Programming Note: The Diff will be off Monday for Independence Day. Back Tuesday.

Longreads

• The Microsoft S-1 from 1986. $480m enterprise value, $163m in sales, $31m in net income. It looks like a good business, but do you really want to back a company with a 30-year-old CEO who's never had a real job? This document is fun both as an early look at an amazing company and for a reminder of how much financial regulations have changed: instead of a few dozen pages of risk factors, Microsoft gives a page and a half. And on page 33 you can see the entire list of underwriters; any old financial document listing every bank participating in a famous deal is a reminder that companies in finance have a short half-life. Via Corry Wang.
  
  Disclosure: Long MSFT.

• The Economist asks which side benefits from a protracted conflict in Ukraine ($). For now, Russia seems to be in a survivable steady-state, but some of the economic upside they've seen from the conflict in the form of higher energy prices is transitory. Russia is well-off in terms of the natural resources it has, but not in terms of its ability to extract them. Meanwhile, the other category of countries to keep an eye on is the set that aren't participating much in sanctions, and are consequentially benefiting from energy and food access through Russia.

• Brie Wolfson on taste. It's very much a know-it-when-you-see-it concept, which is especially annoying because good taste can be recursively described as recognizing good taste when you see it. I suspect that one good proxy for taste is that it's anything that's hard to binge on but easy to revisit repeatedly for the rest of your life. Taste is a concept that can be applied more broadly than just to the arts—it's worth thinking about how taste can be applied to organization decisions, products, and even financial decisions. (An over-complicated and elaborate thesis, like "X will cause reaction Y which paradoxically leads to more Z, meaning that P will go down causing funds to flow into Q" is the epitome of bad taste in a trade, whereas "X usually implies Y, but right now it implies not-Y, so everyone betting on the correlation will blow up" is usually a good one.)

• Joshua Brustein has a look back at Axie Infinity, the pay-to-win crypto-based game that suffered from a boom and bust in its token and a hack. One of the great new anti-crypto arguments that's arisen recently is that crypto's go-to-market advantage is actually a disadvantage. One of the great points for token-based economics for systems with network effects is that owning the token gives early adopters a reason to hype the product, which improves the network effect and can, if calibrated well, bootstrap the entire business to being more valuable than it would have been otherwise. Which is great, if it works, but the downside is you don't know if you have product-market fit or just something people like to speculate with. This is not fully solvable—calculating customer lifetime value is never a solved problem—but given the liquidity of crypto, it means getting it wrong is more value-destructive than it otherwise would be.

• Oren Cass at American Compass on the mess that is student loans. The piece has a partisan slant, but the policy proposals—putting schools on the hook for loans, allowing them to be discharged in bankruptcy—are steps in the right direction. One of the issues with student loans is that they slow down household formation: the people who would be buying homes and raising families are paying down student debt instead. The fundamental problem with any credit crisis is that bad loans have been made: someone got money in order to do something that didn't end up paying off, and discharging that debt will leave someone better-off and others relatively worse-off than before.

Books

• The Big Roads: America's superhighways were the largest public works project in history, and like lots of other major historical events, it started much earlier than is widely understood (no, Eisenhower was not singularly responsible, though he did play a role) and its consequences lasted longer, too. This book is a fun overview of the process, starting with civic organizations and moving on to massive government expenditures. It also spends time looking at some of the costs of the system—some neighborhoods were flattened, and others died out because of the prospect of a highway running through them, even when the road was eventually rerouted. And, because it's a work about large-scale construction happening in the middle of the Cold War, there is a brief interlude about a proposal to speed up construction through mountains by detonating nuclear weapons (this didn't happen because by the time the debate over it wrapped up, a stricter nuclear test ban treaty prohibited it).

• Singapore: Unlikely Power: Singapore is an amazing success story that it's easy to over-extrapolate from. The country had several starting advantages: a city-state near a natural resource producer (Malaysia was the largest British colony in terms of exports in 1948), the best natural harbor in the region, and an unusually competent leader. It's useful to read about the country because, despite all those natural advantages, its success was often in doubt—and Singapore is actually located near the ruins of a once-thriving city called Temasek, which prospered through trade for centuries before being almost completely abandoned.

Open Thread

• Drop in any links or comments of interest to Diff readers.

• Globalization has been rising since the 70s, but there have been similar globalization cycles before. If it's going to recede over a similar time period, which countries are unusually well-positioned to prosper?

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