> So .. what happens to everyone else?
You end up with a society where 90% are destitute and 10% are rich?
At the very least, if the employer strictly loses money on all employees, the business shouldn't be sustainable (if it depends on employees, and they're not just a frivolous "inefficiency" economically speaking).
There is also this idea that a company, or a firm is a miniature socialism and the compensation structure is flattened in relation to the real value produced. Funny that this type of thinking kind of forces us to use some notion of value not directly tied to market, since the labor you do when working for yourself (and presumably, taking money for that directly from the market) is not the same labor you would do for an employer. The latter also provides you with a host of things (accounting, infrastructure...) that you would have to organize yourself if you weren't working for them. This doesn't even account for more financial stability and fixed work hours that you should get under enforced labor laws. So there is definitely value you get from an employer apart from the monetary compensation, if we are to compare that with the theoretical scenario of own business.
No, the point was that at a big company you get paid the average value of the work your and your peers does, while when you work for yourself you get paid the value you yourself does. This means that for strong performers going alone is better, and for weak performers going to a company is better. Nothing exploitative here, just natural consequences of scale and imperfect productivity measures.
I'm not sure about this. Performance and value depend on the environment. Some organizations can provide the infrastructure to uplift workers' performance but some people work better in a self-directed situation.
[EDIT] point remains, your wage is the cost of having that work done by labor in the market, unrelated to the value (return on investment, say) it provides, except that same value puts a de facto cap on the wage. If capital can get a 10% return paying $20/hr, they'll do it. If they could find a way to do the exact same thing but pay $10/hr, they would. "Value" remains constant.
> What's an especially productive 22 year old to do? One thing you can do is go over the heads of organizations, directly to the users. Any company that hires you is, economically, acting as a proxy for the customer. The rate at which they value you (though they may not consciously realize it) is an attempt to guess your value to the user. But there's a way to appeal their judgement. If you want, you can opt to be valued directly by users, by starting your own company.
I wasn't expecting Paul Graham to recite orthodox Marxism. This paragraph is only missing the word "exploited", because he's effectively saying that young good workers are undervalued because a large employer makes more money from them than they are paid.
> Buying larval startups solves that problem for them: the acquirer doesn't pay till the developers have proven themselves. Acquirers are protected on the downside, but still get most of the upside.
The downside of this is of course that the "downside" flows to the not-chosen workers. It's effectively like doing a trial shift, except instead of just a day you have to spend six months on building a business. And during that time, how do you fund your food and rent?
> The math is brutal. While perhaps 9 out of 10 startups fail, the one that succeeds will pay the founders more than 10 times what they would have made in an ordinary job.
So .. what happens to everyone else?
Sure, I like the message that young people should go out in the world, try things, be imaginative, and try to find an employer that will value their skills. And that it's easier than ever to disintermediate the economy. But it needs to come with a recognition of how that's actually funded on the day to day level, and which people are and aren't going to be able to succeed in that environment.