Articles / The Intellectual Property W…

The Intellectual Property Wage Slave, or Why You Should Quit Your Job

A study of the productivity of software programmers shows the most talented coders to be over 100 times more efficient than the meanest. It is clear, however, that there is nowhere near a commensurate increase in pay.

Common programmers may expect to earn at least $60,000/year, but it is rare for even superstar programmers to command above $150,000, excepting very specialized markets like kernel driver development.

If we are to assume that companies would not generally hire employees not worth their keep, the talents of the most elite of programmers are going almost wholly unrewarded. The first lesson from this is that companies should seek the brightest programmers, as the brighter the programmer, the more efficient the returns. Put another way, it is well worth a company's time to pay 30% more annually for an engineer who will accomplish many times more work. A secondary discovery is that, if this is true, outsourcing to lesser-skilled programmers as a small cost savings is a foolish conservancy.

As a programmer, however, the most powerful corollary is that wage labor for my skills is insensible. The advantage of software is its easy replication; once formed, a service or product may be readily resold without further expense. The financial success of my labors is scarcely limited by anything but the quality of the marketing performed. Consequently, for most markets, we find software development has almost infinite leverage. In exchange for a fixed amount of labor, there is a nearly unlimited upside. The programmer who accepts a salary for his endeavors sacrifices the leverage of his own work for the comfort and security of a regular check, which must (but for the lowest-skilled) far underestimate the value provided.

In a small sense, this is allayed by stock options and the like, but these serve principally to give the appearance of offering the wage laborer a slice of the success of his efforts. After the first dozen employees, it is rare to find an engineer not a VP or CTO to be in possession of anything but the shyest portion of a company. The feeling of ownership, however false, usually suffices to content the laborer.

Much of the preservation of the status quo in intellectual property is owed to the mild complacency that accompanies a reasonably safe and secure existence. In truth, while the expert engineer may only be seeing but a small portion of the value he creates, he does not find his station unbearable. With six-figure salaries, stock options, large bonuses, retirement plans, and rich benefits, few luxuries of modern life evade his grasp. It is therefore only the most greedy or adventurous that care to break these golden shackles, taking in their place the gritty tackle of a life of uncertainty and profligate challenge.

But in taking the full risk and reward of the enterprise upon himself, the programmer who is not sorely wanting in skills of business development or marketing must soon find himself enjoying the fruits of his labors, albeit many times only after years of difficult and uncertain unpaid labor.

The discovery of wealth is thus to be found at the temporary expense of comfort and security. But, while there may be intervening poverty while the entrepreneur's first efforts are underway, with success is found the ultimate in job security, the freedom to survive without a wage. The freedom enjoyed by the wealthy and self-sufficient in this world is equaled only by the fierceness of the slavery forged by debt. For while there exist industries multiplying the fortunes of the rich, many more exist to multiply the debts of the poor and those impatient for luxury. Wages and debt go hand in hand, for creditors only make loans which can be repaid regularly. Therefore, the single most important question they ask when ascertaining credit is one's present wages. The consumer is then set in a delicate balance of monthly income to monthly expense. Such a balance can ill afford the years of poverty required by independent enterprise, especially when the financial burdens of family and higher education enter in. The wage slavery of intellectual property workers therefore has as much to do with the requisites of servicing debt as it does the soft comfort of a regular paycheck.

It is a bittersweet tale of modern capitalism that so many should, under pressures of debt, dispose of their freedom and leverage, so sacrificing the gains of their labors almost entirely to one who, through prudence or happy circumstance, finds himself to have the time and disposition to form a new endeavor. The further gains of this cycle repeat themselves, excepting a few choice workers who themselves, through chance or talent, came early to join an endeavor and partook, by way of stock, of a not inconsiderable portion of a success. It is this fleeting and elusive happenstance, not entirely unlike a lottery, to which graduating and aspiring engineers are exhorted, though the chances of anything but modest gains are slim.

To my fellow programmers and knowledge workers, I then beg of you:

Debt is slavery; debt servicing removes your freedom and flexibility to pursue wealth & happiness. Student loans may be unavoidable and have good rates, but steer clear of credit card debt and don't buy a fancy new car or graphics card until you can pay for it out-of-pocket. Don't exchange future happiness for a present whim.
There is no time like the present. While you have plausible reasons why you should not take risks at present, these reasons will only multiply in the future. The sooner you take risk upon you, the easier it will be.
While a large company has much to offer in comfort and infrastructure, most IP work doesn't actually require vast amounts of in-house experience. Open Source software can provide an excellent base from which to get started technically, and legal, accounting, and design services can easily be outsourced. Having a small group or working solo will let you see a healthy portion of the value you are creating.

It is terrifying and gratifying to live off the fruits of your labors alone, not coddled or ruled by another.

This, truly, is the American dream. For engineers, there has been no better time to seize upon the travails and rewards of entrepreneurship than the present.

Go get 'em!

Recent comments

05 Feb 2007 08:07 Avatar Drinkingtea

I did the same
Having worked for 7 years at a large compamy getting more and more frustated at half my colleagues being not very productive but earning the same as me I realised I will never make that much working there. Sure the quality of life was good, but the frustation from work goes into your private life.

And is it that big a risk? I know I will be able to go back and find a similar perm job if my start up fails, and probably get a big pay rise into the bargain - in fact, it may even be financially a gain to leave!

31 Jul 2006 12:04 Avatar neoliminal

Quit Your Job - Day
Quit Your Job Day advocates just this idea, but for entire groups of people. I love that you are making this work!

23 Dec 2005 11:28 Avatar ninthwave

Re: An anecdote (AWOL, 2)
And the UK . I think Upper Management to average shop floor employee pay ratio without compensation package in the us is 1:450 but the compensation packages even make that look like a joke. Germany is 1:4 The UK is 1:150, now these are about 3 year old figures. But the UK shows it really isn't a US thing, though you could say anglo-western thing.

And you are right, though I think that the goal should be that the standard of living world wide should be around the style of American middle classes. But hey money and trade and the movement of money is a strange game.

04 Oct 2005 20:17 Avatar isurge

Re: with age comes wisdom
Wisdom does not come with age. Wisdom comes with experience and or learning through others.

At 26 years of age I had done more than most people will in their entire life. David's career advice is sound you took issue with is age. Funny how old people have made age discrimination an issue when it is young people discriminating against the old.

I own my own business and hold large percentages in two others I helped build and will get percentages in several others over the next few months, because I am financing them and or providing the technology for them. I am a programmer my wife does project management and we both do sales. This year we spent a month in Costa Rica and we take time off from work every month. Our kid goes to one of the best private schools in the SF Bay Area. Next year we will take the whole summer off. David's career advice is dead on.

22 Sep 2005 14:27 Avatar mclaugh2005

I just want to say: "I totally agree!"
Good call David. I uh.. how can I say this. I'm not born to be a drone like so many others. I have been working on side projects almost my entire adult life.

I've started two businesses and made money on both. Right now I'm still slaving away as a code whore, but I'm working on a new site which I am hoping will take off. ahem.. I'm planning will take off.

Anyway, good luck anyone with the tenacity to pursue something better than mediocrity.

Never Hope More Than You Work -- unknown (


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