The Curious Mind: Money Is..., Population Collapse, End of The German Miracle, Forget The Energy Transition, Popper's Theory of Scientific Discovery, Schmidt on AI, Institutions & Crypto...
November 28 2024
I am sharing this weekly email with you because I count you in the group of people I learn from and enjoy being around.
If you missed last week’s discussion: The VIBE Shift, Peter Thiel, Finding Your Super Power, Damodaran on Markets, Milei on Change, Hidden Potential, Becoming Limitless....
This email takes many hours to put together, including hours of sourcing, curating and writing. If it is helpful to you, then do me a favor and hit the “heart” button so I know it’s useful to you.
Happy Thanksgiving!
Quotes I Am Thinking About:
“I have always imagined that Paradise will be some kind of library.”
- Jorge Luis Borges
“If you hate a person, you hate something in him that is part of yourself. What isn’t part of ourselves doesn’t disturb us.”
- Hermann Hesse
“Whenever a theory appears to you as the only possible one, take this as a sign that you have neither understood the theory nor the problem which it was intended to solve.”
- Karl Popper
“You don’t need to worry about progressing slowly. You need to worry about climbing the wrong mountain.”
- James Clear
“There is no such thing as a quantum leap. There is only dogged persistence – and in the end you make it look like a quantum leap.”
- James Dyson
A. A Few Things Worth Checking Out:
1. The Trouble With Money: Everyone has their own nuanced and sometimes difficult relationship with money.
Nadja Taranczewski is a coach and psychologist that specialises in money. She is the author of the book Conscious You: Become the hero of your own story.
She spoke with Tom Morgan at Leading Edge, in a conversation that had an impact on me.
For example, one of her simplest and most powerful questions is simply ask you to complete the question:
“Money is….”
Not only will your answer make you think but then try asking your partner, colleague or friend that question.
Try it now.
She hears three broad kinds of answers: negative, positive and mixed. People with negative projections would say something like “money is dirty.” Somebody with positive projections would say “money is freedom, self-confidence, luxury or power.”
People who hold positive projections can suffer from the illusion that they must earn money to deserve their existence, and that running out of money makes them worthless. These projections often have deeply personal causes.
The real value of money is in showing you where your shadow is. Where the parts of you that need to be integrated.
5 BIG IDEAS:
Our unconscious beliefs about money actively create our financial reality, but not in the simplistic "manifesting" way some suggest. When we believe money is corrupt, we unconsciously push it away. When we believe money equals security, we paradoxically never feel secure enough. The key insight is that these beliefs operate below our awareness, shaping our decisions and opportunities in ways we don't recognize until we examine them.
The goal of money work isn't to eliminate negative beliefs or force positive ones, but to integrate opposing aspects of our relationship with money. For example, being able to joyfully embrace both "I'm a greedy bastard" and "I give everything" creates the freedom to move between these states appropriately. This integration allows us to be both caring and strategic about money, rather than stuck in rigid patterns.
There's a profound fallacy in the capitalist promise that accumulating enough money will eventually buy freedom. Many wealthy people remain trapped managing their wealth rather than pursuing meaningful work. The key shift is to first identify what genuinely matters to you, then align your financial decisions with that purpose. Money follows meaning, not the other way around.
The concept of being "held" by life emerges repeatedly in financial transitions. When people align their work with genuine purpose, unexpected opportunities often arise. However, this isn't passive - you must take concrete steps first, establishing clear processes and practices that support your direction. The universe "winks" only after you've made the first move.
Money serves as a powerful mirror for our deeper psychological patterns, often revealing family dynamics that have played out over generations. Someone unable to send invoices might uncover deep feelings of unworthiness; someone obsessed with security might find childhood trauma. Breaking the taboo around discussing money, especially in group settings, can heal not just individual patterns but collective ones. This is why money work is often more powerful when witnessed by others.
2. Population Collapse: Developed nations face an unprecedented demographic crisis where current fertility rates of 1.4 children per woman mean populations lose one-third of their size each generation. Which is to say that in 50 years you can cut your population in half.
This is unprecedented and our social and economic systems are not set up for it.
What’s the hidden truth about our collapsing birth rates?
Mads Larsen is an author and journalist whose research focuses on the history of human mating ideologies. He spoke with Chris Williamson at Modern Wisdom.
The 5 BIG IDEAS:
The demographic collapse facing developed nations represents perhaps the most significant yet under-recognized existential threat of our era. At current fertility rates of 1.4 children per woman, populations lose one-third of their size each generation - a mathematically certain decline that compounds devastatingly over time. In just three generations, a population of 100 would shrink to 30, with the rate potentially accelerating as fewer children means fewer future parents. Unlike climate change or other long-term risks, these population projections are based on precise current data about birth rates.
