Category Archives: Non-fiction

“Sapiens” by Yuval Noah Harari

This book is well written, and has a certain provocative style that threatens to demolish certain preconceived notions.  It really makes you think.

For starters though, this really is a work of evolutionary psychology masked as an overview of history.  Human ancestors have been around for 2 million years or so, and homo sapiens themselves for about 200,000 years.  For most of that time, change was slow; it’s no wonder that our breakneck race into modernity has been accompanied by some growing pains, which result when our current lifestyle doesn’t match the expectations of our biology, honed by evolution through the millennia prior to the great revolutions that shaped our natures.

The first great turning point was the Cognitive Revolution.  Somehow, homo sapiens developed the use of language, accompanied by the capacity for abstract thinking.  Language is obviously useful for warning the tribe of danger, and for planning the hunt.  Some scholars surmise that the use of language for gossip also played an important role, as it allowed for the shaming and shunning of slackers and wrongdoers who weren’t acting in the interest of tribe.

Also unique in sapiens among all the animals (as far as we know) is a belief and conceptualization of things that aren’t really there.  “Large numbers of strangers can cooperate successfully by believing in common myths. Any large-scale human cooperation – whether a modern state, a medieval church, or an archaic tribe – is rooted in common myths that exist only in people’s collective imagination.”  This is a pretty interesting concept — myths as a survival trait and a motivator towards collective goals, rather than just a “bug” in our critical thinking.

Corporations as modern collective myths: “According to the French legislators, if a certified lawyer followed all the proper liturgy and rituals, wrote all the required spells and oaths on a wonderfully decorated piece of paper, and affixed his ornate signature to the bottom of the document, then Hocus pocus – a new company was incorporated.”

Religion is a big part of the collective “myths” we believe in, but which might be useful to drive community to action and as a shared cultural touchstone.  So, are we in trouble if we live in a society which is slowly rejecting religion?  Is religion necessary to compel the masses to be altruistic, and/or to provide hope in the face of death and despair?  Or is it sufficient to supplant religion with other causes, eg. equal rights or social justice?  Although Harari demolishes the idea of special human rights as well.  He points out that belief in humanism takes as much faith as belief in God – indeed, “without recourse to eternal souls and a Creator God, it becomes embarrassingly difficult for liberals to explain what is so special about individual Sapiens.”

Anyway, next up is the Agricultural Revolution, or “history’s biggest fraud.”  “What?” you think.  “Agriculture is the foundation of civilization, no??”  Well, Harari contends it actually made individuals worse off, since we were not doing activities we had evolved to do, not eating the diets our bodies were accustomed to, and were more prone to famine due to a less varied, more insecure food source.  HOWEVER, agriculture was better for the species as a whole since it allowed for a population explosion.  Essentially, we went from an idyllic king-of-the-beast, top-of-the-food-chain existence to miserable peasants tending the fields.  Kind of like how lifestyles expand to consume all available income.  It’s a similar story for domesticated animals – they are a resounding success from an evolutionary perspective, but individually they often live short lives of misery.

The rise of humanity has been horrible for other forms of life.  Not sure which is worse, those being wiped out by extinction or those domesticated species being exploited by the billions.  “Just as the Atlantic slave trade did not stem from hatred towards Africans, so the modern animal industry is not motivated by animosity.  Again, it is fueled by indifference….Ironically, the same scientific disciplines which shape our milk machines and egg machines have lately demonstrated beyond reasonable doubt that mammals and birds have a complex sensory and emotional make-up.  They not only feel physical pain, but can also suffer from emotional distress.”  (I wonder if Harari is straying into the same contradiction for which he decries humanism — what’s so special about animal lives, or anything really?  Kind of have to pick something, or else why are we here!?)

All right, the rest of this is just going to be a list of some thoughts I liked.

