Tag: Finance

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Day 45 & Noblese Oblige

“With great power comes great responsibility” is a comic book classic known as the Peter Parker principle. If you are bestowed with gifts, you must gift them back to your community. Noblese Obliege or “nobility obliges” suggests that nobility comes with a responsibility to fulfill obligations to the people who guarantee your status.

This sounds like a social good, and sure it anchors all the great heroic narratives of our modern age, but it appears to be unraveling in modernity. It used to be that we believed the morally good are the ones with gifts, if you weren’t wealthy it was because you didn’t deserve it. It was a bit of a religious and heroic tautology. But it worked! The nobles and the superheroes felt an obligation to their subjects insofar as publicly demonstrating their inherent goodness was crucial to demonstrating their nobility.

A key component of noblese oblige was showing off moral worth by giving to the people without the insistence that the people be inherently good. The people didn’t need to be worthy to get anything. Being worthy was the job of the nobility not the peasants. Which meant that all gifts from nobility to peasants were inherently gratuitous. No one deserves to be given gifts. Gifts were bestowed at random and in significant largess.

I’d suggest the reason our institutional trust is breaking down is not because we are wising up to inequality, but because the narrative arc of nobility living up to its responsibilities have broken down. America’s first robber baron class understood this with their grand social gifts of libraries, parks and endowments. Some of our Billionaires still do. But we no longer feel the gifts match the obligations. No matter how much this new nobility gifts, the rabble is still pissed.

Maybe it’s the insistence on making charity go to worthy causes. Or welfare go to people that deserve it. That is ass backwards. The nobility are supposed to be good. The peons with outstretched arms never had any worth to begin with. If they did then they would definitionally be noblese oblige too. You can’t ask everyone in the system to be good, moral, and true. That’s fucking exhausting. Even Christianity got that sin was so encompassing that literally only God could be expected to be without it. Probably why we used to let nobility get away with bad behavior. That is fine as long as they did their part. The prodigal son got shit without deserving it. That was the moral of the story.

The trouble with a time that has broken with historical arcs of goodness is that now no one is nobility or peasantry. No one is noble or good. Which means nobody deserves anything they get. Which is about as close to the war of all against all as I can imagine. Hobbes would be pleased.

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Chronicle Finance Internet Culture

Day 39 and Trustlessness

It may come as a bit of a surprise to people that know me that I find Bitcoin to be a little boring. Finance and decentralization are extremely exciting to me so you’d think I’d be into our standard bearer currency. It’s deeply cool and I’m HODL but it’s not the most fascinating intellectual problem that blockchain can unlock. The possibilities around ditching trust are what make the space.

Some of us don’t don’t trust the dollar. That primes decentralized finance for broader user adoption. as the dollar gets printed. Add in many governments, from India to Nigeria, pushing currency controls and bans, and the political desire for forgoing “trusted” central grows. It’s going to be a fun time as financial products and services get built out just as politics comes for crypto.

Culturally more Americans are sick of relying on trust. A chaotic year building on top of historic institutional meltdowns makes the need for trusted third parties significantly less appealing across all institutions. As a woman I’m excited to be less bound by bias and social expectations. We won’t need to fixate on gender or identity as old trust paradigms of who or what is risky fall away. It simply won’t matter. Decentralization frees us from old white men as being the most trustworthy. Excellence that is validated not by a third party institution but by verifiable information frees us all.

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Chronicle Finance

Day 33 and Psychological Safety

Creativity is scary. Any time you build something new fear lurks around the corner. Because even if it’s not rational, your perception of risk rises when your potential for failure is at its highest. Perhaps this is why when you take a conscious risk you unconsciously try to mitigate any unnecessary additional risks. This has a number of significant consequences for businesses. You want to feel safer when you take risks so you seek out psychological safety from your associates. The principle is simple. You will only take risks if you believe you don’t be punished for it. Psychological safety has been shown to be crucial for teamwork.

I’d wager this is a factor in why startup teams tend to be homogeneous as human nature makes it harder to trust what we don’t know well. Which is fascinating when you consider that diversity is also an important factor in financial performance. And as much as this principle of psychological safety been discussed for team performance, there is one area in startup land where feeling safe is rarely cultivated: venture capital.

