Tag: Geopolitics

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Finance Internet Culture Politics

Day 1807 and Set Hyperparameters to Dumb

As much as I’m trying to salvage the end of my year by taking it slow, I’m still keeping myself plugged in. There is no unplugging in our hyperreality.

I’ve accepted this is a part of being human for the time being. I don’t struggle with internet addiction even if understand how it can be for others.

So here I am keeping an eye on various market movers like central bank rate cuts and earnings calls. It’s a shame I didn’t go into banking as it’s a lovely hobby I just happen to enjoy it watching the data go by.

The intake of long insight and slow instincts interplays with short data and animal spirits if you can stomach it. For me at least I don’t make moves based on any given day.

I find impossible to make much sense of the here and now, so the best I we can do (at least those suitably complex situations) is make very long plays or extremely short ones. I wouldn’t want to plan for a middle distance. Pity the politicians operating on two year schedules.

I’m glad I make long plays if it’s a choice between long and short. I wouldn’t want to edge out small gains in the algorithms like my quant friends do. Too much is out of distribution and nothing is ever really priced in. Cliff Asness is right. Markets have become less informationally efficient. Information becoming free made insights almost impossibly expensive.

For me it’s silly to make grand claims of sensemaking as we bumble from “so over” to “so back” by the hour. I’ll never compete with that.

What do we need over the next decade? How about two or three? That’s my plan. Anything else risks tip toeing between hyper tulip mania and the deepest depths of the Great Recession trough. I’m amazed we’ve shaved off volatility as long as we have. Apres Boomers, le deluge? Reality feels like hyperparameters are deliberately set to dumb.

And so Wendell Berry is now percolating up not just through the permaculture hippies, Monsanto fighting eco-terrorists and nouveau TradCaths but in the feeds of my design hipsters too.

Williamsburg taste by way of pastor parents has found its way back to the Kentucky poet. Back to the land didn’t take for the Boomers but maybe this time it’s different. (Only if you are landed gentry).

“The cure proves incurable.”

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Finance Politics

Day 1799 and Thucydides Middle Income Local Maxima Traps

I have been catching up on Odd Lots which is the one podcast I listen to with any consistency. As all discussions about economics boil down to great power discussions as of late. The times they are indeed a-changing.

I noticed that both hosts brought up their collegiate studies of international relations across two back to back episodes. First on the Thanksgiving episode with Graham Allison of Thucydides trap fame.

I just caught up on it today and then the subsequent interview with Ray Dalio on his five forces episode. Joe and Tracy brought up international relations studies in both episodes as it does seem to be the current mood.

Dalio is always an enjoyable listen but I’m much more interested in Professor Allison as (to prove the joke Joe made) in the introduction that “a substantial portion of our listeners are really into ancient Greek history”

And indeed Joe is right. I’m a huge Thucydides fan, I went on a Peloponnesian War tour and am a regular visitor of the Balkans and its ancient Mediterranean and Roman history.

So naturally I have followed Allison’s work on rising power and its threat to established ones.

The US and China are in a “Thucydides Trap,” whereby the risk of war is heightened when an established power is threatened by a rapidly rising power. This is the framework that’s been popularized by Graham Allison, the Douglas Dillon Professor of Government at Harvard University. Professor Allison has been writing about China and the US-China relationship for decades

I guess all millennials grew up thinking we’d study these historical concepts in an eternal Pax Americana only to find the end of history wasn’t here to stay and we might fall into the trap. It’s just hard to imagine America feeling threatening to anyone at the moment.

As I listened to the episode, I happened to be walking through a neighborhood on the outskirts of a city that is keen to tear down some of its older homes to make way for new roads and denser apartment buildings. Much of those changes were clearly already in motion, as I saw cranes and construction crews.

The older homes looked multi-generational, but not in that wealthy polished way, so much as the middle income stalled economy compromise.