  • Freedom vs equality – these are opposite ends of a spectrum.  Think about that.  We probably need to remember that for the Founders of the USA, equality = equality in eyes of the law and equality of opportunity, not equality of condition or wealth.
  • All cultures have always been in a state if flux.  Religion is a conglomerate: “The average Christian believes in the monotheistic God, but also in the dualist devil (dualism seems solves problem of evil but doesn’t mesh with all-powerful God), in polytheistic saints, and in animist ghosts.”
  • I really like the concept of “empty maps”.  Before the Age of Discovery, maps were often depicted in complete form.  Even though people knew little of lands beyond their backyard, they felt free to fill in the gaps with religious explanations, folklore, or legend.  But then the scientific revolution became concerned with reality and describing things as they actually are; and a big part of that is being honest about what we do not know.  Hence publishing maps with large empty spaces – by its very nature, this provides a goal for us to discover real knowledge.
  • Economies thrive in a world of law and trust.  We wouldn’t be willing to lend money if we didn’t have a reasonable expectation of being paid back.  Furthermore, “the most important economic resource is trust in the future… markets by themselves offer no protection against fraud, theft, and violence.  It is the job of political systems to ensure trust by legislating sanctions against cheats and to establish and support police forces, courts, and jails which will enforce the law.”
  • World is becoming more peaceful: “while the price of war soared [threat of nuclear annihilation], its profits declined [wealth in today’s world is mainly intangible assets like patents and technology, not land and resources]”.  Harari would agree with Michio Kaku that we are moving towards world government.
  • “Amortality” – coming when we conquer death.  Paradoxically, it will bring anger – from those unable to afford the undoubtedly expensive treatments, and anxiety – from those who no longer fear aging, but still are vulnerable to accidents, violence, and the loss of friends and loved ones.
  • “Bioethicists should not only ask ‘What should be forbidden?’ but ‘What should we want?'”  Some biologists assert that happiness is just a product of brain chemicals; if we want to increase happiness we should develop new medicines to alter those chemicals.  Most people are averse to living in a false drug-induced “happiness” – but with any good reason?  Alternatively, there is strong evidence that having meaning in our lives provides happiness.  Medieval peasants lived impoverished lives, but presumably were happy striving for their place in God’s heaven.  But when we lose these “collective delusions” what about the meaning in our lives?  Is any meaning we come up with ultimately just a delusion?  (A very Buddhist thought … maybe we just should let it go…)
  • It seems inevitable that we will create new life beyond humanity.  Whether genetic supermen, or artificial intelligence, or some combination in between, homo sapiens may not be long for this world.  Something else will exist, which may have very alien thinking and motivations.  So much of what we “are” is based on our evolutionary past and hunter-gatherer lineage; with our new children we can change all that.  But to what?  Haunting final line: “Is there anything more dangerous than dissatisfied and irresponsible gods who don’t know what they want?”

Those last two bullets are what really wrap up the book.  We’ve been on this long journey, more or less guided by chance.  But now seems different – we are able to choose our next step.  Maybe deciding what that should be, and striving for it, is the new cultural (or personal) cause from which we can derive meaning.  There is no meaning to life except what we make of it, so what is the cause for which we should strive next?

(At the risk of destroying my provocative rhetorical, I’ll say that providing an interplanetary insurance policy on humanity’s existence a’la Elon Musk going to Mars seems like a good first start.)

Advertisements

“Physics of the Future” by Michio Kaku

Interesting description of future technology, but doesn’t get very deep into the physics involved.  Probably because that would get rather complex very quickly.  So really it’s just a list of “won’t it be so cool when” stuff.  The list holds no big surprises.  Big entrants are AI, virtual reality, fusion power, nanotech, and gene manipulation.

Everything’s at different stages.  For some items, like AI or fusion power, we just don’t have a viable method yet, but Kaku is optimistic that the current trajectory of progress points to a solution in <100 years time.  For other items, prototypes already existing and what remains is an engineering challenge to get them workable at an economical scale.

Kaku predicts a collapse of Moore’s Law in the ~2020’s, with a big impact to the economy, because people’s computing devices won’t become obsolete as fast.  But then again, he predicts a world filled with chips.  So maybe a wash for the tech sector?

As for AI, Kaku’s prediction is a slow rollout.  We won’t have human-level AI for a very long time, particularly if we follow our brain’s blueprint.  Kaku estimates one billion watts plus an entire river for cooling in order to simulate one brain.  So maybe another path is in order.  (Minsky’s Society of Mind is a possibility.)  But, then would it really be a “human” intelligence?  I wonder if we will come up with “other” intelligences which are not human-like at all, but are just as advanced.  Kind of a weird thought — alien AI…

In medicine, we will likely always have some disease, due to the sheer # of viruses and their rapid mutation rate.  But we should be able to generate vaccines very quickly, by sequencing any new viruses DNA and finding weak spots.  We’ll also have nanotech robots in our bodies, constantly monitoring for and neutralizing any cancer cells, years before they become problematic.

For fusion, two promising current experiments are NIF (laser fusion) and ITER.

