they weren’t too horrible to think about back then, I dunno what’s supposed to have changed.

          There are fewer effective counterarguments now. It’s fun to think about the apocalypse when it seems distant; not nearly so fun when it seems near at hand.

          I guess maybe the narrative is still as alive as ever and I just spend less time hanging around Communists than I used to?

          No, it’s definitely restricted to a few niche blogs that focus on it at this point. Most people seem to have drunk the bright green kool aid and think that global warming is the problem, even though it’s a) too late to fix global warming and b) trying to do so anyway exacerbates the peak oil problem

          Now that I think about it, it does seem a little naive to expect this sort of narrative to disappear in response to mere disconfirming facts.

          What specific disconfirming facts are you thinking of?

          I’ve done a lot of reading in this area, and as far as I can tell, the only “disconfirming fact” is the fact that so far the problems have only manifested as an apparently permanent decrease in the average growth rate of the world economy from about 6% to about 2%. (Unless you take China’s growth numbers seriously which, umm, ha….) Note that 2% is pretty similar to the average growth rate before the industrial revolution. Oh, also as a huge balloon of debt brought about by QE.

          I mean, it’s a fact that the major oil companies all seriously decreased their capex back in 2014 before the oil glut when prices were still at historic highs. Decreasing investment when the price is at historical highs, demand is constantly increasing, and supply seems constrained? Why does supply seem constrained in the first place?

          The analysis I’ve seen that makes the most sense is that:
          1. Oil gets more expensive to extract, so the energy share available to everything else shrinks.
          2. Society gets more complex and it’s upkeep costs increase, so the energy share available to growth (as opposed to maintenance) shrinks.
          3. This reduction in “energy dividend” from using fossil fuels has manifested as flatlining wages for non-elite workers.
          4. Non-elite workers can’t afford the big-ticket goods like cars and houses, so demand drops creating deflationary pressure.
          5. To avoid deflation, monetary policy is used to artificially depress interest rates to zero so that even though they’re making very little money, people can get low enough monthly payments to afford houses and cars again.

          I’d love to see some reasons why this story doesn’t make any sense, because I’d rather go on living my pampered, decadent western lifestyle than have to figure out new culinary preparations for crabgrass seeds and dandelion roots.

          • grendelkhan says:

            too late to fix global warming

            Can we not refer to this in purely binary terms? 2 C is much worse than 1.5 C, but not nearly as bad as 3 C, etc., etc. There’s not really a point where it makes sense to say, oh well, we’ve maxed out on badness, unless you’ve gotten past the point where the entire planet is above the human-habitable wet-bulb temperature, I guess.

          • wysinwygymmv says:

            @grendelkhan:

            Can we not refer to this in purely binary terms?

            Acknowledged, I was being extra glib there because I didn’t want to spend a lot of time teasing out the intricacies of the argument. Here’s what I think:
            1. If the negative effects are linear with increase in global average temperature, then 3C is not actually much worse than 2C or 1.5C.
            2. There is absolutely no reason to think that the negative effects will be linear with increase in global average temperature, and many reasons to think otherwise.
            3. Several degrees of warming are already “baked in”.
            4. The only way to significantly decrease carbon dioxide output on a short timescale is to suffer through a crippling global depression.

            Put that all together, and my take is that the “crippling global depression” is in many ways a cure that is worse than the disease, but it is the only cure that will actually prevent 3C or more of warming.

          • grendelkhan says:

            4. The only way to significantly decrease carbon dioxide output on a short timescale is to suffer through a crippling global depression.

            I’m with you on 1-2, unsure about 3, and take issue with this. It would be lovely if we were to actually have this conversation. We kinda did, at the Paris Agreement (the right decided to stay home and whine about that, so we never had the conversation here in the US).

            Imagine graphing negative effects against temperature change, and negative effects against carbon reduction costs. So depending on your values, you figure out where those lines intersect and that’s the level of carbon reduction you shoot for; you don’t just throw up your hands and say “math is hard! let’s go driving!”.

            There are some attempts to show cost-benefit tradeoffs over here (there are footnotes, but it looks like one very group of researchers); see the curves here indicating that at least a significant portion of carbon reductions would be low or negative-cost; and who knows what will fall out of California’s SB 775 if it becomes law?

          • Controls Freak says:

            1. If the negative effects are linear with increase in global average temperature, then 3C is not actually much worse than 2C or 1.5C.
            2. There is absolutely no reason to think that the negative effects will be linear with increase in global average temperature, and many reasons to think otherwise.

            Frankly, these sentences don’t even make sense without an axis for timescale. And then, once we add that in, we’re likely not talking about whether things are linear or not… and we’re also realizing that we have no idea how to compute such a thing anyway.

          • pelebro says:

            I’ve heard that global growth rates of 2 percent were normal on the nineteenth century, which is already post-industrial, so the 6 percent growth might speculatively have been anomalies caused by the world wars. (I think I read this in “capital in the twentieth century”, I’m not an expert or even particularly enthusiastic spectator so take this with a large grain of salt). Do you know if I’m remembering incorrectly or the interpretation is untenable for other reasons? I don’t expect anyone reading this to make some research on this because I most definitely did none but if you have the information at hand that would be okay.
            This does underscore my general skepticism to interpreting historic data to fit some hypothesis, it seems there is way too much leeway for overfitting.

      • bean says:

        I once found an article on peak oil and oil sand/oil shale in an old National Geographic. And when I say old, I don’t mean 1990s, or even 1970s.
        No, it was from 1918.

        • wysinwygymmv says:

          If it was taking the angle that it might be good not to become too dependent on it since it’s a finite resource, then it was a remarkably prescient article.

          • suntzuanime says:

            You can call it remarkably prescient when the shit actually runs out; until then it’s just remarkably agrees-with-me.

          • bean says:

            Not really. It was just talking about how much oil was locked up in shale/sand, and how we’d have to use it when the regular oil ran out, which was supposed to be soon, particularly under the pressure of the war. (No, I am not making this up.)

          • wysinwygymmv says:

            Not really. It was just talking about how much oil was locked up in shale/sand, and how we’d have to use it when the regular oil ran out, which was supposed to be soon, particularly under the pressure of the war. (No, I am not making this up.)

            Uh, why would you have to make that up? It’s factually correct even if it got the timeline wrong.

            You can call it remarkably prescient when the shit actually runs out; until then it’s just remarkably agrees-with-me.

            If you think the problem is literally “running out” then you’re not taking the problem very seriously at all. The real problem is that oil extraction has to be cheap enough that non-elite workers can afford to buy the economy’s output, but expensive enough that extracting it is profitable. Both forks of that test are becoming less true as time goes on.

        • gwern says:

          It goes back before that. One interesting bit in Chernow’s Titan biography of John Rockefeller was about his early investments in the Pennsylvania oil fields: they were the first, and at the time, they were the only commercial oil fields in the world, so there was a great deal of doubt about how long they would last and whether they would be replaceable or if the whole drilling-for-oil thing was a flash in the pan; for whatever reason, Rockefeller had faith that they would last longer than everyone thought and an industry could be built on them, and so he kept reinvesting everything he could in buying up oil fields and refineries, going deep into debt and borrowing constantly from his local bankers. As we know now, Rockefeller was right and everyone else was wrong. But if he had been wrong, he would have been deeply ruined. (I’ve noticed many billionaires are like that: hard-working, talented etc, but ultimately, deeply lucky in doubling down when playing the lottery and winning.)

          • Luke the CIA Stooge says:

            The thing with playing “the lottery” is you can always play again (retaining your skills learned in the case of business).

            I’ve noticed alot with people who comment on billionaires that they treat bankruptcy or even a wound down venture as if the business person died, and then conclude that the ones who get rich just bet their life on a game of Russian Roulette with five chambers loaded and got lucky.

            This strikes me as really weird when every entrepreneur i know assumes anyone serious will be a serial entrepreneur and that a majority of their ventures will not be successes.

            Presumably Rockefeller was (the equivalent of) a millionaire when he made those investments, became a billionaire because of them and had the skills to become a millionaire again ( in a couple of years) if those investments failed and took him to zero.
            Looked at that way 20-50% chance of becoming THE Rockefeller vs. 50-80% of losing a few years to bankruptcy proceedings, It seems like he made the smart bet.

            Millionaires and billionaires really aren’t the risk taking madmen everyone portrays them as, they seem to be rational, it’s the rest of us who are risk adverse even though (realistically) we’ll never fall below first world living standards who are crazy.

          • LHN says:

            Some of that depends on the legal and investment environment. My understanding is that the US has historically been more bankruptcy-friendly than Europe. I’m not sure what the laws looked like in the 19th century, but in practice it was easier to go informally bankrupt by upping stakes and moving (e.g., the famed G[one]T[o]T[exas] signs on failed farms) here than in places with less room for maneuver and more debtor’s prisons.

            And of course you can’t always play again– some entrepreneurs reach a point where they can’t raise new capital or are otherwise irrecoverably ruined. But they tend not to feature in biographies unless they do something else of note. (E.g., Ulysses S Grant and Harry Truman’s business ventures included major failures accompanied by no notable successes, but no one would pay attention if they were just businessmen.)

      • Deiseach says:

        I’m old enough to remember the horror stories people would tell about Peak Oil and the collapse of civilization

        Ah, remember the Good Old Days of We Will All Freeze In The Dark Until The Cannibals Eat Us? Good times, good times!

        Another reason why I am not holding my breath waiting for the existential threat of climate change – and I do notice a slight dialing down in the dire warnings about that; it’s because I’ve lived through several of these scares before (over-population, nuclear war, global cooling and yes children, don’t tell me I don’t remember that, it was never a big deal because oh yes it was, and of course the oil is going to run out in ten years’ time).

        • The Nybbler says:

          Ah, Peak Oil. And yes, I remember global cooling too. Those who are pushing the existential threat of climate change claim it existed only in the popular press and not among Real Scientists, but they say the same about every falsified climate prediction.

          But about about those freeze-in-the-dark days… seems to be that bringing them about is now the method to save the planet. Fracking causes earthquakes, coal produces CO2, dams kill fish, wind kills birds (and makes for ugly transmission lines), nuclear kills Japanese, solar damages the delicate desert ecosystem (and doesn’t work at night), tidal power kills fish and annoys whales, etc.

          • suntzuanime says:

            To be fair, the existential threat of climate change also only exists in the popular press and not among Real Scientists. People should just stop taking the popular press seriously. I was going to qualify that with “about science”, but now that I think about it, nah.

          • The Nybbler says:

            To be fair, the existential threat of climate change also only exists in the popular press and not among Real Scientists.

            The popular press didn’t invent the clathrate gun. And they may not put it in their journal articles, but plenty of scientists have gone to the press (and to legislative hearings) and testified about upcoming catastrophe. It’s motte-and-bailey again.

          • pelebro says:

            “The popular press didn’t invent the clathrate gun.”
            But that is a reasonable hypothesis (which is likely false in view of subsequent evidence). It never had the same evidence weight behind it as global warming, but it was worth exploring, as its completely standard in scientific practice. I would not be surprised if the popular media misrepresented the situation, as they often do, (on timescale and certainty) but without knowing more about what you have in mind about “the clathrate gun” then its hard to judge what you mean.
            “plenty of scientists have gone to the press (and to legislative hearings) and testified about upcoming catastrophe.”
            I would want some examples of this please. Scientist should be climatologists with research record. And catastrophe should be existential crisis, as opposed to something that “merely” could kill a couple billion people as other worse crisis in the past have done (relative to total population). Also the press should be relatively well regarded in journalistic circles, its easy to misled with selective quotes and editing tricks.

            I find climatologists actually pretty reasonable despite surrounding media hysteria. Even if they’re not necessarily experts on the actual consequences global warming could have for people.

          • The Nybbler says:

            I would want some examples of this please. Scientist should be climatologists with research record. And catastrophe should be existential crisis, as opposed to something that “merely” could kill a couple billion people as other worse crisis in the past have done (relative to total population). Also the press should be relatively well regarded in journalistic circles, its easy to misled with selective quotes and editing tricks.

            That’s putting the goalposts in the next state. Killing a couple of billion people easily counts as existential crisis; it would likely collapse civilization if it were not localized. Not all climate scientists are formally “climatologists”; the claim was “Real Scientists”. And most damningly, all of the press uses selective quotes and editing tricks.

            That said:

            Climate Change ‘beyond point of no return’
            Dr. Thomas Crowther, of the Yale Climate and Energy Institute. He’s a soil biologist rather than a climatologist. He uses the word ‘catastrophic’.

            Dr. James Hansen in the Washington Post and the New York Times

            The breathless Moore’s Law for Carbon article

          • pelebro says:

            “Killing a couple of billion people easily counts as existential crisis; it would likely collapse civilization if it were not localized”
            I don’t know enough about this to be sure, and I would not trust uninformed opinion on this either (this ties into your next complaint, climatologists wouldn’t count). I seem to recall similar death tolls in the world wars which certainly don’t seem localized, but the subsequent boom might have helped. A bad outbreak of an antibiotic resistant disease might lead to much worse numbers too, which leads me to at least hope that is not the case. This is all assuming a generous interpretation of what you mean by “civilization”. Pre-industrial civilization wouldn’t be jeopardized of course, I’ve heard claims that easily extractable resources have been depleted so this would be unrecoverable but this seems to me even more of a suspect claim.
            To be honest, I don’t think killing two billion people is very likely either, the purpose of the figure is to give an estimate to see that if someone claims more than that then he is certainly misrepresenting current scientific consensus, and should at the very least give the caveat that he is engaging in unsupported speculation.
            I think a 30 percent permanent decrease in global economic production is more likely, but I’m much less certain about it. It could be higher because of unexpected feedback loops or lower because this is a pretty difficult thing to predict anyway.
            It will certainly be worth some concerted global effort, exactly how much should be agreed to by consulting people that hopefully know more than me.
            “Not all climate scientists are formally “climatologists”; the claim was “Real Scientists”.”
            Of course. But being a scientist doesn’t really give any sort of expertise on climate change, so scientists are also more likely to be misinformed of the state of the literature than someone who is formally a climatologist. In which case their opinion is not much better than a layman’s.
            “most damningly, all of the press uses selective quotes and editing tricks.”
            Of course, but I would expect that some more reputable news reporter might have a greater incentive to use selective quotes and editing tricks as a matter of style and give a honest effort to faithfully reproduce the spirit of the responses of the one interviewed. Less reputable sources, I would expect, have more flexibility in being intentionally misleading.

