Month: February 2022

Putin as a man of ideas

Commentators are drawing lessons from the conflict in Ukraine, but they are missing one key point. Above all, the Russian attack and possible dismemberment of Ukraine reflects the power of ideas.

Read the English translation of the Putin speech to justify Russian’s actions in Ukraine. It is striking how much Putin cites history, going as far back as the 17th century, to justify the Russian incursion.

One of Putin’s core views is that Ukraine is not a legitimate country in its own right. He is clear about this claim and its import: “So, I will start with the fact that modern Ukraine was entirely created by Russia or, to be more precise, by Bolshevik, Communist Russia.” Putin himself published a July 2021 essay “On the Historical Unity of Russians and Ukrainians,” which goes further back yet and discusses Ancient Rus.

Putin’s speech immerses the audience in detail, citing the history of Stalin, Khruschev, the 1917 October Revolution, the Treaty of Brest-Litovsk and what Stalin did in 1922 with respect to the People’s Commissar of Ethnic Affairs. The need for the earlier Soviet Union to offer concessions to the nationalists is portrayed as one reason why Ukraine was allowed to have some of its identity as Ukraine. Here is a typical passage: “Soviet Ukraine is the result of the Bolsheviks’ policy and can be rightfully called “Vladimir Lenin’s Ukraine.” He was its creator and architect. This is fully and comprehensively corroborated by archival documents, including Lenin’s harsh instructions regarding Donbass, which was actually shoved into Ukraine.”

By the time you get to the end of Putin’s speech he is still talking about history, and reciting how Ukraine squandered the wonderful inheritance left to them by the Soviet Union. Furthermore, that same Ukraine has become a tool of Western attempts to disrupt Russia.

Putin is full of ideas about history. You can argue how much these remarks reflect Putin’s own concern with ideas, or the Russian public’s concern or that of foreign audiences, but it is probably all of those. Furthermore, Putin has embraced a coterie of Russian intellectuals, marketing what is sometimes called Eurasianism, who parrot and develop the notion of Russia as a power-deserving Eurasian civilization.

If you think the current version of Ukraine was never a valid nation to begin with, a twisted set of mental contortions might bring you around to Russian expansionism. Russia is just taking back what is rightfully theirs, and by the end of this speech Putin is concluding that: “the possible continuation of the bloodshed will lie entirely on the conscience of Ukraine’s ruling regime.”

The obsession with ideas and also with history is a longstanding tradition from earlier leadership. For instance, Soviet dictator Josef Stalin held an extensive library, amounting to about 19,500 books, which he used as a personal, working archive. Stalin was known for his extensive marginalia and for leaving greasy fingerprints on the book pages. Marxist politics, economics and history were prominent in the library, and after Lenin, the most heavily represented authors in the library were Stalin himself, Zinoviev, Bukharin, Marx, Kamenev, Molotov, and Trotsky.

So Putin is hardly breaking from the mold. We also know, from previous documentation, that Putin considered the dismantlement of the former Soviet Union as a great tragedy. That too is an idea, and it further reflects the continuity between Putin’s efforts and those of his predecessors.

If you write books, whether good or bad ones, and wonder whether your work matters, I suggest the answer lies before you on your TV screen each evening. Russia is a nation of ideas, led by people who are obsessed with ideas. The rest of the world, most of all Europe, will need better ideas in turn.

Addendum: Here is Ryan Avent on the power of ideas.

A simple model of what Putin will do for an endgame

I would start with two observations:

1. Putin’s goals have turned out to be more expansive than many (though not I) expected.

2. There are increasing doubts about Putin’s rationality.

I’ll accept #1, which has been my view all along, but put aside #2 for the time being.

In my simple model, in addition to a partial restoration of the empire, Putin desires a fundamental disruption to the EU and NATO.  And much of Ukraine is not worth his ruling.  As things currently stand, splitting Ukraine and taking the eastern half, while terrible for Ukraine (and for most of Russia as well), would not disrupt the EU and NATO.  So when Putin is done doing that, he will attack and take a slice of territory to the north.  It could be eastern Estonia, or it could relate to the Suwalki corridor, but in any case the act will be a larger challenge to the West because of explicit treaty commitments.  Then he will see if we are willing to fight a war to get it back.

There are fixed costs to mobilization and incurring potential public wrath over the war, so as a leader you might as well “get the most out of it.”  Our best hope is that the current Russian operations in Ukraine go sufficiently poorly that it does not come to this.

Addendum: And some good questions from Rob Lee.

Thursday assorted links

1. “Our contention is that the reason that the West “rules” can be traced back to two events both taking place in China: the invention of the cannon, which made possible the survival of the weakest in Europe; and the arrival of Genghis Khan, which led to the survival of the strongest in China.”  Link here.

2. The debate continues.

3. Chotiner and Plokhy on Ukraine (New Yorker).

The GEZ: A Digital Special Zone

The Catawba are a federally recognized tribe of Native Americans with land in South Carolina, near the city of Rock Hill. The Catawba nation has just voted to establish a new digital special economic zone, the Green Earth Zone (GEZ), which aims to specialize in fintech and cryptocurrency.

