This is a subtle and fascinating discussion about creativity and developing solutions to make things better. A rare and interesting discussion on changing the world of creation by seeing “wrongs”. The approach uses design, electrical engineering and coding examples to explore the principal of getting things right. An amazing video and lesson.
I am wrapping up my book “The Long Game: Mental models for better investing and capital allocation”. Along the way I am finishing some graphics which highlight the processes and systems that lead to success and failure. Capitalism isn’t good or bad, it is a powerful process that is harnessed in different ways.
Understanding who survives and thrives in capitalism means understanding process. The Long Game looks at competition, investing and capital allocation systems through the eyes of a systems thinking approach. Most of the models and analogies are borrowed from biology, ecology and psychology to express why some win, some lose and it always keeps changing. Here are some graphics I am building. Let me know if you have any critiques on how to show the story in a more simple or engaging way.
Oh and if there are any publishers out there…I really need a great editor.
My brilliant polymath friend Ed Rietman sent me a fun paper to read the other day. He used to head up our Nanotechnology and optics research at Starlab. He works on cancer research, phononic crystals and a host of other deeply interesting fields. He is working on a bench set-up in his basement that will test a low energy desalinization method using acoustic waves as well as an optical analog to the event horizon of a black hole. Pretty cool stuff, I always learn a lot listening to Ed.
Learning new mental models of how things works allows one to synthesize models as analogs for other areas. Combining investing, finance, risk, behavior, science and biological processes into functional tools and ways of thinking can be very powerful. My book project (The Long Game: mental models for better investing and capital allocation) uses biological, ecological, statistical and social processes to explain how to invest and allocate capital.
Ed sent me a cool paper the other day which I read on the train for fun. It is titled: Cancer tumors as Metazoa 1.0: tapping genes of ancient ancestors. The general idea is that cancer is a process derived from older cellular functions that exist inactive in the genome and only being expressed under environmental stresses. The cool idea is that legacy genomic functions are carried forward and cause cancer. The reason this is so interesting as a field of research is that it would mean that cancer has a finite set of expression types instead of unlimited types. One of the interesting points in the paper is that most plants don’t get cancer and how tumors can often express themselves with hundreds of cell types.
The paper is thankfully simply written so a hobbyist like me can follow along. The mental model of an evolved system still retaining legacy functions which may express themselves detrimentally to the organism is quite interesting. It is a trade off between functional learning, reproductive progress, climbing a complexity fitness hill and embedded risk. Collecting and synthesizing models of how things work is a hobby of mine, with a friend like Ed, you never know what you can learn that lets you think about the world in a whole new way.
The cheapest lessons are provided by history, sadly they are often ignored as irrelevant or untimely. In 1971, Nixon took the US off the gold standard and also put an immediate 10% tax on import goods including the use of price and wage freezes. He blamed speculators and wrapped the message up in “worker support” speak and anti-elitist tones.
Many Americans would now believe these types of actions to be the sole activity of banana republics. Things can change in an instant. This post isn’t about a party, policy or president, merely a pointer to a past that isn’t really that far past. If you are young read more history, if you are old, don’t forget.
Here is a transcript of the video I had produced for $1 on Mechanical turk:
The third indispensable element in building the new prosperity is closely related to creating new jobs and halting inflation. We must protect the position of the American dollar as a pillar of monetary stability around the world. In the past seven years there has been an average of one international monetary crisis every year.
Now who gains from these crises? Not the working man, not the investor, not the real producers of wealth. The gainers are the international money speculators. Because they thrive on crises, they help to create them. In recent weeks the speculators have been waging an all out war on the American dollar.
The strength of a nation’s currency is based on the strength of that nation’s economy, and the American economy is by far the strongest in the world. Accordingly, I have directed the Secretary of the Treasury to take the action necessary to defend the dollar against the speculators. I directed Secretary Connally to suspend temporarily the convertibility of the dollar into gold or other reserve assets except in amounts and conditions determined to be in the interest of monetary stability and in the best interest of the United States.
Now what does this action, which is very technical, what does it mean for you? Let me lay to rest the bugaboo of what is called devaluation. If you want to buy a foreign car or take a trip abroad, market conditions may cause your dollar to buy slightly less. But if you are among the overwhelming majority of Americans who buy American-made products in America, your dollar will be worth just as much tomorrow as it is today. The effect of this action in other words will be to stabilize the dollar. Now this action will not win us any friends among the international money traders, but our primary concern is with the American workers and with fair competition around the world.
To our friends abroad including the many responsible members of the international banking community who are dedicated to stability in the flow of trade, I give this assurance: The United States has always been, and will continue to be, a forward-looking and trustworthy trading partner. In full cooperation with the International Monetary Fund and those who trade with us we will press for the necessary reforms to set up an urgently needed new international monetary system.
Stability and equal treatment is in everybody’s best interest. I am determined that the American dollar must never again be a hostage in the hands of international speculators. I am taking one further step to protect the dollar, to improve our balance of payments, and to increase jobs for Americans.
As a temporary measure I am today imposing an additional tax of ten percent on goods imported into the United States. This is a better solution for international trade than direct controls on the amount of imports. This import tax is a temporary action. It isn’t directed against any other country. It’s an action to make certain that American products will not be at a disadvantage because of unfair exchange rates.
When the unfair treatment is ended, the import tax will end as well. As a result of these actions the product of American labor will be more competitive and the unfair edge that some of our foreign competition has will be removed. This is a major reason why our trade balance has eroded over the past 15 years.