Welcome to another issue of “A Few Things”, where I distill 44 years of life experience into a weekly email.

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“Do not spoil what you have by desiring what you have not; remember that what you have was once among the things only hoped for.”

- Epicurus

“A wealth of information creates a poverty of attention.”

- Herbert Simon

"Being a contrarian is actually very easy. The problem is being a contrarian that makes money.” 

- Steven Peak

"It’s not enough that we do our best; sometimes we have to do what’s required."

- Winston Churchill

“Men's natures are alike, it's their habits that carry them apart”

- Confucius

A. A Few Things Worth Checking Out:

1. Preliminary Assessment: Unidentified Aerial Phenomena - from the Director of National Intelligence.

In recent years, there have been verified sightings of unidentified flying objects that move in ways that are not possible with technologies known to the United States government. These incidents have been reported by numerous pilots and, at the very least, pose a risk to aviation. The government has no idea what these objects are and, surprisingly, admits as much in this recent report.

While those of us who have been fascinated by the idea of alien UFOs since childhood, the report makes for exciting reading. But perhaps the more troubling possibility is that very human adversaries of the United States have secretly discovered technologies that we cannot yet conceive of. Also, one wonders what the full classified report might include given how candid the unclassified report is….

2. A Taiwan Crisis May Mark the End of the American Empire by Niall Ferguson.

A few quotes from the article:

As a student of history, to quote Kissinger, I see a very dangerous situation. The U.S. commitment to Taiwan has grown verbally stronger even as it has become militarily weaker. When a commitment is said to be “rock-solid” but in reality has the consistency of fine sand, there is a danger that both sides miscalculate.

Blackwill and Zelikow are right that the status quo is unsustainable. But there are three core problems with all arguments to make deterrence more persuasive. The first is that any steps to strengthen Taiwan’s defenses will inevitably elicit an angry response from China, increasing the likelihood that the Cold War turns hot — especially if Japan is explicitly involved. The second problem is that such steps create a closing window of opportunity for China to act before the U.S. upgrade of deterrence is complete. The third is the reluctance of the Taiwanese themselves to treat their national security with the same seriousness that Israelis take the survival of their state.

But I have another analogy in mind. Perhaps Taiwan will turn out to be to the American empire what Suez was to the British Empire in 1956: the moment when the imperial lion is exposed as a paper tiger. When the Egyptian president Gamal Abdel Nasser nationalized the Suez Canal, Prime Minister Anthony Eden joined forces with France and Israel to try to take it back by force. American opposition precipitated a run on the pound and British humiliation.

3. One of my favourite Netflix shows is Formula 1: Drive to Survive.

If you enjoy Formula 1, and apparently 500mm people globally watch it on tv, and if like me you have wondered how exactly it works and how the business makes money then you should check out this business breakdown.

4. This excellent piece of political history from the Atlantic offers an insightful look at how our nation became so divided and “fractured into four parts.”

Focusing on national narratives and identity politics, George Packer attempts to explain “how we got here.”

Narrative 1 - Free America:

In the past half century it’s been the most politically powerful of the four. Free America draws on libertarian ideas, which it installs in the high-powered engine of consumer capitalism. The freedom it champions is very different from Alexis de Tocqueville’s art of self-government. It’s personal freedom, without other people—the negative liberty of “Don’t tread on me.”

What distinguished libertarians from conventional, pro-business Republicans was their pure and uncompromising idea. What was it? Hayek: “Planning leads to dictatorship.” The purpose of government is to secure individual rights, and little else. One sip of social welfare and free government dies. A 1937 Supreme Court decision upholding parts of the New Deal was the beginning of America’s decline and fall. Libertarians were in rebellion against the mid-century mixed-economy consensus. In spirit they were more radical than conservative. No compromise with Social Security administrators and central bankers! Death to Keynesian fiscal policy!

