Post-Pandemic World, Energy Transitions, Ark's Big Ideas for 2021

January 27 2021

“A man is about as big as the things that make him angry.” 

- Winston Churchill

“Time is the coin of your life. It is the only coin you have, and only you can determine how it will be spent. Be careful lest you let other people spend it for you.”

- Carl Sandburg

“The main thing is to keep the main thing the main thing.”

- Steven Covey

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A. Ten Lessons For A Post-Pandemic World

What will the world look like in 2022? How will we learn, live and work in the future? Will COVID change things or will we go back to normal once it’s over?

These are questions I often discuss with friends and I’d love to hear your opinion. I’m still trying to figure this out.

Lenin is supposed to have said:

“There are decades when nothing happens and weeks when decades happen”

Fareed Zakaria is an Indian-American journalist, political commentator, and author. He is the host of CNN's Fareed Zakaria GPS (Global Public Square) and has written a handful of good books. Foreign Policy Magazine called him “top ten global thinkers of the last decade"“.

His latest is: Ten Lessons For a Post-Pandemic World.

He tries to foresee the nature of a post-pandemic world across the political, social, technological and economic spheres. The book helped me answer some of the questions I’ve been grappling with.

Here are his Ten Lessons:

1. Buckle Up

2. What Matters Is Not the Quantity of Government but the Quality

3. Markets Are Not Enough

4. People Should Listen to the Experts - and Experts Should Listen to the People

5. Life Is Digital

6. Aristotle Was Right - We Are Social Animals

7. Inequality Will Get Worse

8. Globalisation Is Not Dead

9. The World Is Becoming Bipolar

10. Sometimes the Greatest Realists Are The Idealists

There are a number of core arguments in the book, one of the key ones being we need better government and better democracy, this was something also well covered in The Wake Up Call in October.

Thanks to Konstantin for the reminder to read the book. If you like podcasts, you should listen to him on Hidden Forces or the discussion below between him and Reid Hoffman is worth watching.

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B. Energy Transitions

A number of you responded to last week’s post on Apocalypse Never by Michael Shellenberger,.

I’ve been thinking more about climate change and energy transitions, and I’ll share a couple more things on the subject.

Prof. Vaclav Smil is the authority on Energy and Growth. When Bill Gates has questions on Energy Transitions, he goes to Prof. Smil, like this discussion here. Prof Smil has written over 40 books on the subject of Energy and why that is the core of life.

All Life is Energy.

In fact if you look at Human history it’s a history of very slow energy transitions.

In this discussion he really breaks down some of the bull$hit, we hear around energy transitions, electrification and innovation.

For example: There is no such thing as an electric car. The motor might be electric, but the source of energy it uses is dependent on where the car is being used. For example if the car is being used in Canada it is a hydroelectric car, in China it is a coal car, in France it is a nuclear car. It is a not a no carbon car. Most the world’s energy is still fossil fuels and will be for many decades.

As a civilisation, we have been in an energy transition since we were cavemen. The transition is happening all the time. As we become more prosperous and discover new technologies we transition to a new fuel. The energy transition is organic, we don’t need committees to make this happen.

At the 19 min mark, he has a great discussion on what went wrong with the German push for renewables over the last decade - A lesson we should pick up before we push the rest of the developed economies into the same trap of spending trillions and finding that the cost of electricity goes up by 50%.

At the 28 min mark, he discusses what can be reasonably electrified and then the numerous industrial processes (fertilisers, cement, steel) that will always be fossil fuel driven.

At the 32 min mark, he discusses the main disagreement between him and Bill Gates on Energy.

His main point: We will be fossil fuel civilisation for a very long.

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C. A Few Things Worth Checking Out:

1. The team at ARK Invest published their Big Ideas for 2021. It’s a always a good report and this one has some great charts.

2. Niall Ferguson article: “History’s Lesson for Biden: Stuff Happens” is a great read. What could de-rail the Biden Presidency? Thanks David Giampaolo.

3. The Future of Offices When Workers Have a Choice. My friend Dror Poleg (the author of “Rethinking Real Estate” and the co-chair of the Urban Land Institute’s Technology and Innovation Council in New York) discussed this in his NYT article and has done great work on his blog on the Rise of the 10x Class.

I’m interviewing him on behalf of Pi Capital next week, with a focus on the roadmap to the future of real estate. Let me know if you’d like to watch / listen.

4. Hank Paulson (previously the CEO of Goldman Sachs 2000-2006 and US Treasury Secretary 2006-2009) spoke to Ben Bernanke (FED Chairman from 2006 to 2014) to discuss his experience leading the Federal Reserve through the Great Recession, what’s needed to overcome the COVID economic crisis, how economic principles apply to baseball, and his advice for aspiring economists.

5. Great interview of Louis-Vincent Gave, CEO and co-founder of Gavekal Research - he makes the case that: Inflation Will Come Back With a Vengeance.

6. Elliott Investment Management is one of the most respected names in hedge funds. Paul Singer, the founder and President of Elliot was on The End Game podcast discussing: Paul's thoughts on the importance of understanding markets are little more than mass experiments in psychology, the fallacy of 'sitting passively', the creation of value for clients and the corner into which the Fed and other central banks have painted themselves. He thinks inflation is around the corner.

He might be right, but it made me think of an open letter, the sharpest minds in finance wrote to Ben Bernanke in 2010 arguing that in QE would:

We believe the Federal Reserve's large-scale asset purchase plan (so-called "quantitative easing") should be reconsidered and discontinued. We do not believe such a plan is necessary or advisable under current circumstances. The planned asset purchases risk currency debasement and inflation, and we do not think they will achieve the Fed's objective of promoting employment.

7. How To Be Lucky - The author of “The Serendipity Mindset” explains how to train for luck and turn the unexpected into positive outcomes - it boils down to an active process of spotting and connecting the dots – “it is about seeing bridges where others see gaps, and then taking initiative and action(s) to create smart luck”.

8. The Age of Asteroid Mining has begun (thank you Niall Bolland).