Via reader David Karam, this is an excellent essay on the early cultural impact of the spreadsheet highlights just how much behavior changed once it got easy to test different assumptions and produce outputs. The rise of the spreadsheet might explain some of the shift towards indefinite optimism; if it takes an hour rather than a second to adjust a model, you'll tend to focus on a single definite expectation about the future and then adjust your actions to match it. If you can do bull cases, bear cases, worst cases, and Monte Carlo simulations, you're less wedded to any one vision.
The case for GDP-linked bonds, both as a financial product that can provide useful information about the world and as a way to compensate politicians so their incentives are aligned. It's not perfect—GDP-linked bonds do better when activity moves on to the marketplace, so it encourages things like daycare subsidies over child tax credits of equivalent value. But it's a net useful product that creates very interesting spinoff markets.
And on a related note: Climate-contingent finance is a very interesting idea for using financial engineering to align incentives. The basic plan is to issue bonds whose payoff is tied to future climate change, and use them to fund mitigation measures. This has two effects: first, it provides a continuous market estimate of the timing and severity of climate change, and second, it lets issuers hedge against the risk that they overinvest in mitigation.
On the popularity of young adult fiction, focusing on the "preoccupation with authority, agency, and surveillance" as an indicator of where culture is right now.
The Peloponnesian War: a grim story about a war that never seems to end. This will, unfortunately, always be relevant. One of the ongoing differences between war then and now is which abstractions get concrete representations, and what stays concrete. One of the constraints on the war is money: Athens has to literally take physical currency out of a stockpile to pay troops, or seize valuable loot. At the same time, victories get a tangible representation; most of the battle scenes end with the winner putting up a trophy (in some cases, both sides claim victory and they both put up trophies). Borrowing to finance a war is a way to project the future into the present—to act as if resources available from victory are already here. Putting up a trophy is a way to project the present into the future: to say that a battle that just happened will always matter.
George P. Mitchell: you can't strictly call Mitchell the "father of fracking," given that fracking research had been going on for a long time, and that a Mitchell Energy & Development engineer got the idea for the company's ultimately successful version of it by talking to a competitor at a baseball game. But Mitchell did bet bigger on fracking than anyone else, and was correspondingly rewarded. Mitchell's career is also a testament to the risks and rewards of dual-class stock: he invested a lot of his company's resources in fracking, which he could only do because he controlled the board, but he also invested a lot in The Woodlands, a master-planned community, which seems to have absorbed more of his attention (and gets more of it in the book). It's sort of like Newton and alchemy: give the right people freedom to work on whatever they want, and they will both achieve a lot and potentially waste most of their time on relatively unimportant side projects.
Ask Your Developer: Twilio CEO Jeff Lawson's book is not what I was expected, but it was something I'd been looking for. After I read Working Backwards, I realized that running a company in Amazon's style sounds good, but it also sounds hard; what I really wanted was a case study in how a company adopted Amazonian management. Fortunately, Lawson worked for AWS from the very early days, built a company that substantially runs on top of AWS, and has adopted but tweaked many Amazon techniques (there are dozen-bagel teams instead of two-pizza teams, and Twilio has a very different approach to capital). The book is also a good recent history of how startups and software engineering have changed in the last twenty years.
Open Thread
Drop in any links or books of interest to Diff readers.
In Marc Rubinstein's China Evergrande writeup, he mentions a "canary" screen—the asset prices he looks at to get an early indicator of a crisis. What's on yours? This doesn't just have to be a list of asset prices that react quickly to systemic problems, but can be a more general set of indicators: which job resignations, sudden relocations, or other such decisions would cause you to adjust your estimate for odds that 2021 will be a very interesting year in a bad way?