Ulysse Pence

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Some Matter More Than Others

September 11th, 2020

Buying power warps how we as individuals and a society value other people.

Pointless Things

I've been learning Mandarin Chinese for about a year now. It's not an easy language for a native English speaker to learn, although it's possible to make slow, steady progress. And that's what I'm doing. Each week, I have several video chats with Mandarin tutors. When I get better at Mandarin, I will go to China or Taiwan for a few months to have an immersive language study experience.

If you're like me and live in a richer country like the US, you may know that the cost of living in China and Taiwan is much lower. Because of this, it feels different to live there coming from the US. I relate to objects and experiences differently when they cost less. Money plays a huge role in my life, so I shouldn't be surprised by this, but I am. It's liberating to temporarily increase your spending power. And it's more than just money. Major cities in China and Taiwan and other lower cost of living countries cater to “rich” foreign tourists.

In the US, there are things I rarely buy because they cost too much. But in LCOL (lower cost of living) countries, almost nothing is cost prohibitive, so I often don't limit myself: nice hotels, indulgent dinners, tourist attractions, and pointless trinkets. The change in mindset is similar to the transformation that has occurred in the US since Amazon Prime launched. As the time and money needed to acquire goods decreases, our personal investment in each successive thing diminishes. We buy so many unnecessary things now because we believe that it will make our lives a little more convenient. As perceived cost becomes inconsequential, so too does the experience. Everything is cheapened as a result. And while we consciously resist the notion, our subconscious cheapens other people's time and worth as well. When we order products from Amazon, we don't think about the delivery drivers or warehouse crew. Similarly, when we order food in LCOL countries, we don't think about the restaurant staff.

Take a Load off. Put it on Someone Else.

It's not only the people who deliver packages that we objectify. The entire service industry is all about objectifying people as a service. Really, the entire job landscape is littered with objectification, but the service industry is the one we can see. At any rate, every time I take a Lyft or Uber, check into a hotel, or go to a restaurant, the representative of the business puts on a performance to please me. The artificiality of it is unsettling to me. These people are not doing anything wrong, but in every interaction I must confront the fact that some number stored on a bank computer is making this person do something for me, if only temporarily. A form of micro-indentured servitude.

While these people consent to the experience in exchange for money, that is not necessarily their endorsement of the status quo. These people are putting aside their own wants and needs because they want or need money. If I had more money, I could make more people put aside their wants and needs. That scares me. Although for some, that's the point of having money. Galvanizing teams of people into action from a bank account happens continually: commercial flights, weddings, police, construction... Yet it's hard to remember this because it's the norm and it's everywhere.

Many people derive pride from their work, but seeing waiters and waitresses in restaurants forced to wear the same uniform, TV commercials displaying vacationers getting massages at resorts, and business websites showcasing stock photos of call center employees awaiting complaints from customers make me sad. When I take advantage of these services, it feels like I'm making someone grovel at my behest.

But our actions seem to suggest that this is what we want... to be waited on. They must. Otherwise, why would businesses keep exposing us to this imagery? How many Hollywood movies end with someone sitting on the beach at a resort holding a pina colada with a paper umbrella sticking out of the straw? These media are trying to depict “relaxation”, but what they are actually depicting is someone's subservience.

Literature in the rationality [0] and productivity spaces highlight how money can solve many problems, especially for loss averse people living with middle class income. Buying specialized products and outsourcing chores to others can shorten your huge list of small but nagging problems. Applying this methodology liberally without restraint, however, reinforces ignorance of the consequences of your actions for other people [1].

Tim Ferriss, author of The 4-Hour Work Week, suggests getting a cheap personal assistant through a Filipino agency to perform many of your day to day tasks [2]. While I don't think hiring a personal assistant is necessarily an unethical decision, I fear hiring one at a poorer country's rates increases the degree to which you'll dehumanize them. Not only does a lower financial commitment encourage you to treat your assistant more trivially, paying an agency means you'll never be exposed to your assistant's personal hurdles. If they have a personal issue, the agency, like an assembly line, will get someone else to take their place and your old assistant's troubles are none of your concern.

In Avatar The Last Airbender, the protagonists disrupt a royal banquet in the city of Ba Sing Se. The city guide assigned to keep them behaved, Joo Dee, vanishes and is replaced by a new city guide, Joo Dee.

