Thinks 572

Economist: “Not so long ago, Latin America was on a roll. A commodity boom brought healthy economic growth and provided politicians with the money to experiment with innovative social policies, such as conditional cash-transfer programmes. That, in turn, helped bring about big falls in poverty, reducing the extreme income inequality long associated with the region. The middle classes grew. That helped underpin political stability. Democratic governments generally respected human rights, even if the rule of law was weak. Growing prosperity and more responsive and effective politicians appeared to be reinforcing one another. The future was bright. Now that virtuous circle has been replaced by a vicious one. Latin America is stuck in a worrying development trap…Its economies have suffered a decade of stagnation or slow growth. Its people, especially the young, who are more educated than their parents, have become frustrated by their lack of opportunity. They have turned this anger against their politicians, who are widely seen as corrupt and self-serving. The politicians, for their part, have been unable to agree on the reforms needed to make Latin America’s economies more efficient. The region’s productivity gap with developed countries has widened since the 1980s. With too many monopolies and not enough innovation, Latin America is falling short in the 21st-century economy.”

FT: “Novels can cast a spell in a way that no other form of entertainment quite matches…Nigel Newton, Bloomsbury chief executive, calls such titles “a marvellous escape in brutish times”…Readers are familiar with the feeling of their imagination being pulled into a story and consciousness of the real world slipping away, although they are just words on a page. The psychologist Mihaly Csikszentmihalyi used the term “flow” for “the state in which people are so involved in an activity that nothing else seems to matter”. He was referring to forms of work and artistic endeavour, rather than simply reading a book, but there are similarities. Long-form reading does require a bit of effort, especially in a world with many distractions, from watching television to scrolling mindlessly through social media…Books also offer something rare and precious: a break from economic worries and media fragmentation. The experience of following a narrative so closely that nothing else intrudes is so valuable that every generation craves it.”

Atanu Dey: “Economics does not tell us what we should or must do: it does not have the power to compel. But it has explanatory power. It can explain why we do what we do, and could reveal the possible consequences of our proposed courses of action. Most significantly, if powerful people who have control over and influence others — politicians, bureaucrats, public intellectuals, popular entertainers — are ignorant of the fundamental lessons of economics, it usually spells disaster for the people. Worse than that, if the people are themselves unfamiliar with the basic economic truths, they are guaranteed to not be able to judge whether their elites are doing what is best for the collective. The fact is that the fundamental truths of economics are all counter-intuitive, and they seem to defy common-sense. It takes a bit of training, though not a lot of it, for us to understand the basics, and when we do, it becomes part of our common-sense…The good news is that now anyone can, if he wishes, learn the basics of economics because there are immense resources on the web for that. Will it improve his financial situation? No. But it will help him better understand the world he lives in. And if enough people understand the world as it is, then the ignorant elites will not be able to push policies that make the world worse than it has to be.”

Thinks 571

FT: “We long to believe that we can be creatures of the day and night, that we can defy the dark to enjoy 24/7 lives defined by long working hours, minimal sleep and, if technology adverts are to be believed, going jogging in the middle of the night. In fact, insists University of Oxford neuroscientist Russell Foster in Life Time, we are “not able to do what we want at whatever time we choose. Our biology is governed by a 24-hour biological clock that advises us when it is the best time to eat, sleep, think and undertake a myriad of other essential tasks.” Pitched somewhere between science book and lifestyle manual, this is a comprehensive manifesto for living in harmony with our body clocks, penned by someone who has devoted his career to studying them. Chasing perfect synchronicity not only increases happiness and mental sharpness, he argues, but potentially reduces the risk of diseases such as obesity and diabetes.”