            All of this is just me giving more details to my previous post, so I’m not really disagreeing with anything you’ve said. I haven’t seen your examples yet. I will do it later though, it looks interesting.

          • suntzuanime says:

            Killing a couple of billion people easily counts as existential crisis; it would likely collapse civilization if it were not localized.

            I have more faith in civilization than you, I guess. We could get by without two billion of the world’s people: we were doing just fine 30 years ago, for example. And wouldn’t losses to global warming be localized? It depends on your model of how global warming is actually leading to these gigadeaths, but it seems like most of the problems happen in already-hot areas and near the sea, whereas currently-frigid areas actually profit from a rise in temperature.

          • HeelBearCub says:

            @suntzanime:
            I would think that the most likely cause of 2 billion deaths would be famine. If you have climate changes that lead to a drop in food production fast enough for long enough, and disrupt the global food supply chain, those won’t be merely localized.

            I doubt that end civilization though. Although, depending, you might then throw a nuclear war on top, I suppose.

          • but it seems like most of the problems happen in already-hot areas and near the sea

            Already hot areas, yes. I have an old blog post trying to do a back of the envelope calculation on how many people live in areas that would become unlivably hot with extreme AGW.

            People tend to exaggerate the scale of sea level rise. The total over the past century is well under a foot, and the high end of the IPCC estimates for 2100 is about a meter. On average, a meter of SLR shifts coastlines in by about a hundred meters, which is trivially small on a geographical scale.

            There are, of course, a few places where it is substantially worse, such as the Nile Delta. But we’re talking about changes over a century, which is a lot of time for populations to shift a little ways inland.

    • shakeddown says:

      At best, fracking gives us another fifty years of oil (with extranalaties). Long-term, we rely on renewables, which we’re assuming are developed in large part in SV. Unless the singularity happens first (in which case SV definitely had more impact).

  21. dansimonicouldbewrong says:

    All the “cloud” stuff is actually very simple: the world’s companies collectively spend about 3.5 trillion dollars (according to Gartner) building, maintaining and operating their IT infrastructure–computer hardware and the software applications that run on it. It turns out that economies of scale, together with ubiquitous Internet connectivity, make it possible for “cloud” services to run most of that infrastructure centrally for lots of companies simultaneously, and moreover do it enormously more cheaply than if each company ran its own. So a huge industry has grown up around (a) providing outsourced infrastructure on that model and (b) coming up with new applications for that infrastructure that are now suddenly cost-effective because it’s become so cheap.

    • Besserwisser says:

      How recent is this technology? I’ve seen a similar approach in the TV series “Halt and Catch Fire”, where a company rented out their hardware to other companies when they didn’t use them anyway. It turns out catastrophically and I’m wondering how much historical accuracy is in this series about the 80s.

      • wysinwygymmv says:

        The model isn’t hardware rental, but so-called “Software As a Service”. Instead of hosting your own payroll database and employing a bunch of HR people to generate paystubs and manage benefits, you pay ADP to do it because they can do it for less money than it would cost you to do the same things. You interact with ADP via a web interface.

        If you want some milestones, I’d say Amazon AWS provides a great deal of the infrastructure for the modern cloud and it went live in 2006. I started working at an internet company in 2007 and my perception was that “the cloud” and “cloud computing” became trendy buzzwords in maybe 2009 or 2010.

        • HeelBearCub says:

          Instead of hosting your own payroll database and employing a bunch of HR people to generate paystubs and manage benefits, you pay ADP to do it

          That’s really more outsourcing than SaaS.

          Salesforce is the canonical SaaS play, where you don’t own the CRM software, or the hardware it runs on, or the underlying data storage. Instead you have your sales force use a cloud based customer relationship management system in almost the exact same way that they would if it was completely internal.

          • wysinwygymmv says:

            I think of ADP as SaaS because our employees (including the HR people who use it to do their jobs, but not just them) interact with it through a web interface and it’s mostly automated. I think it’s a pretty fuzzy boundary between outsourcing and SaaS either way.

          • Besserwisser says:

            How much is it worth learning about the cloud if you want to pursue a career in that field? I’m assuming the people operating the servers would need a lot of specific expertise but I’m also assuming the demand for jobs is lower than in the jobs they replaced, so most jobs are going to be found in the applications this infrastructure enables. And I’m not sure if you need to know so much about the structure of where the servers are instead of just knowing about the product you develop on them.

          • vV_Vv says:

            How much is it worth learning about the cloud if you want to pursue a career in that field?

            It’s a market of system administration and programming jobs.

            Frankly, unless you are a high school student, if you have to ask then you probably have already been outcompeted.

          • enoriverbend says:

            How much is it worth learning about the cloud if you want to pursue a career in that field?

            Starting from what point? Do you know Unix? Do you have an application in mind? Do you want to write an application destined for the cloud? What?

            From a service or application provider’s point of view, the cloud is just a way to set up one or many virtual machines (or some other software) for whatever purpose you desire, without having to maintain hardware. A virtual machine is an OS (or some environment) that is not mapped directly one-to-one to a physical machine.

            The VM’s are quite often running some variant of Unix, but don’t have to.

            Whatever apps you put on the VM, that’s up to you. Also up to you is what access is available to or from the broader network, etc.

            So you could learn to be the guy that set up VMs, you could learn how to control or modify the VMs, you could write or set up apps to run on the VM, etc.

            One advantage you have is that all of the information about how to do this is freely available on the net. And you can even set up (for free) on your own physical box, VM software and related things to run your own bit of the cloud. And you can even get a VM running on somebody else’s hardware for free, although resources and availability are constrained (of course).

            The downside is that there are ton of people who already know this stuff or are learning it. But if you’re bright and really want to, you can do it. If you’re starting from square one and know nothing, it’ll be a long voyage.

      • Brad says:

        In some ways it is a very old model, dating from almost the beginning. Back then there were massive room sized computers that could be accessed remotely on a time-sharing basis by very dumb terminals.

        Back then it was because the computer itself was very expensive, today the driver is economies of scale on the personnel required to babysit the infrastructure.

        • Besserwisser says:

          I guess we’re going back and forth on whether or not the computer you’re working on is actually infront of you.

      • vV_Vv says:

        Amazon Web Services has been around since 2006 and Microsoft Azure since 2010. The idea is certainly much older, but it was not really feasible before widespread broadband Internet access.

  22. rjmason says:

    Others have pointed out that SpaceX is not in Silicon Valley.

    I just want to further point out that this is not some weird accident, but obviously a deliberate decision by Elon Musk. It would probably have been more personally convenient for Musk if SpaceX could be based in Silicon Valley, but instead he went 360 miles out of his way to locate it in Los Angeles, which has been a center of aerospace tech for almost one hundred years.

    • rsj says:

      SV is much more of a center of aerospace than LA. Indeed, it was the west coast center of Aerospace since WW2 and started out as an Aerospace center, primarily focused on rockets and radar. This was due to a series of decisions by the Defense department, not because there was anything special about the apple orchards in Santa Clara. Much of this was due to successful lobbying by Stanford and Berkeley, which received the bulk of California’s defense funding and both of California’s national labs (Lawrence Livermore and Stanford Linear Accelerator). The IC was also heavily involved in developing spy satellites here. With the Korean and Vietnam wars, this importance increased due to being on the west coast. In LA Caltech and NASA JPL played a similar role, but with much smaller budgets no nuclear lab.

      SV has major R&D centers for Lockheed Martin, including the famed Skunkworks plant. There is also NASA Ames & Lawrence Livermore National Labs. Honeywell Electronic Materials, General Dynamics, Loral, Raytheon, BAE, Northrop Grumman all do major R&D here in an attempt to mimic the success of Skunkworks.

      Of course this is difficult to measure because defense contractors site plants all over in order to obtain support from the largest number of representatives, so every populated area is going to have at least one plant.

      But Aerospace in SV has recently been facing headwinds due to the high cost of real estate, and the fact that the area is so focused on tech and semiconductors that defense contractors have receded in relative importance to the local economy. These are the reasons — cheaper real estate and cheaper wages than SV — why SpaceX is located in LA. Not because LA is more of an aerospace center.

      LA does have more light airplane manufacturing, though.

      I recommend looking at The Secret History of Silicon Valley:

      https://www.youtube.com/watch?v=ZTC_RxWN_xo

  23. haltingthoughts says:

    Can you like write an article entitled something like “The extremes are not the distribution” that we can refer to covering say:

    Some Silicon Valley companies seem stupid but we should look at all of them.
    Some of X’s articles are wrong/crazy/stupid but probably aren’t.
    Organization did stupid or inefficient thing but they also do lots of other stuff.
    Any profession can be made to look bad by selective information.

    Not sure Cardiologists and Chinese Robbers rolls of the tongue well enough.

  24. hnau says:

    “The cloud” person here. The language you describe is marketing-speak for “we’re a tech company that sells to businesses, businesses get the warm fuzzies when they hear ‘cloud’ in a sales pitch, and ‘cloud’ describes basically all sensible modern IT practices anyway, so it’s easy for us to claim.” Essentially, “cloud” is to business IT as “gluten-free” is to a grocery store… only more so.

    For example, I work for a company that describes itself as a “data platform for the cloud era.” (Disclaimer: not claiming to represent the company, etc.) What do we do? Well… basically we sell a hardware product for business data centers. It’s a very good hardware product (PB-scale flash storage running lots of clever software to make it efficient and reliable), and our marketing people could have mentioned that it requires orders of magnitude less power and space to operate than an equivalent previous-generation device while also dramatically improving performance and ease of use. But no, business purchasers want The Cloud, so we give them The Cloud, since technically you can build The Cloud on top of our product (more or less the same way you could build it on top of anyone else’s product).

    • zolstein says:

      I too work for this company.

      To be fair, our marketing people did mention those things, as a component of our All Flash marketing, back when other companies didn’t offer that. Now other companies can make similar claims, so The Cloud serves to differentiate us. Somehow. I have no idea why marketing does anything it does, and I don’t know that anyone else does either. I’d rather they advertised our Simplicity, but mainly because I work on our UI.

  25. rsj says:

    Please, can we stop viewing Silicon Valley in terms of weird start ups?

    Silicon Valley is the headquarters of Apple, Google, Intel, Oracle, Facebook, Cisco, Netflix, Paypal, Adobe, Nvidia, Ebay, Brocade, Gilead Sciences, Electronic Arts, Netgear, Salesforce, Xilinx, Palo Alto Networks, and many other large companies, not to mention smaller revenue but big impact firms such as Twitter, Dolby and GoPro.

    Why is the valley being characterized by this Juice startup that has only $150 million in funding? That would be like characterizing Wall Street not by any of the large banks, investment funds, or brokerage houses there, but by a small boutique investment house that had a hundred million in assets under management. Who would do that? How much information would you get on the region from that type of analysis?

    When you think of Wall Street, you think of JP Morgan and Chase, not Bob’s boutique fund with 12 investors. When you think of Detroit, you think of GM and Ford, not Sally’s muffler shop. But when the media describes Silicon Valley they turn to Juicero.

    • shakeddown says:

      But Google and Facebook also like to think of themselves as startups that got big, rather than establishment players. Though perhaps they shouldn’t.

      • JayT says:

        It shouldn’t matter to the media what a company thinks of itself. Google and Facebook are obviously gigantic multinationals.

      • rsj says:

        I’m not sure what your point is. The nature of entrepreneurship like this is that you have 100,000 ideas, most of which are dumb/crazy, but some work, and some are even brilliant, and out of those you get 100 medium sized companies and 10 big ones. That doesn’t mean that the big companies can be represented by a cherry picked crazy idea in the batch of 100,000. If you do that, you can succeed in making Silicon Valley seem crazy, but all you’ve shown is that of the hundred billion or so invested in the region every year, you can find a few million that were invested on some outlandish stuff. Is that news?

        To put things into perspective, Juicero received $28 million in funding in 2016. That same year, Facebook spent 5.9 Billion on R&D. Intel spent over 10 Billion. So in terms of where money is being invested in Silicon Valley, the fact that $28 million is spent on some whacky stuff doesn’t mean much about the valley as a whole, other than they are willing to risk a tiny amount on crazy ideas.

        • eh says:

          I dunno, I thought the point was that all 100,000 were crazy and/or dumb, and 100/10 were the crazydumb ideas that actually worked.

          • rsj says:

            Yeah, that’s true in a sense. Crazy/dumb to conventional wisdom when it is proposed isn’t the same as Crazy/dumb after you’ve tried it. I guess that’s the point.

            But here, the criticism is that “Silicon Valley” is producing this very expensive gadget for rich people that doesn’t really solve any problems. And my point is that Silicon Valley is literally investing many billions of dollars on many things, of which this investment is not representative and is in fact clearly a very minor concern.

            The total amount invested in all start ups is basically a rounding error in Silicon Valley’s R & D budget. Yet because there is funding in quirky start ups at all is viewed as a social ill.

    • wysinwygymmv says:

      There are valid criticisms of Apple, Google, and Facebook that are closely related to what people find ridiculous about Juicero, and so people are pointing to Juicero as a sort of summary of what’s wrong with all of these companies — even the big ones.

      It’s not hard to find the specific criticisms of these larger companies, but they’re not as striking or funny as the ridiculous juicer thing so there’s more clickbait written about the latter.

      • rsj says:

        Which criticisms of Juicero apply to Apple, Google and Facebook? Honestly, I can’t think of any. These are completely different companies. All of the big three make massive investments in R & D, provide compelling products that solve important problems, have solid cash-flows. Only Apple can be said to sell expensive products, but their offerings are well-regarded and compete with lower priced products because of their industrial design, good support, and better resale value. What would life be like without Google? They are actually organizing the world’s information. How much time did people spend on research before Google? Search is an incredibly difficult, society changing technology. Facebook is a bit sleazy in my opinion and I don’t use it, but many people love it. In fact, the biggest problem caused by Facebook is that people spend too much time on it. It’s the new TV.