The modern dating landscape reflects a profound mismatch between human evolutionary psychology and contemporary social conditions. Women evolved to be selective in mating, with distinct mechanisms for short-term and long-term partnerships. Today's environment of female economic independence, combined with dating apps and changing social norms, has intensified female selectivity while simultaneously reducing male attractiveness attributes that historically mattered. This creates a market where a small percentage of men receive most romantic attention while many struggle to form partnerships, directly impacting birth rates.
Society has undergone a radical transformation in its ideology of relationships - from "romantic love" emphasizing lifelong partnership and family formation to "confluent love" prioritizing individual fulfillment and temporary connections. This shift, combined with reliable contraception and reduced social pressure to reproduce, has fundamentally altered how people approach partnership and parenthood. The modern emphasis on self-actualization and career development often delays or prevents family formation, even when individuals report wanting children.
Institutional resistance to addressing declining fertility stems from multiple sources: academic reluctance to research controversial topics, policy makers' fears of appearing regressive, and cultural resistance to acknowledging demographic sustainability as a legitimate concern. Many experts avoid portraying low fertility negatively despite clear data showing its consequences, hoping instead for a spontaneous recovery in birth rates. This creates a dangerous delay in addressing a time-sensitive crisis.
Solutions require careful experimentation with new social structures while preserving hard-won progress in women's rights and individual freedoms. Rather than returning to traditional patriarchal models, societies need to innovate in areas like dating norms, relationship formation, and family support. This might include developing new dating venues that encourage long-term partnership, changing cultural attitudes around parenthood, and finding ways to make family formation more attractive to educated, career-focused individuals. Success requires threading the needle between population sustainability and modern values of individual choice and gender equality.
This twitter post also captures the realities of today’s dating market.
3. KAPUT: Hidden Forces spoke with Wolfgang Münchau, the director and co-founder of Eurointelligence and the author of a phenomenal new book Kaput: The End of the German Miracle, about post-WWII Germany, the rise and fall of the German economy, its industrial sector, and the end of what he dubs “The German Miracle.”
They first lay the stage for how Germany became a juggernaut, and the supercharging of its industrial growth model during the period of globalization and unipolarity, and the cultural, technological, and geopolitical sources of its economic decline.
They then zeroed in on the ten structural sources of weakness for the German economy, including the German capital model and banking system, a corporatism that misaligns incentives between the interests of politicians and those of the German economy, the fiscal doomsday machine in the form of Germany’s debt brake, a radicalizing electorate, and a political mindset among German elite that treats geopolitical risk as an economic externality to be safely discounted or ignored entirely.
The 5 BIG IDEAS:
The Innovator's Dilemma at National Scale: Unlike typical cases of the innovator's dilemma affecting single companies like Kodak or Intel, Germany experienced this phenomenon at a national level. The country's early success in traditional industries led it to systematically reject or minimize new technologies and business models.
Structural Economic Rigidity: The German system works through consensus across government, industry, banks, and media, making it difficult to correct course when the entire system moves in the wrong direction. Unlike in the US, where market forces can correct misallocations, Germany lacks effective feedback mechanisms.
False Narrative of Success: Germany experienced its greatest economic success between 2005-2017, precisely when it was making its worst strategic mistakes. This created a dangerous illusion, leading the country to double down on an unsustainable model rather than adapt to changing realities.
The Time-Inconsistency Problem: Like Smith Corona achieving record profits in 1989 just before its collapse, Germany's industrial model appeared strongest just before its vulnerabilities became apparent. Short-term success masked long-term structural weaknesses.
Political Risk as Economic Externality: Rather than treating geopolitical and security considerations as integral to economic planning, German leaders treated them as externalities - similar to how companies might treat environmental impacts. This led to dangerous dependencies on potentially hostile powers.
4. Jean-Baptiste Fressoz's groundbreaking book "More, and More, and More: An All-Consuming History of Energy" challenges the fundamental narrative of energy transitions.
Rather than one energy source replacing another, history reveals a pattern of accumulation and growing interdependence.
The book uses historical evidence to demolish the transition myth: during Britain's Industrial Revolution, wood consumption surged alongside coal usage, with mines becoming major wood consumers. This pattern continues today, where wood provides twice the energy of nuclear, hydro, or combined solar and wind power, while global carbon emissions hit record highs in 2023-2024 despite renewable energy growth.
