2025-11-07

Derivative Work Level Notes

21 assorted thoughts on derivative levels

The following are an assortment of notes and observations from Why do people who get paid the most do the least?.

  1. A single worker can output a product that maps to different derivative levels.

A YouTube philosopher outputs work with components on every derivative level:

  • First derivative: uses existing tools to upload videos on the YouTube platform
  • Second derivative: builds systems and pipelines to increase content creation velocity
  • Third derivative: identifies which philosophical ideas to popularize
  • Fourth derivative: changing the thoughts of the third derivative people

The shape of their output depends on their objective function.

  1. Nobody likes being told what to do, especially as you move up the derivative levels.

Third derivative workers really hate being told what to do.

  1. Second and third derivative workers are often very stubborn in their personal lives.

The anecdotal evidence is overwhelming. I would be very curious to see data with respect to their personal life metrics (divorce rate, life satisfaction, etc.).

  1. Professional and romantic relationships across large chasms in derivative levels are difficult to navigate, often due to very different interests and values.

  2. Compensation and perceived status are only loosely correlated to derivative levels.

Surgeons are one example of high status, well-compensated first derivative workers. The current market structure of surgeons allows the first derivative workers to be highly compensated and high status because there were a set of third derivative surgeons who created a specific environment to gate supply.

A city transit planner is likely lower status and less well-compensated while being a third derivative worker.

  1. Meta-ambition is well-correlated to derivative levels.

Reflexively true.

  1. First derivative workers seem to have the highest life satisfaction in aggregate.

Possible explanations include their ambition levels being tightly coupled with reality and the ability to tangibly contextualize their impact.

Second and third derivative workers often do not tangibly see the impact of their work. Their impact is often aggregated into a single number (time saved, revenue increased, etc.). The human mind is not equipped to translate abstract numbers into positive emotions.

  1. Higher level derivative workers often have first derivative hobbies to elicit the positive emotions they don’t get from their primary occupation.

  2. Second and third derivative work is inundated with the market for lemons as incompetent actors rationally flock to levels and careers with immeasurable outputs.

  3. AI is good and rapidly improving at digital-native first and second derivative work.

Evidence for this includes the rapid rise and PMF of AI copywriting and code.

It still cannot do first derivative physical labor very well.

  1. Words and culture are disseminated from higher derivative to lower derivative levels.

  2. Outwardly optimistic third derivative workers probably outperform their more cynical and negative counterparts.

This makes logical sense, but would be difficult to prove.

  1. Powerful third derivative people often try to control the fourth derivative people.

Does that make them fifth derivative people?

  1. The status and compensation afforded to third derivative work proves that the world is dying for good ideas.

  2. The companies with the quickest ascent are typically third derivative companies.

  3. The companies with the quickest descent are typically third derivative companies.

  4. It’s difficult to differentiate between the legitimate and the less-than-legitimate third derivative companies.

  5. Third derivative companies increasingly operate second derivative products and divisions as a signaling equilibrium to demonstrate legitimacy.

  6. The best founders are able to context switch across all derivative levels.

Or at least have genuine empathy and to have the ability to do so.

  1. Moving up derivative levels requires increasingly rare combinations of skills, social capital, and luck.

  2. Consider yourself lucky if you go through your entire life and have a single semi-original, non-retarded thought.

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