On the other hand, treating a personal assistant more like a close coworker and less like a cheap, replaceable part is a compounding investment. If you work with someone more local and pay them more, as you incorporate them into more aspects of your organization, they gain more autonomy and the ability to make bigger decisions without your oversight [3].

Using how much money someone has or gets paid as a proxy for their worth is endemic in our society. But who are the people you actually like being around the most? Is it the rich or is it the most interesting and fun? I invite you to think back to a time when you were really happy. What does it look like? I'll bet most of us envision staying up all night talking with a partner, people-watching in a cafe with a good friend, going to see a band in concert, or wandering around in nature. And not getting a raise nor making a sale. Wealth is a means to getting to where you want to go, just like knowledge, health, ableness, and power. But it is not the destination and it is not your worth.

Consumerism and The Principal-Agent Problem

I'm not proposing that we withdraw from the capitalist system. That is near to impossible and will lead to worse outcomes. There's a huge middle ground here. Some people try to encourage corporations to act more in accordance with their values by using money to patronage some and boycott others. This is called Ethical Consumerism.

One of the problems with ethical consumerism is that consumers aren't privy to how corporations use their revenue. We don't know the counterfactual, or what would happen otherwise, of giving or not giving money to a corporation. For example, many people don't like giving money to corporations that outsource labor to sweatshops in poor countries. However, William MacAskill, co-founder of the Effective Altruism movement, notes that “in developing countries, sweatshop jobs are the good jobs. The alternatives are typically worse, such as backbreaking, low-paid farm labor, scavenging, or unemployment [4] .”

Additionally, it's hard to tell if boycotting a corporation will change its behavior or even affect its bottom line. Chick-fil-A's messaging against gay marriage in 2012 drew a lot of attention for Chick-fil-A and allegedly inspired some people to eat at the fast food chain even more 🤨 [5]. Money is such an indirect form of communication. In countries with a tipping culture, what does a small tip mean? The food was bad? The service was lousy? What does a big tip mean? The staff's charisma was good? The cooking was expedient? As a consumer, it's hard to align the company's values with your own.

But what about inside the business? Surely as an employee, you are better equipped to direct the company towards more ethical outcomes? What is good for a corporation is not necessarily bad for its workers. The Principal-Agent problem is an observation that the founder (principal) of an organization is the most motivated to do what's best for it, whereas a subordinate/employee (agent) generally does what is best for them: promotion, money, power, favor from the founder, etc [6]. So it's in the principal's best interest to align what their subordinates want with what they wants because that's good for their organization. Or make the employee's metrics for success complex enough that it's easier to go along with the principal than game them [7]. Ultimately, they wants them to think more like principals and give up conflicting ambitions.

“Ah,” you say, “the founder wants me to do what's best for the organization and not what's best for me. Classic exploitative capitalism. How does this benefit employees?” However, when I reflect back on my career, the periods where I felt most fulfilled were the ones in which I felt strong ownership over what I was doing. I occasionally sacrificed more of my time and energy than I needed to to make sure my project succeeded. Because I cared. After some base amount of salary, engagement is one of the most important contributors to career satisfaction [8].

Another contentious aspect of the Prinipal-Agent problem is how the shares of a company are distributed between founders, employees, and investors. Many companies give shares of the company to employees to combat the Principal-Agent problem. Paypal and Palantir co-founder Peter Thiel believes “equity is the one form of compensation that can effectively orient people toward creating value in the future [9].” Based on my personal experience, founders tend to end up with 50 to 1000 times more shares of their company than early employees. The common explanation is that founders take more risk starting the company, put in more hours, and ultimately have more of an impact on its success (should it succeed).

One other explanation for this discrepancy is that as an employee, you're taking potentially millions in equity from the future and getting it today at a hugely deflated value in the form of salary [10]. And founders don't always pay themselves a salary during the early life of the company, which is an argument for why they should get the larger share of equity.

Although, this doesn't seem right to me because I know founders that started paying themselves a salary within the first year of starting their business. And what about companies that take on large investments within the first year or two? When a company turns 10 years old, are the contributions of a founder 50 to 1000 times greater than those of an employee who joined in the first year?

You could argue that what makes a founder so valuable is the Specific Knowledge they wield in making good, high level decisions for the company [11]. But it seems more likely to me that this equity distribution is the historical norm and founders refuse to be somewhat rich when they could be filthy rich (in the off-chance they succeed). However, my sample size is relatively small, based on a couple dozen data points from working at a couple tech companies and talking with friends in the Bay Area.