The climate change implications are far more challenging than commonly understood. With fossil fuels powering 75% of global energy and deeply embedded in virtually every aspect of modern production – from agriculture to construction – the author argues that mere technological innovation and renewable subsidies are insufficient solutions.
Fressoz contends that meaningful climate action requires something far more dramatic: an "amputation" of fossil fuel systems from the global economy. The concept of "transition" has become a convenient fiction that enables procrastination, allowing policymakers and energy companies to avoid the painful but necessary steps of actively dismantling fossil fuel infrastructure while simply adding renewable capacity on top.
B. The Logic of Scientific Discovery
Karl Popper's book "The Logic of Scientific Discovery" isn’t the easiest book to read, but it stands as one of the twentieth century's most influential works in the philosophy of science, fundamentally challenging how we understand scientific methodology.
Popper argued that science advances through a process of conjecture and refutation. Scientists propose bold theories that go beyond the available evidence, and these theories remain tentative, forever open to potential falsification through empirical testing.
Particularly relevant is his discussion of what he called the "asymmetry of falsifiability" - while no number of positive observations can conclusively prove a universal theory true, a single genuine counterexample can prove it false.
Nassim Taleb often refers to the example of The Black Swan:
No matter how many white swans you observe (even millions), you can never conclusively prove that "all swans are white" is true - because you haven't seen every swan that exists or will exist.
However, finding just one black swan immediately and definitively proves the statement "all swans are white" is false. This is exactly what happened historically when black swans were discovered in Australia, disproving the European belief that all swans were white.
This asymmetry is fundamental to science: while you can never prove a universal statement true through observation alone, you can definitively prove it false with a single counterexample. This is why Popper argued that scientists should focus on trying to prove their theories false rather than trying to prove them true, and why testable predictions that could potentially be proven wrong are so important to the scientific method.
The enduring lesson of "The Logic of Scientific Discovery" is that scientific knowledge is both objective and tentative. Popper showed how science can make genuine progress without claiming absolute certainty, offering a middle path between dogmatism and relativism.
It teaches us that the strength of scientific claims lies not in their immunity to doubt, but in their ability to make precise predictions that could be proven wrong yet consistently survive testing.
It reminded of this Bertrand Russell quote:
"In all affairs it's a healthy thing now and then to hang a question mark on the things you have long taken for granted."
C. The Science and Technology Section:
1. Eric Schmidt spoke to Prof. Galloway about The Risks and Opportunities of an AI Future.
The 3 BIG IDEAS:
The critical need to differentiate between human and AI rights: Schmidt makes a compelling distinction between protecting human free speech while regulating AI outputs, recognizing that AI systems optimize for engagement rather than human wellbeing.
The preventable dangers of unregulated AI: Rather than waiting for tragedies, Schmidt advocates for proactive guardrails around AI's most dangerous potential applications, from weaponization to psychological manipulation, while preserving its benefits in areas like healthcare and science.
The US-China AI dynamic: With China rapidly closing the AI gap (now just ~1 year behind in some areas), there's an urgent need for international cooperation on AI safety, despite geopolitical tensions and different regulatory approaches between nations.
2. Interesting New Yorker article by James Somers titled: A Revolution in How Robots Learn.
The 4 BIG IDEAS:
Recent breakthroughs at institutions like Google DeepMind combining imitation learning (where humans demonstrate tasks) and reinforcement learning (where robots learn through trial and error), robots are now achieving unprecedented levels of dexterity, managing complex tasks from playing ping-pong to manipulating delicate objects. These advances are particularly significant because they represent robots learning to understand and interact with the physical world in ways that were previously impossible.
The field of robotics appears to be approaching a transformative moment similar to what happened with language models like ChatGPT - where previously separate capabilities might converge into more versatile, general-purpose systems.
Just as one AI can now handle multiple language tasks, researchers envision future robots that can seamlessly control various types of physical bodies and learn new tasks quickly. This convergence carries profound implications: while it promises benefits like more efficient construction, safer working conditions, and automated household tasks, it also raises serious concerns about job displacement, military applications, and ethical considerations.
We are on the cusp of a future where physical skills could be shared between machines as easily as software updates, fundamentally changing how we think about physical labor and expertise.
3. Eric Peters of One River and Coinbase Asset Management was on the Empire podcast discussing “What Institutions are Actually Buying this Cycle”.
