Thoughts in Between

by Matt Clifford

Matt's Thoughts In Between - Issue #25

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Which narratives should we believe about China?

Last week we talked about "narrative violations" in thinking about China. Here are two more: first, this New York Times piece that suggests that its technology sector faces a cash crunch that is symptomatic of a broader economic malaise. And then this article that argues, relatedly, that we've passed "peak Xi Jinping" and that the forces of domestic opposition are massing against the leader.

It's hard to overstate how far the first piece goes against the prevailing narrative in the Western tech world. The NYT claims that PE and VC funds "raised less than two-thirds of what they had raised over the same period a year ago", just as Crunchbase argues that the Chinese VC market is more dominant than ever in Asia. And Pinduoduo had a monster IPO this week. More anecdotally, almost every institutional investor in VC I meet tells me that they want to allocate more capital to China.

Similarly, we read that the revealed preference of foreign-educated Chinese is that they've never been keener to return to China. Yet almost no educated American feels that way.

My tentative conclusion, to steal from Walt Whitman, is that we should expect China to contradict itself: it is large and contains multitudes.

Brexit and the meaning of nostalgia

A frequently made point since 2016 is the deep connection between Brexit and nostalgia. This is usually taken as an explanation of the Leave vote, though there was an interesting counter-example this week. Friday marked the sixth anniversary of the (worth a rewatch) opening ceremony of the 2012 London Olympic games. At the time, the ceremony was broadly popular - 84% of the population liked it - but interestingly it has become the centrepiece for a type of Remain-leaning nostalgia for a particular vision of Britain. This tweet is representative, but you can find many more.

I suspect this is a minor instance of a phenomenon we're going to see more and more as the UK's culture wars intensify: the 'factionalisation' of formerly shared experiences (To some extent this has already happened with the England flag, now so often seen as a symbol of xenophobic nationalism, but granted a biennual reprieve for the football World Cup and European Championships...)

I worry this is dangerous. I'm a fairly ardent Remainer, but I can't see the upside from destroying a nation's shared symbols if we want to stay a viable and cohesive political unit.

Strong founders and extreme cultures

Robin Hanson, whose work we've discussed before, has a negative review of Principles by Ray Dalio, the billionaire founder of Bridgewater, arguably the world's most successful hedge fund. If you're not familiar with Bridgewater it has one of the most extreme and unusual organisational cultures in the world, with a focus on total honesty and "extreme meritocracy of ideas". These two profiles in the WSJ are a great introduction.

Hanson's critique is that, while Bridgewater has been extremely successful, assigning causality to its unusual way of operating may be simple survivorship bias. How do we know maximising honesty is better than minimising conflict? Or maximising "extreme ownership"?

More broadly, Hanson argues that Bridgewater's methodology isn't generally applicable:

This book seems useful if you were the absolute undisputed ruler of a firm, so that you could push a culture of your choice and fire anyone who seems to resist. And were successful enough to have crowds eager to join, even after you’d fired many.

But that sounds like a lot of entrepreneurs to me. Perhaps that's one marker of future founders: people whose organisational preferences are so extreme that they can only be satisfied if they get to be CEO... Certainly not the weirdest theory of entrepreneurship in the news this week.

Quick links

  1. The death of the humanities... Great chart on the decline of the arts majors in college.
  2. ... and death in Shakespeare. Equally great chart showing how Shakespeare kills off his many victims. (Prize to the first TiB reader to reply with the name of the character who's baked into a pie...)
  3. The fall and fall of agriculture. What does the British labour force look like over the very long run?
  4. All these VCs with their strong views on German philosophy. Peter Thiel is teaching a class at Stanford.
  5. From ICO to... failure? Excellent in-depth report on the crypto-economy. And Twitter thread summary here.

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Until next week,