        • wysinwygymmv says:

          Which criticisms of Juicero apply to Apple, Google and Facebook? Honestly, I can’t think of any.

          “Expensive products” is not really one of these criticisms from my perspective — high-quality products are often expensive, and as useless and niche as Juicero is, it does seem to be exceptionally high-quality.

          “Sleazy” is probably a good way to collect some of those criticisms under a one-word category. Google is sleazy in pretty much exactly the same ways Facebook is sleazy, and social networking online is a similarly hard problem to search that Facebook has solved. Similarly, Juicero solved a difficult logistical problem of getting fresh fruit into a juicer while minimizing spoilage and contamination. Their solution eliminates the need for the juicer itself, which is where the sleaziness starts to come in. Similarly, Facebook and Google algorithmically compiling dossiers on every human being in the world is related to the problems they solved, but not necessary for solving those problems and is the sleazy part.

          Apple is sleazy in some different ways, but overall I’m less wary about Apple than about Facebook or Google. Though I don’t actually buy their products, either.

          • Squirrel of Doom says:

            That you find all these companies “sleazy” tells us something about your opinions, but nothing about the companies themselves.

    • rahien.din says:

      Agreed. It’s like saying Home Depot is a failed hardware store because it sometimes sells chintzy Christmas inflatables.

  26. Alkatyn says:

    The same can probably be said about anywhere in the world though. Beijing is either a totalitarian dystopia or a hub of innovation and change depending which editorials you like to read. Washington DC is a wretched hive of scum and villainy/full of dictatorial beaurocrats/full of self interested senators skimming money for their corporate overlords/a fairl normal city with a bunch of well meaning people doing difficult jobs

    The question that interests me more is why people write so much about “silicon valley culture” but not Washington culture, LA culture, London culture, etc. Maybe tis because silicon valley is artificial/deliberately created in a way other cities are not

    • shakeddown says:

      That’s gotta be partly an observer effect – I hear about as much about New York and Washington culture as I do about SV culture, but if you live in the bay area or work in tech you probably hear way more.

      • HeelBearCub says:

        Yeah “Acela Corridor” is used in much the same way “Silicon Valley” is …

  27. FishFinger says:

    Hey, why does the link about cultured meat lead to peta.org? I thought they were too sensationalist for your taste.

    • wysinwygymmv says:

      Presumably “if even the crazy people at PETA support it, then it really must be good for animals!”

  28. foo1357 says:

    Meh. Both Yes, We Have Notice The Skulls and this miss the point I think. The reason most people enjoy a good dig at both silicon valley and at rationalists (if they’ve heard of them) is not because they’re more wrong than anybody else. It’s because they’re so obnoxiously self important (both as movements themselves and the types of people they tend to attract). I’d have pretty positive opinions of both if they weren’t so busy telling me how awesome they were, and posts like this just feed into that.

  29. arancaytar says:

    When Silicon Valley screws up, people who want a pointless Wi-Fi enabled juicer get a pointless Wi-Fi enabled juicer. Which by all accounts makes pretty good juice.

    Hypothetically if Silicon Valley ever really, really screws up, we could all end up as paperclips. But that still wouldn’t be because of the pointless-juicer people, and maybe more because all the attention was focused on them.

  30. Jack V says:

    On the one hand, I agree that there’s a bunch of worthwhile innovation.

    For that matter, even though the juicer *seems* ridiculous, lots of the value of a company like that is in potential, in its tech, marketing, etc, even if it’s first product is stupid, that might still be a near miss of something v successful.

    On the other hand, I’ve definitely heard VCs like Paul Graham say VCs are surprisingly bad at choosing companies that might do well, which leads to this sort of thing. (Techies have other blind spots.)

  31. Shewanna says:

    Juicero isn’t that bad a product idea. Beverages are a huge market, more than $100 B in the US. It’s also stagnant with the top 3 companies controlling 2/3rds of the market and producing little innovation. Juicero solves a real problem for delivering fresh juice, there aren’t any fresh juice products on the market because they’re easily contaminated. So in the end they all get pasteurized which damages the taste and requires artificial additives. In the supermarket, fresh fruits and vegetables are the strongest vector for E Coli contamination. Only Chipotle has an official policy of tolerating food poisoning and they can get away with it because their competition is Taco Bell.

    A $400 first generation product is a good result, go back a few years and the first generation pod coffee makers cost that much. If they get market traction they can probably build a $179 model that’ll work just as well.

    $100 M is actually pretty efficient for brining a new product to market. Most people underestimate how expensive engineering and marketing a consumer product is. R&D for a non-wifi connected razor blade, resalable bag, government health care website or toilet paper texture will run a $1 B. New product introduction costs twice that. $100 M barely buys 6 months of a presidential primary or 2 rocket launches.

    Yes, their founder is a nutcase, but that’s about normal. Who else would think they could win in a market with well funded competitors, hostile regulation and tort laws and lazy journalists?

    • Some Troll's Serious Discussion Alt says:

      The $400 machine doesn’t seem to contain much of that innovation, though.

      The $7 bags are neat. They deliver pre-shredded blends of fruits and vegetables ready to be turned into fresh juice with a minimum of mess or work on the consumer end. I can see the appeal. Wouldn’t want them myself, but I get why others might.

      The $400 machine squeezes these bags.

      • random832 says:

        I’m not sure I understand why the bags need to be squeezed. Is there any actual benefit to the consumer of delaying the step of removing the juice from the fruit pulp?

        It seems like the whole thing was a shell game, – all the real hard work that might require a $400 machine instead of a pair of bare hands was done at the factory when the fruit was ‘pre-shredded’. They are delivering bags of juice with fruit bits suspended in it.

      • Jiro says:

        What’s the difference between delivering fresh bags of pre-shredded material and squeezing them at home, and squeezing them at the factory and delivering bottles of juice? (It seems likely to me that pre-shredded material can get stale in the same way that juice can, so the juice isn’t actually any fresher when you squeeze them at home.)

      • Shewanna says:

        It does contain a supply chain innovation, the ability to recall the bags when they’re known to be contaminated. Today if food is contaminated there’s pretty good tracking through the supply chain but the communication and reverse logistics are hard. Supplier issues a notice, product in transit can be blocked before getting on the shelves but there are some that consumers have purchased. If it’s visibly bad, like a puffy container, the consumer will do the right thing and has the option to return to the store, who in turn gets a credit from the manufacturer.

        Some consumers won’t notice and drink contaminated products, a small fraction of those get sick and a smaller fraction of those die. Bad press, and unfortunately the same press (and people doing likes) that could have aggressively communicated the recall will broadcast the more interesting story of “corporation makes fruit that kills people”. If you’re a company like Odwalla, you give up, pasteurize your products and hope it doesn’t happen again.

        Lets consider the alternative at the endpoint. If you can improve the likelihood of intercepting a bad packet, then you reduce the cost of inevitable contamination both in terms of exposure and return logistics.

    • grendelkhan says:

      Only Chipotle has an official policy of tolerating food poisoning and they can get away with it because their competition is Taco Bell.

      Official policy? Where?

      (Also, generally we should probably make explicit tradeoffs about this sort of thing, so if Chipotle really did do that, it’d raise my opinion of them somewhat.)

      • Shewanna says:

        You can read all about their policies, written in the wake of their last PR crisis, here (only #2 is effective, the rest is theatre): http://www.chipotle.com/foodsafety

        The gist is their aim is to minimally process food, relying mostly on speed and stern glances to keep pathogen count down.

  32. Hey, I’m 23 years older than QVC!

  33. leoboiko says:

    The way I see it, Juicero was deemed over-engineered because it costs a lot, even though you can make juice quite decently by pressing the juice packets bare-handed. (It’s also of course decadent, but I’m putting my leftie sensibilities aside for the moment and trying to think like a dirty capitalist pig entrepreneur, for the sake of argument).

    Judging from their Medium post, the company’s defense of their product is that they’re not just selling state-of-the-art super-high-quality machines with the best parts and components, but also that they have a ton of contracts with the entire supply chain, producers, distributors and such, and what they offer isn’t merely a juice-maker but also a subscription service; the desired effect is that, for its clients, drinking juice would be as easy and convenient as buying a soda from the convenience store and picking it up from the fridge.

    …Am I the only one who think they’re missing an opportunity here? That The Market has spoken, and the smart thing would be to submit to Its unholy Demand?

    Forgo the fancy juicing machine entirely. Deliberately engineer juice packets hand-squeezable by design. Forgo the high-end market, and focus on getting the price of each packet beat that of a Coke. Leverage your already-existing infrastructure to sell hand-juice-packet subscriptions. Market it as a healthy choice, as fair-trade, as helpful to the local community. And now you can make the claim they were trying to make, that the company helps against the obesity crisis, without the absurdity of only ever helping useless, privileged bourgeois bastards… er, I mean the luxury customers.

    • random832 says:

      What’s the advantage to delivering it in squeezable packets with fruit bits suspended in it rather than, say, bottles, at that point?

      > And now you can make the claim they were trying to make, that the company helps against the obesity crisis

      The problem with that is that fruit juice isn’t actually healthy, at least not in terms of having less calories (and it doesn’t have the fiber content of a smoothie). That might actually be the benefit of requiring the user to squeeze a packet – it makes them less likely to chug a twelve-pack over the course of an evening.

      • leoboiko says:

        They implied that the packaging helps preserving it, though I didn’t look into it carefully. But yes, you’d want to optimize for taste, shelf life, manufacture costs and transport costs. If juice bottles reach better optima, no reason to keep the packages.

  34. keranih says:

    Scott, I really wish that if you were going to write things like this:

    Silicon Valley companies were busy inventing cultured meat products that could end factory farming and save millions of animals from horrendous suffering while also helping the environment.

    that you would do so from a base of knowledge and/or humility that would prevent you from writing things like this:

    I’m sure somebody in the comments is going to tell me why FitBits for cows is actually a vital service that will revolutionize agriculture, but I’m trying to err on the side of caution here.

    You are treating modern agriculture just like the biased-against-Silicon-Valley villain of your post is treating tech innovations – smearing the whole industry with the faults of some. And I’d really wish you’d stop doing that.

  35. Dominik says:

    While Gizmodo was busy writing that this “is not an isolated quirk” because Silicon Valley investors “don’t care that they do not solve problems [and] exist to temporarily excite the affluent into spending money”, Silicon Valley investors were investing $35 million into an artificial pancreas for diabetics.

    A nitpick, because this really struck me as hype (I’m an MD).

    It’s an Insulin Pump – a product that already exists. Maybe they are improving upon it, but it’s not a replacement for your pancreas (such as after severe pancreatitis, pancreatic cancer etc), which would be great when you lose your own.

    The pancreas has more functions, such as digestion and advanced blood sugar regulations (besides Insulin). Being able to replace that would though be amazing. https://en.wikipedia.org/wiki/Pancreas#Function

    • Svejk says:

      Some of the most recent advances in artificial-pancreas-related technology are coming from established medical device manufacturers like Medtronic, and industry/academia partnerships (e.g. UVA, UC, Mass). There is at least one public benefit company in the space on the East Coast; it is raising money from the public and large medical/pharmaceutical concerns.

    • Deiseach says:

      If anybody can develop an actual artificial pancreas, that will be one hell of a “Holy crap, they did what? and it works?” moment.

      I don’t think we’re anywhere near that stage yet.

      • Svejk says:

        We are nowhere near having a true artificial pancreas. Most efforts are focused on some small sub-aspect of insulin regulation.

  36. J Milne says:

    Tech criticism on Twitter: “Every new idea is stupid until it becomes popular, at which point it must be considered evil.” (from https://twitter.com/ryanchris/status/854754738037964800 )

    • cbv says:

      Seems about right, if you substitute “Every new idea” for “Most new tech products”.

  37. wysinwygymmv says:

    So although meat-and-potato business/software companies do outnumber really high-tech or altruistic ventures, there’s not a lot of evidence for silly Juicero-style startups being much of the Silicon Valley business community at all. So how come everyone thinks that they are?

    Well, probably because you just got through explaining that they make up 20% of the startups in Y Combinator, which, as you also explained, probably has a lower proportion of these sorts of businesses than Silicon Valley as a whole.

    You didn’t go into the fact that nifty Internet of Things gadgets have awful security than causes them to pose a pretty grave risk to security and usability of the internet as a whole, but that’s true and also shows the hubris of people in Silicon Valley. You didn’t talk about that app deBoer mentioned where potential renters bid against each other — which I’m not saying is obviously bad but it does seem like the sort of thing that might have serious unforeseen side effects (relevant to any discussion of hubris, I think). You didn’t mention how bitcoin transactions use something on the order of 5000x the energy of a credit card transaction, how bitcoin mining uses 0.05% of the world’s energy (the article I read suggested that isn’t very much, but compared to the proportion of people who actually use bitcoin that seems astonishing to me), and how the structure of bitcoin creates incentives for miners to always increase their energy consumption as long as doing so gets them a few more pennies of profit.

    You also neglect the fact that many of these startling and impressive claims might be hype, e.g. @Dominik’s comment about insulin pumps vs. artificial pancreases. This is another important aspect of Silicon Valley thrown into especially high relief by Juicero.

    You’re right that the media doesn’t give enough credit, and maybe you needed to give a one-sided account to effectively make that argument, but this is terribly one-sided and ignores a lot of the arguments against Silicon Valley.

    • herbert herberson says:

      0.05% of the world’s energy (the article I read suggested that isn’t very much, but compared to the proportion of people who actually use bitcoin that seems astonishing to me), and how the structure of bitcoin creates incentives for miners to always increase their energy consumption as long as doing so gets them a few more pennies of profit.

      what, what? Even if it’s just %.05 of the world’s electricity, rather than energy, still, no way, right?