The 5 BIG IDEAS:
After years of regulatory headwinds, crypto is poised for mainstream adoption through a dramatic shift in US policy. Rather than viewing crypto as a threat, the incoming administration sees it as strategic technology that could reinforce US financial dominance, particularly through dollar-denominated stablecoins becoming the global standard for digital transactions.
The institutional adoption of crypto remains in its earliest stages, with even the Bitcoin ETF launch primarily attracting self-directed investors rather than managed money. While some hedge funds trade crypto actively, the major institutional pools of capital - pension funds, endowments, sovereign wealth funds - have yet to make meaningful allocations. Their methodical process of entering the market could create sustained demand over multiple years.
Blockchain networks, particularly Ethereum, are evolving beyond trading venues into the foundation for a modernized financial system. The vision is for these networks to handle everything from stock settlement to international payments, dramatically reducing costs and friction. Similar to how the internet made information instantly accessible, crypto networks could make financial services globally accessible while keeping the dollar at the center.
The current moment represents one of the rare occasions when financial infrastructure itself is being redesigned. This creates opportunities beyond just new assets - it enables fundamentally new ways of handling payments, trading, lending and other financial activities. Countries and regions that embrace this transformation early could gain significant advantages, which helps explain the shifting political attitudes.
The winners in this transition will likely be the companies that build reliable infrastructure for the new system. Just as Black Rock disrupted traditional asset management by embracing new technology, companies like Coinbase that provide the essential services for crypto - custody, trading, compliance - are positioned to become cornerstone institutions of the modernized financial industry. Traditional firms must now decide whether to build these capabilities or risk losing relevance.
4. Bill Gurley and Brad Gerstner discussed AI Scaling Laws, the future of inference, AI memory and actions, National Full Self-Driving Regulations, FSD 13, Robotaxi and Waymo, Department of Government Efficiency (DOGE).
The 5 BIG IDEAS:
The debate about AI scaling laws is more nuanced than initially expressed. While pre-training gains may be slowing for large language models, companies are seeing substantial improvements through other vectors like inference-time reasoning, post-training optimization, and product features like memory and actions. If you want to go deeper into AI models check out this No Priors conversation with Aidan Gomez of Cohere. Cohere’s job is to deliver AI to enterprises.
Tesla's Full Self-Driving technology is showing exponential improvement, with FSD 13 representing a potential 1000x safety improvement since early 2023. Running on Tesla's new Austin supercomputer with 5x larger parameters, it's expected to achieve 25,000 miles per critical disengagement, matching Waymo. The key insight is that robotaxi mode can operate more conservatively than human-driven mode, potentially enabling faster deployment.
The Department of Government Efficiency (DOGE) represents an unusually ambitious attempt at government reform, inspired by both Milton Friedman's ideas and Argentina's recent rapid reforms. Rather than just proposing cuts, they're taking a novel approach: using social media transparency to directly expose government waste to the public, launching initiatives like the "DOGE-cast" with Elon Musk and VΛC. Their analysis suggests balancing the budget in four years requires relatively modest 5% annual cuts, though they aim to be even more ambitious. The initiative is gaining bipartisan support in Congress, suggesting potential for actual implementation.
The autonomous vehicle revolution could reshape the auto industry more dramatically than many expect. Rather than FSD becoming a commodity feature available to all manufacturers, we might see an iPhone-like disruption where superior technology and data advantages lead to massive industry consolidation. Tesla's advantage comes from both their FSD technology and their unique position with millions of vehicles that could join a robotaxi network. Traditional manufacturers face a difficult choice between trying to develop their own systems (which may be impractical given the data advantage of leaders) or licensing technology from companies like Tesla or Waymo.
The 2025 tech market outlook reveals an interesting divergence. While overall market valuations are high (S&P at 24x earnings, NASDAQ at 29x), the market is splitting between AI-empowered companies showing massive margin expansion (like Microsoft's 1000 basis point margin improvement under Nadella) and consumer-exposed companies facing headwinds from depleted savings and rising credit stress. Add in the potential impact of new policies (lower taxes, reduced regulation, but also new tariffs), and 2025 looks likely to be a stock-picker's market rather than a broad rally. The key insight is that technology companies benefiting from both top-line growth and AI-driven efficiency gains may continue to outperform despite high valuations.
P.S. Could you do me a favor ? This email takes many hours to put together, including hours of sourcing, curating and writing. If it is helpful to you, then do me a favor and hit the “heart” button so I know it’s useful to you.
This took till episode 3 to grow on me, and then I couldn’t switch it off.
I can’t help but wonder if the problem of overconsumption of energy #4 will not be solved by problem #2 population collapse.