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Matt's Thoughts In Between - Issue #51

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February 12 · Issue #51 · View online
Matt's Thoughts In Between
This week: Capitalism and the global poor; a bad week for billionaires; the end and restarting of history; come work with me; and more…

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How are the world's poorest doing?
For capitalists (like me) the ultimate backstop defence of capitalism is that, despite all its flaws, it’s lifted billions of people out of poverty. This is the favourite argument of optimists like Steven Pinker and Bill Gates. But what if it’s not true?
Jason Hickel has posted an interesting critique of the Pinker worldview. He makes five arguments: (1) Pinker’s data overstates improvement since 1982 because the dataset shifts from measuring income to consumption; (2) revealed preference of people in poor countries suggests they preferred subsidence lives to colonial industrialisation (!); (3) using $1.90/day as a definition of poverty is absurdly low and the picture is less rosy when you look at more realistic levels; (4) almost all the gains are in China/East Asia, which didn’t follow “neoliberal” prescriptions; and (5) poverty has fallen much more slowly than our capacity to end it.
There’s some good nuance on the topic from Charles Kenny, Martin Ravallion and Branko Milanovic. My own view is that of Hickel’s arguments, (2) is absurd, but (4) and (5) deserve serious thought. As does a bigger question: if you’re a capitalist for consequentialist reasons (as I am, broadly), what would it take to make you change your mind? More than Hickel’s essay for sure, but it’s worth pondering.
A good, bad week for billionaires
Billionaires are all the rage this week. Most strikingly, we have Jeff Bezos posting what must surely be the most extraordinary self-penned note ever published by a public company CEO. Bezos has generally been praised for facing down the blackmailers, though it’s hard not to think that he has been very lucky in his choice of enemies (though he does have some who are less easily dismissed). The episode surfaced the ongoing threat of cyber-crime/cyber-repression (and more) - as well as the surprising fact that the sophistication of even a billionaire’s cybersecurity is often pretty low.
Leaked selfies, though, are mild compared to call from the American left to abolish billionaires entirely (and not just because Howard Schultz might inadvertently assist Trump’s reelection). Farhad Manjoo has a column with that headline in the NYT, which draws on ideas from Bernie Sanders and Alexandria Ocasio-Cortez (AOC).
The core argument, as Manjoo quotes an AOC adviser, is that “Every Billionaire Is A Policy Failure”. Clinton-era Labor Secretary Robert Reich thinks the same:
Robert Reich
Anyone who has a billion dollars either exploited a monopoly that should have been broken up, got inside information unavailable to other investors, bribed some politicians, or inherited the money from their parents (who did one of the above). https://t.co/pzVOxr1K7m
Expect much more argument on these lines in the run up to 2020. I don’t buy Reich’s argument, but a global debate about rent seeking would be no bad thing.
Has history started again?
Last week in London we kicked off the Peter Thiel/Sovereignty reading group I announced a few weeks ago (You can join our Slack group here). We’re working through this reading list, which many TiB readers will find interesting. I wanted to share some thoughts on the first session, which was on the theme of Globalisation: Prophecy vs History. Stefano Zorzi and Peteris Erins have also written up excellent reflections.
One of the texts was Francis Fukuyama’s 1989 article “The End of History”. I’ve not read it before and expected it to be an amusing example of the dangers of prophecy. In fact, it holds up rather well. Fukuyama’s core contention is:
There is no struggle or conflict over “large” issues, and consequently no need for generals or statesmen; what remains is primarily economic activity”
From the vantage of 2019, there appear to be two obvious critiques: (1) the rise of China and (2) the (re)emergence of populism. But I’m not so sure. China looks successful today not because it’s engaged with great ideological struggle with the West, but because it’s (maybe) winning the battle on “End of History” territory - delivering economic growth.
On populism, I’m optimistic that it will resolve itself within the current system. My big question, though, is whether the economic structures that enable prosperity, albeit with high inequality, (e.g. the EU, free trade, immigration, etc) undermine the mutual loyalty on which the nation state is built. As I’ve asked before, are we mere customers of a state’s institutions and infrastructure or is citizenship something more? I’m looking forward to debating this question in future sessions.
Quick Links
  1. Would you like fries with that? All the jobs growth is in services (striking chart)
  2. 55 year olds are really nice. Graph of how personality changes over your lifetime.
  3. A nation of… book publishers? Which countries publish the most books per capita?
  4. Visible from space? A new era of big budget Chinese sci-fi.
  5. It beats Starbucks. Great menus of the 18th century.
One more thing: come work with me...
Alice and I are looking for a Chief of Staff to come work with us on our biggest strategic priorities at Entrepreneur First. There’s a job description here. If that might be you or someone you know, get in touch…
Your feedback
Thoughts In Between is one year old today. When I started writing it, I thought it might only last a few weeks, but it’s become something I love doing. Thanks everyone for reading - I know there are lots of (too many!) newsletters out there. If you like TiB, do forward it to a friend; it can be a first birthday present.
Until next week,
Matt
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