One of the most important things we can teach our children as they’re coming of age is to cultivate a comfort with contradiction. Sometimes good things come at the expense of other good things. You can’t always get your way. There’s no such thing as a free lunch.
As we grow up, we discover the contradictions of everyday life: one benefit requires giving up another.
In fact, we do teach these things as parents trying to raise well-adjusted kids: Share and help others. Tell the truth, even when...
I have two major worries. First, if Milei approaches fiscal success, the opposing parties will think long and hard about whether they wish to enable further success. Or will they instead prefer to see the Milei reforms crash and burn for fiscal reasons? I don’t think they know themselves, but the history of politics in Argentina does not give special reason to be super-optimistic here. You don’t have to believe the opposition will deliberately flush their country down the toilet, they just not might be convinced that further fiscal consolidation...
Argentina has become infamous for its decades-long struggles with inflation and economic instability. For an otherwise fairly well-off nation, it’s surprising to outsiders how deep the problem on this has been.
In this episode of EconTalk, Devon Zuegel talks about an article she wrote on this topic, after spending time there and investigating the problems for herself. What’s most surprising about all this is how pervasive a problem it is. Inflation touches everyone; everyone is hyper-aware of money issues and constantly thinking about...
With the ongoing energy crisis happening in Europe, Anton Howes has some interesting ideas on how the Euro nations could convert the short-term pains of fossil fuel shortfall into a long-term surplus based on a mix of renewables and non. In the article he explores why energy commodities globalized, some extremely quickly, creating a global-scale marketplace for resources (Egyptian oil is competing with Venezuelan, for example), but renewables like solar and wind have not. Most energy from, say, solar is consumed very close to where it’s produced, due in...
In his newsletter, Brian Potter started a new series looking at why the construction industry seems to lack economies of scale, like you find in IT, media, and nearly every manufacturing business.
When you look at the data on construction, you find that there seems to be no or little advantage to scale when it comes to price or efficiency. A single-family residence costs about the same per-square foot to build as a high-rise condo (holding equivalent things like build quality, materials, etc.).
I thought this was an interesting figure — it also turns out that construction is a very diffuse...
In early 1944, journalist Arthur Koestler was onto the horrors of the Holocaust taking place in Europe. He wrote this essay, originally published in the New York Times, calling attention to the atrocities in a climate where most in media were denying or claiming conspiracy.
At present we have the mania of trying to tell you about the killing, by hot steam, mass-electrocution and live burial of the total Jewish population of Europe. So far three million have died. It is the greatest mass-killing...
From Mark Levinson’s The Box, on the shipping container and its impact on global trade:
The true importance of the revolution in freight transportation would be found not in its effect on ship lines and dockworkers, but later, as the impact of containerization resonated among the hundreds of thousands of factories and wholesalers and commodity traders and government agencies with goods to ship. For most shippers, except perhaps government agencies, the cost of transporting goods was decisive in determining what products they would make, where they would manufacture and sell them, and whether importing or exporting...
Ben Thompson follows up his 2017 piece with an update on the state of bundling strategies from some of the big tech and media companies.
I liked this description of where Disney+ fits into Disney’s overall strategy with the service:
While Disney’s hand was certainly forced by the COVID pandemic, the company’s overall goal is to maximize revenue per customer via its highly differentiated IP; to that end, just as Disney+ is a way to connect with customers and lure them to Disney World or a Disney Cruise, it is equally effective at serving as a platform for shifting...
The Tour is on its second rest day, 15 stages into a brutal 3 weeks of hills, mountains, and even challenging “easy days.”
I’ve followed the sport pretty closely over the past 6 years, but not too far into the business behind it. This article goes deep into the economics of the race. The organizer, ASO, doesn’t disclose financial numbers, so this was an interesting look at some estimates of the money generated by the race. Also some good insight into how team budgets and sponsorships work.
I think I probably read three different pieces this week alone that reference James Scott’s Seeing Like a State. It presents an argument about the desire for “legibility” that overthrows and reorders bottom-up, emergent systems that develop naturally.
In this piece, Venkatesh Rao dives into what legibility means and what happens when the pursuit of order and “governability” ignores locally-discovered motivations that could be at work informing why a system works the way that it does.
This conversation with José Luis Ricón Fernández de la Puente on Erik Torenberg’s podcast was an expansive cover of more topics than I think I’ve ever heard discussed on a single podcast. A brief sampling of the subjects touched: scientific progress, economics, GDP growth, health care, regulations, longevity research.
Also see José’s blog for more in-depth coverage on his research topics.