      • wysinwygymmv says:

        Perhaps I shouldn’t believe everything I read on Vice — I’m not sure I have the expertise to vet the model it’s based on — but here’s where I got that claim:

        In absolute terms, bitcoin’s electricity consumption is still small potatoes: De Vries’ index estimates it at 0.05 percent of world energy consumption as of March 1, or about as much as the country of Paraguay. Generously, it could even be a third of that figure.

        https://motherboard.vice.com/en_us/article/bitcoin-is-still-unsustainable

        Obviously I disagree with the “small potatoes” remark.

    • rsj says:

      Security is a problem everywhere, but tech companies have *much* better software security than non-tech companies. This is *exactly* the problem the with the internet of things.

      Non-tech companies, like auto companies, or washing machine manufacturers, decide it’s a good idea to embed a webserver into their products, and they are in way, way, way over their heads. It’s precisely because they are not tech companies that they don’t have the people or leadership to do this safely, because it’s really hard and expensive to do that. But just because the washing machine maker hires some programmers to install the webserver doesn’t mean that it’s suddenly a Silicon Valley company.

      If, tomorrow, restaurants decided that they were going to start providing on-the-spot surgeries with your next take out purchase, you would have a crises of infections and medical accidents. Then you would blame the health care industry, instead of restaurants.

      Medical Care is regulated, so we don’t see that, but software isn’t, and so when someone decides to make a TV that spies on you and posts back the data to the corporate headquarters, there is no regulator to say “no, this is a bad security design”. You have to rely on in-house expertise and decision making of the TV maker, which is going to be poor. This means any company can start doing dangerous things like this, even if there are only a small number of engineers worldwide who have the expertise necessary to design an internet connected device safely. They command high salaries, tend to be concentrated in places in like Silicon Valley, and aren’t going to want to work for the TV maker. Most companies outside of big tech companies can’t afford to hire such people. Instead, they wing it.

      The lesson here is to not purchase products that are internet connected unless they are made by a small handful of experienced, large companies that have a good internet security reputation and that have been doing this for at least a decade. At least, that’s my policy.

      Similarly, for web security in general, I do not give my real payment information to small businesses or firms that do not have a well-regarded software security staff. This includes mom and pop restaurants (protection of physical copies of data is just as big of a problem). I have separate payment accounts that aren’t in any way connected to my salary or main accounts, and I give out that information for the hole-in-the-wall store or website that wants my card data. This even applies to local banks. If it’s a small bank and they do online banking, then they can’t afford enough security staff to properly protect that interface.

      To anyone who is aware of the software security landscape, as soon we saw the flood of cheap Chinese consumer devices with embedded webservers (often posting back customer over http to hardcoded IP addresses), we knew this was going to be a disaster. ABC Toaster or TV company isn’t going to do this right. BMW can’t even do it right.

      • wysinwygymmv says:

        Security is a problem everywhere, but tech companies have *much* better software security than non-tech companies. This is *exactly* the problem the with the internet of things.

        1. There are many tech companies with terrible software security. Many IoT manufacturers are themselves tech companies. This is just “no true Scots-tech company”.
        2. To the extent that tech companies create and maintain an infrastructure/ecosystem that enables unsecure IoT, they are still subject to criticism for enabling the problems cause by IoT.

        Non-tech companies, like auto companies, or washing machine manufacturers, decide it’s a good idea to embed a webserver into their products, and they are in way, way, way over their heads. It’s precisely because they are not tech companies that they don’t have the people or leadership to do this safely, because it’s really hard and expensive to do that.

        There are essentially no externalities for an unsecured washing machine (oh no, they’ll find out how much detergent I use!). If I buy an IoT-enabled car with shitty security then someone might steal it by hacking the on-board computer. But my impression is the botnets are composed not mostly of IoT-enabled cars and washing machines but rather products like webcams, alarm clocks, routers, and various other wifi-enabled devices that are mainly both produced and consumed within tech culture more broadly and SV more specifically.

        Similarly, for web security in general, I do not give my real payment information to small businesses or firms that do not have a well-regarded software security staff. This includes mom and pop restaurants (protection of physical copies of data is just as big of a problem). I have separate payment accounts that aren’t in any way connected to my salary or main accounts, and I give out that information for the hole-in-the-wall store or website that wants my card data. This even applies to local banks. If it’s a small bank and they do online banking, then they can’t afford enough security staff to properly protect that interface.

        Does SV encourage this attitude towards security? Or have they generally decided that good security culture is a drag on uptake of new technologies and encourage “gee whiz!” optimism and downplay the security concerns? My impression from inside the industry is very much the latter.

        To anyone who is aware of the software security landscape, as soon we saw the flood of cheap Chinese consumer devices with embedded webservers (often posting back customer over http to hardcoded IP addresses), we knew this was going to be a disaster. ABC Toaster or TV company isn’t going to do this right. BMW can’t even do it right.

        Who do you think is designing these interfaces? Where do you think those people come from? Do you think that the Chinese consumer devices were designed in China? Do you think BMW can’t pay for some damned good software and hardware engineers?

        Yeah, Google and Mozilla finally disabled Flash. Flash is a security nightmare, but a lot of content was built on it because it was convenient to do so and the incentives were all to grow user bases rather than ensure security. (And note they’re still not doing anything about javascript, even though it makes any machine that runs it basically unsecurable.) SV doesn’t get to wash their hands of that dynamic since it’s exactly the dynamic promoted by SV for more than a decade now.

        • rsj says:

          You are confusing the industry with the occupation. “Silicon Valley” refers to companies in a particular sector of the economy. It’s not an occupation. That a programmer does something doesn’t mean “silicon valley” does it.

          In terms of tech companies having bad security, sure, there are security problems in the tech industry. But there is such a thing as best practices in each industry and we can compare the security level of different industries. The state of security in the IOT space is a horror show. It is much worse than the Unix era of the 70s, which is now considered a dark age in software security in tech. Consumer products with hardcoded passwords that post back via http to a hard coded IP address, or that have an open telnet port that is unauthenticated but provides root access — are ubiquitous in the IOT space and manufacturers honestly see nothing wrong this. They don’t even have security contacts. They don’t run bug bounties. They don’t even hire many security people at all.

          Or in the auto-space, where the industry standard is lack of any authentication at all or authentication which is easily bypassable, and security by obscurity is the industry mantra.

          But if the impression you got from my post is that you can trust your data with any tech company at all, then that’s not what I was trying to say.

          Security is a problem everywhere, just not the same problem everywhere. Internet security done by companies that aren’t tech companies is much worse than internet security as done by tech companies. I’d stick to large, well-regarded tech companies and use throwaway accounts for everyone else. I would not, for example, place a whole lot of trust in an SV start up, but the SV start up isn’t going to have access to the quantity and quality of data that a major manufacturer with tens of millions or hundreds of millions of customers has.

          • wysinwygymmv says:

            “Silicon Valley” refers to companies in a particular sector of the economy. It’s not an occupation. That a programmer does something doesn’t mean “silicon valley” does it.

            “Silicon Valley” is a nebulous term. Perhaps I should have specified “Silicon Valley culture which has influenced tech culture everywhere.

            Regardless of the semantics, Silicon Valley is at the center of the IoT fad. IoT would not even be a concept if it weren’t for the major players in SV. And SV culture is also at the hart of laxness on internet security measures. The big companies have gotten better because they’ve been forced to, but overall SV culture promotes rapid development and “disruption” over conservatism, caution, and taking unintended consequences seriously.

    • Deiseach says:

      how bitcoin mining uses 0.05% of the world’s energy (the article I read suggested that isn’t very much, but compared to the proportion of people who actually use bitcoin that seems astonishing to me)

      This is the kind of thing I meant when talking way upthread about how utopian notions never seem to end in reducing consumption/the strain on the planet; whether it’s a Western couple deciding having a child would be bad for Mother Earth or someone advocating for culling all the dairy and beef herds for the sake of the environment, somehow we keep getting newer and shinier toys that use up all those saved resources.

  38. Freddie deBoer says:

    Next time you write a “why do people hate the rationalist community and think it does more harm than good?” piece, link to that jamieinnyc thread above blaming the subprime crisis on everything other than the people and institutions who actually brought it about.

    • J Mann says:

      Freddie, who do you blame?

      On first read, your post strikes me as a left-wing analogue of the right wing “we know the answer; don’t confuse us with facts” response – that it’s making you angry that people who look at the facts might disagree with the morally correct answer.*

      I suspect I’m reading you wrong, though, and would be very interested in hearing more.

      * Note – I’m not saying they disagree correctly, only that if different people look at a complex situation, they might rationally disagree.

      • Eli says:

        Is it really “rationally disagreeable” to blame the Global Financial Crisis on, you know, the actual parties and counterparties to all the bad assets, especially the ones on the lending/selling end who knew exactly what they were issuing?

    • ADifferentAnonymous says:

      If I read you correctly, you are speaking in favor of expanding the list of positions that are beyond tolerance, where even associating its adherents is socially punishable.

      I think we should all stop and reflect on that.

      • wysinwygymmv says:

        That’s a pretty uncharitable reading. Maybe we should all stop and reflect on that.

        • Spookykou says:

          It is a weird comment, for starters, unless I am wrong about who Freddie thinks is responsible, Scott and him are in tacit agreement? Scott is certainly one of the more influential figures in the ‘Rationalist community’ as I understand it.

          It seems to be saying that the comment thread in question is why people might hate rationalist, which isn’t the same as condoning/justifying that hatred, which would be uncharitable to assume.

          However it also implies that there is something objectionably about the thread(since people would hate rationalist because of it), but besides a few overly rude people like the person who started the thread, most of the comments in that section seem like very well informed people(I have no idea what any of it meant so maybe I was just baffled by bullshit?) going over the various potential influences. There was hardly consensus as to what caused the problem, but at least from what I was reading plenty of people ascribed various amounts of blame to the group that I think Freddie also thinks is responsible.

          It could be that the thread got better with time and Freddie made his comment before the counterarguments were brought up, but to someone reading them in the order I did, it does seem at least a bit like him objecting to the very idea of people discussing this topic at all, as if any nuanced or divergent opinion on this topic no matter how informed, would clearly elicit scorn from some third party.

          That seems like an unfortunate state of affairs to me.

          EDIT: I went back and looked at time stamps and it seems like most of that thread happened after Freddie made this comment, so maybe it just didn’t age well?

    • suntzuanime says:

      Why do people hate the rationalist community and think it does more harm than good? Because it doesn’t blame my favored scapegoats for all of society’s ills.

      To be fair, this thread is a good example of why I hate the socialist community and think it does more harm than good.

    • Edward Scizorhands says:

      Next time you wonder “why do so many people DDoS my websites off the Internet?”, reread any comment you make.

      • wysinwygymmv says:

        “He was asking for it!” Man, SSC norms of discourse and ethics really go out the window when anyone vaguely left makes any criticism at all of the main shibboleths.

        As if, say, @suntzuanime doesn’t say similarly nasty things 8 or 9 times per thread.

        • Edward Scizorhands says:

          Did you even notice the parallels between my comment and the one I replied to?

          When person A tells person B “you know why everyone hates you?”, an observer might notice that person A has gotten so many people so angry with person A that person A can only make very vague guesses about who is conducting the latest action.

          Getting people angry doesn’t mean you are wrong. However, if you seem to get lots of different people angry at you in all sorts of places, it’s time to reassess your judgment in what makes people angry.

          • wysinwygymmv says:

            Did you even notice the parallels between my comment and the one I replied to?

            Yeah, but I didn’t see where Freddie deBoer suggested that it would be just if someone DDoSed SSC.

          • suntzuanime says:

            Just because X causes Y doesn’t mean X justifies Y. For example, the rationalist community’s relative uneagerness to slaughter kulaks makes internet commies hate them, but internet commies are not justified in doing so.

    • haltingthoughts says:

      People extrapolating from a extreme or non-representative samples is a problem (see post), but do you really think that restricting the scope of innovation or discourse is an appropriate solution?

  39. rlms says:

    Juicero isn’t symbolic of Silicon Valley’s evil and decadence, but it is symbolic of the way almost any company can get investors, regardless of how stupid its product is. I don’t know when the bubble will burst, but I’m pretty sure it will eventually.

  40. fwiffo says:

    I’m not sure this is a fair sample, given that the incubators/VCs you’re studying are very much in the pro-social space.

    A better test would be to look at the batch of graduating YCombinator firms from 3 years ago, and then see where they all are now. If you find that uber-for-dog-treats has had 8 successive up rounds of funding, and hep-vaccines-for-south-sudan has vanished (the founders got jobs at salesforce), then it’s a point for deadspin.

    Maybe a shortcut would be to apply your categories to the companies on the wsj’s billion-dollar-startup list: http://graphics.wsj.com/billion-dollar-club/

    At a glance there’s a lot of fluff, but that’s because I wouldn’t recognize the artificial-pancreas companies by name.

  41. phil says:

    The Juicero expose` strikes me as pretty excessively ‘hot-take’

    Reading the Bloomberg piece that seems to have set this off, and all the follow ups that I’ve seen, noticeably absent is any discussion of what sort of revenue the company has generated.

    I don’t know, but I’m guessing that they have a surprisingly high amount of revenue, I suspect that it reasonably fits in the high end corporate break-room appliance space, I suspect there are enough of those out there to support a relatively nice business (ballparking, I suspect any break-room supporting 20-25 highend employees [think lawyers, finance people, programmers, consultants, etc] averaging 250K salary, can probably support a Juicero pretty effortlessly). I suspect that there are enough of those in our society that that’s a big enough niche to actually support a reasonable business.

