This is the fourth in a series of posts about Paul Graham’s book Hackers & Painters.
Why are so many programmers libertarians? Some have suggested that, as designers of complex systems, they naturally maintain a preference for simpler, more elegant legal frameworks. Others accuse them of lacking empathy, their aversion to the welfare state the result of a geeky semi-autism. To Paul Graham, in his essay “How to Make Wealth” (Chapter 6), the answer is simpler: Programmers, unlike most people, directly create wealth. What others learn from reading Greg Mankiw, programmers learn firsthand: “In our world, you sink or swim, and there are no excuses. When those far removed from the creation of wealth—undergraduates, reporters, politicians—hear that the richest 5% of the people have half the total wealth, they tend to think injustice! An experienced programmer would be more likely to think is that all? The top 5% of programmers probably write 99% of the good software.”
The economics lesson continues in the next chapter, “Mind the Gap,” in which Graham urges the reader to consider income disparities to be not only morally acceptable, but a cause for celebration: “Could it be that, in a modern democracy, variation in income is actually a sign of health?” His point is a familiar one: As the rich get richer, the poor also get richer (the exception being when the rich are the beneficiaries of government). The rich get to where they are by making products that other people enjoy. “I’m not talking about the trickle-down effect here,” Graham clarifies, distancing himself from one of the weakest economic arguments conservatives make, “I’m not saying that if you let Henry Ford get rich, he’ll hire you as a waiter as his next party. I’m saying that he’ll make you a tractor to replace your horse.”
These two chapters are reminiscent of the 1946 classic Economics in One Lesson, but with pithier prose. My favorite passage: “In a free market, prices are determined by what buyers want… To say that a certain kind of work is underpaid is thus identical with saying that people want the wrong things. Well, of course people want the wrong things. It seems odd to be surprised by that. And it seems even odder to say that it’s unjust that certain kinds of work are underpaid. Then you’re saying that it’s unjust that people want the wrong things. It’s lamentable that people prefer reality TV and corndogs to Shakespeare and steamed vegetables, but unjust? That seems like saying that blue is heavy, or that up is circular.”
I’ve often said that libertarianism needs a more relatable public face than Drew Cary, host of the frustrating reason.tv series. I wonder if the affable PG ever considered hosting his own political talk show. Of course, he’ll do no such thing, for the same reason that he doesn’t write essays like this anymore: He’s found a better way to influence the world. As an economist would say, funding and advising startups is his comparative advantage.
[Addendum: For more on PG’s motivations, see his more recent (and brief) essay “Why YC,” particularly the last two paragraphs.]
You conclude that programmers create wealth, but you also note that 95% of the programmers only create 1% of the great software.
It sounds like as a class programmers are equally as likely to destroy wealth as to create it, especially considering all of that enormous mass of not-great software that is the underpinning for our medical billing systems, our health insurance systems, our credit card processing systems, our automated stock options trading systems, and the fantastic code that helped people evaluate risks in collateralized debt obligations (that got the risks utterly wrong).