And yes you see it even in first world nations. In America and Europe, many conditions would benefit from more of a longhouse “in it together” approach. As elders stretch on in years and millennials go into middle age with few markers of adulthood. You’d think we’d want more of these style of homes.

I wondered if a city carving out the old construction through imminent domain tactics and buyouts, would make this outskirts neighborhood more vibrant. It would certainly bring in new buyers of condominiums. Consumption must go up.

I wondered about the families inside of the homes that looked more like multi home construction. Gates and other obstructions made it hard to tell, but the impression I got was more middle income local maxima family compound trap.

China rising, while the first world learns it may be more second world than it realized, makes me wonder if we’ve got it all wrong. More of the planet is in the middle income trap than the World Bank realized.

What if there is no Thucydides trap to fear as other powers sputter and stall. We long for an artificial intelligence boom to launch the globe into a high earning high efficiency world.

Sociologist Salvatore Babones and political scientist Hartmut Elsenhans call the middle-income trap a “political trap” as economic methods to overcome it exist. However, few countries use them because of their political situation. They trace the causes of the trap to the structural problems and the inequalities generated in the early development process.

According to them, the wealthy elites then follow their interests by bargaining for a strong currency which shifts the economy’s structure towards the consumption of luxury goods and low-wage labor laws, which prevents the rise of mass consumption and mass income.  Via Wikipedia

That sure sounds like a lot of the problems we see in America and Europe. All we are doing is getting gummed up in Baumol’s Cost Disease as we try to reinvent new ways of living that consume what remains of the old without the new going as fast as is needed.

But old multi-generational homes blocking the expansion of a city won’t get anyone to mass affluence. So it’s time to bulldoze old neighborhoods and make luxury boxes in the sky.

Not sure that ended well for China either. They popped their real estate bubble. And they wisely tamp their currency to export all their consumer goods. They might be stuck in a local maxima middle income trap too. Maybe Thucydides isn’t the framework here. Or maybe war is the only reset humanity knows.

I myself am hoping we choose to go to space instead but the South China Sea sits waiting. The only currency that matters in this strange moment is GPUs and that’s a different trap entirely.

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Culture Politics Startups

Day 1796 and I’ve Got Billions in My Inbox Julie!

I’m not new to the boom and bust cycles that have defined not only technology startups, but American herself. Most millennials have opinions about their malign status in an economy designed to borrow from the future for a dubious present.

Much of the world is in a state of panic over “the churn” of the old rules changing and the new ones not being quite clear. But it’s really not clear what happens next.

I think anything goes as the networks speed up our connections to each other through artificial intelligence. The end of the age of scaling means it’s time for the era of deployment is it not? Or are none of us Carlotta Perez fans.

I enjoy speculating as is the fashion. Do I think corporate debt financing of data centers is some time bomb in private credit? Not really, no. I think it’s way more likely that don’t understand the full demand case for coordination in a mediated world.

I don’t know if we can meet the demand to be perfectly honest. I will say I am way more worried about us not meeting the moment. Changes to our cultural environment are as hard as our material ones.

If I had to read sentiment, I’d say that everyone is absolutely sick of having their attention used like a fiat currency. We cannot inflate our capacity for focus as easily as we can inflate the dollar. And we will demand simplicity by any means necessary just to exist. And artificial intelligence will smooth our world to manage with what we’ve got.

I think running a decentralized world will prove to be far too complex for most humans and it will be mitigated by layers of choices in governance that will probably not always maximize for the freedoms we’v come to expect from the liberal world order.

And yeah I think we will need a lot of data centers for that coordination effort. That the state might be the ones with the most demand seems a little rich though. Every individual on earth will want to be on the right side of the ratings. That’s more network state than state and it will be a longtime horizon.

I know it doesn’t sound great on its face. And yet I think it has had upsides. The demand for real businesses that operate in some world of efficiency has never been higher.

And to some extent, I believe that was always the entire point of computing. Make things so much better and cheaper we move on to bigger projects.