A helpful resource here for understanding flywheels, the “causal loops” of different types of businesses. The reference examples show how the most successful companies ramp up the gear ratio by combining multiple flywheels to compound effects:
The most successful moats have multiple flywheels that feed off of each other’s momentum. Google’s technical advantages enable stronger brand allegiance and vice versa. Coca-Cola’s marketing-driven brand feeds off of it’s distributor/bottler based network effects. Facebook’s brands have at least 3 reinforcing network effects: direct (social network), 2-sided aggregator (advertising and developers), and brand-driven social proof.
This is the second episode of the “Torch of Progress” series that the Progress Studies for Young Scholars program is putting on, hosted by Jason Crawford. Tyler Cowen is unbelievably prolific in projects he’s got going on, so it’s great to see him making the time for things like this.
Read more here from last year on the progress studies movement.
The collapse of trust in our leading institutions has exiled the 21st century to the Siberia of post-truth. I want to be clear about what this means. Reality has not changed. It’s still unyielding. Facts today are partial and contradictory—but that’s always been the case. Post-truth, as I define it, signifies a moment of sharply divergent perspectives on every subject or event, without a trusted authority in the room to settle the matter. A telling symptom is that we no...
I’ve been following Gurri’s work closely since I read The Revolt of a Public a couple months back. I think he’s one of the sharpest minds we have right now thinking and writing about what’s going on in politics, media, and public opinion.
He was on this week’s EconTalk talking to Russ Roberts about his book. The show notes for the episode provide excellent additional material on his core ideas.
A 2017 commencement address from Mihir Desai, critiquing the phenomenon of infinite optionality and lack of commitment pushed by modern universities:
I’ve lost count of the number of students who, when describing their career goals, talk about their desire to “maximize optionality.” They’re referring to financial instruments known as options that confer the right to do something rather than an obligation to do something. For this reason, options have a “Heads I win, tails I don’t lose” character—what those in finance lovingly describe as a “nonlinear payoff structure.”...
As the country is becoming more and more anxious about ending COVID lockdowns (with some states opening while others rein further in), Tyler Cowen had an interesting post about the timing of lockdowns:
Let’s say you have a simple model of political sustainability where Americans will tolerate [???] months of lockdown — shall we say two? — but not much more. (Maybe three months if we had Merkel as president.) Then, if you scare/lock down in parts of the country where the virus is not yet evident, you create economic misery but not many public health gains. Who after...
Bryan put together this neat little utility for merging point data with containing polygon attributes with spatial join queries. It uses Turf.js to do the geoprocess in the browser.
NASA’s Curiosity rover has captured its highest-resolution panorama yet of the Martian surface. Composed of more than 1,000 images taken during the 2019 Thanksgiving holiday and carefully assembled over the ensuing months, the composite contains 1.8 billion pixels of Martian landscape. The rover’s...
New York Times writer Ross Douthat has a new book out called The Decadent Society, which explores how we’ve arrived in a period of (in the book’s terms) stagnation, repetition, sterility, and sclerosis. This post is a review of the book from Peter Thiel, who’s been talking about the problems with stagnation and lack of progress for a decade or more.
Now the old family structure has been smashed, religion is in decline, patriotism is passé, and the cultural marketplace is fragmented. Because there is no longer a healthy dominant culture, would-be rebels have nothing...
A discussion between economist Arnold Kling and author Martin Gurri about the erosion of institutions and what that means for polarization and cultural instability.
Martin Gurri doesn’t like to make predictions. But if you were lucky enough to read his groundbreaking 2014 book, The Revolt of the Public, when it was first published, you’d have an excellent guide for understanding much of what subsequently happened in the United States and around the world. Gurri’s thesis—that information technology, particularly social media, has helped to dramatically widen the distance between ordinary people and elites—has proven invaluable in explaining not only the...
I’ve been doing a lot of thinking lately on our strategic objectives — where we are today, where we want to be in a few years, and the tactics in between to navigate us to a long-term maximum (and hopefully avoid compelling, but ultimately sacrificial local maxima). One of the most efficient ways to set up a business for successful long-term goals is to shrewdly align the go-to-market in ways that go around your competitors entirely, versus having to compete head-to-head.
Germane to this topic is this piece I’d bookmarked at some point from
This is an essay from EconTalk’s Russ Roberts with some takeaways from Adam Smith’s The Theory of Moral Sentiments. It’s a book on topics like altruism and what drives human morality, and it’s clear that much of what drives us are those unmeasurable things: satisfaction, respect, honor, meaning. When economists try and design policy only taking into account things that can be measured, a massive piece of the problem is missing. Roberts, on the unmeasurable:
But not everything that is important can be quantified. I worry that as economists, we too often are like the drunk at 1 am...
