Category: Books

Cryptoeconomics!

The crypto market is up! The crypto market is down! The roller coaster can be fearfully thrilling but as thoughtful academics and people interested in ideas let’s look away from the daily ups and downs and focus on the big picture. What is crypto? What is cryptoeconomics?

Tyler and I have written a new chapter for our textbook, Modern Principles. In Cryptoeconomics we explain just enough cryptography–namely cryptographic hash functions and public-private keys–to understand what new forms of communication and organization have been made possible by these breakthroughs. We then use these fundamentals to explain NFTs, blockchains, Bitcoin, smart contracts and decentralized finance–all in a crisp, compact format accessible to everyone.

Not everyone wants to teach crypteconomics, of course, or has the time (scarcity!) so this chapter will be available as an option to anyone using our book and the Achieve online course management system (in fact, it’s available now). Tyler and I have found, however, that our students, colleagues, even people at dinner parties ask us about crypto. Probably your students and friends will ask you as well. Plus our textbook is called Modern Principles so we thought we were obligated to teach these new ideas!

Cryptoeconomics is a good guide to some fundamentally new ways of trading, communicating, and cooperating.

Addendum: If you want to learn more about DeFi, my talk goes into greater depth.

My Conversation with the excellent Daniel Gross

This is Daniel Gross my co-author on Talent and the venture capitalist, to be clear.  And here is the audio and transcript.  Of course we focus on talent and also:

They also explore the question of why so many high achievers love Diet Coke, why you should ask candidates if they have any good conspiracy theories, how to spot effective dark horses early, the hiring strategy that set SpaceX apart, what to look for in a talent identifier, what you can learn from discussing drama, the underrated genius of game designers, why Tyler has begun to value parents more and IQ less, conscientiousness as a mixed blessing, the importance of value hierarchies, how to become more charismatic, the allure of endurance sports for highly successful people, what they disagree on most, and more.

Excerpt:

GROSS: Well, take a step back. Why are we even here? And why would I even have a shred of an interesting opinion on talent? To the extent that I do, I think it’s because in the venture business — much more so than, I think, almost any other business — you live in constant paranoia of missing out on great talent. You might say, “Well, that’s true in every company.” And it’s true at the Met when you’re looking for someone to play in the orchestra, too. But in the venture business, unlike others, great talent always looks very weird to whatever convention is.

Before Mark Zuckerberg came along, that phenotype of the hoodie sweatshirt and slightly aspie kid was not the common phenotype. Now, of course, there was a phase — 2013, 2014, 2015 — where everyone started looking for that. But then it hit you again with a very weird-looking person, where Vitalik [Buterin] is of a completely different ilk than Zuck. One very much is Julius Caesar, and I think another one — I don’t exactly know how you’d bucket Vitalik — maybe like an early pope.

COWEN: Like a Russian holy saint.

GROSS: Exactly. By the way, not just the person is weirder than whatever the conventional norm is, but the idea is weird, too.

Interesting throughout!

Russia fact of the day

A study of Russian publications in the 1990s found that some 39 percent of all nonfiction published in Russia in that decade had something to do with the occult.

That is from the really quite interesting The Russian Cosmists: The Esoteric Futurism of Nikolai Fedorov and His Followers, by George M. Young.  And for more on Russian Cosmism, you might try reading this collection.  It is interesting to get such a different perspective on the issues raised by Bostrom, Hanson, Balaji, Musk, and the longevity writers, among others.  I don’t believe any of those thinkers would be happy with these Russian discussions, but…I suppose that’s the point!

What I’ve been reading

1. Paul Strathern, The Florentines: From Dante to Galileo.  It is not just Dante and Galileo, there is also Boccaccio, Petrarch, Machiavelli, Giotto, Botticelli, Leonardo, Fra Filippo Lippi, Michelangelo, Ghiberti, Brunelleschi, and many more, all from one small region of Italy.  This book doesn’t answer how that all happened, but it is perhaps the best survey of the magnitude and extent of what happened, recommended and readable throughout, good as both an introduction and for the veteran reader of books about Florence.  While we are at it, don’t forget Pacioli and the first treatise on double-entry bookkeeping.

