The Paul Graham essay I linked last time didn’t cut much ice, which I’m not sure I understand, but this one is great too, I recommend reading it.
“Indeed, it may be that reducing investors’ appetite for risk doesn’t merely kill off larval startups, but kills off the most promising ones especially. Startups yield faster growth at greater risk than established companies. Does this trend also hold among startups? That is, are the riskiest startups the ones that generate most growth if they succeed? I suspect the answer is yes. And that’s a chilling thought, because it means that if you cut investors’ appetite for risk, the most beneficial startups are the first to go.”
This guy either reinvented Grenznutzen (marginal utility) on his own, which would be a formidable feat, or has an amazing skill for explaining Austrian economics for the laypeople.
It’s good to see that I’m not the only Paul Graham fan here. What I find most encouraging about his work (both written and coded) is that it shows that in spite of all of the socialistic propaganda that many academics spew forth about how the government is responsible for all the technological advances of the last 100 years, the people who are out there making them don’t buy it.
I don’t know whether Graham has any knowledge of Austrian Economics, but I wouldn’t put coming up with some of it on his own past him. He’s has some other pretty awesome acomplishments under his belt.
His argument could be a little more rigorous, there’s a couple of logical gaps and fudging, but overall, I would tend to agree with his argument against forceful reduction of economic inequality. He’s explaining unintended consequences.
Also, his focus is on start-ups. To make it more "economic’, we can equate start-ups with entrepreneurs. Start-ups are entrepreneurial businesses that are trying to fill what they perceive to be unfulfilled needs in the economy.
I’ve read some of Graham’s other essays. He makes for interesting reading, but doesn’t always come to profound conclusions.
I love his casual writing style and the ease at which anyone can understand his point. Thanks for the link!