Frank Knight: “The first commandment, with respect to any intelligent action is self-evident: “compare the alternatives,” beginning with understanding  what they are. But that is what people dislike doing. And the second and third are, appraise the alternatives, and then act on the basis of the best knowledge or judgment that is to be had. The basic axiom is that it is better not to act unless it can be done intelligently; as people are and as the world is, the odds are strong that bad results on balance, rather than good, will follow from acting ignorantly, at random – and acting on false knowledge is of course worse; but unhappily it is more common.” [via CafeHayek]

Decrypt: “Soulbound Tokens (SBTs)…are a primitive, or foundational building block, in an emerging Web3 trend known as the Decentralized Society.  DeSoc sits at the intersection of politics and markets and, much like the wider Web3 context into which it fits, is based around principles of composability, bottom-up community, cooperation, and emergent networks that are owned and governed by network users. It aims to augment Web3’s trajectory toward hyper-financialization to something more inclusive, democratic, and decentralized. SBTs are an essential feature of DeSoc. Similar to a resume or medical records in the non-Web3 world, SBTs are non-transferable tokens that represent “commitments, credentials, and affiliations” that make up the social relations on Web3 networks. In other words, they are tokenized representations of the myriad traits, features and achievements that make up a person or entity. Crucially, Souls can issue and attest SBTs to other Souls; so for example a college (represented by one Soul) could issue a SBT certifying that a course has been completed to a student’s Soul…In their purest and fullest expression and manifestation, however, Soulbound Tokens stand to become a foundational element of the Decentralized Society movement, in which communities emerge around shared networks and goods that are owned and managed by the Souls that use them.”

Thinks 570

Eric Ashman: “A VC’s job is not to help founders build great companies. Instead, a venture capitalist’s job is to raise money from Limited Partners (‘LPs’) to invest in a portfolio of startups that will produce returns that can outperform the stock market. LPs are primarily institutional investors, such as foundations, pension funds, family offices, university endowments, and sovereign wealth funds. Those LPs view venture capital as an asset class. A part of a diversified portfolio that also invests in bonds, stocks, real estate, and commodities. That’s your startup right there, in a portfolio with 90 other startups, in your VC’s 7th fund, as a part of a diversified mix of investments in Standford’s endowment fund.”

Economist: “The corporate world has changed since the mba first became a rite of passage for high-powered executives. Management teams answer to a growing number of “stakeholders”, from employees to social activists, and face public scrutiny on their companies’ environmental, social and governance (esg) record. Simply creating shareholder value no longer cuts the mustard. One consequence of this trend is that running a modern business requires an ever-expanding list of credentials and competences. In addition to financial and digital literacy, strategic acumen and communication skills, executives are expected to be clued in on supply chains, climate science and much else besides. They must ensure that their workforces are diverse and inclusive. And as work life goes hybrid, mixing time in the office with home working, they are also asked to spend more time checking in on subordinates.”

WSJ: “President Reagan understood something neither party grasps today: that the value of the dollar isn’t a function of how many dollars government supplies but of how many dollars people demand. Money is supplied insofar as it is demanded by people who can put it to good use. Inflation arises when people have less use for money, which is why stagnation comes with it. Reagan beat inflation not by reducing the official money supply—M2 nearly doubled during his time in office—but by boosting demand for money. The great lesson of the Reagan era is that money supply is determined by investment opportunity. Absent such opportunities, no matter how much money the government gives people, they will reject it and turn it into stuff. Here is the radicalism of Reagan: Orthodox economics attempts to use both monetary and fiscal policy to manipulate the availability of dollars. Reagan used both to increase the utility of dollars.”

Thinks 569

Sridhar Ramaswami: “Now we are in this environment that everything is about grabbing our attention. And, this is where things like the free model that you, like, give that really nice vignette about sort of come into play. We are now in a world where we think we’re getting a bunch of free products; but in effect we have given away all of our attention–and attention equals dollars. And, I think economists sometimes have trouble understanding that. All of us are eminently manipulatable. The brands you’re going to remember are the ones that showed you ads, whether you cared for them or not. We have run studies, for example, where we ask people about remarketing ads. Every single person, if you talk to them, individually is 100% convinced that they can never be, like, persuaded to buy anything. But, if you ask in anonymous surveys whether they bought stuff that they didn’t really need because of remarketing ads, 50% of people will say, ‘Absolutely. I ended up spending money on junk.’ So, this stuff works, and free isn’t really free.”