Narrative 2 - Smart America:

They’re at ease in the world that modernity created. They were early adopters of things that make the surface of contemporary life agreeable: HBO, Lipitor, MileagePlus Platinum, the MacBook Pro, grass-fed organic beef, cold-brewed coffee, Amazon Prime. They welcome novelty and relish diversity. They believe that the transnational flow of human beings, information, goods, and capital ultimately benefits most people around the world. You have a hard time telling what part of the country they come from, because their local identities are submerged in the homogenizing culture of top universities and elite professions. They believe in credentials and expertise—not just as tools for success, but as qualifications for class entry. They’re not nationalistic—quite the opposite—but they have a national narrative. 

The winners in Smart America have withdrawn from national life. They spend inordinate amounts of time working (even in bed), researching their children’s schools and planning their activities, shopping for the right kind of food, learning to make sushi or play the mandolin, staying in shape, and following the news. None of this brings them in contact with fellow citizens outside their way of life. School, once the most universal and influential of our democratic institutions, now walls them off. The working class is terra incognita.

Narrative 3 - Real America:

The triumph of popular democracy brought an anti-intellectual bias to American politics that never entirely disappeared. Self-government didn’t require any special learning, just the native wisdom of the people. “Even in its earliest days,” Richard Hofstadter wrote, “the egalitarian impulse in America was linked with a distrust for what in its germinal form may be called political specialization and in its later forms expertise.” Hostility to aristocracy widened into a general suspicion of educated sophisticates. The more learned citizens were actually less fit to lead; the best politicians came from the ordinary people and stayed true to them. Making money didn’t violate the spirit of equality, but an air of superior knowledge did, especially when it cloaked special privileges.

Narrative 4 - Just America

It’s another rebellion from below. As Real America breaks down the ossified libertarianism of Free America, Just America assails the complacent meritocracy of Smart America. It does the hard, essential thing that the other three narratives avoid, that white Americans have avoided throughout history. It forces us to see the straight line that runs from slavery and segregation to the second-class life so many Black Americans live today—the betrayal of equality that has always been the country’s great moral shame, the heart of its social problems.

It sees American society not as mixed and fluid, but as a fixed hierarchy, like a caste system. An outpouring of prizewinning books, essays, journalism, films, poetry, pop music, and scholarly work looks to the history of slavery and segregation in order to understand the present—as if to say, with Faulkner, “The past is never dead. It’s not even past.” The most famous of this work, The New York Times Magazine’s 1619 Project, declared its ambition to retell the entire story of America as the story of slavery and its consequences, tracing contemporary phenomena to their historical antecedents in racism, sometimes in disregard of contradictory facts. Any talk of progress is false consciousness—even “hurtful.” Whatever the actions of this or that individual, whatever new laws and practices come along, the hierarchical position of “whiteness” over “Blackness” is eternal.

Which America are you?

5. I attended the Robinhood Conference two weeks back, one of the sessions was by Ray Dalio discussing whether he thought the stock market was in a bubble. Great 9-min discussion on the market.

6. Great mental health article on how to live the meaningful life of a Roman Emperor.

7. The After Life Experience is an interactive website that will walk you through the process of figuring out which memory from your life to date you would choose to spend eternity reliving.

The “Facilitation” process will ask you a series of questions like, “When was a moment you felt your most authentic self?” or “on a brilliant adventure?” or “in awe of something so much bigger than you?” or “knew you were in love?” and on and on until you’ve decided on your forever memory.

8. I’ve been a MasterClass subscriber for the last year, and this week I’ve been watching the Jeff Koons class.

B. The Psychology of Influence

One of the most influential books I’ve read is Influence by Robert Cialdini.

Cialdini is the seminal expert in the field of influence and persuasion, and the author of the canonical book (originally published in 1984 with 4mm copies sold) which explains the psychology of why people say yes and how to apply these principles ethically in business and everyday situations.

The new edition just came out a month ago, and covers the original six techniques and one new one.

