ANDREESSEN: The American Middle Class Is A Historical Accident
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New York Magazine tech columnist Kevin Roose recently sat down for an epic interview with Netscape creator and power tweeter Marc Andreessen. They occasionally veered into talking about the future of the economy, and particularly about how Silicon Valley’s obsession with disrupting industries might affect our future economic system.
Here are the most interesting things that Andreessen had to say:
The American middle class is a myth
Andreessen thinks the American middle class of the mid-20th century is an accident of history, created because much of the industrialized world was bombed out of existence during World War II. “The one major industrial country that wasn’t bombed was the United States. So the United States became the monopoly producer of industrial goods.” However, by the late 1960s, Germany and Japan had rebuilt their economies and it started to fall apart. “It was an accident of history.”
We need a fairly robust social safety net
Capitalism mostly works, he says, but high taxes and a “vigorous safety net” are important, too. “I believe at the individual level, these changes are real and they matter,” he says.
The new economy — even low paid jobs — are an improvement
“The old farming jobs were fucking terrible jobs. I mean, farmers wake up at six in the morning and work 14-hour days. Industrial jobs—people would get killed in these factories all the time. Coal miners—people are trying to protect coal-mining jobs. They’re terrible, terrible jobs … In developing countries, everybody’s dying to get into modern factory jobs because the alternative is far worse.”
Disruption is part of natural economic cycles
“We have this new magic machine that cleans hotel rooms, but we’re not going to use it because we want to keep the maids in business. Well, in the old days there used to be a job at the hotel called the guy who lights the coal fire … If you follow that logic, you would unwind all the way back to where it all started, which was subsistence farming.“
Silicon Valley disruption is dismantling cartels
Speaking specifically about the music and publishing industries, Andreessen says that it’s not a bad thing that producers make so much less than they did a generation ago. For example, he says, “…recorded music was an oligopolistic cartel. The only reason why musicians were getting paid what they were getting paid in the 1990s off CDs was because the record labels were price-fixing.”
Specifically about the music industry, he notes that live music has become a much bigger industry, and has become the main source of revenue for a lot of producers. As for whether musicians should get paid more when people listen to their songs online he says, “That’s when we get down into the sticky situation, which is, is our work actually worth what we think it is?”
Disclosure: Marc Andreessen is an investor in Business Insider.
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