Dev Lewis: “In my view the Modi government’s reactions— the app bans, military strategy, rejection of Chinese investment exemplified head in the sand behaviour that did very little to benefit Indian citizens (let alone India’s physical sovereignty for that matter). The PRC’s military actions and rhetoric reflected the CCP’s own sense of power in the world and disregard for Chinese business or citizen’s interests. People on both sides of the border lose while the States play their own game of nationalist narratives of victimhood, morality, and superiority, drawing power and legitimacy domestically from bilateral hostility. I see very few incentives for this status-quo to change.”

The Milk Road summarises Stanley Druckenmiller’s advice to young investors: “He encourages them to learn all the asset categories and how they integrate. Not easy… but fundamentals are fundamental…His number one advice to young people? Do not invest in the present. The present is not what moves stock prices. Change over time is what moves them. He says to try and envision a different world a year and a half from now.”

Thinks 568

Sam Gerstenzang on his learnings from Stripe. Among them: “Turn up the heat in every interaction and ask uncomfortable questions. Some of the questions I repeatedly ask: Can we re-frame this in terms of the customer’s problem? What’s the soonest we could get this done? What would you need to get this done tomorrow instead of next week? What would we need to do to get twice as many customers? Ten times as many customers? How does this relate to our goal? Is this the most important thing we can do for our goal? What’s most important? What do we really need to get right? What could we cut, even if it’s painful?”

NYTimes on Nike@50: “Nike, named for the Greek goddess of victory, has become not just the most valuable apparel brand in the world (worth more than twice as much as Adidas, its closest sportswear rival, and ahead of Louis Vuitton, Gucci and Chanel). It is part of the movies we watch, the songs we hear, the museums we frequent, the business we do; part of how we think about who we are and how we got to here. It is, said Robert Goldman, the co-author of “Nike Culture: The Sign of the Swoosh” and professor emeritus at Lewis & Clark College, “an emblem of individuality, in an age where individuality has become rampant” that also happens to be one that can be read by the masses.” Forbes on how it’s using the metaverse, Web3 and NFTs.

Bloomberg: “Some people are naturally more decisive. These charge-ahead types make choices assuredly, from the trivial to the life-changing, stick to them and don’t look back. But do they make better decisions?  It turns out that indecisive people don’t make worse decisions. In fact, the art of making good choices is as much about how we make them, and whether we actually put our decisions into action, as it is the choices themselves…“Action-oriented” people — those who find it easier to initiate and follow through on decisions — more easily adjust to time pressure or stress and are more likely to follow through on their decisions. “State-oriented” people, on the other hand, find decisions more difficult, are less flexible, more likely to question the choices they’ve made and more prone to abandoning efforts later.”

Thinks 567

David Sax: “Engagement with strangers is at the core of our social contract. Most religious faiths instruct us to welcome the strangers we encounter, and there’s good reason for this. If we engaged only with the people we knew, our world would be small. That leap of faith toward the unknown other is what allows us to grow beyond the family unit, tribe or nation. Everyone you converse with who is not a biological relative — your best friend, neighbor, lover, spouse or even that chatty taxi driver from last weekend — was a stranger before you spoke to that person. Anytime we ignore strangers in our vicinity, whether because of fear, bigotry or the everyday convenience and efficiency of digital technology, we weaken that contract. Far from random human inconveniences, strangers are actually one of the richest and most important resources we have. They connect us to the community, teach us empathy, build civility and are full of surprise and potentially wonder.”

Matthew Hennessey: “Life is not determined by what you want. Life is determined by the choices you make.” [via CafeHayek]

Sangeet Paul Choudary on ecosystem business models: “In an ecosystem, we typically see three types of horizontal business models emerge – Aggregators, Integrators, and Infrastructures – which may be distinguished based on their position in the value chain. Additionally, firms may specialise and act as capability providers.”