Giving you video games and porn might have been a weird way to get to Mars but medicine is as driven by vanity as much as survival so I don’t judge reality. I just want us to get more nuclear power. I don’t ask for much.

We didn’t want a legion of information processing professionals. We wanted to change the material conditions just as the Industrial Revolution did. The invisible hand is a strange thing.

I expect we will see quite a bit of opposition to the people believe that we need more energy, more industry, and more science. The future and its enemies are legions. I always did find it funny that fashion critics had a better read on the future than anyone else. Virginia Postrel and William Gibson both have good taste.

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Community Startups

Day 1792 and Grateful for The Exceptions

This Thanksgiving I am feeling particularly grateful for the exceptions in my life. My world is filled with the exceptionally rare. Rare people, insights, businesses, and outcomes are part of building something genuinely new.

I suspect I’ll have to justify my faith in investing in and introducing new technologies to the world. We are doing a lot of looking back as the path forward looks so uncertain. And I continue to advocate for looking forward with optimism.

We have a lot to integrate and metabolize into human cultural life. We will be forced to address these changes as they change our institutions and expectations over the next few decades.

There is a lot to dislike about the technology industry at the moment. We’ve evolved far beyond “startups” being scrappy zero to one experiments in the proverbial garage. Startups turned into “Big Tech” and that concentration of influence and money has not always lived up to the high expectations we have for power.

We have had multiple cohorts of businesses as a mature industry. And indeed we’ve had multiple generations of people who spent their entire lives building a global ecosystem of technologies, along with the talent and capital to scale it. We may relentlessly start afresh but we cannot avoid acknowledging that we are a power base in our own right now.

Just in my lifetime, we’ve publicly codified our cultural mores, shared decades of knowledge on best practices on the open web and built institutions dedicated to helping people work across the multiple fields and disciplines that encompass “technology” as an industry. Or maybe I should simply call it an economy. It may even be the economy at this point.

Which is a problem. Our capital sorting mechanisms have seen our efficiencies and returns and pushed more resources, human and financial, towards us.

That has frustrated and starved the industrial base that provides us with the infrastructure to build. Let’s not even get started on what it has meant for food, education, entertainment and family.

I began more seriously investing in startups at the beginning of the pandemic. We maintain a small fund with low key LPs and our own family capital.

That is enabled by what we jokingly call the circle of life that is a liquidity event. When a startup sells many people become not just a little bit better off but sometimes twenty or even hundred times better off.

Those outlier events pay for all of the other things which don’t work as well. It’s a hits driven business. Hollywood would say “Thats show biz baby!” Oddly we don’t have a simple way of explaining the randomness of who or what becomes a winner.

Being excellent just isn’t enough. Startups that succeed are often exceptional in all areas and even then it still might not work. That bothers losers more than it does winners because the winners can comfort themselves with the money. But deep down even the winners know it could have easily gone another way.

So this Thanksgiving I am grateful for all the exceptional cases that have come into my life. To even see one is a rare thing. To be exposed to dozens of them is extremely unusual. To be invested in even positive outcome from the very start is beyond rare.

We’ve done so much to make startups more accessible to those with the mindset and discipline to succeed and still so many barriers remain. I see my work as the first check a founder takes as being a small part of the cycle of exceptionalism that builds success.

Just in the past two weeks we’ve had three companies raise large scaling rounds at markups that now place them soundly in the exceptional category. In two cases, I was their very first check, and in the third I was in their first pre-seed round. I qualify it only because I was not the first person to commit which I strive to be.

That is where I strive to be exceptional. I want to be the very first person that sees you for what you will be.

And I am deeply grateful to the founders that allowed me to be their first believer. It’s hard to be a founder. I’ve done it. To be an investor is much easier. You just have to have the balls, the brain and the bravery to say “yes” to something nearly impossible. That I can say yes is something for which I am most thankful.

