Seth Godin Is Wrong

image I have read most of Seth Godin’s books and am an occasionally reader of his blog. On June 9, 2010, in a post entitled Hourly work vs. linchpin work, he wrote the following:

You should pay people by the hour when there are available substitutes. When you rely on freelancers you can put a value on their time based on what the market is paying. If there are six podiatrists in town, and all can heal your foot, the going rate is based on their time and effort, not on the lifetime use of your foot.

There is no other way to say it, this is just plain wrong.

Once again, a really smart person has fallen prey to Marx’ Labor Theory of Value. Effort does not have value, results do. The value of a podiatrists healing your foot is based on the lifetime use of your foot. This does not mean that the price is solely based on that lifetime value.

All value is subjective, not objective. Assuming a free market for this service (laughable considering it is healthcare), the “going rate” is not based on the time and effort of the doctor, but what a patient is willing to pay the doctor, period. Increased supply does bring price down, but not because any change in time and effort.


  1. OPM always creates a market distortion. Too bad politicians don’t get it or maybe they do and just ignore it.

  2. The interesting thing is that in his book, Linchpin, he talks about how linchpins are not hourly labourers and the value of their work is not the function of time.

    So, this post is a bit of a shock.

    I believe there is a similarity between how we sell our expertise and how we buy expertise. If we buy expertise by the hour, there is a good chance that we sell our expertise by the hour too.

    A few weeks ago I was discussing a lead generation project with a software company’s ( CEO. Being a lawyer, he kept pestering me on how many hours a day I was willing to work on his project.

    I tried to explain to him that hours were irrelevant and what mattered was the results we wanted to achieve. He didn’t budge. He simply couldn’t push his brain outside the realm of the notorious 6-minute time increments.

    Sometimes I think that considering that I grew up in hard-core communism, I’ve done a pretty good job at recycling my communist-brainwashed braincells and overcoming the limitations and stupidity that 14 years of Marxist-Leninist schooling deposited in my head. Now my brain is more or less healed.

  3. Hi Tom, as always it is great to hear from you.

    Maybe it is because you grew up in hard-core communism and have seen the detrimental effects that you have been able to rewire your brain.

    I think we in the West are very susceptible to its influences because we have not seen it up close and personal.

  4. Matthew Tol says:

    Surely the issue that needs to be considered in this argument by Godin is the one that whilst all six Podiatrists might be able to heal your foot, to highlight something he hasn’t covered – how long would they each take to do it and how long will the “fix” last?

    You might have one that can do it quickly and one who is slower. The issue, as posted above, is the outcome. This will come down to the experience, diagnostic and practical skills of the Podiatrist. If you want a “job” done on your foot, go with the cheapest. If you want an outcome you’re totally happy with and a process that will ensure that you not only understand the procedure and outcome, along with a relationship with the provider, then you will buy the relationship.

    Commoditising everything is great, but we’re not dealing in widgets here. I won’t hand my foot (sorry about the pun) over to just anyone.

  5. Thanks, Matthew. Don’t apologize about the pun, it was a good one!

  6. Thank you for creating a clear moment in the otherwise loose and murky world of aphorisms that is Seth Godin’s work. I am struggling to read “Linchpin” as it appears (so far) to be an amalgam of gripes against all things industrial, rather than a road map to a realistic and better tomorrow . As a business owner, nay, “bad guy business tyrant”, the principals that govern my world do not align with Mr. Godin. That’s okay with him as his worker of the future is an artist with no boss. That is a brave new world indeed. When Marx is quoted more than once in a treatise (as a positive or prescient entity) I take pause and question what is [really] the underlying message: Workers of the World Unite?

  7. I have not read Linchpin and your brief review has knocked it to near the bottom of the anti-library.

    From it and his above referenced post, I take it that while Seth “gets” knowledge workers, he does not “get” economics.

    Sadly, he is not alone.

  8. I was given this book by a key employee in my company. Within minutes of starting the read, I questioned the motivation behind the gift. I am trying to keep an open mind as I plod along. I want to learn, if it is a diametrically opposed opinion. Clarity is better than agreement (so says Dennis Prager). However, after a while of reading his work, I come away with a feeling that his ideas are no more than “new-age” psycho-drivel. His Utopian view is a bit unsettling to those of us not ready to give up on a system that has brought more prosperity to billions of souls world-wide than any other in human history. You may want to save your time and money Ed, but then again, I’m not through with the book and perhaps, he ties it all together at the end.

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