Nassim Taleb is quoted as saying “The three most harmful addictions are heroin, carbohydrates, and a monthly salary,” and “those who do not think that employment is systemic slavery are either blind or employed.” Also, reliance on a paycheck makes one ‘anti-fragile,’ because all of one’s metaphorical eggs are in a single basket, that being their job.
You start thinking: well, you know, if Bob were a slave, someone you own, you know, these kind of things would not be possible. Slave? But wait… what Bob just did isn’t something that employees who are in the business of being employees do! People who are employees for a living don’t have such opportunistic behavior. Contractors are too free; they fear only the law. But employees have a reputation to protect. And they can be fired. People who like employment like it for a reason. They like the paycheck!
People you find in employment love the regularity of the payroll, with the special envelop on their desk the last day of the month, and without which they would act as a baby deprived of mother’s milk. Then you realize that had Bob been an employee rather than what appeared to be cheaper, that contractor thing, then you wouldn’t be having so much trouble.
But employees are expensive… You got to pay them even when you’ve got nothing to do for them. You lose your flexibility. Talent for talent, they cost a lot more. Lovers of paychecks are lazy … but they would never let you down at times like these.
So employees exist because they have significant skin in the game –and the risk is shared with them, enough risk for it to be a deterrent and a penalty for acts of undependability, such as failing to show up on time. You are buying dependability.
James Altucher also makes a similar argument that relying on a paycheck is like putting all of one’s eggs in a single basket, as opposed to entrepreneurship.
Of course, this argument is wrong for the most obvious reason: a job is voluntary, slavery is not.
James and Taleb also argue that you cannot get rich with a salaried job, because companies deprive workers of the value they ‘truly’ create. An employee may create $1,000/hour of value but only be paid $100. The idea that you cannot get rich with a salary is demonstrably ludicrous. Just ask Will Smith or Tom Cruise; or doctors, lawyers, top tech employees, Wall St.and hedge fund traders, money mangers, or any professional athlete. Poor Tom Cruise. He should have chosen himself than be a slave to those oppressive movie studio and their $20 million paydays and doting treatment. He should sell books on Amazon instead. Then he can able experience the joy of having Amazon take 30-50% of his gross sales before the government takes 20-30% of what is left, after waiting 60 days to get his money. Poor lawyers and their multi-million dollar settlements. They instead should be doing podcasts and pushing Dollar Shave Club. Or a YouTube channel that will likely be later be demonetized or flagged. Idiots. Those doctors are slaves to hospitals that pay them so much. Google apparently is such a terrible company, James Damore not withstanding, that thousands of people still apply and only 0.2% get in. Apparently Google is very choosy with who gets to be their slaves. I guess those thousands of people applying have not gotten the memo by James and Taleb, or have not read enough history, to know the perks of slavery include stock options and solid six-figure and even seven-figure salaries.
Also companies provide infrastructure, such as overhead costs and clients, that an entrepreneur would have pay out of her or her own earnings or capital. So some of that $900 of ‘stolen’ value goes into those cost, as well as to make a profit, which is a good thing because unprofitable companies tend to layoff workers.
The egg basket metaphor is also wrong. With entrepreneurship, the risk is you lose everything, permanently, much like a cracked egg being irreparably damaged, whereas accumulated wages are monotonically increasing, meaning that even if you get fired you keep the money you already made. You keep your basket but you cannot accumulate any more eggs, rather than the eggs being totaled. James and Taleb overlook this critical detail.
Entrepreneurship is closer to slavery because you’re at the mercy of customers, clients, and, of course, payment processors and networks such as PayPal, Google Adsense, YouTube or Amazon. With a regular job, you are guaranteed a paycheck even if you show-up late and do nothing, although you probably will not last long, whereas Google and Amazon, not only hold on to your earnings for up to 60 days, but can refuse payment for arbitrary reasons, with appeal impossible. And YouTube and Twitter can terminate your accounts with no appeal either. If an employer tried to delay payment by 60 days and then not pay, the company would be sued to oblivion, and it would be illegal. Not to mention, with entrepreneurship, you are investing your own money, whereas with salaried work, the company takes the risk by paying you. Apparently this is such a big risk to the company that 90% of businesses fail. I guess slavery is not as profitable for employers as Taleb and James would have one believe. Labor is one of the biggest expenses when running a business. Also, if a company fails, employees always get paid first, even before any investors.