In the concluding chapter, we have an almost-comically written account of daily life in 100 years.  It’s a grand utopia: wall screen AI, magnetic superconducting highways, programmable furniture, major cities submerged or fighting back the oceans (ok, almost a utopia), genetic engineering of babies, elimination of cancer and aging, AI taking over all menial jobs and freeing us to do creative tasks.  Sounds pretty nice, although I couldn’t help but wonder how this utopia might be subverted, ala Black Mirror or Gattaca

“How Jesus Became God” by Bart D. Ehrman

Although the author wrote many books in between, I see this as a good follow-up to “Misquoting Jesus.”  In the first book, Ehrman established that what we have in our New Testament today has been modified extensively over the centuries.  We probably won’t really know what the “original” sources looked like, but by examining what’s left and applying critical thinking, we can at least lay a baseline.  For instance, one method scholars use to determine veracity of early documents is the criterion of dissimilarity: if something would have been unlikely for an early Christian to have wanted to add it, then we can consider it more authentic.  There are other methods, all of which are like applying psychological detective work to long ago history.

Now in “How Jesus Became God”, Ehrman looks at the reasons for Christianity’s belief in a divine Jesus.  He starts by pointing out that myths and stories about people becoming divine, or divine beings becoming human for a time, were not uncommon in the time period.  One example who can actually be described in very similar fashion to Jesus was Apollonius.  What we can, with high probability, say about the life of Jesus: he was baptized by John, was an apocalyptic preacher who declared a soon-to-come kingdom of God on earth, and was executed for teaching that Jesus himself would be the Messiah, God’s chosen king in that kingdom.  (Ehrman suggests that this latter teaching, of Jesus as future king, was the secret that Judas betrayed to the authorities.)

“Jesus began his ministry by associating with a fiery apocalyptic preacher, and in the wake of his death enthusiastically apocalyptic communities of followers emerged. The beginning was apocalyptic and the end was apocalyptic. How could the middle not be?”

So how did we get from the life of Jesus, a man, to the concept of Jesus as God?  If you know the New Testament you might think the answer is obvious: because Jesus said he was the Son of God.  But all those passages can be shown to be later additions.  “…the followers of Jesus, during his life, understood him to be a human through and through, not God.”  In Ehrman’s hypothesis, Jesus was not thought of as anything more than a holy man during his life.  But then, after his death, his followers began to believe that he had been resurrected.  This was the key that caused early Christians to re-evaluate the teachings of Jesus, and to retrofit his identify as more-or-less God himself.

What caused them to believe in the resurrection?  Ehrman points out that leaving bodies up on the cross to rot and be eaten by scavengers was a big part of the punishment of crucifixion – it would have been unusual to allow someone to be taken down only a few hours after death.  The tomb provided by Joseph of Arimathea is probably an invented story.  The belief in resurrection could have been due to visions experienced by a few key followers, namely Peter, Paul, and Mary.  Ehrman notes that ~10% of people (P. McKellar 1968, T.B. Posey 1982, A.Y. Tien 1991) have reported vivid visions or hallucinations at some point in their life, not uncommonly during the grieving period for a loved one who has unexpectedly passed (“bereavement visions”).  The accounts of Jesus appearing physically to all the disciples were probably added later – stories of doubters remain but don’t make sense if he was actually physically there; they do make sense if the doubters were only doubting the visions that others reported.

Continuing the evolution of beliefs, Ehrman posits that the early Christians first subscribed to a “low” or “exaltation” christology: that Jesus was a man, who was exalted at his death to semi-divine status, as evidenced by the miraculous resurrection.  The earlier gospels Matthew, Mark, and Luke, mostly support this view of Jesus.  (Note that Ehrman mostly rejects John as historical as it is much different in tone and a much later addition — 90 AD.  John is the source of virtually all of Jesus’s own clear divinity claims.  I can picture the apologists: “easy to argue your claims when you throw out our most powerful source!”)

In not so many years, the low christology became a high, or “incarnation” christology: that Jesus was a pre-existing divine being, who came down to earth as a human.  Ehrman admits something is not quite right with his timeline, since the earliest parts of the New Testament, the Pauline epistles written about 50 AD, suggest a high christology but the early gospels, not written until 65 AD at the earliest, suggest a low christology.  Some speculation is that the oral traditions which later became the early gospels pre-existed Paul, but were just not written down yet, or at least not in any form we still have.  (For that matter, consider that the whole of early Christian belief was not written down for many years, but was like the game of telephone.  We don’t have any original sources written in Aramaic, the language of Jesus and his immediate followers, but only in Greek.)

