Matt's Thoughts In Between - Issue #48

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Is Trump's rise more about lost faith than lost factories?

There’s been endless analysis of why Trump won the presidency, much of which seems - by happy coincidence - to demand we adopt the policy preferences of the writer... This piece, though, on the unusual relationship between religiosity and voting Trump is the most interesting I’ve seen so far. In short, one of the best predictors of Trump support is identifying as Christian but not attending church.

Do read the whole thing. There are lots of interesting ideas that deserve further musing. For example, pessimism about the future is another strong correlate of voting Trump - and this in turn is associated with a drop off in faith:

“The more people worshipping and studying with neighbors with whom they shared a higher cause, the less belief that the American Dream was dead”

This is ultimately a story of institutional decay (presumably it’s not just church; I’d expect to see a similar-ish effect around ex-union strongholds). It’s unclear what can be done to reverse it, short of funding more Mormon missions (the section on Utah is excellent). My colleague Zefi recently asked who is building the future of communities. To me the replies are very unsatisfying. I’m a tech optimist but this doesn’t seem like the sort of problem Silicon Valley is well equipped to solve...

Why is the UK's productivity so poor?

The always interesting Rob Wiblin asks why UK productivity is so low. He’s not the only person to wonder. It’s one of the biggest - and most important - puzzles in UK policy. Ian Goldin’s work at the Oxford Martin School does an excellent job of explaining both why it matters and why it’s so hard to explain.

One big question is where we should look for the problem. Andy Haldane, Chief Economist at the Bank of England, has a good speech on the topic. He suggests that the issue is the long tail of badly managed, low productivity firms. If that’s true, we should worry less about cutting edge technologies and more about diffusion of what's already out there - less AI and more broadband.

But I came across this week this post on the Bank of England's Bank Underground blog, which suggests it's more complicated that that. The long tail may be laggards, but it's the most productive firms whose growth has slowed most since the financial crisis. The author doesn't provide an explanation, but it's worth pondering. I have no data, but I wonder if since the crash our previous star sector, finance, slowed down, but we've not yet replaced it with a truly substantial tech sector, at least compared to the US. If that's right, we need both AI and broadband. I'm biased, but I hope so.

Supply chain diplomacy: Huawei edition

Back in November, we talked about the US's efforts to get its allies to drop Chinese makers of tech equipment. This week, it seemed to pay off, as Germany (and, on a rather different scale, Oxford University) announced that it would no longer work with Huawei, the leading 5G manufacturer. As commentators have pointed out, this is a big deal:

In a matter of few weeks, China saw Huawei - its successful private enterprise and and first native multinational - shut from all high-end markets: Australia, Canada, New Zealand, Japan, Korea, France, UK and probably Germany. Not your run on the mill protectionism or cyber scare

The Huawei moment has escalated nastily into a full-blown diplomatic incident. After Canada arrested CFO (also the founder's daughter) under threat of extradition to the US, China has sentenced a Canadian citizen to death in an apparent retaliation(!).

That might seem surreal, but it's another datapoint in a bigger trend in which controlling the tech supply chain is an top national security priority - particularly as China (apparently) tightens control over its own tech companies and treats them as national security assets. One interesting second order effect to keep an eye on: India's tech/geopolitical importance is in the ascendant.

Quick Links

Of art museums and opioid addicts. Extraordinary, damning thread on the Sacklers - the most destructive family you've never heard of?
Bricks, no mortar. Lego as an asset class.
We were promised flying people... and we got them?
Famous last words. Beautiful piece on what people actually say before they die.
Space is big. How long does it take light to reach Mars? Great animation.

Your feedback

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Until next week,

Matt