    ————-

    The money they apparently raised, I sure they had a convincing song and dance about how they were the next Keurig for juice or whatever, and about to take over the universe, such that the money they raised was somewhat divorced from reality

    that said, I suspect that they had to demonstrate some degree of actual traction to raise that amount of money

    like nearly all tangible products, I suspect they were in the position of needing to achieve scale in order to make the costs reasonable for mass market adoption

    that doesn’t seem a problem unique Juicero, but instead common to nearly every tangible product

    ————-

    I’m really skeptical as to how this story found its way into the news cycle

    there doesn’t seem to be anything actually news worthy about it

    I sort of suspect that its the product of intra-VC firm political angling

    I sort of imagining it happening like this:

    Juicero shows up a pitches VC firm, junior VC associate thinks its dumb and suggests a pass, senior VC associate likes it, thinks its Kuerig of juice or whatever, suggests investment to VC partner, debate happens, senior associates has more sways, wins debate, is probably kind of an a**hole to junior VC associate, junior sort of hates senior, definitely wants his job, knows just the reporter at Bloomberg to tip, knows that said reporter thinks mockable SV folly makes great copy … we know the rest

    ————

    fwiw, a biometric tracker for livestock strikes me as such an obviously useful idea, that I’m more surprise that it’s still an exploitable niche than I am that someone’s trying to do it

    call it ‘a fitbit for cows’ makes me think phrasing it like that is more for VCs than customers, but whatever

    • Deiseach says:

      call it ‘a fitbit for cows’ makes me think phrasing it like that is more for VCs than customers, but whatever

      That made me think of a potential meeting with a VC investor 🙂

      “Okay, you’ve explained the FitBit part. Now, what’s a cow?”

  42. Besserwisser says:

    Mere Coffee could probably make a lot of money if the coffee is both good and cheap. They got their customer base right infront of their door.

  43. J Mann says:

    Disclosure: I haven’t seen Silicon Valley yet. Once the new season of Game of Thrones premieres, I plan to subscribe for that run, and mainline Silicon Valley and Westworld in between new GOT episodes.

    It’s a Mike Judge show, right? Judge is very observant and funny, but he’s a satirist, so he’s going to take the funniest aspects of Silicon Valley startups and exaggerate them. I’d expect Silicon Valley to be insightful but not comprehensive, the same way King of the Hill or Office Space pointed out some aspects of middle American life or American office culture without describing them comprehensively.

    Orthagonally, IMHO Judge is a very talented satirist but can’t really write a good emotional story (or a third act!) without a good partner. Is he doing Silicon Valley with someone good?>

    • Whatever Happened To Anonymous says:

      For whatever it’s worth, as someone who doesn’t have the context to appreciate the satire (aside from recognizing the Peter Thiel and Mark Cuban stand-ins), I think Silicon Valley stands on its own as a solid comedy show.

    • Eli says:

      I work in tech. Everyone in the industry I’ve met has found Judge’s Silicon Valley to be frighteningly, disturbingly accurate. The show basically compiles all the “that one time” stories everyone in tech has.

  44. p duggie says:

    The 2 dimensional israel sounds like the Jack Vance Dying Earth story where the people who wear green cloaks can’t see the people who wear grey cloaks and vice versa, because they hate the other cloak color’s religion.

    • herbert herberson says:

      Or Mieville’s City and the City.

      • Rob K says:

        The City & The City is pretty overtly a metaphor for the way we all already live in cities – different overlapping worlds to which people and places belong, and which we implicitly recognize based on their appearance and behavior. It’s an amazing setting.

    • JulieK says:

      > an archangel brings peace to the Middle East by splitting the Holy Land into two parallel dimensions.

      Well, except for all the conflicts in the Middle East that *don’t* involve the Holy Land.

  45. usualgm says:

    Neither the thinkpieces, nor this post, actually get to the piece of information I need to evaluate the argument:

    How much money goes to each of these companies, proportionally?

    The impression given is that the socially worthwhile companies get just what they ask for in terms of funding, and the “Uber for Tacos” companies are basically besieged by random folks thrusting fistfuls of dollars into their pockets yelling “shut up and take my money” so they can then become oversized, money-sucking behemoths that produce minimal social good.

    This is a falsifiable proposition. But I have no data to judge.

  46. aciddc says:

    I thought the point of the Juicero story was that Silicon Valley is in the middle of a ridiculous bubble of overvalued companies and overly free-flowing venture capital. The Juicero is an exemplar of how even something unbelievably useless and ridiculous can get a ton of funding, which implies that the less obviously terrible ideas are probably also being over-hyped. Famous companies like Uber and Tesla are valued unbelievably highly despite no plans to be anything but a money-pit for investors for the foreseeable future. Most of the ‘altruistic’ startup ideas are going to take some money from investors who think they’re a cool concept and then go nowhere. Some of that funding is at least producing useful research that will be handy even if the specific business it’s for doesn’t go anywhere. A lot of it is just being flushed down the toilet.

    • Deiseach says:

      Tesla might actually end up making something, and I’m surprised to see myself typing that. Uber is a taxi firm in all but name, and the way it’s annoying the EU might end up slapping some sense into it. Not going to hold my breath on that one, but it’s not going to be the same kind of easy “if this American city won’t roll over and beg for us, we’re going to threaten them with a loss of a huge amount of money if we don’t get our way” stunt they’ve been pulling so far.

      I have no idea why Scott is so ride or die for Uber; I know he’s a nice chap and an idealist and he knows these kind of Silicon Valley/Bay Area types who are all nice chaps and chapesses themselves and sincerely into making the world a better place, but just because a company is based in lovely San Francisco and know how to sling the earnest authentic social visionary line of claptrap does not mean they can’t be sharks and vultures looking to make a quick buck under the cloak of “we help you help yourself!”

  47. Sylphiae says:

    Wouldn’t the better measure of comparison be how much venture capital has been sunk into different types of startups? So $35 million has been spent on diabetes research, but ~$118 million was spent on Juicero? Otherwise it seems like you’re just comparing your list of companies to admittedly hyperbolic news articles’ examples of SV companies.

    Hah, looks like there are other commenters raising the same question above.

  48. J Mann says:

    A couple thoughts:

    – John Schilling and Scott just had a good conversation about how Silicon Valley practices aren’t a good fit for space launches. Here, I suspect that the speed of Silicon Valley both (1) encourages the pace of innovation; and (2) results in some dumb investments like Juicero. It’s possible that all the money chasing investments like Juicero or Theranos is rational – that enough of the bets pay off that it makes sense to invest faster, even if it results in some dumb investments.

    – On the other hand, Eric Falkenberg had a nice analogy to Batesian mimicry a while back, where he hypothesized that one reason for a business cycle crash is that dumb investments learn to mimic the qualities of good ones.

    – On the third hand, maybe Juicero is just an honest mistake. Based on the tear-down article, it looks like they thought they could become the Keurig of juice with their special press, but their mistake was that you could pulp the fruit in their bags by hand, as long as you were willing to pulp one area of the bag at a time, instead of pressing the whole bag simultaneously. As shown by recalls or 2 star products on Amazon, people make mistakes all the time, even when they’re not in Silicon Valley.

  49. John Schilling says:

    Then Bloomberg View did some investigative reporting and found that you could actually make juice equally well by skipping the $400 juicer and just squeezing the juice packets with your bare hands.

    You say this like it’s a bad thing, or even an embarrassing thing. And you’re not alone.

    Do people not get that the purpose of Juicero, whether the greedy economic purpose or the benevolent social one, isn’t to sell anyone a $400 juicer? The purpose is to sell lots of people a $7 juice pack every day.

    If there are two competing memes in circulation, one that the Juicero press is a stylish, well-engineered product that will enhance the owner’s lifestyle for decades, and the other is that the Juicero press is a rip-off but that you the memetically informed consumer can prove yourself better than the sheeple and put one over on The Man by just buying the juice packs and squeezing them yourself, that’s win-win for Juicero. And if we buy the premise that the juice is going to be at least $7 tastier and/or healthier than whatever else people would be drinking, then win/win/win all around.

    • Rob K says:

      No such thing as bad publicity, I suppose, but headlines about “these guys made a comically overpriced and unnecessary piece of hardware” certainly aren’t prompting me to go plunk down whatever they claim their beverage product is worth.

      • Civilis says:

        People plunk down good money for Keurig coffee machines, don’t they? Juicero always struck me as the natural result of the single-cup coffee machine boom, which in many ways struck me as a stepchild of the inkjet printer market.

        I don’t drink coffee (I can hear the cries of ‘Heretic!’), but I tend to laugh when someone tries to get me to make something with the office single-cup coffee machine. It looks like the cost per cup for most of the single-use cups is about $.50. I’m lucky in that I prefer tea, and hence can make due with a $.15 teabag and the microwave. To me, the Keurig has always been “a comically overpriced and unnecessary piece of hardware“.

        That’s less than the $7/cup cited for Juicero, but I can easily see the markup for juice being higher than that for coffee. I also have had the unfortunate experience of having to get tea from a coffee establishment like Starbucks, and thus feeling ripped off by paying several dollars for hot water and that $.15c teabag. On the other hand, if you’re used to paying $3 for a coffee shop coffee, paying $.50 for a single cup without having to the office is a steal. And if you’re used to paying $4 for a bottled juice at the same establishment, it might be worth $7 for it in the office.

        • Brad says:

          The difference between the tea and coffee situations is that the tea bag equivalent for coffee is horrifically bad. I’m not some hand picked single source beans made by a virgin barista under a full moon snob either. I drink plenty of bodega coffee, but instant is a crime against humanity.

          Drip coffee out of a $25 machine at cents per cup is a perfectly fine option for an office. But many modern offices don’t have anyone obvious to be responsible for the menial labor involved. If you pick someone non-obvious they are likely to be offended. A Keurig solves that management problem and in the grand scheme of things isn’t a big deal cost wise.

          As for Keurig at home, the only scenario that makes sense to me is for non-coffee drinkers that want to have some way of making not-terrible coffee for guests on occasion.

          • random832 says:

            Isn’t the obvious person “whoever had the last cup from the last pot”? Doesn’t solve the problem of the first one in the morning, I guess.

          • Jordan D. says:

            I can’t even trust people who finish the pot to rinse the damn thing. The less I have to trust anonymous co-workers to do in the kitchen, the better.

          • random832 says:

            I suspect you’ll find more volunteers for “sit near the coffee machine and ‘remind’ the person who finishes it of their responsibilities” than for actually being responsible for doing all of the work.

          • Brad says:

            If I’m going to have infighting and drama at least it should be bad commit messages rather than who didn’t clean the coffee pot.

        • Deiseach says:

          Making tea in the microwave?

          *swoons away in horror*

          Yeah, I know it’s supposed to be the optimum but still – swooning away in horror, here 🙂

          (Re: that scientific paper – if you need to put hot water in first anyway, aren’t you boiling the kettle to do so in the first place and so isn’t it easier to just make tea THE WAY GOD INTENDED IT TO BE MADE?)

          • Civilis says:

            I said I could make due… or should it be ‘make do’?… with a microwave to heat water. We actually have a ‘hot water’ functionality on the office water ‘cooler’, which is more of a fancy filter device.

            Though if that article is right, perhaps I should look at the horrible germ-riddled office microwave that hasn’t been cleaned since approximately the Carter administration.

          • Loquat says:

            Yes, “make do” is indeed the correct version. I don’t understand why so many people use “due” instead – overcorrection, perhaps?

          • Deiseach says:

            Based on this and other online conversations, I now have a fool-proof can’t lose gimme the hundreds of millions in VC cash now idea:

            INTRODUCING THE ELECTRIC KETTLE TO THE USA

            Naturally, I’ll have to foo-faw it up some but that’s what all these industrial design grads are for, right? Imagine my pitch:

            BOILING HOT WATER AT THE TOUCH OF A SWITCH! NO STOVE TOPS REQUIRED! ERGONOMIC SPACE-SAVING INNOVATIVE RAPID-BOIL TECHNOLOGY! THE FUTURE OF BEVERAGES IS HERE TODAY! DISRUPTING THE PARADIGM! GOOD FOR THE ENVIRONMENT – REDUCED ENERGY CONSUMPTION REDUCES YOUR CARBON FOOTPRINT!

            Yes, the thirsty office workers of America will find a saviour in me, and my bank balance will find its first million in them 🙂

          • Brad says:

            Electric kettles in the US aren’t very good because our standard outlets put out about half the power yours do.

          • LHN says:

            That said, they’re still better than a kettle on the stove or microwaving the water. (And the fancier ones offer better temperature control for, e.g., green tea.)

            But since tea-drinking is niche here rather than the cultural universal it is in other places, the product is likewise something some people have rather than a kitchen staple.

          • random832 says:

            That said, they’re still better than a kettle on the stove

            Are they? The stove has access to more power. Or did you mean on some basis other than time to boil?

          • Nornagest says:

            They really are pretty convenient. I spent years boiling water for tea and coffee on a gas range, like some kind of caveman, and disdained electric kettles until someone gave me one as a gift. Now I use it constantly. It heats up faster and does better temperature control, and I’m pretty sure it’s also more efficient.

            (Said stove was at one point an enormous howling gas range looted from a defunct restaurant, so I’m not sure why an electric kettle heats up faster. But it does appear to be so.)

        • Rex says:

          I always thought the appeal of Keurig machines is that they’re more convenient than the usual way of brewing a pot of coffee. That’s not true of Juicero, since it doesn’t actually make juice.

          • Civilis says:

            How long will the juice packet keep? Our office building has a deli and a small restaurant in the ground floor, so I can just walk down there if I want a slightly overpriced but not Juicero-overpriced bottle, but many offices might not be so lucky. If you don’t have that availability, it might be more convenient to have it on hand.

    • Douglas Knight says:

      But, actually, Juicero won’t sell you packs unless you own a juicer.

      Added: a good comparison is the price of the machine to the price of the pack. A Keurig machine costs 200 of its coffee cups. The original price of the Juicero was less than 100 packs of juice. And Juicero doesn’t make it easy to buy less than 5 packs per week. So none of their customers should blink at the up-front cost.

    • Deiseach says:

      I really think Juicero should have forgotten the fancy juicer and concentrated on “delicious healthy organic fair trade non-GMO fruits, vegetables and herbs” packs to sell people; make them compatible with some cheap(ish) juicer or build a cheap(ish) one yourself without the over-designing and over-engineering of the Juicero machine and make a selling point of “you can hand-squeeze the packs yourself!” as the stand-out gimmick; get them into the chill cabinets of select supermarkets (but not too select so a relatively mass-market consumer base can access them) and market the hell out of “a juice bar in your kitchen without the peeling, chopping, slicing and clean-up afterwards”.