As time went on, doctrine continued to be molded and heresies (which are only ideas which ultimately were not accepted by the church) pronounced as scholars and leaders tried to reconcile incompatible scripture.  Witness the admittedly weird doctrine of Trinity: God the Father, the Son, and the Spirit are One, but separate.  Jesus was fully divine, but also fully human.  What does that even mean??  The heresy of Marcion was particularly interesting.  He thought the God of the Jews and the God of Jesus were separate beings, one a god of justice who established the law, and the other a god of mercy who provided the means (Jesus) to save us from the law.


This is a fascinating book, particularly for someone with a Christian background.  Part of me wonders, is this really true?  Is Ehrman just spouting off lies from the devil, trying to lead me astray?  I think, ultimately, belief is a choice; we can never know the truth of practically anything, much less the truth of events which occurred two thousand years ago.  But Ehrman and his colleagues are the world experts – in a blog post, Ehrman points out that his views are more or less the consensus of bible scholars at all the major universities in America; after all they use his textbook.  They are the heirs of many before them and the torch-bearers holding the best reconstruction of events that humanity can muster.

The exception, people who disagree with him, come from the evangelical bible college and fundamentalist apologetic community.  Something in this disagreement strikes very deep, and is very similar to what I’ve noticed in researching Mormonism lately.  If truth is what you are after, then you should consider the merits of all sources and all sides.  Weigh the evidence, and see where it leads.  Pre-supposing a conclusion is what I see apologists do time after time.  Sure, you can cherry-pick little details which support your position.  That’s what flat earthers and anti-vaxxers do, too.  But looking at the big picture and deciding what the whole of the evidence suggests is the more sound method.

I wholeheartedly admit I am not and will never be an expert on the bible, or early Christian history, or early Mormon history, or anything really.  Relying on the consensus of experts, while not totally abandoning our own critical thinking and realizing that we will never know the whole “truth”, seems like the best option we have.

 

“The Geography of Bliss” by Eric Weiner

The author sets off to many places around the world to find out what makes us happy.  Pretty entertaining travelogue, interposed with some philosophy and psychological research about happiness.

Key ideas on happiness:

  • “Wanting” and “liking” activate different parts of the brain.  What we want is not always the same thing as what makes us happy.
  • Trust is a huge part of happiness.  We need to have trust in our neighbors, government.
  • On the flip side of trust, envy is toxic to happiness.
  • Family, friends and relationships are important.
  • Recipe for happiness: count the number of kind acts you do each day + think about death each day (makes you realize each moment of life is a gift).
  • Hedonic adaptation: events may temporarily boost our happiness high (winning the lottery) or low (being paralyzed in a serious accident), but over the long term an individual’s happiness levels are generally consistent.

Some notes on some countries he visited:

  • Bhutan: “Gross National Happiness”
  • Qatar: Riches don’t buy happiness.
  • Iceland: head of Iceland’s “Heathen” religion admits it all might be a “confused muddle” but still people need a belief system in order to have transcendental spiritual experiences.
  • Moldova: Least happy country on the list that isn’t at war.  Moldovans are glad when misfortune strikes others – “at least it wasn’t me!”  (Although, seems like author was looking for misery and found it…)
  • Thailand: too much introspection, even about happiness itself, causes unhappiness.  Just go with the flow.

A paraphrased quote: “Maybe happiness is being in a place where you don’t want to go anywhere else, or just being yourself and not wanting to be anyone else.”

“The Demon-Haunted World” by Carl Sagan

Sagan summarizes why he wrote this book, his last before dying in 1996:

Science is more than a body of knowledge; it is a way of thinking. I have a foreboding of an America in my children’s or grandchildren’s time — when the United States is a service and information economy; when nearly all the key manufacturing industries have slipped away to other countries; when awesome technological powers are in the hands of a very few, and no one representing the public interest can even grasp the issues; when the people have lost the ability to set their own agendas or knowledgeably question those in authority; when, clutching our crystals and nervously consulting our horoscopes, our critical faculties in decline, unable to distinguish between what feels good and what’s true, we slide, almost without noticing, back into superstition and darkness.

Twenty+ years later, I’d say America is not much better off…

Sagan spends the good first chunk of the book discussing UFOs and alien abductions.  This is an interesting subject in its own right, particularly with Sagan’s involvement with SETI.  But it is also a good example of the type of pseudoscience, lacking in firm evidence, which he feels is so dangerous to our society.