Thinks 566

Matthew Green: “Legacy industry and regulators have smothered two generations of technological improvement, largely (I suspect) by building a (mostly) closed and permissioned financial system. And this is a big deal: payments are too important to our economy to entrust them to 1970s-era technology and an extractive industry. We don’t even know what novel applications — Googles, Facebooks, Wikipedias, Instagrams — we’re missing out on because the industry simply won’t allow them to exist. I don’t know if blockchains are the solution to this problem. I see indications that the technology is finally starting to grow up in ways that seem like a harbinger of major positive changes on the horizon. Progress here is slow, though in some cases because the regulatory apparatus is throwing sand in the gears of cooperative products, and/or utterly failing to move expeditiously to uncover possible fraud. And maybe the result won’t even be a success for blockchain solutions: perhaps we’ll simply get more and better offerings from “traditional finance” industry as they start to wake up to the fact that more open systems can compete with their closed offerings. So while I don’t know if cryptocurrency will be the answer, I’m just hopeful that something will be.”

Shane Parish: “There is a constant battle in all of us between our today-self and our tomorrow-self. Today-self is like our inner child. Today-self cares only about today. It wants to focus on things that offer an immediate payoff. Whether that’s kicking back with a few too many glasses of wine, spending money on status symbols, or avoiding doing things that can be done tomorrow. Tomorrow-self is like our inner adult. Tomorrow-self cares about things that take time to get results — like working on your relationship, saving money, or consistently moving the project forward one inch at a time.,,The wisdom of tomorrow-self is this: Focus on one thing you can do today to make tomorrow easier. Repeat.”

David Perell: “Philosophers are the most rigorous thinkers I know. Like intellectual boxers; they come to understand ideas by making them fight with each other. Their style of analysis is effective because it’s so bloody. One friend calls his style “violent thinking.” He talks about thinking like a soldier talks about interrogation. He subjects ideas to ruthless torture, shaking them and grabbing them by the throat until they can no longer breathe and, eventually, reveal their true nature…Good philosophers are like my friend from middle school. But instead of playing with computers, they play with ideas. Writing takes them a long time not because they’re finger-happy keyboard warriors, but because they rip ideas apart until they’re left with only the atomic elements. Once the idea has been sufficiently deconstructed, they put it back together. Usually, in new ways.”

Thinks 565

Shruti Rajagopalan in conversation with Lant Pritchett. “PRITCHETT: I think this is maybe the deep problem about state capability in India is that—and Arvind Subramanian just had an interesting interview in which he was pointing out that what the government’s done is not try and fix the hard-implementation things like health and education. They’ve improved the direct targetable here. You’re getting gas here. You’re getting concrete benefits of cash or in-kind transfers that are logistically simple. That, again, it’s not going to re-create a coalition about fixing the core problems of the Indian state. RAJAGOPALAN: I call it the upside-down Indian state. They don’t provide public goods and quasi-public goods. But what they provide is private transfers and private entitlements, which could be done very well by the private sector, except now it’s the government in the business of—it’s a little bit upside down if we think of it from a development point of view. It might still be better than nothing. PRITCHETT: Yes, it is worrisome if you’re providing subsidized gas but you don’t have a police force that’s reliable.”

Jack Dorsey’s tdb’s presentation on Web5. “Web5 brings decentralized identity and data storage to your applications. It lets devs focus on creating delightful user experiences, while returning ownership of data and identity to individuals.” Namcios: “Web5 is based on the assumption that Web3, the idea of building a decentralized web with blockchain technology and cryptocurrencies, has the right intentions but is using the wrong tools. Web5 leverages Bitcoin, the decentralized monetary network, and a plethora of sound computer science technologies to create a new ecosystem of decentralized identities, data storage and applications in which the users are in control of their personal information. Fairly decentralized developments in the internet over the past couple of decades such as BitTorrent and Tor have shown that blockchain technology is not a necessary component for decentralization. Rather, the blockchain has only proven to be needed for a very specific purpose – mitigate the double-spend problem to successfully bring peer-to-peer money to the digital realm with Bitcoin. TBD’s Web5 is made up of software components and services such as decentralized identifiers (DIDs), decentralized web node (DWNs), self-sovereign identity service (SSIS) and a self-sovereign identity software development kit (ssi-sdk). These components let developers focus on building user experiences while more easily enabling decentralized identity and data storage in applications.”