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Internet Culture Media Politics

Day 1785 and Adversarial Openness

There has been quite a bit of discussion in alignment theory with artificial intelligence that considers how legibility and openness might work at cross purposes when coordinating across different intelligences with different goals. Politics exist everywhere it would seem.

If you are transparent, but seek to change an agent’s behavior, you might reasonably be interpreted as adversarial by the agent. So it follows you must consider that their actions are no longer collaborative and open towards you but potentially adversarial and opaque depending on how it judges you.

The information habits and “winner’s optimism” that some American elder millennial display in public digital spaces are telling. In particular, we have skewed heavily towards legible openness as our internet was often friendly and our geopolitical positions was dominant.

These conditions are no longer true. And so we are now experiencing the Dark Forest Theory of Yancy Strickland (based on Liu Cixin’s stellar science fiction series the three body problem). American millenials are on a very different internet than we grew up on.

I’ll admit I have a bone to pick with Yancy as it felt more like he was defecting from the open web in 2019 because it was scary and filled with fascists. I didn’t think he believed it was because it was actually dangerous. His return makes me question his original declared intentions and his goals now.

The Dark Forest disappearing man has come back to the open web now. Things have changed and we all need our own private Idaho. Which you can find through his offerings.

I’ll note he needs the distribution channels of large adversarial networks like Twitter and that means gaining power in the dark forest. As we consider how open and legible to be in this very difficult moment I thought this was an instructional revealed preference.

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Politics Startups

Day 1784 and Strange Trade Offs

It’s been a pretty fantastic few weeks for my investments. Decisions made years ago are now looking pretty smart. A bet I made two years ago announced a round and then proceeded to announce splitting the atom the next week.

Not to only focus on current belle of the ball in Valar especially as everyone in the portfolio seems to be finding their way. We are lucky that we focused on compute, energy, and decentralization as that is the trifecta of the artificial intelligence wave.

I honestly didn’t expect that we’d see such progress in our nuclear pick. With the regulatory climate it seemed more likely compute marketplaces and inference products would outpace the most regulated technology in the world.

Somehow during a Trump administration you get unexpected outcomes. I’ve been fighting for compute figuring the energy bottleneck wouldn’t get addressed till we had the full supply side of new AI products. It turns out everyone wanted to rush into capital expenditures and infrastructure as the demand was already there.

I guess I’ve proved my own thesis again. You can get a read on the direction and maybe even first order effects but in a chaotic world the second and third order effects are much harder to predict.

And on balance for all the bad I think on balance the atomic age finally arriving might be a worth while trade for our future. Hard to say if I’ll keep that opinion but I am grateful America is getting back on track with nuclear power.

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Preparedness Startups

Day 1783 and Good Days In Bad Times

I have spent a lot of time in various states of concern, sadness and frustration this year. Which is too bad, as so many incredible things have happened to me. We passed a right to compute law. Valar Atomics took “accelerate” way more seriously than most.

It’s hard to balance knowing the future won’t be anything like the past, but still having to make decisions made on that being the only data you’ve got. Engaging in governance and investing in energy seem like sensible ways of approach a strange future. Organizing energy is civilization 101 stuff.

I can predict a world with increasing chaos but how it will affect demand for things like energy, compute and decentralization are directional bets. You know it’s coming but how and when? And the downsides are hard to consider. Nobody ever thinks the entropy will apply to them but it’s already begun.

Every time future shock gets me I’m surprised I’m managing an imitation of Cayce Pollard at all. I’m practically a poster child for “sensible takes about various concerning challenges” as I get asked about various eccentric revealed preferences.

The Fourth Turning is coming about and we aren’t ready. I use short hand like the Churn, elite overproduction, The Sort and other minor terminologies and schools of thought to signal to others. I understand this to be my best way available way signal. But who knows as the humans retreat from shared networks it won’t stay that way.

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Community Internet Culture

Day 1780 and Being Cooked

I’m starting to think the more optimistic you are about the future, the more cooked you think we are. I didn’t expect this.

