Business
After the Ladder
paulgraham.com
Business
3 min read → 60 sec
The shift from climbing corporate ladders to building startups changed how people get paid and take risk. Safe jobs and promotion paths carried hidden economic value that standard statistics and balance sheets did not capture.
The corporate ladder gave way to startups selling to big companies
The new model is more liquid and efficient, but financially less different than it looks
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Economic inequality looks larger than it is because statistics ignore the value of safe jobs
A secure, hard-to-lose position is worth money, but that wealth never appears in the data
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A corporate ladder position had real financial value because it promised future high-paying roles
The ladder's hidden value resembled corporate goodwill: it created expected future earnings
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Big companies once avoided firing people and promoted from within largely by seniority
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A sinecure is effectively an annuity, and trading safe jobs is a common form of corruption
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Socialist countries also had meaningful wealth gaps because powerful bureaucrats held secure seniority-based jobs
The value of a safe position transcends economic systems
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Corporate balance sheets ignored the implicit debt owed to employees expecting later rewards
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Takeovers since the 1980s helped kill the corporate ladder by making long internal careers unreliable
Corporate raiders profited partly by stripping firms that carried these unrecorded obligations
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A company full of vice presidents may be repaying earlier work, not merely indulging corruption
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Treating jobs as rewards often turned good engineers into bad managers and increased office politics
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