…The GEZ can be prosperous thanks to the ability of Native-American Tribes under US law to have their own commercial code, regulation-making and administrative capacities.

…Using a model similar to Estonia’s eResidency, after completing the ‘know your customer’ (KYC) requirements, anyone in the world will be able to set up an eCorporation online in the GEZ, and take advantage of policies and regulations that allow them to safely manage their digital assets, raise investment capital and offer digital-banking services. eCorporations are legal corporations, permitted to conduct business virtually from the GEZ, and can open bank accounts within the United States. GEZ eCorporations are ideal for online companies, software developers, remote workers, banking and finance, insurance and firms involved in the creation, sale or management of digital assets.

This is a very interesting development for crypto which needs some legibility and rational rule making that the SEC is not providing.

Trudeau has turned off the invocation of the Emergencies Act

After two days it is no more.  I was and remain completely opposed to this invocation of the emergency powers.  I think they simply should have arrested the protestors early on, before the whole thing became such a big deal.

Here is a good short essay on the “digital jail” created by having your funds frozen in a nearly cashless society.  How is it you are supposed to pay for a lawyer?  What about joint bank accounts with other family members?  The more you think about this option, the worse it gets.

That all said, I have never been sold on the more dramatic claims of the critics.  No, this is not the transition moment for crypto.  Canada has not become a fascist state.  The government made a mistake, and the mistake has been corrected.  They should not have had this power to begin with.

I would stress that eternal vigilance is the price of liberty, and vigilance was needed to push this one back.  But if this was your freakout for the week, most of your attention is directed to the wrong places.

My Conversation with Chuck Klosterman

Excellent stuff, we had so much fun we kept on going for an extra half hour, as he decided to ask me a bunch of questions about economics and personal finance.  Here is the audio and transcript.  Here is the CWT summary:

Chuck joined Tyler to discuss the challenges of writing about recent history, the “slow cancellation of the future” that began in the aughts, how the internet widened cultural knowledge but removed its depth, why the context of Seinfeld was in some ways more important than its content, what Jurassic Park illustrates about public feelings around scientific progress in the ’90s, why the ’90s was the last era of physical mass subcultures, why it’s uncommon to be shocked by modern music, how his limited access to art when growing up made him a better critic, why Spin Magazine became irrelevant with the advent of online streaming, what made Grantland so special, what he learned from teaching in East Germany, the impact of politics on the legacies of Eric Clapton and Van Morrison, how sports often rewards obnoxious personalities, why Wilt Chamberlain is still underrated, how the self-awareness of the Portland Trail Blazers undermined them, how the design of the NFL makes sports rivalries nearly impossible, how pro-level compensation prevents sports gambling from corrupting players, why so many people are interested in e-sports, the unteachable element of writing, why he didn’t make a great editor on his school paper, what he’d say to a room filled with ex-lovers, the question he’d most like to ask his parents, his impressions of cryptocurrency, why he’s trying to focus on what he has in the current moment rather than think too much about future plans, the power of charisma, and more.

Whew!  Here is one excerpt:

COWEN: I see the world as follows. Every decade, to me, is super weird, but the 1980s and ’90s pretended they weren’t weird. The ’80s pretended to be good versus evil. The ’90s pretended that good won. But when crypto comes and persists, you have to drop all pretense that the age you’re living in isn’t totally weird.

You have internet crypto, and everyone admits, right now, everything’s weird. And that, to me, is the fundamental break with the 1990s because everyone pretended most things were normal and that Seinfeld was your dose of weird, right? Jason Alexander — that’s a very manageable weird.

KLOSTERMAN: Oh, absolutely.

COWEN: Some guy in an apartment in New York City cracking sarcastic jokes — like, whoop-de-do.

And:

KLOSTERMAN: …this guy, Mark Fisher, who’s dead now, had this idea about the slow cancellation of the future. I feel like that’s one of the most profound ideas that I’ve come across in the last 10 years of my life, and it seems so palpable that this is occurring.

An example I will often use is, if you take, say, 10 minutes from an obscure film in 1965 with no major actors, and then you take 10 minutes from an obscure film from 1980 where nobody became famous, and you show anyone these 10-minute clips, they will have no problem whatsoever figuring out which one came first. Even a little kid can look at a movie from 1965 and a movie from 1980 and instantly understand that one predates the other.

But if you do that with a film from 2005 and a film from 2020 — again, an obscure film where you don’t recognize the actors — you’re just looking at it aesthetically and trying to deduce which one came first and which one came second. It’s almost impossible.

This phenomenon just seems to almost be infiltrating every aspect of the culture…

And:

KLOSTERMAN: Before I did this podcast, I listened to your podcast with Žižek.

COWEN: Oh yeah, that was hilarious.

KLOSTERMAN: Are you friends with him? It sure seemed like it. And if you are, what is it like to be with him when he is not in a performative scenario?

Recommended.  And again, here is Chuck’s new book The Nineties.

