a case against feudalism

or why seeking monopoly rents creates a caste system

reading byrne hobart’s take on cash burn reminded me of his criticism of david graeber's bullshit jobs on twitter, and now i see the profound misunderstanding between the two theories. graeber wrote that: "A world without teachers or dock-workers would soon be in trouble, and even one without science fiction writers or ska musicians would clearly be a lesser place. It’s not entirely clear how humanity would suffer were all private equity CEOs, lobbyists, PR researchers, actuaries, telemarketers, bailiffs or legal consultants to similarly vanish. (Many suspect it might markedly improve.)" and hobarts responded:

"I find lines like Graeber's sad in a way. He hears about these well-paid jobs, can't imagine that they're worth doing—and doesn't pause for a second to wonder why people with money pay so much for them!"

the difference between the two takes is that graeber cares about social value, while hobart think that because these professionals got paid so much they obviously create value. but they are not really in the value creation business in social level, they are in the value extraction business for a small minority. rolling up an industry in a given geography and creating a monopoly rents is valuable for the priate equity shareholders, but hurts everybody else.

maybe actuaries enable value creation by insuring against risk, but a lot of graeber’s examples are just in the value extraction business, which is entirely different from value creation.

the chicago school’s denial that predatory pricing is even possible and the corresponding antitrust enforcement are at least as important to explain why startups burning increasing amount of cash as the technological progress that enabled saas business models.

still it worth mentioning that creating geographic or sectoral monopolies and seeking rent from it just recreates feudalism. it's landlords and guilds with their impenetrable barriers and birthright nobility or inherited craftmanship all over again.

hobart’s article describes perfectly how this process works, without recognizing the broader implications on the social system and the embedded hierarchy within. and that is why the barriers are ever higher, to exclude more and more people.

while in the golden age of silicon valley, you can create a competitive startup from your garage, in the ai age, you need billions of dollars to compete. it’s a perfect form of exclusion and it’s perfect to perpetuate inequalities embedded within the system. it’s true that in the garage business model you also need good social network to even get introduced to venture capitalist or to get favourable press and prestigious pedigree also never hurt. but now it’s getting more and more explicit, while the tech sectors newest blessings become more and more questionable. maybe software eating the world, but apple and nvidia are mainly peddling hardware, while the microsoft-alphabet-meta trios cloud business more and more resembles the railroads of the robber barron era or just some more moden utility company.

it’s beside the point of this article, but ai or machine learning or whatever probably already made a lot more money for algorithmic traders, than llms and generative ai will ever make.

meanwhile elite academic instituitons hire people like huntigton or fukuyama, whose theroies - end of history or clash of civilizations- are on the level of hitting the blunt hard and saying some really grand bullshit. of course they do the busywork to support their theories, but it still plain nonsense, wishfull thinking or just thinly veiled racism.

it is not really surprise that now legacy admissions fight against affirmative action and dei while supporting a nepo baby for president without a shred of self awareness.