In the spirit of honesty and “data driven” thinking, this piece from the FEE has some eye-opening numbers on global energy usage, renewables, and the economics of the energy sector. I’d place myself in the category of a skeptic in general about the “new energy” movement, but certainly with an open mind to new (and occasionally radical) solutions to address climate change impacts and global scaling of population.
What these numbers uncover are the maddeningly huge scope of what’s required to make renewable technology work effectively at scale. The problem of energy storage is a particularly acute one, given that...
I don’t follow international markets closely enough to keep up with this, but interesting to see this take on Hong Kong’s relative stagnation in recent years, especially as compared to other nearby mainland China cities like Shenzhen and Guangzhou:
Despite the transformation the global economy has undergone, Hong Kong’s business landscape remains largely unchanged – the preserve of a small body of property developers and conglomerates, most of them tycoon-owned, who rose to prominence long before the handover. Indeed, one of the most striking things of the city’s history for nearly three decades has been its failure to produce...
As a country, Japan is aging not just because it’s people are getting older but because it’s birth rate is well below replacement. This year there will be fewer than 900,000 births in all of Japan–a number not seen since 1874 when Japan’s total population was much smaller. Overall, Japan’s population is declining.
Time is our most fundamental constraint. If you use an hour for one thing, you can’t use it for anything else. Time passes, whatever we do with it. It seems beneficial then to figure out the means of using it with the lowest possible opportunity costs. One of the simplest ways to do this is to establish how you’d like to be using your time, then track how you’re using it for a week. Many people find a significant discrepancy. Once we...
This piece resonated in the wake of the mess around California’s AB5 legislation, which puts limitations on classifying workers as independent contractors. The backlash to AB5 shows how it’s a case study in unintended consequences.
The modern interventionist’s view wildly overestimates how well problems are understood, and what the second- or third-order consequences of an intervention might be.
I’m reminded here of Hayek’s quote on economics (applicable to any uncertain, massively complex field):
The curious task of economics is to demonstrate to men how little they really know about what they imagine they can...
This is a great conversation from EconTalk with advertising exec Rory Sutherland on his new book Alchemy. He’s got interesting ideas on the role of psychology and human emotion when it comes to decision making, markets, choice, and governance. A very entertaining and humorous discussion, as well.
Patrick Collison poses and tracks possible responses to broad questions on his website. In one, he asks:
Why are certain things getting so much more expensive?
Spending on healthcare in the US is up 9X in real terms since 1960. K12 education spending in the US has increased by 2-3X per student per year since 1960. The cost of college in the US has more than doubled (again, in real terms) since 1984. Growth in everything from construction costs to childcare costs is significantly outpacing inflation. Lots more at SSC and from Tyler.
I’ve been reading some of Hayek’s famous articles this week. This one is all about what he probably considered one of the most important concepts, since these basic ideas form a central thesis for most of his works. His argument was for bottoms-up, decentralized systems of decision-making instead of centralized, top-down systems:
The peculiar character of the problem of a rational economic order is determined precisely by the fact that the knowledge of the circumstances of which we must make use never exists in...
A great long-form conversation with Ray Dalio on his experiences and thoughts on the current state of economic conditions and relationships. I’m in progress reading Principles, which I find interesting, but perhaps a bit overrated. Like many of the great economic thinkers in history, he’s got an impressive perspective with a reasoned, objective, long-term view on what’s happening. And his knowledge of history allows him to step back and look at current conditions through the lens of what’s happened before. Turns out most things that happen to the economy have happened many times before.
Ben Hoen from the Lawrence Berkeley National Lab gave a lightning talk at Geo2050 about this project, a map and database of the operational wind generation capacity in the US. The map currently reports the country producing around 90 gigawatts of wind power. They also publish the raw dataset for download.
A continuous challenge in product development (perhaps the ultimate challenge) is the balancing of many wants and needs with an inability to have everything. You never have the resources to build everything you want into your product — be it labor, capital, or time.
All this year I’ve been studying economics, some foundational resources, different philosophies, and the history of economic theories. I think what attracts me to the subject is how its fundamentals can be applied to so many other areas. I just finished Thomas Sowell’s Basic Economics a few weeks ago, which is a great...
Learn the foundations of how an economy works, in only 30 minutes.
This piece from Ray Dalio (hedge fund manager and author of Principles and hedge fund manager) breaks down an entire Econ 101 class in a concise, graphical form. He’s actually an excellent narrator. And knows a thing or two about how markets work.
Google has built their own custom silicon dedicated to AI processing. The power efficiency gains with these dedicated chips is estimated to have saved them from building a dozen new datacenters.
But about six years ago, as the company embraced a new form of voice recognition on Android phones, its engineers worried that this network wasn’t nearly big enough. If each of the world’s Android phones used the new Google voice search for just three minutes a day, these engineers realized, the company would need twice as many data centers.