Wednesday assorted links

1. Jason Furman on gas tax incidence, policy economics, and other matters.  And more.  And more.

2. The redistribution result seems to be false.

3. The mainstreaming of “sexual wellness” products (NYT).

4. Rafael Guthmann on the Roman empire and Walter Scheidel and political fragmentation.

5. Magpies outwit research scientists by helping each other remove their tracking devices.

6. Relevant for the phenomenon of near-death experiences?

Ronald Reagan is underrated

That is the theme of my latest Bloomberg column, here is one excerpt:

As I interpret the career of Reagan, he understood another point very well — and that concerns the scarcity of moral capital. Reagan knew there were real “bad guys,” and that it was up to leaders and elites to identify them and stand up to them, both rhetorically and diplomatically. Most of all, it was important to encourage the American public to internalize these same moral judgments. This may all sound corny and dated, but the pending conflict in Ukraine shows it to be an enduring truth.

The complementary Reagan vision was positive, optimistic and focused on what Americans can accomplish when working together. Americans are going to disagree on a lot of issues, he acknowledged, but they should maintain a relatively united front and save their real opprobrium for the truly destructive forces on the global scene.

Fast forward 40 years, and it seems that America has almost completely ignored these strictures. Many on the right seem most upset about the worst aspects of the left, and vice versa. Even when bad forces emerge in the international arena, Americans seem far more preoccupied by their fights with each other.

On Russia specifically, as recently as several months ago the current military escalation was hardly a topic of discussion among U.S. elites. When Mitt Romney tried to raise the danger of Russia in his 2012 presidential campaign, the point largely fell flat. Former President Barack Obama actually mocked him.

One of my biggest beefs about the status quo is that both the Trumpist Right and the Progressive Left are so willing to run down America’s moral capital in service of their pet partisan projects.

A big thank you to Jane Street

To the company that is, not the street:

We trade a wide range of financial products, including ETFs, Equities, Bonds, Options, Commodities, Digital Assets, Futures, and Currencies. We have global offices which allow us to make markets continually on more than 200 electronic exchanges and other trading venues in more than 40 countries around the world.

A number of people at Jane Street have donated a total of over $20 million to Emergent Ventures and Emergent Ventures India, as well as a significant sum to Fast Grants.  This support has existed for a while now, but they’ve always been anonymous donations. I am happy and honored to now be able to recognize them publicly, even if they prefer not to be individually named!

Jane Street is renowned for its brainy, challenging environment, and also for its ability to spot and recruit talent, so that makes their support for Emergent Ventures and Fast Grants all the more meaningful to me.  One further implication is that, if this is an appropriate option for you, please do consider working there.  I’ve always had a blast during my visits, and I recall one time where I gave a talk, we all went out to dinner, and then quite late everyone went back to the Jane Street office to play chess, bughouse, and other games.  They are better at these games than you might think, update your other expectations accordingly!

Be Green: Buy an (Australian) Coal Mine!

In Be Green: Buy A Coal Mine! I wrote:

Buying a coal mine and leaving the coal in the ground looks like a cost-effective way of sequestering carbon dioxide.

Recall, the key idea is that there are coal mines that are barely profitable now so shuttering mines can be a cheap way of sequestering carbon dioxide. Well, it’s starting to happen in Australia.

Tech billionaire Mike Cannon-Brookes has teamed up with international fund manager Brookfield to launch an audacious takeover bid for Australian energy giant AGL with the intention of setting stronger emissions-reduction targets and forcing the early closures of its remaining coal-fired power stations.

Mark Carney, former governor of the Bank of England and the Bank of Canada, is also involved. Unclear whether the bid will be accepted. The Australian government is actually against the idea.

Addendum: Philosopher William MacAskill also told me recently that he liked the idea because it would leave a source of energy that could be used to reboot civilization after an existential crisis. Hadn’t thought about that! MacAskill is always thinking ahead.

Hat tip: Sam Roggeveen.

What has been driving America’s opioid problem?

Matt Yglesias had an excellent (gated) Substack on this question lately, now Jeremy Greenwood, Nezih Guner and Karen A. Kopecky have a new and quite valuable paper.  I found this to be the most interesting segment:

Through the eyes of the model, there were two key forces.  The first force is the decline in prices for bot prescription and black market opioids.  This had a big effect.  The second force is the increase in the dosages per prescription meted out by doctors.  This also had a significant impact.  The fact that doctors kept pain sufferers on prescription opioids for a longer period of time had little effect.  Last, an analysis is conducted on medical interventions that reduce either the probability of becoming addicted or the odds of an addict dying from an overdose.  Reducing the odds of addiction can result in even more deaths due to the rise in users.

The opioid problem is a very difficult one to solve!  I should stress that the paper has other results of interest.

What should I ask Daniel Gross?

I will be doing a Conversation with him, noting that he is my co-author on Talent: How to Identify Energizers, Creators, and Winners Around the World.

Daniel is an entrepreneur and venture capitalist and here is his Wikipedia page.  Here is Daniel on Twitter.  Here is Daniel’s ideas page.  Here is Daniel on his work, including Pioneer.

Since we are co-authors, this won’t just be the standard interview format, how do you think we should do it?  And what should we ask each other?