2. Geoff Dyer, The Last Days of Roger Federer: And Other Endings.  A hard book to explain, mostly it is about how careers end or collapse or implode, only some of it is about Federer.  “De Chirico lived till he was ninety but produced little of value after about 1919.”  Calling a book a “tour de force” almost certainly means it isn’t, but this book…is a tour de force.

3. Mason Currey, Daily Rituals: How Artists Work.  One or two-page sections on the work habits of famous artists, the selection of names is intelligent and this book is like potato chips in the good sense of the term.

4. Asa Hoffman with Virginia Hoffman, The Last Gamesman: My Sixty Years of Hustling Games in the Clubs, Parks and Streets of New York.  A fun look back at the NYC chess world of the 1970s and trying to make a living as a chess and Scrabble hustler.  I knew Hoffman a bit back then, and even as a kid I wondered “is this guy happy?”  In the book he says he has largely been happy!  I am still wondering.  Maybe the secret is to play a game many discrete times where your losses are temporary and swamped by rapidly forthcoming wins?  I am reminded of the words of the recently deceased grandmaster and centenarian Yuri Averbakh (NYT): “The main thing was that I never obtained great pleasure from winning,’’ he wrote. “Clearly, I did not have a champion’s character. On the other hand, I did not like to lose, and the bitterness of defeat was in no way compensated for by the pleasure of winning.”

5. Christopher Duggan, The Force of Destiny: A History of Italy since 1796.  A good and very useful general introduction to the history of the latter part of the story of Italy.

How to make talent scouts work for you

With Daniel Gross, here is a (very much) shortened bit from Talent: How to Identify Energizers, Creators, and Winners Around the World, published at a16z, excerpt from the chapter on when to use talent scouts:

It is worth thinking about why the scouting model works in this context [finding supermodels]. First, the relevant talent could come from many different parts of the world, and the number of people to be scouted is very large. It is hard to imagine a centralized process getting the job done. Second, many of the scouts plausibly have a decent sense of who might make a good model. Looks are hardly the only factor behind modeling success, but they are a kind of “first stop,” and expecting the scouts to judge looks well from first impressions is more plausible than expecting the scouts to use first impressions to judge talent well for skill in, say, quantum mechanics. Third, a follow-up investigation to judge the modeling talent of the chosen candidates is not extremely costly. You can have them in for a photo shoot and see how popular they prove in the market without having to invest millions of dollars right away…

Scouting is also becoming more important as the options for self-education are rising. With more people trying their hand at various avocations than ever before, that places more and more burden on talent search. We need to be more open to the accomplishments of self-taught individuals without traditional training, and that holds all the more true for the tech world, where many of the most important founders have eschewed the institutions of traditional education.

There is much more at the link, we also consider when scouting models fail relative to centralized evaluation, and which kinds of incentives should be given to scouts.

Some blurbs for *Talent*, with Daniel Gross

Talent” is what happens when two brilliant and profoundly iconoclastic minds apply their imagination to one of the hardest of all business problems: the search for good people. I loved it.”

–Malcolm Gladwell

“Talent is everything―whether in investing and building startups, or in other creative endeavors. Between product, market, and people, I’ve always bet on the last one as the biggest predictor of success. But while talent may be everywhere, it’s unevenly distributed, and hard to ‘find.’ So how do we better discover, filter, and match the best talent with the best opportunities? This book shares how, based on both scientific research and the authors’ own experiences. The future depends on this know-how.”

―Marc Andreessen, co-founder of Netscape and Andreessen Horowitz

“The most important job of any leader is to find individuals with a ‘creative spark,’ and the potential to discover, invent and build the future. If you want to learn the art and science of spotting and empowering exceptional people, Talent is brimming with fresh insights and actionable advice.”

