Longreads + Open Thread
Progress, Kishi, Permission, Allocation, Nuclear, YouTube, Disruption
Eric Gilliam at FreakTakes looks at the world of Gerard Holton on when ideas get easier to find. One amazing chart from the piece shows progress—in this case, in particle accelerators—as exponential overall growth caused by stacking S-curves. That's heartening because it means that we can still achieve progress in broad fields when individual techniques are getting played out, but it's also daunting, because it means that consistent growth is actually the result of finding novel things to work on, rather than perfecting existing techniques. (Via Marginal Revolution.)
Lars Erik Schönander at Palladium has a piece on Kishi Nobusuke, a pivotally-important but now obscure Japanese politician who a) committed serious atrocities in the 30s and 40s, and b) set up the modern Japanese political system after the war. Kishi is worth understanding because he straddles so many different eras. He was technically part of the old aristocracy, but cemented the nominally democratic system that has mostly controlled Japanese politics ever since. He was an early practitioner of the state-driven industrialization that propelled East Asian economic growth, but a look at his earliest practices and influences shows that it was affected, not just by protectionist theory from 19th century Prussia, but by Stalinist thinking as well. The general rule in history is that everything has older precedents than you think, which often means that fairly benign trends share a nearest common ancestor with much darker ones.
Milan Cvitkovic has a list of things you're allowed to do. This is a great resource: a long list of ways you can marginally improve your life at a trivial cost in either money or social awkwardness.
Bridgewater Associates has a nice piece on how to build a beta portfolio—i.e. one that isn't trying to make market calls, but to get general exposure to different return streams—in times of high inflation. For a long time, the answer to this has been "own stocks, but own bonds, too," and Bridgewater certainly benefited from the long bull market in bonds. Bonds and stocks have had an inverse correlation over the last two decades, and it's tempting to treat that as a law of nature—but it's really a feature of low inflation. When inflation isn't a problem, slower growth leads immediately to rate cuts, and that's good for bonds. But at times of higher and more variable inflation, those rate cuts aren't so automatic. Bridgewater suggests a larger allocation to commodities. It's hard to estimate the size of the commodities market, and it would be very interesting indeed if it turned out that commodities couldn't absorb the inflows from a few percentage points of the world's institutional portfolios moving from stocks and bonds to oil and copper futures.
Brian Potter of Construction Physics asks why nuclear power plants have gotten so expensive. It's a piece very much in the spirit of State Capacity Libertarianism: there are regulatory factors that drove higher prices and longer construction times, and that compounded by reducing the amount of expertise the nuclear industry could generate. If plants take twelve years to build instead of five, it takes a lot longer for people to get experienced at building them. And these high costs reduce the marginal cost of customization, which naturally kills cost curves. Now we're at a point where relaxing regulations on nuclear power is less exciting because costs are still so high, but doing that in combination with funding more of them over a long period might start moving the cost curve in the right direction.
Like, Comment, Subscribe: Inside YouTube's Chaotic Rise to World Domination: Available in September, this book is a history of YouTube from its beginnings as a dating site to its present ubiquity. This book was a major resource for this piece ($). YouTube's success was partly due to a few big decisions—ranking by view time, video recommendations, dynamic ad load—and lots of incremental tweaks. Now it's big enough that the problems the business faces have shifted from technology and business to politics and culture, both of which are much less amenable to scaling.
Drop in any links or comments of interest to Diff readers.
What makes a company or business undisruptable? Some institutions have a crazy amount of staying power, like Disney, Harvard, and Goldman Sachs—they've been at the top of their category for long enough that you can't attribute it to any one leader, and the nature of each business has changed. Is there something that differentiates institutions that stay at the top of their category for long periods, or is it a "Matthew Effect" where they're able to hire the best people?
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