Longreads + Open Thread

Longreads

• Colossus has a profile of Interactive Brokers founder Thomas Peterffy, mostly focused on his career before Interactive Brokers, when he pioneered electronic trading and automated market-making. He's one of a few people who figured out Black-Scholes before Black and Scholes published it, and then had to figure out how to solve differential equations in a practical amount of time. (The piece also features a cameo from Henry Jarecki, who was the most entertaining character in the recently-reviewed-in-The-Diff book *The Story of Silver.) Peterffy's story is partly a story of solving problems by adding dimensions—if your Quotron has a user interface problem like only displaying one quote at a time, you can whip out an oscilloscope and turn it into an electrical engineering problem instead.
• Erik Hoel argues against treating chatbots as conscious. Which is really about three separate questions. The first one is: when an LLM chatbot produces a sequence of tokens that includes a claim about experiencing something, is that an accurate description of reality? And the default answer to that is "No." But the harder questions are: if we don't know how consciousness emerges in a biological substrate, how confident are we that it can't emerge in other media? And, separately, is it better to be polite to LLMs in order to retain the habit of being polite, or to treat them as impersonal tools whose user interface mimics text on the grounds that it's bad for one's mental health to start adopting an animistic view that sufficiently complicated matrix operations are conscious? Those last two are harder ones. I don't think there's any evidence that LLMs are conscious, but I don't know how one would collect such evidence. And in general, bets against LLM capabilities are losing bets, so it would be a bad idea to write an indefinite put option on the idea that an LLM might some day be capable of having its feelings hurt.
• Lucas Shaw profiles Mr. Beast in Bloomberg. It's at least a little surprising that being one of the most popular entertainers on earth is a money-losing proposition, but that's downstream from the fact that Mr. Beast is probably the first real example of everyone's favorite financial thought experiment: what if you could buy stock in someone? The answer to this is, of course, that that person would probably structure their financials in a similar way to a startup, converting that current equity into higher future earnings even if it meant red ink in the short term. He now has a CEO, who plans to cut some costs—and has identified some diseconomies of scale: "There isn’t a huge difference between giving away $1 million and $100,000... 'If I were to give a random person on the street a million dollars, a lot of people who see that video, especially because we have a very international audience—they just don’t think it’s real.'"
• And speaking of streaming stars with hundreds of millions of fans, James Marriott warns about the dawn of the post-literate society: fewer teenagers are reading books for fun, the average book has shorter sentences than it used to, and standardized test scores are declining. There's nothing intrinsically superior about 100,000 words in a book compared to ten in a tweet; the best epigram is more worthwhile than the worst novel. But there's something extrinsic to the process of either producing or consuming a book that is special. It requires extended attention and continuous engagement, and the amount of sustained thought you can give something sets a limit on the complexity of ideas you can understand. It's probably a mistake to blame big tech for this, since they're all competing for a finite amount of attention and will generally give their users what they want. Instead, we can be thankful that older technological limitations made books a viable medium, and we can hope that they stay available and that people either burn out on junk food-style content or that tech companies decide that there are better ways to maximize their revenue. In the meantime, the books are still there.
• As reading lengthy books shifts from a normal behavior to an eccentric hobby, it attracts a weirder audience. Here's a fun but depressing piece about a radical bookstore that collapsed almost immediately after opening, due to labor disputes. One sometimes unpleasant feature of markets is that they flatten many interactions down to an impersonal transaction: the person who sells you a cup of coffee is a human being whose inner life is presumably every bit as rich as yours, and who has dreams, secrets, deep questions, etc. They are also, from your perspective, a machine that turns money into an opportunity to do a socially-acceptable drug. Meanwhile, to them you're a mild inconvenience that's tolerable as an input into their being able to pay for rent and groceries. But this also means that markets let people interact in mutually positive-sum ways despite not being able to get along well. When you liberate yourself from the clutches of capitalism, you suddenly find that these personal conflicts are an important part of the process of getting anything done—and the quirky and somewhat disagreeable people who opt out of the mainstream end up having quirky and disagreeable squabbles.
• This week in Capital Gains, we look at the various interpretations of vendor financing. Investing in someone with the explicit expectation that they'll turn around and buy your products is, of course, a straightforward way to manufacture profit with less-than-zero economic substance—if you have to pay the marginal cost to make a product and get it to customers, and it's obsolete by the time they default on their financial obligations to you, you're out the cost of goods sold at a minimum. But vendor financing is also a way for profitable companies in a supply chain to reinvest their profits elsewhere, and it's a way for suppliers to exercise control over the competitive dynamics of their customer base.
• On ReadHaus (disclosure: I'm an advisor) one reader shared a chat asking about games. Two that are missing from the list: Railroad Tycoon II had an excellent simulation of pre-SEC financial norms. You can't lever up quite as much as Gould and Drews were able to, but you can—and the AI will—manipulate prices in order to force other players into a margin call. There is one other, even more detailed game, Wall Street Raider, which is absurdly detailed and which has been continuously developed for my entire lifetime.

