You could explain the bulk of median wage stagnation and income inequality since 1973 from the ideas in this one class lecture to Stanford computer science undergrads and it doesn’t even mention the finance industry…oh, and it’s a HOW TO GUIDE.
Thiel just can’t seem to see how human beings could rationally choose a motivation other than profit seeking…even though someone has to keep teaching undergrads how government works, seing as we suck pretty badly at understanding that as is. And, um, Apple, the most valuable company in the world, started by a Berkeley and a Reed dropout. NYU, Harvard and MIT are at least as productive at churning out students who create high value creating startups these days.
Startups are really important for creating value, creating competition, and driving new products and productivity gains as well as making the labor market more favorable by prventing corporate America from dictating the terms and fuctioning of the labor market. That being said, perfect competition and markets where consumers have perfect information are a virtual myth, and plenty of companies provide value and capture value in markets other than ones locked down by one firm. Those memtioned in this lecture that own their market tend to have some fairly anticompetitive behavior that decreases value the consumer recieves in the name of maintaining the moat (I think about downloading songs from blogs on my iPad that record labels have provided for download as marketing). Barriers to entry are always effective to hide behind, and firms shoukd seek to do so, but the free market, as we have defined and justified it, is supposed to function in a manner where eventually (after the leading firm captures plenty of value) other entrants can enter the market, make it more (not perfectly) competetive. The reulting competition for talent is going to create growing inequality, this is inevitable and can be compensated for at the policy level, but we justify free markets in the premise that they function in an open manner that eventually provides more benifit to more people than alternative economic paradigms. Monopoloy market control never does much good for all but a few in the end.
(Source: Silicon valley can be worse than wall st)
