> the art of this game is to extract value which you did not create

in common parlance, theft

You're overlooking that net new value was created in both of the scenarios. Don't you have any idea how many family horse businesses went under with the invention of the car? How many artisans wound up broke post-industrialization? We can both agree that we'd all be much much poorer in the world where those things didn't happen. NVidia makes a huge margin on the things they sell. Is that theft?

The word "create" is too fuzzy here. If the thing that your company is selling wouldn't exist if you hadn't started the company, did you not "create" it?

It comes down to a fundamental misunderstanding of how the market operated. Profits only come from exchange. It is more accurate to say profits are given than extracted.

The world is not zero sum, AND in practice most business models are not entirely value creation or rent seeking, but a mix of both.

Ideally a new business creates more value than it simply takes out of an existing marketplace.

I think one can argue a lot of 2010s app-ification, Uber-of-X, or what I called "re-intermediation" was more than 50% rent seeking.

The business model of being willing to lose billions selling $1 of goods for 80cents (before even talking CapEx) until your competitors fold (and then raise prices) is the kind of thing we used to regulate against.

At some point our regulation shifted towards a more short term "if it makes consumer prices lower right now its OK".

> Apple made a cool phone that it sells for a high but fair price, but it also takes 30% of everything you buy with that phone

Apple was already a multibillion dollar company almost 30 years before the iPhone was invented...

(though I'm sure you will have no trouble inventing some other reason that that wealth, too, was created through exploitation)

What you are describing is exploitation. And to be fair, you probably also mean exploitation. I’ve never really understood the distinction, nor do I believe there is any meaningful distinction. Externalizing costs is just one of many ways capitalists exploit workers. But externalities doesn’t sound quite as bad so maybe capitalists can justify their obviously evil behavior by using a fancier term for their exploitation against their workers.

You're asserting a dichotomy that doesn't exist. One can both create and extract at the same time.

That's why we're here debating, because one can create value, and one can extract value. Both statements are true and easy to argue for. The synthesis is that creating value also grants licence to extract since it's impossible (possibly even theoretically impossible) to define exactly where the line between the two is.

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From an HN comment recently:

> There are three ways to make a living:

> 1) Lie to people who want to be lied to, and you’ll get rich.

> 2) Tell the truth to those who want the truth, and you’ll make a living.

> 3) Tell the truth to those who want to be lied to, and you’ll go broke.

> The original claim, as I understand it, is basically this: you can’t be an honest actor in a dishonest system.

Right, but, taken to its logical conclusion, you cannot earn any amount of money honestly at all, because you'll always create negative externalities to some extent, or supporting people who do/companies who exploit their workers, even as a rank-and-file employee.

He explicitly and clearly disagreed with the claims, and argued against them:

> What [AOC] meant was that it's impossible to get that rich without doing something bad — without cheating in some way... The reason [my founder's] startup was growing so fast was simply that users loved what she'd built. So she could feel from her own experience how wrong [AOC] was. She wasn't exploiting anyone. Exactly the opposite in fact. The reason her startup was growing so fast was that she and her cofounder had been working their asses off to make their users happy, and as a result the users had been telling their friends. And that gets you exponential growth.

To any honest reader, it's clear he's saying the system isn't necessarily dishonest, and that it's possible (if not common) to rapidly earn money in the system by simply creating things of value and selling them to willing customers.

The original claim is stupid because it is applying a personal moral judgment to a legal system at the individual level, usually for the purposes of justifying theft or other punishments for the person being talked about. it is irrelevant whether the person is honest or dishonest by your own personal moral compass, what matters is whether what they did was legal or not by the legal standard we are all operating under. The criticism needs to be leveled at the legal system and its ability and desire to change to accommodate the criticisms is the measure of the total system. By this correct measure what we have is amazing vs what has come before and alternate systems tried in the 20th century (looking at you *isms, which have all been terrible in the long run and usually also in the short and medium run).

The marxist nonsense about exploitation is getting really tired and needs to die already. Yes, we get it, marxists don't value anything that grows total output, don't think it should be compensated and are totally fine living in the stagnation that view creates. If they could all just skip a few steps and go to the end game of their philosophy that would be great because I'm tired of hearing from them.

Look around you and see we are not living in mud and huts anymore

As the Wikipedia article states, the labour theory of value (LTV) was replaced by the theory of marginal utility in mainstream economics due to its major inconsistencies.

> Take Google as another example. The profit per employee has famously been (at times) over $1 million per year.

So, are you saying that the employees were exploited in some way? I could give you examples of how value is created without any work at all.

Seriously, the paragraph is bad enough to warrant an accusation of bad faith.

Like, does PG really not understand that nobody is arguing that a company can build a billion dollars worth of value? Has he not read Adam Smith? Is his definition or understanding of rent seeking so limited that he can't see the grey areas between "extraction" and "earning" money?

Anybody who earns significant income from investment, including VC money, should recognize that they are at some level extractive, not the hard won dollars that the folks at the ground level are generally putting in.

For guys like PG, Musk, Bezos, Zuck, Ellison, Thiel their very identity is tied to winning this as a game, and thus, any actions they take must defended at all costs, and the score must be seen as righteous and deserved and free from interference.

Why should we only count physical goods as benefits?

That sounds like a pretty impoverished world to live in. No music, no art, no communication with our friends and family beyond speech…

Don't forget this is from the group of people who get an extraordinary helping hand in the form of YC and all that represents, and of businesses hand picked to be the most likely successes. And even then, it's still just winning the lottery.

Isn't most of our economic growth based off inputs of energy (in the form of labor, electricity, etc) that ultimately derive from the sun, though, rather than primarily non-renewable non-recyclable resource extraction? The sun is technically a non-renewable resource, I guess, but only on cosmic timescales.

On a trillion year time frame, sure.