The Doomers have a coherent worldview. It’s simple to imagine involving losing your humanity to machines. This is at least legible and a call to our common humanity. Change is scary and bad and we don’t know how any of this is going to go. So why not be cautious?

The optimists are all excited about different things though. And that opens us to a lot of attack paths. And yes I’m calling myself an optimist though I have a lot of downside scenarios on my radar.

Some of the outcomes that you might find dystopian are the utopian outcomes for someone else. Think Caliphates or Communist surveillance states.

The complexity of our reality is so far beyond the grasp of your average person it seems cruel. And we sympathize with the struggle to adapt because it appeals to our common humanity.

It’s no wonder America has had so many revivalist movements. We have changed so much in our 250 year history, we are always rediscovering the value of faith. What else do you have when the future is uncertain? If we are cooked anyways we may as well all take Pascal’s Wager?

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Community Culture Politics

Day 1776 and Remembering the Specifics

A little quirk of my personal record keeping that day seventeen sixty six of writing coincides with Armistice Day and in America now Veterans Day.

A lot to be said for how Americans always make it about themselves. World War I because an entirely new scale of war that did not exist when we fought the Red Coats for self governance.

And that has a lot of foreign interventionism in it. But we won that war so the assist from the French isn’t seen as pesky meddling. Imagine how the British press must have covered that at the time.

It’s still hard not to think about how different Americans post colonial future could have gone. We stabilized into a democracy and went in meddled in other people’s wars.

I don’t know why it never occurs to most Americans now people meddle in our problems with the intent of making us an easier target. One man’s nation is another nation’s propaganda target. Americans get targeted too.

The soft grey war is much harder to see when the wars we are taught to remember get lumped into one holiday honoring all veterans.

Wars aren’t specific anymore for us and this is a bad thing. My generation got the “global war on terror” and we learned our lessons in ways far too abstract for most and concrete in ways.

That disproportionately affected regular people rather than the wealthy inner core. Hard to consider how that plays into other nations calculations. Just seems like remembering the specifics of a conflict might be helpful to staying a thriving nation.

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Aesthetics Politics Preparedness

Day 1774 and Haywire Hell Handbaskets

It’s getting harder to ignore the crumbles. Everyone on the internet is furious about everything. And everyone offline is just trying to keep their heads down.

I should probably have the good sense to do so as well, but I’ve made my bones being accessible and not at all sure I know what happens in a post-human Internet. I want it to be a human directed future.

2025 as a year has been particularly challenging even though we’ve had some positive moments. More and more things are breaking and it’s just impossible to ignore no matter your insulation from reality.

And quite obviously, I have done more than average to move us as far from the center of Empire as is feasible. We moved to Montana.

Part of me thinks it’s well past time we really took a hard look at the hell in a hand basket direction we are headed in. Things are going haywire everywhere. The brief moment in which it felt like we might accelerate through the turn naturally goes splat if you don’t commit to the bit.

And part of me says fuck’em all. The shit that was done to me in the service of extracting my life force for what, pensions and healthcare costs for a generation who broke all social fabrics? It’s literally Saturn eating his son levels of disgusting.

And yet, I’m still unwilling to consider the centralized approach. We’d be eaten faster just like whales fished into oblivion by mistakes in the Soviet math.

It’s quite canny of Peter Thiel to be ahead of it and it’s a better look than insulting the spiritual leader of the Catholic Church. And I’m not a notably sympathetic person when it comes to institutions like the Church (being a Protestant and all). I’m more of a direct communion with the Lord type.

However when a man well versed in scapegoat theory puts out a sympathetic hand & his most significant rival makes the tactical error of insulting the Pope, you know the tilt-a-whirl is in full spin and there is little space for any of us to cling.

We are on the highway to hell, & I was promised a handbasket but there are none to be had as they’ve been hoarded. The fourth turning is about to show us that even the liberals get the boot. There is little doubt that I am mere scraps of elite overproduction that refused to fuse to my intended spot. I’ll find my own place to stand.