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- This 1999 article on "The New Politics of Consumption" by economist Juliet Schor is fun to read, especially in light of how many issues it talks about that a) must have seemed new and pressing at the time, and b) are exactly the same things we talk about today. If you were to publish the essay again, you'd want to throw in something about Long Covid and the laptop class, and update the references to sport utility vehicles, but the broad thrust is consistent: we spend more than we really need to, and, as a consequence, many of us work more than we'd really prefer to. One thing that has changed: the piece talks about how there isn't a strict consumption-versus-leisure tradeoff because it's hard to negotiate 10% fewer hours for 10% less pay. But in practice, this is easier than ever, as long as your preferred form of leisure involves quick breaks while using a smartphone or having a tab open. Remote work makes this even more fluid.
- John Loeber: Why Europe Fails to Create Wealth. This essay starts with AI regulation and then goes in some very unexpected directions, including the contrarian take that it's Europe, not America, that is the land of over-consumption and under-production. "How fitting: the European Commission assembled around an iPad. On the back, in fine print, it will read: Designed by Apple in California. Assembled in China." And: "You might disagree and point at European cars, German steelworks, British petroleum, and so forth. But these are the colossuses of yesteryear. They are fundamentally not dealing in new technologies. Most of them are in decline, losing market share, and we will see them disappear."
- A programmer interviews his mother about her three decades writing COBOL for a bank. The first companies to digitize were the ones with the most pressing need to, which means that the more information-rich an industry is, the more likely it is to be running on very, very old systems: in this case, the primary database in use was originally designed for the Apollo program.
- Casey Winters on companies launching their second product, with a great breakdown of when this works and when it fails. The real takeaway is that, especially in software, nothing is ever static: the more successful your product is, the more likely someone will realize it ought to be a feature of theirs.
- How Lego builds a new Lego set. New companies are defined by the problem they solve, but the day-to-day effort at established companies is defined by the specific operating obstacles they face. A highlight in this piece is that Lego has an internal vocabulary and accounting system for thinking about the tradeoffs involved in new sets and parts: "And those teams came up with one simple idea to stem the tide of complexity: “frames.” Want a part in a different color? That costs designers a frame. A new piece? Spend some frames. Bring back an old out-of-print piece? That’s a frame, too. Every year, design leads like Scott are given a limited number of frames that they can spend on their entire portfolio for physical pieces that aren’t readily at hand. “If I have five products or 10 products coming out, I need to allocate where those frames go,” says Scott."
- This week's issue of The Riff covers growth, value, the half-life of investing insights, and a bit about AI and social media. Listen on Spotify/Apple/YouTube.
- In Capital Gains, our spinoff newsletter breaking down mental models in finance, economics, and corporate strategy, we looked at the DuPont Formula for breaking returns down into their contributors.
- Germany 1923: Hyperinflation, Hitler's Putsch, and Democracy in Crisis: Reading history books about terrible times tends to combine two different things—worrying about how bad things can get, but also taking comfort in the fact that, in a broader context, what's going on right now is not that bad. The events described in the book are all downstream from the First World War, which is a good reminder that the names-and-dates model for history is good scaffolding, but also tends to underestimate how long some events really last. Part of what happened was a feedback loop: the less people could trust what they thought was reliable (the government, their savings, their jobs, social norms) the faster these things decayed.
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- Drop in any links or comments of interest to Diff readers.
- Lego has “Frames,” and the Japanese semiconductor equipment company Disco has “will,” an internal currency employees can use to pay one another. What other companies have developed their own internal accounting system like this?
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