―Eric Schmidt, co-founder of Schmidt Futures and former CEO of Google

“I do not know of any skills more worth developing than the ability to find exceptional undeveloped talent. I have spent many years trying to get good at that, and I was still astonished by how much I learned reading this book.”

Sam Altman, CEO of OpenAI, formerly of YCombinator

“Two of the premier talent spotters working today, Cowen and Gross have written the definitive history of identifying talent. Anyone who is interested in innovation, entrepreneurship, or the roots of America’s start-up economy must read this book.”Christina Cacioppo is CEO and co-founder of Vanta

You can order here on Amazon or here on Barnes & Noble.

Recommended!

The Essential Women of Liberty

Here’s another excellent book in the Essential Scholars series. You can download the book for free, find additional resources, introductory videos and more at the Women of Liberty web page.

This series of essays, written by leading scholars in the United States, Canada and Europe, explores the lives and ideas of some of the most influential women over the past few centuries whose work contributed enormously to the democratic, prosperous and free societies that many people enjoy today. They are a remarkably diverse group of women. Their lives span the eighteenth to twenty-first centuries and their contributions are significant despite the barriers each faced. Some were educated at prestigious universities while others only had informal schooling. Some were academics, others writers and journalists, and still others activists. What they had in common was an understanding of the power of freedom and liberty, and their influential advocacy of such during their lives. These essays are a celebration and recognition of their lives and contributions.

*The Baby on the Fire Escape*

An excellent book, full of substance and going well beyond cliche, the author is Julie Phillips and the subtitle is Creativity, Motherhood, and the Mind-Baby Problem.  Strikingly unsentimental, it covers women writers who balanced (or didn’t balance) their creative urges with their child-rearing responsibilities.  Excerpt:

Grace Hartigan married at nineteen and had her son the same year, 1941.  In 1975 she said:

“My son bitterly opposed my painting.  He would stay after school and would come in at five o’clock, look at me, and say: “I know, you have been painting again.”  When he got to be twelve and his father had remarried, I sent him to California.  I have never seen him since.  It is a very bitter relationship.”

I especially enjoyed the chapters on Doris Lessing, Ursula Le Guin, and Angela Carter.  Will make the year’s “Best Non-Fiction” list.

What I’ve been reading

1. Dervla Murphy, A Place Apart: Northern Ireland in the 1970s.  Imagine a single Irish woman in the 1970s bicycling though Northern Ireland at the height of The Troubles.  Charming and perceptive throughout, and remarkably well-written.  Murphy is in general an underrated figure, and note she is still at it, recently in her 90s she did a Lunch with the Financial Times.

2. Marc F. Bellemare, Doing Economics: What You Should Have Learned in Grad School — But Didn’t.  A sober and very useful book, covering topics such as “Navigating Peer Review” and “Finding Funding” and “Doing Service.”  The advice offered is on the mark.  Yet the book as a whole makes economics (academia?) as a whole come across as a grim and dysfunctional profession.  You won’t find much on “generating new ideas” or “influencing policy” or “inspiring students.”  I guess they taught all those things so well in grad school!

3. Gregory Forth, Between Ape and Human: An Anthropologist on the Trail of a Hidden Humanoid.  The claim is that the Flores mini-humanoids may have existed on the island until quite recently, or possibly even still today.  I am not persuaded (for one thing the villagers promote too many other ancillary hypotheses about these creatures, for instance they fly), but at the very least this is a fascinating take on how to interpret eyewitness evidence.  And the author is a credible authority.  They should invite this guy to Hereticon, he is an actual heretic!

William R. Cross, Winslow Homer: American Passage is a definitive biography with wonderful photos, maps, and images.  Not a “picture book” but a book with amazing pictures.  And text.

Yaffa Assouline, Avant-Garde Orientalists: Tribute to Igor Savitsky.  One of the largest collections of Russian avant-garde art is in Karakalpakstan in northwestern Uzbekistan — you can view the work here, recommended.

Thomas W. Merrill, The Chevron Doctrine: Its Rise and Fall, and the Future of the Administrative State, “This book is primarily a work of history about the Chevron doctrine — where it came from, how it spread, the fate of attempts to cabin it, and recent arguments that it should be overruled o significantly rewritten.”