The six techniques they cover:

1. Reciprocation: The internal pull to repay what another person has provided us.

2. Commitment and Consistency: Once we make a choice or take a stand, we work to behave consistently with that commitment in order to justify our decisions.

3. Social Proof: When we are unsure, we look to similar others to provide us with the correct actions to take. And the more people undertaking that action, the more we consider that action correct.

4. Liking: The propensity to agree with people we like and, just as important, the propensity for others to agree with us, if we like them.

5. Authority: We are more likely to say "yes" to others who are authorities, who carry greater knowledge, experience or expertise.

6. Scarcity: We want more of what is less available or dwindling in availability.

Here he is discussing the techniques in 30 mins.

He was also on the Masters In Business podcast with Barry Rithholtz last week.

C. The Crypto Section

1. The Bull Case for Ethereum II on the Bankless podcast.

2. Bloomberg’s Odd Lots podcast had Tom Schmidt of Dragonfly Capital on to explain: What You Need to Know about DeFi.

3. Marc Andreesen of a16z was interviewed recently, the whole thing is worth a read, but it had an interesting crypto section:

Question: You've been more and more interested in the crypto space in recent years. What are some cool things about crypto that aren't emphasised enough in popular discussions?

Marc (emphasis is mine):

Crypto is one of those topics that calls to mind the parable of the blind men and the elephant -- there are so many aspects of how it works and what it means that you can interpret it many different ways and seize on one part or another to make whatever point you want. A lot of people, for example, seize on the money part, and either glorify it as a new kind of monetary system that liberates mankind from the nation state, or crucify it as a danger to economic stability and the ability for governments to tax. All of these are interesting arguments, but I think they all miss a more fundamental point, which is that crypto represents an architectural shift in how technology works and therefore how the world works.

That architectural shift is called distributed consensus -- the ability for many untrusted participants in a network to establish consistency and trust. This is something the Internet has never had, but now it does, and I think it will take 30 years to work through all of the things we can do as a result. Money is the easiest application of this idea, but think more broadly -- we can now, in theory, build Internet native contracts, loans, insurance, title to real world assets, unique digital goods (known as non-fungible tokens or NFTs), online corporate structures (such as digital autonomous organizations or DAOs), and on and on.

Consider also what this means for incentives. Up until now, collaborative human effort online either took the form of a literal adoption of real-world corporate norms -- a company with a web site -- or an open source project like Linux that had no money directly attached. With crypto, you can now create thousands of new kinds of incentive systems for collaborative work online, since participants in a crypto project can get paid directly without a real-world company even needing to exist. As great as open source software development has been, far more people are willing to do far more things for money than for free, and all of a sudden all those things become possible and even easy to do. Again, it will take 30 years to work through the consequences of this, but I don’t think it’s crazy that this could be a civilizational shift in how people work and get paid.

Finally, Peter Thiel has made the characteristically sweeping observation that AI is in some sense a left wing idea -- centralized machines making top-down decisions -- but crypto is a right wing idea -- many distributed agents, humans and bots, making bottom-up decisions. I think there’s something to that. Historically the tech industry has been dominated by left wing politics, just like any creative field, which is why you see today’s big tech companies so intertwined with the Democratic Party. Crypto potentially represents the creation of a whole new category of technology, quite literally right wing tech that is far more aggressively decentralized and far more comfortable with entrepreneurialism and free voluntary exchange. If you believe, as I do, that the world needs far more technology, this is a very powerful idea, a step function increase in what the technology world can do.

4. Zerohedge published a great primer on DeFi.

5. Fred Ehrsam (Coinbase co-founder), Blake Robbins of Ludlow Ventures and Jesse Walden of Variant talk about creators, communities and crypto. From my perspective, the creator economy is one of the most natural fits for a tokenised offering and seeing how the innovation unfolds in real time is just truly fascinating.

P.S. Maybe last week was the bottom.