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PaperclipPerfector  1yr ago (text post)   32021 thread views

Culture War Roundup for the week of August 19, 2024

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Sam Altman was pretty clear that most of the startup founders Y Combinator funds come from PMC backgrounds. The original interview with Tyler Cowen where he talks about it is now behind a paywall, but this blog post has the key quotes.

ALTMAN: There’s a statement here that’s just bad about the world, but I think if you look at most successful founders, they are pretty smart, upper-middle-class people. They are very rarely the children of super successful people. They are very rarely born in real poverty. They are very rarely the absolute smartest people who otherwise would win a Fields Medal. They are never dumb, but upper-middle-class, pretty smart people that have grit and drive and creativity and vision and edge and a different way of thinking about the world. That is what I think I’m good at spotting, and that is what I think are good founders. There’s a whole bunch of reasons why that’s a sad statement about the world, but there it is.

Part of what Y Combinator has done (and Altman has also written about this at length) is to turn "founding a startup" into gamified meritocratic competition with a facially similar progression to moving through the junior-to-middle ranks at McKinsey or Goldman. Paul Graham (but not Altman) also did pitched early acquisitions as good for founders, which matched the McKinsey/Goldman pitch of "do this for a few years and move onto your real career with cash in your pocket and an impressive CV." The reason to do that is to make "found a startup straight out of Stanford" a more appealing option for PMC strivers, and therefore shift the universe of startup founders in a way which matches YC's comparative advantage.

I don't think salaried employment is part of what defines the PMC. Lawyers, accountants, and (in the US) doctors are core PMC members who (if successful) end up as owner-partners in their practices. Wall Street types get most of their income in what is in effect commission. Genuine entrepreneurship is exceptional for the PMC, but it is exceptional for everyone. And VC money is designed to de-risk entrepreneurship for founders so the amount of skin in a game a founder has is closer to the Biglaw partner who sets up his own boutique firm than the chef who remortgages his house to buy a restaurant.

and (in the US) doctors are core PMC members who

Just as FYI physician owned private practice is very rapidly dying for a variety of reasons (including increased regulatory/administrative burden.

I don't think salaried employment is part of what defines the PMC. Lawyers, accountants, and (in the US) doctors are core PMC members who (if successful) end up as owner-partners in their practices.

They're PMC until and unless they end up as partners. "Making partner" is a big deal; it's a transition from agent to principal. Possibly they remain PMC in some cases -- particularly doctors -- because they may technically own a practice but are really subservient to some larger group. But not in other cases.

I think you are using "PMC" in a non-standard way if you think that partners in law firms are not part of it. A "class" is a group where movement in or out is somewhat exceptional - an associate making partner is completely usual.

To me the defining features of the PMC (as opposed to other elite and elite-adjacent groups) are:

  • A self-image as engaged in meritocratic competition and tribal values that reflect this (including a much stronger work ethic than traditional elites). A rejection of explicit dynastic privilege (while still doing everything they can to help kids get ahead, because even the PMC is the product of evolution).
  • Allocating more status to formal education than it deserves.
  • A focus on professional networks (formed in explicitly professional contexts where spouses are usually absent and children always are) over traditional social networks (mostly formed at dinner parties with spouses present). This has an important impact in the way that privilege is transmitted - traditional elites would personally introduce their teen and young adult children to important social contacts purposively, whereas PMC elites pay for their kids to have access to high-end networking opportunities (e.g. Harvard) but expect them to do the networking themselves.
  • Revolving doors based on those networks as an important way of making money in the second half of your career.
  • Low ownership (relative to income and social status) of tangible capital other than primary residence (except when obfuscated through mutual funds)
  • Avoiding situations where they have line management responsibility for social inferiors (except when obfuscated through outsourcing orgs) - this includes both the types of jobs that PMC members seek out and the way they run their households. A lot of gig economy apps got built because PMC members in Silicon Valley were willing to pay to put a computer into the loop to obfuscate the fact that they were hiring servants.
  • Urban orientation
  • National (and international) orientation as opposed to local - in general elite-adjacent PMC members in the major cities treat local elites in the sticks as food animals.

In America, I would say that the boutique law firm partner who is making a mid-six-figure income based on the combination of "what he knows" and "who he knows" built up over 20 years of experience including stints in Biglaw and government work is at least as archetypally PMC as the 20-year GS-13 career bureaucrat. See this Substack or this FT Alphaville post for some discussion of the unusual degree to which the UK economy depends on this kind of person. Money quote - "The UK is the Saudi Arabia of miscellaneous business and professional services."

I think you are using "PMC" in a non-standard way if you think that partners in law firms are not part of it.

I think he's using it in the way it was originally intended. Partners aren't PMC because they're partial owners of the company, so they belong squarely in the capitalist class. PMC was supposed to reserved for people with control over capital without direct ownership of it.

If most successful professionals are excluded from the professional-managerial class because they are partners in their firms, then surely it would just be the managerial class?

The original Barbara Ehrenreich essay defining the term is less helpful that I would expect. It defines "self-employed professionals" as part of the legacy petit bourgeoisie (which she calls the "old middle class" and consistently with mainstream Marxist theory but incorrectly predicts is on the way to extinction) when she is trying to define the PMC at the beginning, but later on in the article she gives accountancy as an example of a core PMC job even though accountants are frequently self-employed professionals. Ehrenreich also says that class should be defined based on the economic substance and cultural context of class relationships, not on legal forms. The emphasis of the article is on the role of the PMC in disciplining the working class to accept capitalism, not how they get paid.

Having read the essay, it is obvious that Ehrenreich didn't think about lawyers while writing it, but based on what she did say I think she would call it as follows:

  • I think she would assign all lawyers who work for large businesses (or government departments that interact with them) into the PMC, with the distinction between in-house lawyers, associates in law firms, and partners in law firms as formal rather than real - they are all boot-boys for the real capitalists who are paid for their skilled labour, not for access to their own capital. The exception is that a subset of Biglaw partners are sufficiently close to power that they are part of the ruling class. (Ehrenreich talks about this in the context of the management hierarchy of large companies, where she says there is obviously a fuzzy boundary between middle managers who are PMC and executives who are functionally part of the capitalist ruling class even if as non-owners they are not technically bourgeois on a strict Marxist basis).
  • She would definitely put all white-collar professionals in the criminal justice system including lawyers into the PMC on functional grounds, again regardless of how they get paid.
  • The partners in the small law firm that does small business and private client work are petit bourgeois. The status of the associates is not clear - they are not performing PMC functions, so they probably count as skilled workers. This type of firm doesn't have very many associates anyway because a competent lawyer with 5-10 years' experience who still isn't made a partner is better off starting their own firm than continuing to work as an associate.

Ehrenreich explicitly says that trying to assign non-petit bourgeois status to individuals based on asset ownership was foolish as of 1977 when she wrote the essay because the function of the bourgeoisie was mostly being performed by large companies with non-owner senior management. So I don't think she would find the argument that partners in law firms are capitalists exploiting the associates decisive.

If most successful professionals are excluded from the professional-managerial class because they are partners in their firms, then surely it would just be the managerial class?

No, the PMC specifically includes professionals who were traditionally owners of their own firms (petite bourgoise in Marxist terms, I believe) but are today employed in a corporate environment.

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