Dan Shipper and Casey Rosengren: “Peer coaching is a structured way to learn, grow, and share with a close friend. It’s a deep commitment to creating a supportive environment where you and a friend can develop as individuals. The bare bones structure of it is to meet weekly for an hour, with one person as the “coach” and the other as the “focus person,” and to alternate each week who is in each role. The focus person shares whatever questions or challenges they’re sitting with, and the coach’s job is to listen, and at times, reflect or share their own experience.”

Thinks 564

Evan Armstrong: “Software is consuming industries but it is also consuming individuals. What it means to be human is shifting. We are becoming what I call “embedded humans.” Our interactions with the world are determined by the software that we use. Software is being embedded into our identity and individuality… up to this point in human history, almost all of these goods have been centered around physical augmentation. The vast majority of products were meant to increase the labor capacity of a person’s hands. Now though, most technology is doing mental automation. Rather than increase the strength of an arm, we are directly embedding software into our cognitive processes to automate away mental labor…This arguably makes the creation of thoughtful software the most important task facing the technology sector today.”

Bikram Gupta Sarma: “A technology CEO constantly faces these five anxieties or challenges. The first is dealing with increasing individual and team performance. Technology moves at such a rapid pace that it is difficult to keep up with evolving new concepts. The second is with doing more with less – either with resources (people and budgets) or time to meet the company goals. Most technology organizations have developed specializations over the years and the CEO experiences the third anxiety of leveraging with partner organizations as specializations are all over. Often, either the organization, the investors or the board has a new vision, and the CEO now needs to deal with a fourth anxiety of how to synchronize one’s execution with a new vision. Finally, the technology world has grown global and technology teams take the job to where the talent is. This now means managing and leading global workforce, the fifth anxiety.”

From Common Sense Economics: “Competition is a disciplinary force. In the marketplace, businesses must compete for the loyalty of customers. When firms serve their customers poorly, they generally lose business to rivals offering a better deal. Competition provides consumers with protection against high prices, shoddy merchandise, poor service, and/or rude behavior. Almost everyone recognizes this point with regard to the private sector. Unfortunately, the importance of competition in the public sector is often overlooked.” [via CafeHayek]

Thinks 563

Economist on AI foundation models: “Earlier generations of ai systems were good for only one purpose, often a pretty specific one. The new models can be reassigned from one type of problem to another with relative ease by means of fine tuning. It is a measure of the importance of this trait that, within the industry, they are often called “foundation models”. This ability to base a range of different tools on a single model is changing not just what ai can do but also how ai works as a business. “ai models used to be very speculative and artisanal, but now they have become predictable to develop,” explains Jack Clark, a co-founder of Anthropic, an ai startup, and author of a widely read newsletter. “ai is moving into its industrial age.””

Eric Ashman: “In the search for new customers, you increase spending on sales and marketing. You launch new products and services, hoping to extract more value from existing customers while also unlocking new customer segments. You know that all of this growth work is fraught with peril. Many of the things you try won’t work. New products may not be as desirable or viable as your original idea. Marketing channels don’t scale infinitely at your target efficiency. New sales channels can prove to be inefficient paths to new customers.This is why growth must be built on a constant cycle of testing, measurement, and iteration.”

From a JM Financial report: “Quick Commerce platforms are essentially trying to disrupt the unorganised grocery market (mainly the neighbourhood kirana stores) in large cities. Their broader strategy seems to focus on driving the message that shopping for groceries through their online platforms is far more convenient than having to take physical trips to the neighbourhood grocery/convenience stores. By leveraging their scale, platforms can also extract better margins from brands/manufacturers/distributors, a percentage of which then can be shared with the customers to create top-of the-mind awareness or improve customer stickiness. Moreover, some platforms are providing more flexibility to consumers by giving them the option to decide their own delivery schedule. This messaging of speed and convenience essentially addresses the pain-points of urban families having busy lifestyles and nuclear families. High NPS scores for Quick Commerce players compared to offline channel and scheduled delivery players are indicative of the growing consumer satisfaction with the channel.