Longreads- Casey Handmer on the impact of cheaper solar on, well, everything. One of the fun angles is land, specifically changing the quality of land through solar-powered desalination. Cheap energy increases GDP per capita, which tends to increase the value of land overall since land is a complement to every kind of economic activity. If it's cheaper to terraform, and it's more desirable, this is one of those feedback loops that can run for a surprisingly long time. It's a useful exercise to go through each of Handmer's proposed growth areas and to ask: what's the least elastic complement?
- John Hawkes on the evolutionary history of the German cockroach—a species that exists everywhere but that is only adapted to survive in an environment that's only a few thousand years old—unlike other cockroaches, we don't find them in the wild, only in human structures. Via Razib.
- Dan Luu has a great retrospective on the Google antitrust case in 2011-12. In an adversarial system, both sides will select facts that make them look good, which is a tractable problem as long as each side is of comparable skill. They'll also have a model of the world that corresponds to their side of the case (partly for the same adversarial reason, partly because the people with such a mental model are more likely to think the case is winnable). And that means they'll sometimes make errors of analysis despite having the right facts. He runs through many examples: evaluating search competition by looking at monthly active users rather than search volume ("the overwhelming consensus [among tech people] has been that it's generally very difficult to convert a lightly-engaged user who barely registers as an MAU to a heavily-engaged user who uses the product regularly, and that this is generally considered more difficult than converting a brand-new user to becoming heavily engaged user."), treating desktop rather than mobile search as the focus, and distribution as the deciding factor when two products are of similar quality. Getting antitrust right in tech means understanding companies' strategies, and unfortunately for the FTC and DOJ, Google pays a lot more for this skill than the government can.
- Max Dama on why high-frequency trading is good for the world. The key object-level claim is that competing on latency means providing cheaper liquidity—it's less risky to make a tight market if you're confident you can adjust your orders fast when prices change, so that speed translates into liquidity, and liquidity raises the return on accurate analysis. He also makes the more striking meta claim HFT is an optimization layer for the entire economy, and that "This optimization role would likely exist even in alternative economic systems, such as a planned cybernetic socialist economy." Would Cybernetic America have people doing high-frequency trading? Probably not. Would it have people trying to reduce the latency with which economic news gets transmitted to the agents who need to change their behavior in response? Definitely. (One of the interesting features of planned economies is that we don't treat their planning as zero-return deadweight loss, even if it serves the same function as exchanges, market-makers, hedge funds, and PE. Some of that might be because planned economies tend to have less freedom of expression, but even so it seems that the criticism of planners is that they're bad at their job, not that allocating resources is an intrinsically wasteful activity.)
- Judge Glock writes in City Journal about Chicago's death spiral: city and state liabilities total $85k per person. The mechanism of a debt-driven death spiral is simple: as long as the extra income from living somewhere exceeds the present value of future taxes from moving there, the economy can grow. Once that doesn't happen, people leave, especially high earners, and the debt/tax ratio gets even worse. Some people won't leave, either because they aren't aware of this or because they can't afford to go, so they don't produce all that much taxable income. Meanwhile, when the city faces budget pressure, it has to cut costs, and some of those costs—particularly, workers covered by collective bargaining—are harder to cut than others. So the city loses flexibility at exactly the time that it needs to pivot. In the private sector, when companies run into this kind of problem they typically reorganize their debts, defaulting a little bit on everything but getting back to fiscal sustainability. The temptation in politics is to do the opposite: a gradual, disorganized liquidation that continues until there's literally no other option (and Illinois bans big cities from going bankrupt, so they really don't have a choice here).
- In this week's Capital Gains: "When It's Legible, It's Too Late. The popular view of what it's like to have a particular job or work in a particular place will be dated—and the population in those places will be skewed towards people who consumed the same media you did and were looking for the same thing you were.
- This week on The Riff, we covered the Google leak, the economics of being the app that people use to talk to other apps, and the Texas Instruments activist campaign. Listen on Substack/Spotify/Apple/YouTube.
BooksThe Inheritance of Rome: Illuminating the Dark Ages 400-1000: I've found that when I think of broad historical epochs, I tend to anchor to when they reached the peak of their power and differentiation. So, there was once a Roman world, with roads, aqueducts, public baths, assorted legions defending the border. And, at some point after that, the formerly Roman world was fragmented into smaller kingdoms, typically ruled by someone who owned a castle or two. But that leaves a lot of the transition between the two unexplained, and this book is all about how we got from point A to point B. One reason this process doesn't get a lot of coverage is that the collapse of Rome was a disaster for European standards of living. The Roman Empire was an extractive state, i.e. it converted taxes on peasants into infrastructure, luxury consumption for the rich, as well as assorted conquests, attempts to defend itself from being conquered, etc. But it was big enough, and imposed enough consistency in language, legal code, and currency, that it could support a complex economy with trade between different regions. Post-Roman Europe really couldn't manage this. Some post-Roman states were very weak indeed: the book describes kings in England as being entitled to tribute, paid in food, but often only paid when the king and his entourage showed up. It's a big decline, from emperors who can command vast armies and skim some production from tens of millions of people to a guy who shows up with a posse of intimidating friends and demands dinner. As with other books I've read about turnover in regimes, like Tony Judt's Postwar, a transition that's sharp and impossible to ignore in the capital city is more gradual everywhere else. To someone in the city of Rome itself, 476 AD was a discrete and meaningful point in history, but to someone in what is now France or England, the fall of Rome was a gradual process happening over centuries—in England, at least, the Roman Empire more or less ghosted them, by answering letters more and more slowly and eventually neglecting to reply at all. In other places, the Roman system was kept running, to a degree, but under new management. A running theme in the book is the search for legitimacy. Rome had lasted long enough that it probably felt unquestionably permanent to most people who lived in the empire and were even aware of it. But when someone new is in charge, they need some way to demonstrate that they are. You can roughly measure how nice it was to live in a particular post-Roman state by what their leaders did to signal that they were leaders: in the worst case, it was typically by killing off some rival claimant, but in a few places it meant building a nice church or mosque, a palace, or perhaps making a slapdash effort to reconstruct a Roman bridge or road. That search for legitimacy still matters, at many scales; it's useful to have someone specific in charge, but it's costly for them to demonstrate that they are, in fact, calling the shots. Open Thread- Drop in any links or comments of interest to Diff readers.
- What are some other good transitional periods in history to read about and write about?
Diff JobsCompanies in the Diff network are actively looking for talent. See a sampling of current open roles below: - A company building the new pension of the 21st century and building universal basic capital is looking for a senior frontend engineer. (NYC)
- A successful crypto prop-trading firm is looking for new quantitative developers with experience building high-performance, scalable systems in C++. (Remote)
- A startup that scrapes public facial images and sells recognition services to law enforcement agencies is looking for a senior fullstack engineer with Python and Typescript experience. (Remote)
- A top prop trading firm is looking for an intellectually curious, mathy generalist to work on projects spanning business strategy, technology, and markets. (NYC)
- A well funded startup founded by former SpaceX engineers is building software tools for hardware engineering. They're looking for a senior designer interested in building visuals for satellites, rockets, and other complex machines. (Los Angeles)
Even if you don't see an exact match for your skills and interests right now, we're happy to talk early so we can let you know if a good opportunity comes up. If you’re at a company that's looking for talent, we should talk! Diff Jobs works with companies across fintech, hard tech, consumer software, enterprise software, and other areas—any company where finding unusually effective people is a top priority.
|
