I didn't watch the linked video, but aren't things like education and affordable housing also problems that governments have been tackling for decades without much progress and even often making things worse?

For example, economists are almost uniformly against rent control, which many cities try to implement. And the flood of government money encouraging educational loans seems to have made college costs spiral.

Personally, I think both the free market and the government can do good and can do bad. Sensible policies and entrepreneurs can help these issues, and bad policies and bad companies can worsen them.

> aren't things like education and affordable housing also problems that governments have been tackling for decades without much progress and even often making things worse

Not exactly. Government has been throwing band aids at the symptoms, while continuing full steam ahead with the underlying policy - an inflationary treadmill that keeps pushing "full employment" at a time when human labor is rapidly less required.

Housing is not affordable not because it has become expensive to build, but because it has been effectively financialized into a rent extraction scheme. And changing those fundamentals would disrupt the exit plans of everyone that has bought into the bubble.

I'm not excited about private industry approaches - they can succeed in isolation but they can't change the game. Even if innovation does say, bring down the cost of housing. The explicit government policy is to then raise prices across the board to make sure that average costs still keep going up. Essentially, economic progress itself has been turned into a zero sum affair for everyone but the upper class.

This feedback is exactly what happened after free trade and big box stores brought the benefits of cheaper goods and economies of scale, but also hollowed out our local economies. Rather than everybody ending up with more buying power that compensated for the local lost income, prices were raised to erode those gains. So we were left with lower quality goods for the same price, and displaced workers unable to take over a share of the still-needed work, as the still-employed had to keep working "full time" to keep the same buying power.

The government is in charge of determining what types of businesses are profitable though, so even areas where the government hasn't been effective usually still require better government policies in order for the markets to be able to offer solutions. There are certainly problems that businesses can ameliorate given current government policies, but it just isn't realistic to think that we can solve every problem on our own by routing around government.

Exactly right. I can give you a perfect example from a project I'm working on: http://openinsulin.org/

We're working to make medicine more affordable, focusing on insulin in particular. Insulin has been around for decades, it's easy to make. Technology has been improving, things should be getting cheaper. Instead, insulin continues to rise [1]. People with diabetes need this stuff, if they don't have it they'll literally drop dead.

The left wing "solution" to this problem is to force taxpayers to subsidize it, and perhaps impose price controls. The right wing "solution" is to puke some cookie cutter line about the "free market" and America's incredible "innovation" in drug development, exposing his skin-deep understanding of what those terms mean. (Later, he'll throw a fit about how so many millenials want socialized medicine).

So our startup idea is to create cheap small-scale insulin production hardware, except the second we try to pay back investors and become "for profit", we get regulated like any other drug manufacturer. That means we need to hire an army of lawyers, go through a multi-year multi-million dollar FDA approval process for all the production equipment etc., and open ourselves to patent lawsuits and other weapons of corporate thuggery that the big-time drug companies are so willing to wield.

If we manage to make it through that gauntlet of fuckery, god knows if we'll actually be able to sell it for any cheaper than the status quo. I'm open to being told I'm wrong about this problem, but from my understanding there's simply no way to solve this problem without massive regulatory reform.

[1] https://cdn.vox-cdn.com/thumbor/11u1Lqm70xFl0kWTtrt6kAEhrSE=...

This is really cool--did you hear about how a bunch of hospitals are coming together to manufacture generic drugs that are marked up by PBMs--I imagine if something like that where a stakeholder with input in the buying process can come in and guarantee like a monopolistic market for an upstart..the drugs are going to be cheaper but the fact that the hospitals themselves are consumers means people can take long term bets without fear of losing money

Hmm that's an interesting avenue. I've heard of that briefly somewhere but haven't put any thought into seeking out partnership. Thanks for the tip.

Although it's great to make insulin more affordable, wouldn't it be better to attack the source of the problem? In my opinion the biggest contributor to diabetes is our diet, we eat too many carbs and too little fat. Since fat delivers 9 calories vs 4 for carbs, we humans could suffice with eating way less when switching to fat. The food industry would suffer, but it could be a win for the environment.

This is really amazing. Kudos to you for the initiative. Going through regulatory, IP, clinical etc. is hard but not that hard. We are going through this ourselves at our startup, and it is daunting and rewarding at the same time. I am happy to share notes should you like.

Thank you, I’m interested in comparing notes. Feel free to send me an email at my user name at gmail dot com

This is awesome! I'm the founder of Alto Pharmacy - let me know if we can help with anything (matt at alto.com)

There may be another way, partner with academic hospitals and have them sell the insulin at cost.

That’s an interesting idea. Maybe something like

- We make the insulin and give it to them for free. - They sell it - They donate to us as a 501c3

The legal framework is really twisted and difficult to parse. Maybe this is the perfect loophole, maybe somebody would end up in prison. We’ve got some lawyers volunteering, but per not having much money its difficult to get steady legal counsel to brainstorm with about the legal risks

Why would you go to jail??

If we set up a production facility and start trying to sell the insulin we produce, without going through the full regulatory process, we're in violation of the law. If we set up a production facility and give it away for free, and then ask for "donations" from the same group we give it away for free to, is that legal?

Jail may also be an overstatement. We are working with lawyers to get a clearer picture of the legal risk involved, for example maybe the biggest risk is that they just come shut us down.

Hospitals do cell therapy etc... so I bet there’s a way. Maybe a clinical trial.

I agree - it would be great for the government to tackle these problems. But looking at the current US government that doesn't look likely. I agree it feels almost impossible for a startup to actually fix some of these problems. But we fund startups who try to do the almost impossible all the time. And sometimes they succeed :)

I guess a lot of blowback is coming from the fact that you decided to call it Government 2.0. It seems a bit presumptuous, guilty of the same hyperbole tech is always accused of...changing the world etc...but at the same time it's a title I would click on. It's outrageous, but serves a purpose

Are the startups listed actually fixing these problems, though? You say that Promise, for example, is attacking mass incarceration — but it's basically just a dashboard for lawyers. Maybe lawyers could be more efficient, but that's a way easier problem to solve than radically changing our justice system so that fewer people get pulled into it in the first place.

What's worse, given that Promise appears to be a for-profit company and you're investing in it to make money, you now have a financially incentive against fixing the systemic issue. It's better for you if the justice system is bigger and less efficient, because you'll make more money selling us a band-aid.

So count me in with the GP and Andrew Yang: it's not that the problems seem too hard for startups to tackle, but because they are fundamentally not problems that the free market rewards solving. YC mostly funds profit-seeking companies. That's okay! But I am skeptical that there is profit to be made in e.g. dismantling the justice system.

not sure if I agree with your point about promise--especially with the implied "moral hazard"--if they are trying to solve the inefficiency in the justice system then its better for them that the system remains inefficient-- def seems like something beyond their control that they had no role in creating, and they are trying to help as best as they can. There is a bigger problem for private prisons---not promise

Having a bunch of white tech dudes show up with a startup to "solve" something like mass incarceration is just absurd, and reveals both the massive naivete of this project and the extent to which startup funding has become a meaningless ponzi scheme with no expectation of profitability.

It's also just insulting to activists and others who have been in the trenches fighting these problems for decades.

Incorrect.

The free market can reward this, with certain incentive structures ( https://hackernoon.com/wealth-a-new-era-of-economics-ce8acd7... ).

It is Capitalism that doesn't. Neither does Socialism. :/