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TiB 131: How smart are politicians; why tech needs some crazy money; religious fundamentalism and the internet; and more...

This week: Do we get the politicians we need or those we deserve; SPACs and the need for price-insens
September 8 · Issue #131 · View online
Matt's Thoughts In Between
This week: Do we get the politicians we need or those we deserve; SPACs and the need for price-insensitive money; religious fundamentalism and the internet; and more…

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How smart are politicians anyway?
Do we get the right politicians? I recently wrote a column for new publication Flink that argues that it’s broadly a good thing for humanity if the most ambitious people shun seeking political power in favour of building companies. But, of course, we do need able politicians - and there’s a danger that given the higher financial rewards available in the private sector, democracy may select against competence (I know lots of politicians read Thoughts in Between, but don’t worry, I’m not talking about you…)
I came across this superb (and optimistic) paper this week that suggests that we shouldn’t be too concerned. Using a remarkably rich dataset from Sweden that compiles candidates’ socioeconomic backgrounds, pre-office earnings, IQ and leadership ability, the authors conclude that politicians are, on average, smarter and better leaders than the people they represent.
Moreover, there appears to be no trade-off between able politicians and representativeness. The authors suggests that their results are not the consequence of elite capture of the political process. They find that higher ability is selected for even when they condition on social background - and, indeed, that the distribution of politicians’ parents’ incomes is fairly representative of the country as a whole. Of course, this may tell us more about Sweden than about democracy, but it’s an encouraging datapoint…
The crazy money we need right now
Over the last few months, there’s been a lot of excitement in the venture capital world about Special Purpose Acquisition Companies (SPACs) - a not particularly new, but newly hot, way for private companies to go public. The basic idea is that an investor (usually a well known one) raises money from the public markets into a shell company in order to acquire a private company - which becomes a public one on completion. John Luttig of Founders Fund has the best explainer.
Why are SPACs interesting? First, they’re the latest manifestation of Silicon Valley falling out of love with the traditional IPO, as discussed in TiB 85 (though Matt Levine points out that SPACs are usually much more expensive). Second, they’re an interesting - and high stakes - example of the growing trend of “personal brand as retail product”. Alex Danco has a good post on this idea and what it might mean for Silicon Valley.
Third, and perhaps most interestingly, as Michael Dempsey notes, SPACs represent one way to fund deep tech companies “that today rely more on narrative than business metrics for a longer period of time than previously seen in public markets”. Perhaps that sounds like a bad thing. But Carlota Perez would argue that technology revolutions usually need apparently irrational financial behaviour to become mainstream. And, as my friend Ian pointed out, with Softbank’s Vision Fund floundering (see previous coverage), perhaps SPACs are just the crazy money we need right now. 
The internet, the printing press and fundamentalism
Back in TiB 90 we talked about the parallels between the 16th century Reformation and Bitcoin. Razib Khan has an interesting new post that makes the broader point that information revolutions from Martin Luther to Twitter have tended to drive religious fundamentalism. The core argument is that the disintermediation of elites by texts allows more extreme - and, in Khan’s words, dumber - beliefs to spread (There are echoes of Martin Gurri’s Revolt of the Public thesis, discussed in TiB 80 and 92).
With this in mind, it’s interesting to consider this fascinating profile of the QAnon conspiracy theory and its spread through the US evangelical Christian community, despite the opposition of many pastors. (If you’ve not heard of QAnon - lucky you! The BBC has a good quick overview). In Khan’s framework this is easy to explain: the internet weakens the monopoly on information and authority of church leaders and the ideas that fill the void are more extreme.
It’s tempting for small-L liberals (like me) to see this as a phenomenon of the right, but I suspect it’s more universal than that. As we discussed in TiB 76, there are striking parallels between liberalism and the traditional role of religion in society (see, e.g., this superb Slate Star Code post). And, of course, liberalism is increasingly interpreted not by elite gatekeepers but Twitter. The long term consequences are important to ponder, whatever your politics. 
Quick links
  1. The best way to boost standardised test scores? Surprising / revealing international results.
  2. Not my heresy. Amazing passage on Luther’s take on Copernicus.
  3. Hi Mum! Covid seems to have accelerated inter-generational cohabitation.
  4. AI ain’t cheap. GPT-3 pricing announced (with commentary).
  5. Working from home? What would happen to the economy if no one went back to the office? (Worth reading the replies if you’re skeptical)
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Until next week,
Matt Clifford
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