      Do a seasonal variation every so often (“this month baby pink coconut and whatever the latest trendy berry is”) besides your standard range to keep it fresh, keep on top of the latest foodie trends and be sure to get your version out fast fast fast so your customers can feel like they too are on the bleeding-edge of food trend like the big sophisticated cosmopolitan outlets, and laugh all the way to the bank.

      • suntzuanime says:

        Yeah, the biggest mistake they made was engineering an excellent but expensive machine instead of putting out a cheap piece of plastic crap using off-the-shelf parts.

      • Loquat says:

        I feel like “we will disrupt the juicing paradigm with our fancy machine!” was a big part of the reason they got VC attention. If they’re not making a machine, they’re just a food company with little to no tech angle to hook the investors.

    • Nornagest says:

      Forget the $400 machine; that’ll amortize eventually. My real objection to the business model is that adding $7 juice packs to my diet sounds like an obviously bad idea when I can just go out and buy a $3.50 smoothie at half the money and zero percent of the preparation time. Or a $0.30 apple.

      But I’m not in the target audience for this. The target audience is my old roommate who spends $500 a month on Costco produce and juices it every morning while listening to Tony Robbins on audio.

  50. It’s not hard to understand where the hostility comes from. Craigslist is a sucking chest wound to the news industry and if I worked in news I’d probably be inclined to assume the worst about Silicon Valley too.

  51. AnthonyC says:

    I have never worked in Silicon Valley, but I work at a tech scouting/market research firm. My job is to talk to start-ups, separate wheat from chaff, and tell our clients, “These people know what they’re doing and those don’t; this idea has market potential and that doesn’t; these people have no idea who their market is; this technology isn’t as high performance/scalable/affordable those people think they have no competition even though the product they’re developing has been commoditized for a decade. So, this company might make a good investment/acquisition target, that one might make a good tech partner or licensor, that one can be a supplier in a few years, ignore the others.”

    This obviously creates a bias in who I bother talking to, in favor of companies that will be interesting to large companies rather than those with more purely prosocial aims. Even so, there is a huge, clear disconnect between funding & hype vs real potential. Most companies that receive massive funding levels either fail, or at last never generate a real return for investors, and in all likelihood the founders could have done better if they refused most of that money. 90% or so of start-ups fail anyway, this is expected, but “success” is a lot harder when you need to generate enough ROI to justify $100M in investment than $10M. It also effectively prevents a positive acquisition because you’re valued too highly; you need either huge revenue or a huge IPO, which are harder to achieve. If your idea really does require $100M+ to bring to market, it probably should be aiming to only be a start-up until you prove the concept, then get bought by a big company that can afford to make that big of a bet, and that has an existing stage-gate development process.

    But, big funding levels and impressive claims of any kind generate lots of press. My colleagues and I get a lot of calls from reporters trying to find grounding and context; most are of the “I’ve never heard of this entire field but I need to write an article by 4pm today” variety. But, most reporters don’t have the time or inclination to seek out independent assessments. That, combined with constant republishing of marketing fluff press releases with no commentary or qualifications, is what propels Juicero to the forefront of the popular press.

  52. vV_Vv says:

    Wait, I thought that you were desperately trying to avoid the Nerd Culture Wars. What are you, a horrible FOX News conservative witch?

    While Deadspin was busy calling Silicon Valley “awful nightmare trash parasites”, my girlfriend in Silicon Valley was working for a company developing a structured-light optical engine to manipulate single cells and speed up high-precision biological research.

    While FastCoDesign was busy calling Juicero “a symbol of the Silicon Valley class designing for its own, insular problems,” a bunch of my friends in Silicon Valley were working for Wave, a company that helps immigrants send remittances to their families in East Africa.

    Oh, I see…

    Or to put it another way: there’s a chapter in Unsong (spoiler!) where an archangel brings peace to the Middle East by splitting the Holy Land into two parallel dimensions. Any Jew who enters will find themselves in a united Israel; any Muslim who enters will find themselves in an independent Palestine.

    Yay, magically enforced ethno-religious segregation! Scott, you truly are a conservative witch.

    At its worst, some of their criticism sounds more like a worry that there might still be some weird nerds who think they can climb out of the crab-bucket, and they need to be beaten into submission by empty suits before they can get away.

    “Nerds should be constantly shamed and degraded into submission”, once said a wise man talking about some horrible people. Or so I’ve heard.

  53. bintchaos says:

    yes!

    If a deeply good person crusading for a better world enters Silicon Valley, she’ll find herself surrounded by deeply good people crusading for a better world. She’ll see mobile apps that track tropical diseases, clean energy startups that fight global warming by directly sucking carbon dioxide out of the air, companies bringing microbanking to poor Nepalese villagers, and boutique pharmaceutical labs searching for cures for orphan diseases.
    If a futurist enters Silicon Valley, she’ll find herself surrounded by futurists. She’ll see neural nets and deep learning, reusable rockets and flying cars, high-throughput genome sequencing and CRISPR, metamaterials and nanotechnology.
    If a social-media-obsessed narcissist whose view of the world begins and ends with his own Instagram page enters Silicon Valley, he’ll find himself surrounded by social-media-obsessed narcissists whose view of the world begins and ends with their Instagram pages. He’ll see a bunch of streaming video services and Uber-for-hair-products apps and elite pay-to-play dating scams and people trying to disrupt the gymwear market.
    And if one of those people who talks about “the cloud” all the time enters Silicon Valley, he’ll find himself surrounded by people who talk about “the cloud” all the time. I have no idea who these people are or what they’re doing, but they all seem really happy with each other and I’m glad they’re enjoying themselves.
    They’ll all have their blind-men-and-elephant view of what kinds of things Silicon Valley “does”. And they’ll all be sort of right.

    To take something else from UNSONG (yes, its an acronym, so all caps, and i strongly recommend it) its fractals all the way down…and not just any fractal scale-variant shape-invariant — small world networks.
    like convergent gene networks in cognitive genomics

  54. Tatu Ahponen says:

    The whole point with the Juicero criticism is that it’s emblematic of a larger trend of trying to come up with extensive techy solutions to problems that have simpler, traditional solutions (eg. squeezing fruits by hand instead of an extensive machine). Such criticism theoretically keeps the entire field of business in check and reminds them to develop other sorts of things instead of Juiceros. Thus, it serves its own function, no matter how annoying it might seem from a Silicon Valley point of view. The more successful startups don’t need as much praise for good ideas – they already know those ideas are good if they make a steady profit.

    Similarly, when government bureaus screw up, it gets a more attention, laughter, criticism etc. than contrariwise – when government bureaucracies handle things smoothly and people don’t experience too much fuss and trouble with them. As it should be.

    • Christian Kleineidam says:

      If I buy an apple at the store I can’t squeeze it by hand to get apple juice. It’s only the juice backs that the company behind juicer produces that can be squeezed by hand. Squeezing by hand isn’t the traditional solution at all.

      The project of overengineering juice production not only lead to the $399 device but also to the juice packs that can be handpressed.

    • Deiseach says:

      I thought the most pointlessly expensive trendy juicing implement was the Philippe Starck lemon squeezer, which had the lifestyle section of magazines and newspapers having orgasms over it, and it still sounds reasonably priced by the standards of the Juicero 🙂

      Then again, its heyday was back in the 90s and early 00s so I imagine there was a gap in the market for an up-up-scale fruit juicer – at least Starck (or rather Alessi, the company he was designing for) never sold the lemons along with the juicer, maybe that was the secret of its success!

      First produced in 1990, this squeezer is as controversial as many of Starck’s other designs. Some say it doesn’t work very well and makes a mess of the worktop. Others celebrate it as a piece of form over function. Whatever your opinion, it now ranks among the greats of modern design with a place in the Museum of Modern Art in New York, which means that it’s a work of art in your kitchen.

      Michael Czerwinski, of London’s Design Museum, says of the squeezer: “Starck has imbued what was a perfectly adequate kitchen drawer filler with aspirational desirability, indications of intellectual meaning and a mythical lack of juicing prowess.”

  55. Brian says:

    Overall a nice post, but let’s also keep in mind that there are more than failure modes for the SV startup than “ridiculous niche Uber-for-tacos startups”. Case in point:

    clean energy startups that fight global warming by directly sucking carbon dioxide out of the air

    This sounds very prosocial, but we are literally talking about developing the technology of a tree.

    • suntzuanime says:

      The tech industry hears “only God can make a tree” and says “well we’ll just see about that!” It’s endearing, honestly.

      Realistically the goal of the carbon scrubbing technology is to suck carbon dioxide out of the air efficiently. If you can get a little rooftop carbon scrubber that has the same impact as an acre of forest, it’s silly to say “why don’t you just plant an acre of trees on your roof”.

      • vV_Vv says:

        The tech industry hears “only God can make a tree” and says “well we’ll just see about that!” It’s endearing, honestly.

        How good are startup at creating groundbreaking technology?

        Google did it, 20 years ago: Page and Brin took their cutting-edge academic research and turned it into a product.

        But, if I understand correctly, this seems to be the exception to the rule. Most successful startup just find some clever way to apply already proven technology.

        This is why I’m skeptical of startups that claim to have a production-ready solution to what anybody who knows what they are talking about still consider an open research problem.

    • Nornagest says:

      Trees take a while to grow and are inefficient both as a carbon sink and as a source of energy. Basically all photosynthesis does is take sunlight and water and CO2 and produce carbohydrates, but if we could make a gadget that took the same inputs and did a reasonable job of producing the same outputs without bothering with all that inconvenient fruiting and flowering and growing business, I can think of a half-dozen applications right off the top of my head. Even without the carbon-offset angle!

      Especially if we can lose some of the extra oxygens in the process and end up with a convenient hydrocarbon, like diesel fuel.

    • vV_Vv says:

      This sounds very prosocial, but we are literally talking about developing the technology of a tree.

      That’s a ridiculous niche Juicero-for-hippies startup. Except that the Juicero machine at least produces juice, while this thing probably doesn’t produce whatever it is supposed to produce.

    • uncle joe says:

      Let’s not get big heads here. Trees are complicated, and being able to precisely imitate something that already exists can be really useful.

      Think about how big a deal it would be to make artificial brains. Even growing something more prosaic, like a kidney, would be a massive breakthrough.

  56. SpaghettiLee says:

    Honestly? I think it’s a proxy war for the general STEM vs. liberal arts rivalry, and I say that as someone from the latter group. A lot of us are really insecure about our skill level in our chosen field(s) and what kind of life we’re going to make of it, so “at least we’re better than those soulless code monkeys” is a regrettably common sentiment. I’ve been trying to change minds on that front among my lefty friends, but it’s hard going.

  57. bdb says:

    “And if one of those people who talks about “the cloud” all the time enters Silicon Valley, he’ll find himself surrounded by people who talk about “the cloud” all the time. I have no idea who these people are or what they’re doing”

    They’re converting the plumbing of the internet from a thing every company has an in-house plumber to maintain to a thing that you call a plumber for when it’s broken, more or less. This will reduce the cost of everything you buy, delivering the greatest marginal benefit to the poor of course, and is therefore probably far more beneficial to society in the short run than landing a rocket back on its pad.

    • bintchaos says:

      and they are also forming a closed network of “the cloud” shared interests
      Scott is perfectly correct about emergent “small world” style closed networks

      • bdb says:

        Sure. Everything that comes with economy of scale also comes with monoculture problems or closed network effects or fragility to black swans or whatever you want to call those issues. But there are really a lot of cloud providers, some very specialized.

        • bintchaos says:

          im not a “the cloud” node…but i think highly different specializations = ingroup diversity
          *Social Physics definition of diversity

  58. The Nybbler says:

    Maybe I’ve been in tech too long, but some of these silly-season startups don’t sound all that bad. Monitoring of activity of dairy cows sounds perfectly reasonable. A service model for blender cleaning seems downright tame. Movebutter is getting a little sillier, but on the other hand, some people eat Soylent which is much weirder. MereCoffee just appears to be a Keurig competitor. LitHit does appear to be an overpriced gadget, though if it were less limited it would be another story.

    • Leit says:

      LitHit may be an overpriced gadget, but it’s certainly one that I’d dearly love to take out to the range for a run. And surprisingly, their FAQ starts with questions I actually wanted answered, not nonsense that reeks of marketing insisting on starting with a soft pitch or info on support for some designer’s pet standard.

  59. Eli says:

    So you’re saying that lots of Silicon Valley startups are… making the world a better place.

    YEEAAAAAAAAAAAAAAAAH!

  60. TheRadicalModerate says:

    Another effect: core competencies of various engineers and scientists are fairly narrow, and have less to do with one another than you might think. So the web programmers and app builders don’t have daily contact with the bioinformatics or AI people, the hardware weanies and manufacturing types tend to view software content more as a necessary evil than the thing that distinguishes one product from another (Exhibit A: Android phones), and the odd interdisciplinary types either succeed or fail based on whether they randomly bump into the right people.

    So this is less about the inclinations and viewpoints of the participants and more about what they know and to whom they communicate it.

    • bintchaos says:

      Another effect: core competencies of various engineers and scientists are fairly narrow, and have less to do with one another than you might think. So the web programmers and app builders don’t have daily contact with the bioinformatics or AI people, the hardware weanies and manufacturing types tend to view software content more as a necessary evil than the thing that distinguishes one product from another (Exhibit A: Android phones), and the odd interdisciplinary types either succeed or fail based on whether they randomly bump into the right people.

      see MIT Social Machine Project and anti-disciplinary innovation for an attempt to harness the randomness

  61. bean says:

    I’m not sure what about Cowlar is so amusing. My grandfather was a beef farmer, and while the markets are somewhat different, not having to go out and check on the cows as often would have been a big benefit to him as he got older. I’m not sure how well Cowlar has dealt with the fact that their products will be used by people like him, who are technology-challenged, to put it nicely, but I can definitely see a potential market there. Even better if you include location services and can tell when the cows are in the wrong pasture because someone left the gate open.

    • Paul Zrimsek says:

      “The more modern type of end-user says, ‘I don’t see the use of this app; let us uninstall it.’ To which the more intelligent type of end-user will do well to answer: ‘If you don’t see the use of it, I certainly won’t let you uninstall it. Go away and think. Then, when you can come back and tell me that you do see the use of it, I may allow you to uninstall it.'”