Regardless, the distribution of shares seems uneven. While I understand some of core ideas (founders should get more equity than employees, early employees should get more equity than later employees, etc), “more” and “orders of magnitude more” are not the same thing. You could argue that the large supply and frequent hiring/firing of employees ensures that these goods are liquid, like other economic goods, and employees will be “well-priced” and paid competitively. But have you or a friend ever been paid less than a coworker to do the same thing? Exactly.

The People Far Away

So much of life comes down to luck. Many are unlucky and are forever stuck in the lower economic tier because of where, how, or to whom they're born. Of course, you don't have to be born or live in rich countries to have a fulfilling life. And depending on how you define luck, you can improve your luck (e.g. networking with others, trying to succeed many times, specializing your skill set [12]). But in a rich country, there is more economic opportunity. Education, while not equally distributed, is more accessible. At the very least, being a fluent English speaker is admission to the best educational online resources in the world (Coursera, Wikipedia, Khan Academy, YouTube, MIT OpenCourseWare, etc). And in richer countries, the minimum wage may enable you to comfortably retire to someone else's country.

Why does so much depend on something completely out of your control? Why are you restricted to which countries you can visit based on your citizenship? Where you were born seems like a coarse, but reasonable approximation of your life. You probably speak the language, observe the cultural norms, share the value system, and are entangled in relationships with people of your country of birth. At the very least, you're more likely to have loyalty to that country over others. If the leader or a legislative body or most of your fellow citizens—whichever is necessary in your country—decided that they want to destroy a neighboring country, you may be compelled to help. A nation is probably far from the best proxy for understanding an individual and their intent, but it doesn't surprise me that nations make policy regarding other nations; it seems like a simple answer to the complexities of international relations... like parents squabbling over the actions of their pets.

Only it seems so unreasonable that being born on one side of an invisible line comes with all these obligations and attachments, especially for immigrants. They can live outside of their country of birth for years, pay taxes in that foreign country, become fluent in its language and culture, and yet all it takes is an intractable bureaucracy or a single person with executive power to ask them to leave forever without recourse.

Consider the fraudulent music festival, Fyre Festival. Organizer Billy McFarland recruited hundreds of workers who lived on the island in the Bahamas where the festival was taking place. He recruited them at the last minute, promising to pay them after the revenue from the festival came in. However, musical artists didn't show up, McFarland's investors discovered he'd defrauded them, “influencer” guests from around the world were left stranded without accommodations, and the Bahamian workers went unpaid without a path to recompense.

Surely there were many victims of Fyre Festival, but the people who likely suffered the most were the Bahamian workers: several weeks of unpaid work and little chance of reparations through US court system. McFarland's US-based investors will almost certainly receive what's available for repaying damages before the Bahamians. Why? The Bahamas poses little military threat to the US and has little economic leverage, so its people matter less on the international stage. It's similar to how a US company that contributes a lot of pollution into the environment has little risk from Bahamians, even if climate change may disproportionately affect a developing island nation. There is a strong historical belief of cultural superiority at play as well. How many people have stayed at a resort in the Caribbean nation and never seen its cities?

When people come to richer countries like the US, how are they treated? The United States immigration has a few different visas that skilled foreign workers can use to work in the US. Permanent residency cards (green card) are distributed equally between the countries, so workers from the most populated countries (India, China) end up waiting disproportionately longer, often needing to renew their work visa after it expires 6 years later. All the while, they are paying taxes into social welfare (social security and medicare) without the promise that they will ever be able to access it. While they wait for permanent residence, they are required to be consistently employed (by the same company, depending on the visa), so losing their job due to their company's poor performance or a pandemic also means they may lose their home.

This makes it near impossible for the visa-holder to hold their employer accountable, although as employees, their knowledge of the inner workings of the company make them uniquely qualified to make critical remarks. It also reduces their ability to work towards better employment because the stakes are much higher when asking for better pay or applying for other jobs [13]. And this is all because of where they were born, something they had no control over.

People often make value judgements based on the attributes of a person's country of origin (e.g. social welfare, restricted freedom of expression, unstable economy, military tradition). Each citizen influences their nation, some more than others, but none of them can say they are the nation, nor that the nation is them. Consider how wealth makes you feel about your interactions with other people. Consider how wealth makes your group feel about other groups. Not all passports are created equal and it's worth thinking about how a person's nationality affects how they think and feel. It's just one more dimension to help you understand and empathize with others.

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Footnotes