Venture’s entire culture is steeped in cliches of competition and combativeness. Which seems odd for a group that theoretically prizes high performance. Wouldn’t they benefit from cultivating psychological safety the most? If entrepreneurs are solving entirely new problems with high chances of failure feeling like they can trust their financial partners should be a top priority. And surely plenty of ink has been spilled on picking good partners in the literature of startup advice. And yet the atmosphere of distrust is pervasive. Venture capitalist and entrepreneur are constantly managing the information flow between each other. Which is exactly the opposite of what creates the necessary safety to take creative risk. So why isn’t this discussed more?

Imagine a fund who instead of poking holes in your data or lobbing grenades in your plans instead showed it was sensitive to the parade of fear and doubt that pervades most decisions. You’d get more done by a mile. Ideas could be refined instead of defended. Plans could be buttressed and shored up rather than rationalized. Having safety will lower the kind of inhibiting social pressures to show “that you are always crushing it” perhaps enough to produce startups that actually do go on to crush it.

This strategy could shift the dynamics of a firm’s competitiveness too. In group dynamics of status and posturing prioritize deal flow among only in group group members which disadvantages everyone by increasing competitive deals and rising prices. Funds who who have psychological safe founder relations will then disproportionately control what deals get done as the creative risk takers will seek them out. That kind of deal flow would be a major leverage point. Rather than getting stuck fighting for the same deals everyone agrees on (which isn’t a sign of quality no matter how much we want it to be so) venture fund that sticks to prioritizing psychological safety will spend more time with productive risk taking that builds the future.

Developing emotional capacity isn’t a platitude. It’s grueling work that takes place over years, sometimes to little effect given our innate resistance to change. But it is truly transformative.

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Chronicle Finance Internet Culture Preparedness

Day 28 and Limbic Memory

Today I want to talk about how this past year has set in motion the next hundred years of human imagination. Yes, I think it’s that important.

Mental elasticity is an incredible thing. We humans learn quickly and have a seemingly endless capacity to adapt to impossible things once we’ve wrapped our minds around it. Sadly though, forgetting doesn’t come as naturally to us as learning. Once we’ve seen the impossible happen, we never forget. Instead of storing miracles and crisis in the front of our minds like new knowledge, to be reinterpreted as new and possibly ephemeral, it goes right to our limbic back brain.

The limbic system is set in the deep structure of the brain where it regulates autonomic or endocrine function in response to emotional stimuli. It’s part of our survival response encoding. Which is why trauma is so crucial to evolutionary pressure. Those that survived, generally did because they took an impossible situation seriously. It becomes a part of our reactive unconscious survival instinct. And boy is this going to have consequences for American millennials.

The last year has had its share of impossible things occur. And we’ve gone about our business adapting to things that couldn’t possibly happen before. Early doomers were dismissed on the pandemic, political Cassandras ignored until an insurrection occurred, and now a new kind of financial mania which Stalwart Joe at Bloomberg calls an “upcrash”. He explains the impossible inversion using 1987’s Black Monday 22% drop.

Once people became aware that such a severe crash in so short a time was even possible, the likelihood that it could happen again was never dismissed. The consequences aren’t as big, but in a sense, what we’ve seen in GameStop could be thought of as a Reverse 1987. Upcrash. A gain so fast and rapid, that it might previously have been thought to be impossible.

Why do I include a seemingly jokey memetic internet troll in a list of traumas? Because a positive memory is just as jarring to our limbic memory as a bad thing. We overweight good experiences just as heavily as bad. Once the impossible becomes real our bodies retain the memory.

We’ve now got sense memory for global pandemics, political instability and positive market manias in America. Things we haven’t had for three generations (or more in the case of political instability). And the consequences, most of which remain unknowable, for these visceral impossibilities won’t leave our bodies till we are dead. We are stuck with the paranoia and exuberance of this last year till our grandchildren are in charge.

So we’ve just tossed several intense traumatic evolutionary events onto American millennials that not a single institution can do shit about. And I’ve honestly never been more excited for what our chaotic future might bring.