I have not read Jerry Z. Muller, Professor of Apocalypse: The Many Lives of Jacob Taubes, but it appears to be a work of promise.

My Conversation with the excellent Chris Blattman

Here is the audio, transcript, and video, we did this one face-to-face.  Here is part of the summary:

What causes war?…Chris and Tyler also cover why he doesn’t think demographics are a good predictor of a country’s willingness to go to war, the informal norms that restrain nations, the dangers of responding to cyberattacks, the breakdown of elite bargains in Ethiopia, the relationship between high state capacity and war, the greatest threats to peace in Ireland, why political speech isn’t usually a reliable indicator of future action, Vladimir Putin’s centralized motives for invading Ukraine, why he’s long on Colombia democratically — but not economically, why more money won’t necessarily help the Mexican government curb cartel violence, the single-mindedness necessary for bouldering, how Harold Innis’s insights about commodities led Chris to start studying war, how the University of Chicago has maintained a culture of free inquiry, and more.

And from the dialogue:

COWEN: If you look at the marginal cases — since there are some wars — there’s a bunch of cases, even if unusual, where someone is right at the margin. At the margin, what are the factors that are most likely to account for the explanatory variation in whether or not a country goes to war?

BLATTMAN: For me, the one that people talk the least about that strikes me as the most important is how concentrated is power in the country. What’s holding back someone from considering all of the implications of their actions on other people, should they decide to take their society to war?

It’s maybe the most important margin in history, and it’s maybe the one that no one of my tribes — which are political economists — think and talk the least about. It’s the one that — in journalism, people leap to psychological explanations, and they try to understand the psychology of leaders, but they don’t try to understand the way in which they’re constrained. So, it’s this combination of the most important and the most ignored.

COWEN: So federal societies are less likely to go to war?

Interesting throughout.  And I am very happy to recommend Chris’s new and important book Why We Fight: The Roots of War and the Path to Peace.  And here is my earlier 2018 Conversation with Chris.

My excellent Conversation with Thomas Piketty

Lots of disagreement in this episode, though always polite.  Here is the transcript, video, and audio.  Here is part of the summary:

He joined Tyler to discuss just how egalitarian France actually is, the beginning of the end of aristocratic society, where he places himself within French intellectual history, why he’s skeptical of data from before the late 18th century, how public education drives economic development, why Georgism isn’t sufficient to address wealth inequality, the relationship between wealth and cultural capital, his proposal for a minimum inheritance, why he turned down the Legion of Honor, why France should give reparations to Haiti despite the logistical difficulties of doing so, his vision for European federalism, why more immigration won’t be a panacea for inequality, his thoughts on Michel Houellebecq’s Submission, and more.

Here is one excerpt:

COWEN: If I visit every major country in Europe, what I observe is the highest living standard is arguably in Switzerland — Norway and Luxembourg aside. Switzerland has one of the smallest governments, and they attempt relatively little redistribution. What is your understanding of Switzerland? What if someone said, “Well, Europe should try to be more like Switzerland. They’re doing great.” Why is that wrong?

PIKETTY: Oh, Switzerland. It’s a very small country, so it’s about the size. . . . Actually, it’s smaller than Île-de-France, which is a Paris region. Now, if you were to make a separate country out of Île-de-France, GDP per capita, I think, would actually be higher than Switzerland. Of course, you can take a wealthy region in your country and say, “Okay, I don’t want to share anything with the rest of the country. I’m going to keep my tax revenue for me. I’m going to be a tax haven based on bank secrecy.” That’s going to make you 10 percent or 20 percent richer. I’m not saying —

COWEN: It’s been a long time since Switzerland relied on bank secrecy, right? Following 9/11, that Swiss advantage largely went away.

PIKETTY: Oh, that’s wrong. Oh, you’re wrong on this.

We talk about Matt Rognlie and Greg Clark as well.  Recommended, this was fun for me to reread.