      • bintchaos says:

        i actually want a HorseLar for pregnant broodmares or colicky performance horses
        is there sucha thing?
        horses have the most inefficient and potentially deadly placetal structure in the history mammalian evolution.
        a HorseLar would be magnificent.

    • Bugmaster says:

      I know absolutely nothing about farming; my experience with cows is, basically, “it mooed at me once”. But still, hooking up wireless biometric sensors to each of your very valuable animals sounds like a good idea. If cow #3735928559 starts spiking a fever, you want to know it sooner rather than later, I think.

      I’m sure there are lots of logistical issues involved — how do you charge this device ? How accurate is it ? is the data actually useful ? is it easy enough to use so that regular farmers can do it ? — and so on. But still, the idea doesn’t sound crazy at all.

      • vV_Vv says:

        my experience with cows is, basically, “it mooed at me once”.

        My experience is “they taste good”, but AFAIK gps trackers and monitoring sensors for cattle and other livestock have been used for over a decade.

      • Paul Brinkley says:

        My experience is “grew up on one”. 250-ish acres (it varied over my childhood), roughly 60 head (also varied). Cowlar seems fun, but of limited use.

        I’m guessing the use case is to do a routine roundup, and stick one of these on each cow while you’re giving it its usual six-month shots. Assuming you don’t need an Official Accredited Cow-Orker to install them, that seems all right. Then you can check your smartphone or desktop app every so often and maybe get alerts if one of them has wandered through a hole in your fence or went to the woods and hasn’t appeared to move in the last 24 hours. Caveats:

        * Calves won’t have these. But that’s usually okay; calves always hang out near their moms, and if they’re away for too long, it’s probably some problem we can’t fix anyway (e.g. coyotes).

        * Every week, we had to turn them into a new pasture anyway. So Cowlar at most saves us about six days. Occasionally we check more often, and that meant hopping in the pickup for a slow drive over to the pasture to look for any isolated spots where a cow might be having trouble, but if unless Cowlar gave to-the-minute alerts, there’s not much we can do about cows that have drifted away from the herd to die (or to just give birth).

        * Much of our farm management was in a sort of supplemental mode: Dad was the main farm runner, and had a day job (as a physicist in Austin), so most of the intensive work happened on the weekend. It’s possible that Cowlar might come in handier to a 24-hour farmer, or a rancher, or someone leasing several farms (we knew a few people who did that). It’s hard for me to say how many farms were run the way ours was.

    • Deiseach says:

      I do love that Scott introduces, as one of the “rightfully useless products people should mock but this is not what Silicon Valley is really about”, the Cowlar and immediately there are a bunch of us rural types saying “hey, this sounds like a great idea, what’s crazy and ineffective about it?”

      Just more of that urban/rural divide, I guess 🙂 Though I’d certainly want to see pictures of the cows wearing these collars (and not managing to get them off) and data on how well they worked out in the field before plonking down investment money or ordering 500 of them for my dairy herd.

  62. PeterDonis says:

    > maybe we should try to be more quantitative about this

    I’m not sure that just counting companies is the best way to do that. I notice you gave the amount of funding Juicero got ($120M), but didn’t give that number for any of the other companies you mention. That number seems to me to be a better measure of the actual resources being put into various areas. A still better measure might be value at ultimate exit (amount of acquisition or IPO, vs. shutting down the company at essentially zero value left).

    Past performance by that measure doesn’t paint quite as rosy a picture. As far as I can make out, Facebook’s IPO, all by itself, was larger than the sum of all previous IPOs of Silicon Valley companies, at least the ones anyone has ever heard of (even allowing for inflation). And I have a really hard time putting Facebook into the “making the world a better place” category. (To be fair, it’s not in the “pointless Wifi enabled juicer” category either.)

  63. hurrya1 says:

    Reality check or denial. Being very defensive and shifting the blame can only delay the day of reckoning. The election of Donald Trump shows that a large decisive section of the population is not happy with the selfish actions of the elites. Silicon Valley venture capitalists and entrepreneurs are part of the elite and share the blame for the demise of the standard of living of large sections of the population. The Pharma industry uses many of the same arguments, many of its leaders claim that they are working to fight diseases and improve the human condition, but a closer analysis reveals that their sole focus is maximum profit even if that means focus on orphan diseases that afflict very few or developing yet another drug to treat diabetes. American pay up to ten more for drug prices and at least two times more for health services and get worst outcomes than most OECD countries.
    Disruption means changing business practices but it’s also disrupting the lives of people who used to earns a respectable living in retail, transportation, or hospitality and now find themselves victims of the rapacious appetite of an Amazon, Uber or AirBnb. The author claims that Silicon Valley led a revolution in solar power that’s resulted in a 1500% increase in cell installations over the past few years, the credit goes to the Chinese solar companies which were able to reduce the price of Solar Panels from $4/watt in 2010 to less than $0.40/watt today.
    What did Silicon Valley inventions really accomplish in the past ten or twenty years that really improved the lives of people? Did Facebook improve the lives of people or is Facebook and social media in general a tool that reduces productivity and hurts democracy? Can SV do better? Can SV really focus on tackling the problems that face society and the world, can SV leaders be more like Elon Musk.

  64. A Definite Beta Guy says:

    Steel-Man Version:
    Globally, we are on the wrong end of four decades of productivity slowdown. The US is about to hit business cycle peak, and (eyeballing some GDP gap graphs here), this’ll be the first recession where the US will not return to trend-line GDP (1973-2007 in this case).

    So our growth in the 2001-2007 business cycle and possibly 1991-2000 business cycle were possibly not as vigorous as they actually appeared.

    The presence of SV has done nothing to arrest or reverse this trend, at least visibly.

    This is a major problem for the West. We’re about a decade away from some VERY difficult public finance choices. Median family incomes, buoyed by women joining the work-force, will probably not advance much at the same time governments will need to raise taxes sharply.

    It’s quite possible that we are just on the cusp of some incredible innovation, but it doesn’t show up in macro-economic data yet. Analogy: it’s 2100, the Earth has warmed 7 degrees, major cities are flooding, and SV says “don’t worry, we are just on the cusp of this cold fusion revolution!”

    The problem with SV is the same problem with Wall Street last decade: it sucks up bright minds and scarce capital in non-productive enterprises.

    What might be a better solution? Well, I don’t know, but the above is the simplified steel-man version. Perhaps it’d be better if everyone in SV learned backyard agriculture and evangelized to suburban households.

    Also, dispute: the 2008 recession is not Wall Street’s mistake. It is the Federal Reserve’s mistake. Recessions are not only likely, they are certain in capitalist economies with financial sectors. The financial sector is a leveraged industry, inherently prone to runs and panics, and because it controls the capital it will inevitability cause peaks and troughs in business cycle activity.
    The Federal Reserve’s entire reason for existence is to offset this risk. They are the only institution with a specific Congressional mandate to reach full employment (I think). If the Federal Reserve can’t handle a recession, what’s the point in its existence?
    If the Fed is simply making things worse, or not doing anything at all, abolish the Fed. Ride out the storm. Let Congress issue specie as it feels prudent.
    Caveat: I agree largely with Sumner that the Fed is merely a reflection of the macro-field’s consensus, so it’s the econ profession more broadly that shoulders the blame.

    Analogy: if your nuclear reactor overheats because the control rods don’t slide in, your immediate problem is the control rods. Every complex system (of which financial systems are one) needs to have certain regulators in place to keep things running smoothly.

    • albatross11 says:

      I don’t have any proof of this, but my intuition is that the finance industry is siphoning off more brainpower toward zero-sum stuff (getting a bigger slice of the pie rather than making the pie bigger) than SV can dream of. But as I write this, I realize I don’t really have a good way of even coming up with a Fermi estimate here. How would we know if this were true?

  65. Urstoff says:

    That EZ Crunch Bowl does look pretty dope.

  66. madrocketsci says:

    If you own a business out here in the ruins of flyover country, you couldn’t get a machine loan to save your life doing something you have 10 years of experience at, with a solid business plan, without putting up some large fraction of the principal as collateral and being treated like a thief.

    All the while you get bombarded by another set of random thinkpieces about how you’re obsolete and are going to be replaced any day now by the robots that you’ve been operating (and maintaining, and cleaning, and debugging, and holding together with duct-tape because you’re a ‘bad business risk’ to buy anything new) your entire life. “You have no place in the future, you dumbass midwestern sub-man. Go die on welfare.” (Some national review screed (i think) that I can’t be bothered to remember/look up being the worst of the genre.)

    So, hearing about people in Silicon valley rolling into VC meetings with half-baked ideas (things that would get you a C- in a non-ivy engineering senior design) and being handed more startup money than you could ever hope to make in an entire life of honest work back home: It sort of burns. (Maybe it makes you want to move to Silicon Valley and scam VCs, but maybe that’s not an option. (Family issues, home, etc.))

    The resentment generated by the Marie Antoinette act feeds the $400 juicer being the thing that sticks out in the news. Nothing really to take away from this than to try to unplug from news designed to prey on your emotions. Thanks for telling the other half of the story.

    But for those of us who can’t move to a micro-apartment on the West Coast, it still burns.

    (PS this may be a bit hyperbolic in style. Also I’m aware that VC investment isn’t a loan, and comes with significant strings wrt the operation of and ownership of your business.)

    • madrocketsci says:

      Actually, just thanks in general for posting links to interesting and positive things. I could use more of it, and less clickbait designed to prey on insecurity.

  67. apullin says:

    Bruh, if you want to see the real cons in SV, you need to look a little deeper.

    Look at Jibo: that was an out-and-out scam, and no one even knows it yet. Every trick in the book was used:
    1) “MIT Professor” – an adjunct that teaches 1 class
    2) Indiegogo campaign – looser rules than Kickstarter
    3) Already had millions in funding before campaign
    4) $100K target funding for a company with a 10+ strong roster, which would have a burn rate of $1m/month
    5) $100K target was met literally within the first hour of the campaign going up … did you know that IndieGoGo lets you make anonymous “contributions” to a campaign, without actually buying one of the deliverable items?
    6) $100K target let you ultra-scale your magic funding number: 4000% funded!
    7) No hardware delivered. No schedule for hardware to be delivered.
    8) ffs just look at the video … it’s a robot that raises your kids for you because you can’t/won’t

    And not all of it is some nouveau ventures, the biggest ones are the ever-present power structures taken into a new realm:
    There are 300 acre tracts of land in the middle of SF or Santa Clara that go undeveloped for 3 decades, until someone comes along with enough payola to get the attention of the city fathers. And even then, they will only ever do single-owner developments, so one corp owns a huge block of housing resources, and there is zero market liquidity to it. That way, they can always keep 2-3% of the units open for immediate availability, and thus charge *absolutely* what the market will bear.

    ffs is literally $500b in real estate sitting in the middle of the SF bay (treasure island) that is part of the city of SF, and they just will not develop it because they are holding out for the best deal for their own pockets.

    And at the intersection of the two putrid roads: Lily!
    Lily just went belly up and (I assume) tried to save face and save legal problems by doing a full customer refund on their campaign, *maybe* leaving them in a place to get acqui-hired for the remnants.
    But the city of SF is not happy with that. The city of SF stood to make a nice income from $36m in sales and all their gross tax receipts. So the city of SF wants its pound of flesh, and even despite a full refund to all customers, now the SF DA’s are out for blood against the company … with whom said city did zero business. Under the veil of “consumer protection” … even though the consumers were fully compensated.

  68. The Nybbler says:

    It’s not the GPLs fault that (e.g.) Adobe and Microsoft switched to subscription models. They have their own libraries, proprietary or derived from BSD-licensed codebases. There’s lots of BSD-based and LGPL libraries still out there, too. There are some classes of software that “free software” has ruined the market for, particularly including the basic tools of software development itself. But I don’t think free software drove the box/download model out of business; that was web apps.

    • madrocketsci says:

      Whoops, sorry. That was in reply to my comment (I deleted it, because it didn’t seem entirely on topic.)

      Here it was:
      An idea: Perhaps one reason why everyone is desperate to monetize their users with web-applications that don’t execute on the user’s machine, sell their customer’s personal info, and spam ads is that it’s become impossible to make a living selling software honestly: By bundling something in a box or giving your users a licence key and download installer.

      Perhaps it’s one of the unintended side effects of licenses like the GPLv3, which make it impossible to actually earn a living selling anything that builds on libraries under it. Perhaps the insistence on software being “free” means that you don’t actually get to own any of it.

      Instead of the path of least resistance being to write your own libraries and then write the application, and sell the results; now the world is saturated with libraries (making it hard to justify starting from square one) – libraries that have legal landmines attached and legal organizations waiting for them to trip.

      Coders have to make their living somehow (for anything nontrivial). In a world where everything is “free”, you’re going to end up being the product.

      (Just a bit of devils advocacy: I sort of miss being able to buy a freaking box of $software$version$year, permanently. Not have to rent it month to month through a browser.)

  69. MB says:

    I still think the author is missing the point. It’s not about being right or wrong. The point is that by shouting loudly and making these semi-believable claims (or by keeping quiet about some juicy bit of gossip), those websites — Vox, Slate, etc. — are setting themselves up as arbiters of good and evil, such that their utterances carry weight and need to be taken into account. They are influential.
    This is valuable currency for the sites’ backers and even for the contributing writers, who can trade it later for political favors, for comfortable sinecures for their relatives as board members for promising startups or as diversity consultants for established businesses, or who knows for what. They can sink careers, reputations, etc.. They’ll make it such (if they haven’t already done so) that no Silicon Valley business can be successful without their imprimatur. Whether they are right or wrong, their targets will have to make them some concessions to appease them. From their point of view, this is what matters.

  70. Marshayne Lonehand says:

    Science-minded/math-minded SSC readers who are seeking to refine their understanding of Y Combinator’s investment strategy are invited to do as I do, namely, thoughtfully read the books and weblog essays of Y Combinator Research Fellow Michael Nielsen.

