Industrial Policy – Stupidity by Another Name

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Zero-sum thinking has begun. Despite comparative advantage, mutual cooperation, and specialization proving indisputably more beneficial than any other approach to economic interaction, this ideal is under threat. Rules and norms for economic integration lifted hundreds of millions of people out of poverty, created an order-of-magnitude increase in the average wealth of the Western population, and benefited countless hundreds of millions enabling a way of life otherwise unimaginable post-World War II. Now that system is under threat as developed countries subsidize alternative energy, attract manufacturing via expensive subsidies, and restrict the flow of goods and capital. Mutual benefit is out; national gain is now the highest priority. In other words, stupidity and zero-sum thinking have taken over. A handful of bureaucrats, regardless of how brilliant each may be, can never equal the mind of the market. Management and control usually spell disaster eventually. Managed focus on technological development for products and services the central government believes have greater substantial benefit to the overall society may not be calamitous, but the law of unintended consequences has not been repealed. It will be inefficient, substandard, and create potentially dangerous side effects. Innovation, creative freedom, and unstructured thought are essential components to the development of any technology of substance and disruptive benefit.

Proud Certainty

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In his preamble to “The Theory of Relativity,” Einstein implored his reader to, “set aside your proud certainty” because he was about to present something quite revolutionary, iconoclastic, and, as he discovered for many years after publication, challenging to be broadly accepted. Of course, his insights would be vindicated, and would soon be considered one of the leading minds of the 20th century, and perhaps one of the great minds in scientific history. Einstein knew things that everybody else was ignorant of and was ignorant of things that everybody else knew. That was probably the key to his great thinking – he assumed no knowledge and didn’t confuse himself with the trivial or unimportant. Always explore, race to keep up, clear the field, and let other vibrant minds pass. It is the spark of human creation, analysis, and understanding that gives us a glimpse of nature’s fundamental beauty. We only touch a small fraction, and our hardest work and most diligent thinking expose a little bit more – and that is one of humankind’s most worthwhile pursuits. Set aside proud certainty; be indifferent to your failings and the cacophony of critics. See, question, verify, and question again.

The Broken Road of Innovation

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Discovery, innovation, and practical application are never a straight line and, the best analogy is “the broken road.” Our greatest discoveries and advancements have confusing, uneven, and broken pathways that often lead somewhere astonishing – even though at the outset the initial steps could never envision this as a final destination. Artificial intelligence is the embodiment of this concept. A powerful tool that can lead anywhere given the imagination and unlimited creativity of its users. There may be nowhere more impactful, generating therapies for unmet medical needs in record time, than artificial intelligence’s ability to mimic evolution in minutes. The real outcomes are still unpredictable, but the potential is unfathomable. AI languages that produce pictures seem to be initially relegated toward a combination of Tik-Tok influencers, outraged artists, and those with limited imaginations and creative skills. But now, AI-generated pictures can use text to direct specific protein designs with properties of shape, size, and/or function that make it possible for these new proteins to perform specific tasks on demand. This breakthrough may lead to more efficient and effective drug development and, the discovery in minutes of what evolution would otherwise have taken millions of years to develop.

Podcast – The Point of the Point

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Life’s dramatic and unexpected change keeps us vital and longing to see what will happen next. To experience, to travel, to be a loose-fitting component to a tightly fitted place. Anywhere one can be a loose component and absorb the unique experiences of societies and cultures where we will never fit. I am not finished. It is easy to give up sometimes, especially when one feels tired, and abandoned, and, like many, the best is behind me. What is the point of continuing? Like The Point, the point is to go on. One is never finished. The realm of the Gods will come fast enough.

Better Investment Strategy

A Better Investment Strategy – Data, Discipline, and Rigor

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Let the data tell the story. Remove human bias. Intuitive investment ideas may seem compelling, but more often, these ideas are time-consuming, inefficient, and inferior.

Diverse thinking, innovative approaches, and a willingness to be wrong and start over typically bring superior results.

Trust the model. Data, discipline, and rigor win more often.

Digital Assets

Recent Lecture – Digital Assets: Innovation, Opportunity, and Nonsense

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Recently, I gave a lecture at a graduate program focused on innovation, technological disruption, and the impact on global industries and investment opportunities. My lecture focused on digital assets and attempted to draw distinctions between disruptive and substantial opportunities and hype, nonsense, and unsustainable business models. This is a quiz given to the students that reflects the main points raised in this lecture. For fun, I am including it here because it makes a series of fundamental points that I think are especially important, and the true-false construct conveys those points with clarity.

Arcadia Capital

Podcast Channel

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The show analyzes emerging economic and social developments, identifying the most critical issues impacting investment success. It looks at globally disruptive changes and strategies to profit from these new market forces. Innovation, advanced technologies, geopolitics, and new interrelated factors are essential components of future investment success. Investment success combines predicting the future, the confidence to make bold choices, and the fortitude to stay with those choices. Today’s volatile and uncertain world requires new knowledge and perspective and assembling relevant facts from many diverse sources to make better decisions and achieve superior returns. Some of the world’s most important industries are being profoundly impacted by new technological innovations and platforms, such as artificial intelligence, digital assets, blockchain-based businesses, gene editing, and DNA sequencing, enabling unprecedented disruption to business and economic models. Stable predictability is increasingly anachronistic. Every company or industry will either be a disrupter or disrupted. The leading growth companies of today stand an excellent chance to be memories tomorrow.

Russia Ukraine

Russia, the US, and Liar’s Poker

Lectures

Collectively, the world is good at screaming about all sorts of immediate and looming crises, whether that is climate change, totalitarian governments abusing civilians and trampling on personal rights or outright genocide. A speech and a prayer suffice but we’re not going to do anything. Donation websites, lighting buildings in flag colors of abused nations, and sending hopes and prayers accomplish nothing. We send prayers. We just won’t answer them. The Ukraine war’s consequences are severalfold. Economically, global consequences may be slower and less spectacular than the dramatic Russian military invasion. But, the effects will permeate the global economy, and Russia will be the biggest long-term loser. While this does not comfort families suffering and dying in the streets of Ukrainian cities, it realigns global industries and economies, strengthens the West, and is likely to galvanize United States’ leadership in the global economy – setting up even more intense rivalry China. A big uncompromising response now is the most likely strategy to settle these dramatic issues – and if it leads to regime change in Russia, that helps everyone, especially the Russians. The US and the EU need to grow up and start acting like global leaders.