Books

Buckley: The Life and the Revolution That Changed America: As suits a conservative, Charlie Kirk was following a tradition (though, as suits a conservative who wants to get anything done, he had to make some allowances for circumstance). There's a classic path that starts with going to an elite school, then writing a book about how unbearably smug the progressive teachers, students, and administrators are, and then parlaying this into a career of producing conservative commentary and going on campus tours to hold lively Q&A sessions. Like many traditions, it has a surprisingly recent progenitor: William F. Buckley went to Yale and wrote about God and Man there; Ross Douthat wrote something in a similar vein about Harvard, Dinesh D'Souza about Dartmouth, and Ben Shapiro on UCLA. The next step is to start writing regular articles, get on TV, and then split your time between being a campus influencer and a political kingmaker.

But Buckley got there first, and did it best. He co-founded the National Review, wrote the country's most popular syndicated column, and also periodically re-forged the American conservative coalition—critiquing Eisenhower from the right, running the John Birch Society and the Objectivists out of the conservative mainstream, making Goldwater a viable nominee, and then helping Reagan to be a conservative standard-bearer. Meanwhile, for many people who grew up in the relevant time period, his TV show, Firing Line, was their first introduction to live political debate. (I've talked to more than one person who assumed that Firing Line was part of a genre, and who were distressed to learn later on that, no, it was just Buckley's way of doing things.)

Buckley had an incredibly potent mix of insider and outsider status. He was a consummately WASPy public figure who was also a Catholic; he had an absurdly broad vocabulary in English, but actually learned it as his third language (he learned Spanish from his nanny, then French at school in Paris, before finally adopting English). He came from money, but not from old money; his father was a slightly more adventurous version of the modern SPAC promoter archetype, who was entrepreneurial enough to travel to Mexico to drill for oil but who was better at selling stock than actually finding any or keeping it from being expropriated. (Buckley himself came close to bankruptcy in the late 70s, in part because he'd bet against oil by investing heavily in a small media conglomerate that used heavy leverage to roll up drive-in movie theaters just in time for the oil crisis to crush that business.)

And he kept the contradictions going in his own behavior. Buckley defended segregation in the 1950s but was one of the rare media figures to interview people like Eldridge Cleaver a few decades later, and got Jesse Jackson one of his early media hits (he also wrote in 1970 that American ought to have a black president soon—on that issue, at least, Buckley was a quarter-century ahead of the electorate, though he died a year before it happened). Buckley called Gore Vidal a "queer" on national TV, but had a wide circle of gay friends and hosted fundraisers for AIDS-related causes at a time when neither was all that socially acceptable broadly, much less among conservatives. He aggressively policed the bounds of acceptable conservative behavior, which led to weird contortions like defending Nixon over Watergate but mostly breaking with him after he restored diplomatic relations with China.

Buckley also found time for other hobbies: lots of sailing, throwing parties, writing spy novels, etc. He participated in what was a minor fashion among mid-century men of letters: getting infatuated with a sociopathic murderer and providing weirdly sympathetic coverage even though the man was obviously a monster. (No, not Henry Kissinger—Buckley strenuously advocated for the release of Edgar Smith, who, to be fair to Buckley, was a surprisingly eloquent writer, but also, to be fair to the legal system, was also clearly guilty of a sordid murder. A few years after Smith's release, he tried to do it again, and Buckley turned him in.)

Put all of this together and Buckley is not just a great subject for a biography but someone who seems to have designed his life around that. This might be downstream of a narrower goal, like being the kind of person you absolutely must invite to a party. All the flaws and contradictions are part of this. But, in the end, the book ends up being an extended review of a multi-decade multimedia entertainment experience. We have thousands of hours of footage and millions of words telling us exactly how Buckley wanted to present himself to the public. To the extent that there are glances at the real Buckley, they come from how the quality of his writing varied depending on the topic (the book calls out Buckley's public policy books as slapdash, but praises his book about sailing and his week-in-the-life, Cruising Speed—given the first-person narration and Buckley's longstanding amphetamine prescription, this technically counts as gonzo journalism). But Buckley himself remains a mystery. Was his accent the natural result of a quirky upbringing, or an affectation? Was he an attention-seeker who tacked right as a fashion statement that would shock the establishment, or a reactionary who deftly hid his views? Did he use all those obscure words because he was delighted by the English language, or because getting a letter from Norman Mailer asking "What the hell does 'emunctory' mean?" was funny? The easy part about writing a biography of someone as prolific as Buckley is that there's a lot of material—enough, in this case, for a balanced view, even though the material was also sufficient for many different kinds of hatchet job. But, in the end, it's an extended study of a character named William F. Buckley, who for decades was played by an actor named William F. Buckley about whom we don't know very much.

Open Thread

• Drop in any links or comments of interest to Diff readers.
• One piece of evidence that Buckley was historically unique, rather than an intermittently-rich guy who had a unique hobby, is that it's harder to imagine a right-of-the-typical-Republican pundit who hobnobs with well-reviewed novelists and very lefty activists. Was this a Buckley thing, or has there been a culture shift away from elites fraternizing across partisan lines?

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