    Nielsen’s books and essays provide a rich banquet of food for thought — particularly in respect to the SSC-compatible intersection of cognition, technology, teaching, medicine, culture, politics, and enterprise — albeit some alt.Trumpish SSC folks may complain that the banquet Nielsen offers is unpalatable! 🙂

  71. Anon256 says:

    Pretty ironic to claim that nothing bad happens when Silicon Valley screws up less than a day before the WannaCry ransomware attack disabled hospitals, factories, and hundreds of thousands of other computers. (This obviously doesn’t represent Silicon Valley attacking people directly, but is a symptom of Silicon Valley not taking security seriously, in part because they’re too busy chasing the latest shiny.)

    • Marshayne Lonehand says:

      What’s ironic (for American citizens anyway) is the cognitive incapacity of GOP leaders and the White House to appreciate — or even speak aloud — the adverse consequences of free-market exclusion of people with pre-existing medical conditions.

      Not least, because the free-market healthcare subjects all Americans to relentless life-long “scraping” of their identities, with a view to maximizing healthcare “market efficiency” … by efficiently denying health-care to people who need it. Yikes. 🙁

      Moreover, Silicon Valley can be counted on provide — with the utmost amoral enthusiasm — next-generation AI tools for automated offshore-sited “scraping” operations, can’t it?

      That free-market healthcare efficiently evolves America toward a privacy-free, AI-dominated, morally bankrupt, economic dystopia is the most rational kind of medical common-sense, isn’t it? Golly! 🙁

    • 6jfvkd8lu7cc says:

      To be honest, WannaCry doesn’t seem to be a good example. NHS has paid a significant amount of money for extended support for XP and still the patches were not applied even though they were available. Any innovative solution would be too novel to be even considered, given various software and hardware which is known to be bad at compatibility with anything, including Windows updates.

    • John Schilling says:

      Also to be fair, WannaCry reportedly uses a reverse-engineered exploit developed and weaponized by the US National Security Agency. It may be setting the bar a bit high for Silicon Valley to secure its products against that level of attack.

      Or not, because security against state-level attacks is achievable and I’d like SV to make it more of a priority to achieve that level of security in released products But the bulk of the criticism on this one should be reserved for A: the criminals responsible and B: the people who left the cybernetic equivalent of a batch of cruise missiles in an unlocked warehouse in a high-crime neighborhood.

      Also also to be fair, Windows XP is perhaps not properly attributable to Silicon Valley, either geographically or culturally.

  72. Nancy Lebovitz says:

    Scott, thanks for the article. I’d been worried that Juicero was a sign of a lot of stupid money sloshing around, but apparently not– it was just one silly project that attracted investors.

  73. Scott H. says:

    I see two lines of attack here — one, that Silicon Valley isn’t bold enough, and two, that capitalism can’t be trusted with an economy. That total ignoramuses can venture so brazenly into subjects like this is cause for major concern. Don’t we teach history or economics anymore?

    I feel like Scott’s defense of Silicon Valley is so narrow and understated that it plays into these morons’ hands. Such a poor understanding of history and economics should be generally humiliated for what it is. The greatest economic system the world has ever known should not be narrowly defended on a project by project basis.

    • The Nybbler says:

      Don’t we teach history or economics anymore?

      History, no. Did we ever teach economics to journalists?

  74. Christopher Hazell says:

    You are making this way, way too complicated.

    Here’s the problem: Silicon Valley Types sell everything they do the same way. It doesn’t matter if its an unusually crappy juicer or a revolutionary artificial pancreas: It all gets sold the same way Billy Mays sold the EZ Crunch bowl, or like one of those old shorts that explained how General Motors was bravely leading the way to a glorious future of flying cars and robots that will wash your dishes, or, at its worst, like one of those books that claims to be a self-help book but actually turns out to be an Amway pitch.

    It’s a very American form of advertising where gee-whiz excitement about a glorious future is slathered over everything in hopes of disguising a core of naked greed.

    You know who hates that kind of shit? You know who probably spent years getting a degree where most of the work involved tearing up and deconstructing and complicating and problematizing just exactly that shit?

    The kind of Liberal Artsy-Fartsy type who now writes for Deadspin.

    I find it pretty tiresome myself. Soylent was the previous Silicon Valley punching bag, and I never really understood the hostility. I have pretty severe depression, and of course, one of the prescriptions for people who have depression is to eat healthier food and cut down on junk food. But one of the symptoms of severe depression is how much effort everything seems to take. You really expect me to decide on a recipe, go to the store, find ingrediants, bring them home, disassemble them, and reassemble them at a time when putting on pants seems as difficult and impossible as scaling Olympus Mons?

    Something that has the convenience of fast food but the nutrition of slow food has a lot of useful applications; but sometimes it was pitched as though it was going to replace regular food, and suher in a soylent utopia.

    Sometimes it seems like everything that comes out of Silicon Valley investment firms is sold like this. Nothing is ever a useful doodad; everything is the first and greatest step on the road to totally eliminating human misery. And it’s so reasonably priced, too!

    Shit gets old after a while, yo.

  75. daniel says:

    The unique thing about Silicon Valley isn’t that it’s got overpriced status goods designed to separate rich people from their money. The unique thing about Silicon Valley is that it’s got anything else.

    Where did this even come from?

    But. Separating rich people from their money is a good thing. It’s what allows capitalism to be a decent system to live in and it’s what saves the efficiency of capitalism from breaking due to inheritance.
    If a certain class of people (i.e. programmers) become a scarce resource the free market provides a much more efficient way to allocate scarce resources than a planned market. The downside is that now you have a bunch of people with extra power (to the extent that money == power) due to mere luck of the draw.
    It’s not efficient that they get loads of money because they have not proved that they are good investors, it is not a moral imperative that they have loads of money because they aren’t better people than anyone else nor have they greater needs.
    The solution is to sell them junk and get the money flowing to… Chinese factory workers producing useless juices?

    The fool and his money are quickly parted and the world goes on spinning…

    • It’s not efficient that they get loads of money because they have not proved that they are good investors, it is not a moral imperative that they have loads of money because they aren’t better people than anyone else nor have they greater needs.
      The solution is to sell them junk and get the money flowing to… Chinese factory workers producing useless juices?

      If they do a poor job of investing the money, it still goes to workers somewhere, possibly in China, to build factories that turn out to be not worth building or produce software that nobody wants to buy.

      If they spend the money buying junk, real resources are being consumed making junk instead of making a factory that might be useful or goods or services of actual value to them.

      Your argument was wrong in the 18th century and it still is.

    • it’s what saves the efficiency of capitalism from breaking due to inheritance.

      That suggests that the alternative is the high earners investing their money and becoming wealthy. Why would that break the efficiency of capitalism?

      … The downside is that now you have a bunch of people with extra power (to the extent that money == power) due to mere luck of the draw.

      That makes it sound as though they end up with more power and other people with less. But if they are becoming wealthy by investing their money instead of consuming, the total output of the society is going up. So they have command over more goods and services, which is what your “power” amounts to, than otherwise, but that doesn’t mean that other people have command over less, since there are now more goods and services out there.

      It’s not efficient that they get loads of money because they have not proved that they are good investors, it is not a moral imperative that they have loads of money because they aren’t better people than anyone else nor have they greater needs.

      You are taking it for granted that the only moral reasons for people to have stuff are either that their having it benefits others (“good investors”) or that they are better people or that they have greater needs. Who produced it is simply irrelevant.

      Would you still feel that way if we consider the limiting case of a society with no interdependence? A bunch of people go into a limitless forest and do stuff, each in his bit of it–clear land, plant crops, gather berries, whatever. None of them has any effect on others. Some of them produce more than others, whether because they are lucky, talented, hard working, or whatever. Do you really want to say that if you have produced ten bushels of wheat and I have produced five, it is morally wrong for you to consume more than I do unless your doing so benefits me, or you are morally superior to me, or you need more than I do? That’s what the logic of what you wrote implies.

      To quite a lot of people, the starting point is that if I produced it, it belongs to me. Applying that to a complicated society is hard, for obvious reasons. But you are treating that moral intuition as obviously false.

  76. isomorphismes says:

    … deeply good crusader … futurist / neural nets … social-media-obsessed narcissist … one of those people who talks about “the cloud” all the time …

    Scott, I think you are communicating about yourself with this choice of topics. I’m not sure these categories of person exist (well, they seem to online — but I’m not sure I can match it to people I know in person — they seem to generally be much more nuanced) . And I am sure many other categories of person exist, and are more worth the thought / consideration / energy. Also, “people who talk about ‘the cloud’ all the time” (and this annoys me too) — is an unsympathetic look. What is driving people to talk about big data, to listen to Tai Lopez, or to wist for a technofuture?

    Point taken about seeing what you look for, though. And that what you look for is saying about yourself.

    A reasonable follow-up, I think, is: how can any of us become better people or improve anyone’s life (including our own) by talking about Juicero one way or the other? I think mocking YCombinator has real value / helps others, but it’s of limited value because that message is quick to get across and relatively few people need to hear it.

  77. The unique thing about Silicon Valley isn’t that it’s got overpriced status goods designed to separate rich people from their money. The unique thing about Silicon Valley is that it’s got anything else.

    When I go to the grocery store, hardly anything in it is produced in Silicon Valley. Some of what is in it might be overpriced status goods designed to separate rich people from their money, but not very much–that isn’t why there are tomatoes and hamburger and bags of flour. The same is true in the hardware store.

    If nobody but Silicon Valley produced anything but status goods we would all have died a very long time ago.

  78. enkiv2 says:

    When Silicon Valley screws up, people who want a pointless Wi-Fi enabled juicer get a pointless Wi-Fi enabled juicer. Which by all accounts makes pretty good juice.

    I’m pretty sure this is not the kind of failure comparable to the others — i.e., the worst result that happens every few years. There are Silicon Valley screw-ups that occur across the spectrum of all the kinds of startups you mentioned, and they happen basically continuously. Most of them are related to what happens when these startups die, because startups (having a median lifespan of about three weeks) aren’t actually well-suited to being long-term solutions to continuous problems.

    Instead, the normal failure mode is that a startup has an idea that looks interesting to somebody (even if that idea is an internet-controlled pair of rollers for squeezing mylar packets), people put bits of their own value into that product (buying juice packets or uploading photos or whatever), and then the company goes under and everybody who ever trusted it is left screwed-over (unable to drink all their now-rotting juice packets and unable to see their vacation photos). Generally speaking, for these really short-lived startups, whatever they were doing isn’t actually that complicated & it’s possible for a relatively non-technical user to simulate some large portion of the core functionality themselves (i.e., they can squeeze the packet with their hands and get the same kind of effort to result ratio as running their own small web server to host their vacation photos, with comparable levels of technical knowledge necessary for both because running a web server is no more difficult than squeezing a mylar packet). Juiciero is actually a relatively successful case, because not only is it trivial for non-technical users to extract most of the value they put in once the company inevitably goes under, but those non-technical users are actually aware of how trivial it is to extract that value — something not typically true of image hosts.

    (And, of course, when these startups are trying to do something genuinely complicated and put real work into it, they will go under long before anybody other than a VC firm has invested anything in them, and the VC firms are accustomed to hemmoraging money, being essentially professional gamblers anyway. So, for instance, our optical computing startup will never actually affect the world one way or another except perhaps providing literature that might in the far future be used to invalidate patents from big incumbant companies’ R&D labs, and thus is irrelevant.)

    The big failures — the ones we should worry about — are the ostensibly “altruistic” ones that target the poor & people from developing countries. Lock in should be avoided in those at all costs if the intent is actually altruistic, even though avoiding lock-in would damage hypothetical profits, because nearly all of these startups will go under & those that have any kind of lock-in at all will take down big groups of users with them, propelling them deeper into poverty (and in many cases probably killing them).

    SV’s optimism is really damaging here: the normal case for a startup is to crash and burn spectacularly, and so the only ethical way to manage one is to operate under the assumption that it could crash and burn at any time without warning & to structure it so that its inevitable failure will affect users barely at all (even if doing so screws over the founders / employees / VCs), simply because users should come first.

    • Creutzer says:

      Juiciero is actually a relatively successful case, because not only is it trivial for non-technical users to extract most of the value they put in once the company inevitably goes under, but those non-technical users are actually aware of how trivial it is to extract that value — something not typically true of image hosts.

      As far as I understand, once the company goes under, your 400$ juicer will be worthless because they will not be selling any more juice packs, and squeezing those is all the thing is good for.

      • baconbacon says:

        If there is any residual demand someone will buy the scraps of the company and keep producing the packets.

        • 6jfvkd8lu7cc says:

          The problem is that producing packets seems to require keeping the company servers up, and probably some signing keys; if the company has any patents someone may want to buy just all the patents and copyrights… and so the software and keys will be lost.

          They don’t sell juice packets to people not having bought the machine, and on the other hand the machine will probably not accept non-DRM packets.

          Security model of modern technology recognizes only one kind of threat: the user.

    • The Nybbler says:

      The big failures — the ones we should worry about — are the ostensibly “altruistic” ones that target the poor & people from developing countries. Lock in should be avoided in those at all costs if the intent is actually altruistic

      Absolutely. In fact, any charitable ventures should be carefully vetted by the government and be forced to demonstrate that they have a plan to avoid all these bad effects and put up a large bond as well before a permit to engage in them is issued.

      (Did I mention I’m that cold-hearted libertarian they warn you about?)

  79. sinanreis says:

    I think behind the surface of “Haha, Juicero” articles is a deep question: what does SV actually do for consumers? Do their products/innovations actually make life better?

    – Smartphones are a big deal, game changer. At any rate, a very significant change for most people. I’d guess overall a life improvement (but some will disagree, eg. http://www.timewellspent.io/).
    – Social networks also affect many people profoundly. My guess is that they are overall bad for people and the world.
    – Many of the rest are improvements in efficiency and convenience. Transportation (Uber, Lyft), Payments (Paypal, Venmo, Square), etc.

    So it’s mostly the smartphone. Given that SV is the main source of innovation in the world today, I can relate to the Juicero frustration. Generously interpreting the Juicero thesis, it reminds me of the “we ate all of the low hanging fruit” thesis of The Great Stagnation.