Matt's Thoughts In Between - Issue #37

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The expensive desire to be an entrepreneur

There's an interesting new economics paper out on the personality and other traits that predict (a) that someone decides to become an entrepreneur and (b) that someone succeeds in doing so. Interestingly, the paper finds that characteristics that make entrepreneurs successful are not necessarily the same as those that drive people to start businesses in the first place.

For example, people who score highly on the Big Five trait Openness to Experience are more likely to want to be entrepreneurs, but also more likely to earn less in self-employment than paid employment.

As the authors point out, this has important public policy implications: small business subsidies "do not attract talented-but-reluctant entrepreneurs, but instead attract individuals with personality traits associated with strong preferences for running a business and low-quality business ideas". This seems like the worst of both worlds. Maybe we need to systematically raise aspiration rather than subsidise self-employment.

If only there was some programme that paid people to try entrepreneurship, but was highly selective on the traits that do predict success...

Is history cyclical?

A few weeks ago, I was fortunate to go to a breakfast with Steven Pinker, who was talking about his new-ish and optimistic book Enlightenment Now. Pinker mentioned that Bill Gates loves it, but the philosopher John Gray hates it ("a feeble sermon for rattled liberals").

The central conflict between Pinker and Gray is that Pinker sees history as as broadly - but by no means inevitably - positive march towards better outcomes, whereas Gray sees it as cyclical: he believes there has been significant regression before and there's likely to be again. Gray is this week's guest on the reliably excellent EconTalk podcast and his pessimism is worth a listen, if only because - continuing a TiB theme - I think it's important to engage with smart critiques of liberalism.

It's interesting how much hangs on this question of how to think about history. Another broadly optimistic liberal is Tyler Cowen, whose Stubborn Attachments I strongly recommend. In Cowen's very long and very good interview with Rob Wiblin, Wiblin asks him what's the most likely way his worldview might be wrong. Cowen's answer: if history turns out to be cyclical. Let's hope not.

Nick Clegg, Facebook and the EU

We had Nick Clegg come to speak at Entrepreneur First last Wednesday (I'll share the video in a future newsletter when it's ready) and on Friday Facebook announced that it was hiring the former deputy Prime Minister as its Head of Global Affairs. I'm not suggesting a causal link (!), but Clegg's remarks in his talk to our entrepreneurs point to two important themes that are likely to be important in his tenure at Facebook.

First, he believes that the collisions between technology and politics are going to be increasingly important (a familiar TiB theme) and that it's critical that the two worlds educate themselves about the other. He expanded on this idea in an oped in the Guardian. It's certainly true that - with some important exceptions - when I speak to policymakers about any technology topic, I'm often shocked by how low the baseline level of knowledge is. But the same is equally true of entrepreneurs and policy...

Second - and much less discussed - the EU is now arguably the most important tech regulator globally, partly because it is both more willing to regulate and more ambitious in asserting its jurisdiction (see, e.g., previous TiB discussions on GDPR and anti-trust). Clegg doesn't have a long history in Silicon Valley and (presumably) less experience in Washington than many candidates for the role. But he knows the EU inside out - and that may be the decisive arena for many of Facebook's policy headaches right now.

Quick links

1. The inner circle. Amazing and thought provoking anecdote about when Daniel Ellsberg met Henry Kissinger.
2. Opposable thumbs. Impressive two-hand robotic dexterity (video).
3. Unlikely bedfellows. What do Mahmoud Ahmadinejad and Silicon Valley liberals have in common?
4. The bad old days. Graphic of transport times in Britain before the railways.
5. Time for some game theory. Brexit as a prisoner's dilemma.

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Until next week,

Matt