I think that overall this is a great post, and that you’ve made serious progress towards concretizing some vague concerns I have about EtG.
For me, the most striking point was:
Given the current lack of infrastructure to make use of unaligned individuals, the benefits of hiring such people is low. This analysis recommends building infrastructure that allows for money to be used more effectively, e.g. increasing the management and training capacity of existing organizations.
I had not heard this before reading your post, and it feels novel and useful to me. I don’t think it’s true for all roles, but I like it as a way to think about some roles.
Two things in the post confused me.
First thing:
However, due to communication and managerial overhead, two people will do less than twice the work of one person or cost more than twice as much. One person with twice the talent is more valuable than two people, just like an iPhone 15 is more valuable than two iPhone 12s.
The purpose of hiring two people isn’t just to do twice the amount of work. Two people can complement each other, creating a team which is better than the sum of their parts. Even two people with the same job title are never doing exactly the same work, and this matters in determining how much value they’re adding to the firm. I think this works against the point you’re making in this passage. Do you account for this somewhere else in your post, and/or do you think it affects your overall point?
Second thing:
You use the word “talent” a lot, and it’s not clear to me what you mean by that word. Parts of the post seems to assume that talent is an identifiable quantity, in principle measurable on a single scale. I think that many (most?) real world cases don’t work like this. To me, “talent” is a vast array of incommensurable qualities. Some are quantifiable, some are not. In practice, the market attempts to rectify this by (implicitly) assigning monetary value to all these quantities and adding them up—your post argues convincingly that it regularly fails to do so.
But if we can’t really even measure talent to begin with, what are we even talking about when we talk about talent? What do you mean when you say “talent”?
The purpose of hiring two people isn’t just to do twice the amount of work. Two people can complement each other, creating a team which is better than the sum of their parts. Even two people with the same job title are never doing exactly the same work, and this matters in determining how much value they’re adding to the firm. I think this works against the point you’re making in this passage. Do you account for this somewhere else in your post, and/or do you think it affects your overall point?
My claim is that having one person with the skill-set of two people is more useful that having both those people. I have some sense that teams are actually rarely better than the sum of their parts, but I have not thought this very much. I don’t account for this and don’t think it weakens my overall point very much.
But if we can’t really even measure talent to begin with, what are we even talking about when we talk about talent? What do you mean when you say “talent”?
I mean something vaguely like “has good judgement” and “if I gave this person a million dollars, I would be quite pleased with what they did with it” and “it would be quite useful for this person to spend time thinking about important things”.
It is difficult to measure this property, which is why hiring talented people is difficult.
I agree I use the word talent a lot and this is unfortunate, but I couldn’t think of a better word to use.
I think that overall this is a great post, and that you’ve made serious progress towards concretizing some vague concerns I have about EtG.
For me, the most striking point was:
I had not heard this before reading your post, and it feels novel and useful to me. I don’t think it’s true for all roles, but I like it as a way to think about some roles.
Two things in the post confused me.
First thing:
The purpose of hiring two people isn’t just to do twice the amount of work. Two people can complement each other, creating a team which is better than the sum of their parts. Even two people with the same job title are never doing exactly the same work, and this matters in determining how much value they’re adding to the firm. I think this works against the point you’re making in this passage. Do you account for this somewhere else in your post, and/or do you think it affects your overall point?
Second thing:
You use the word “talent” a lot, and it’s not clear to me what you mean by that word. Parts of the post seems to assume that talent is an identifiable quantity, in principle measurable on a single scale. I think that many (most?) real world cases don’t work like this. To me, “talent” is a vast array of incommensurable qualities. Some are quantifiable, some are not. In practice, the market attempts to rectify this by (implicitly) assigning monetary value to all these quantities and adding them up—your post argues convincingly that it regularly fails to do so.
But if we can’t really even measure talent to begin with, what are we even talking about when we talk about talent? What do you mean when you say “talent”?
My claim is that having one person with the skill-set of two people is more useful that having both those people. I have some sense that teams are actually rarely better than the sum of their parts, but I have not thought this very much. I don’t account for this and don’t think it weakens my overall point very much.
I mean something vaguely like “has good judgement” and “if I gave this person a million dollars, I would be quite pleased with what they did with it” and “it would be quite useful for this person to spend time thinking about important things”.
It is difficult to measure this property, which is why hiring talented people is difficult.
I agree I use the word talent a lot and this is unfortunate, but I couldn’t think of a better word to use.