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TiB 88: the internet in historical context; what China wants; new kinds of charities; and more

This week: Facebook in historical perspective; what China wants and why it matters; institutional inn
October 29 · Issue #88 · View online
Matt's Thoughts In Between
This week: Facebook in historical perspective; what China wants and why it matters; institutional innovation in nonprofits; and more…

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Facebook in historical perspective
I don’t usually revisit the same topic two weeks in a row, but just after TiB came out last week, Ben Thompson published the best essay yet on Facebook and free speech and I feel it’s worth further commentary. Do go read it. (This piece is un-paywalled, but in any case if you don’t subscribe to Stratechery already, it really is the best tech analysis out there).
Thompson situates the rise of the internet in historical context and compares its disintermediating role to that of the printing press. It’s a familiar analogy, but Thompson treats it with more subtlety and sophistication than is typical. The point I want to amplify is the one in the final paragraph: macro-historical shifts are drawn out processes, however fast the tech moves. The Reformation - partly enabled, as Thompson argues, by the printing press - took centuries of (bloody) struggle (This is the best book on it) - and left the Catholic Church diminished but far from dead. 
Today the nation state is not dead yet either. The US government poses an existential threat to Facebook, hence Zuckerberg’s attempt at self-regulation via an Independent Oversight Board. The problem is, Zuck is so powerful - an absolute monarch in his company, given his voting rights - that he can’t credibly commit not to intervene. As Henry Farrell (previous coverage) says in this superb interview, absolute monarchs have always faced this challenge: their countries became more successful once the ruler was constrained (see this paper). This may yet prove true of Facebook too. 
What does China want?
I’ve written a lot recently about China’s growing ability to project its values into the West (and its “hard power” is growing too). Given this, it’s important to build an accurate model of “what China wants” if we are to avoid great power conflict with disastrous consequences. The always excellent Tanner Greer (see previous coverage) has a recent piece in Foreign Affairs in which he lays out two perspectives on the topic.
In the first - represented by the book China’s Vision of Victory by Jonathan Ward - China seeks global dominance for geopolitical/economic reasons. It has core economic interests far outside Asia-Pacific and seeks a unipolar world anchored in Beijing. Greer himself argues for a second viewpoint, which he elaborates on his blog. For Greer, the CCP’s motivation is primarily ideological, not purely economic: as long as the CCP’s ideological opponents can “freely speak within the United States, America will be seen as a threat to the Chinese party-state”, whatever China’s economic dominance.
This points to a broader question in international relations - do ideas or interests shape action more decisively? As Dani Rodrik notes, it can sometimes be difficult to distinguish the two. But if Greer is right, it’s a question of growing importance. If we’re to avoid the Thucydides Trap we discussed a couple of weeks ago, it’s essential that the West - and above all the US - understands the motivations of its new(ish) rival for power. 
Can new non-profit structures do more good?
I’m very interested in how new kinds of institutions can enable progress. Paul Christiano (a prominent figure in the effective altruism movement; see previous coverage) recently proposed an interesting institutional experiment for not-for-profit organisations. The basic premise is that employees and donors want to maximise their impact, but it’s usually unclear what level of talent and capital allocation achieves this, as - unlike in the private sector - there’s no price signal.
Christiano proposes to resolve this through a quasi-market mechanism: a charity raising money would set a “valuation” that implicitly prices the impact relative to other opportunities. Donors receive “altruistic equity” in return, which represents “credit for impact” rather than a claim on profits. Crucially, assuming that employees have been assigned altruistic equity too, employees can gauge their own value in producing impact. The author believes this should allow more efficient allocation of resources.
It’s tempting to look at venture capital and see analogues with effective altruism, especially in the fact that some outcomes are orders of magnitude better than others (I gave a talk on this a while ago). But the big difference is that VC prices its inputs and its outputs in the same currency - cash - which allows big wins to pay for many failed investments. As “altruistic equity” is not fungible, there is no “exit” that enables this reinvestment. It’s interesting to think about what the equivalent of an IPO is for an effective charity (a GiveWell recommendation?) If you’re interested in maximising good, there’s lot to ponder here. 
Quick Links
  1. Talent is globally distributed, part . Startups that “win” more H1-B visa lotteries do better.
  2. Inelastic weed. What happened to demand when cannabis supply exploded? Interesting chart.
  3. One belt, one roadblock? Chart of the surprising slowdown of China’s OBOR initiative.
  4. We got 280 characters. Interesting thread of one-tweet critiques of capitalism.
  5. We’re all secularists now. Striking chart on the growth of atheism in the Arab world. And a fascinating example of competitive response from the Catholic Church!
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Until next week,
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