One interesting point, which informs the choice of title, is that alien abductions are awfully similar to medieval accounts of demons and witchcraft, even down to the often sexual nature.  Many other details which Sagan describes point to these events as being almost solely psychological.  He does propose a clever test for those claiming to be in contact with presumably-advanced aliens: ask them unsolved mathematical problems for which a correct answer would be immediately recognized.

Some possible explanations of UFO sightings may be gleaned by examining conditions during their heyday, the late 1940’s through the early 1960’s.  Nuclear missiles were being developed, and a key aspect being worked out was re-entry.  Tests would have resulted in strange lights in the sky, along with an evasive national security response, since acknowledgement could give away what our national capabilities were.  Also during the same period, US and Soviet aircraft were routinely testing each others radar defenses, perhaps even with experimental aircraft.

A few more examples from the book of pseudoscience:

  • There is a human innate tendency for pattern recognition (especially faces): Man in the Moon, Jesus in tortillas, face on Mars, canals on Mars.
  • Incredible and horrifying story of Paul Ingram.  He was led to believe that he had actually done horrible things to his children under Satanic influence.
  • Carlos Hoax – incredible story of a deliberately fake medium who still fooled the entire Australian media.  Even when the hoax was revealed, some people insisted that the revealers were lying and he was a real channeler.

The gist of the matter is that we should be more skeptical.  “Extraordinary claims require extraordinary evidence.”

Everything hinges on the matter of evidence.  On so important a question, the evidence must be airtight.  The more we want it to be true, the more careful we have to be.  No witness’s say-so is good enough.  People make mistakes.  People play practical jokes.  People stretch the truth for money or attention or fame.  People occasionally misunderstand what they are seeing.  People sometimes even see things that aren’t there.

And from Sherlock Holmes:

It is a capital mistake to theorize before one has data.  Insensibly one begins to twist facts to suit theories, instead of theories to suit facts.”  We should make theories from facts, not twist facts to fit theories.

And the opposite attitude, which Sagan quotes from from Theodore Schick Jr and Lewis Vaughn:

There’s no such thing as objective truth.  We make our own truth….If an idea feels right to you, it is right.  We are incapable of acquiring knowledge of the true nature of reality.  Science itself is irrational or mystical.  It’s just another faith or belief system or myth, with no more justification than any other.  It doesn’t matter whether beliefs are true or not, as long as they’re meaningful to you.

NO!!!!

Several concluding chapters bemoan the state of science literacy and education.  Is it any better now, with widespread internet?  Seems to be … or am I just in my own Google-personalized bubble?  Fake news and pseudoscience seems just as easy to find as real science.  Are all the skeptics getting more skeptical, and the gullible getting more gullible?

For formal education, Sagan echoes Dorothy Rich, teacher from Yonkers: more important than traditional subjects are “confidence, perseverance, caring, teamwork, common sense and problem solving” + skeptical thinking and an aptitude for wonder.

Sagan stresses the need to fund basic scientific research, even if there is no known application – it’s the “seed corn” of the future.  Maxwell had no idea about radio, television when coming up with his equations.

My big thought after reading this book is on science vs. pseudoscience: how do you know what’s true when you don’t have a lifetime to devote to personal study and experimentation in the subject relevant to whatever is being claimed?  It seems like you have to trust someone at some point.  Maybe we just stick with the general scientific consensus?  More often than not, this will probably be the best we can do… but many times the whole of a scientific field has been upended by a single individual, fighting the system.  Eg. Copernicus, Darwin, continental drift theory.

One thing Sagan does offer us to determine truth is the “baloney detection kit“:

  1. Wherever possible there must be independent confirmation of the “facts.”
  2. Encourage substantive debate on the evidence by knowledgeable proponents of all points of view.
  3. Arguments from authority carry little weight.
  4. Spin more than one hypothesis. If there’s something to be explained, think of all the different ways in which it could be explained.
  5. Try not to get overly attached to a hypothesis just because it’s yours.
  6. Quantify. If whatever it is you’re explaining has some measure, some numerical quantity attached to it, you’ll be much better able to discriminate among competing hypotheses.
  7. If there’s a chain of argument, every link in the chain must work (including the premise) — not just most of them.
  8. Occam’s Razor. This convenient rule-of-thumb urges us when faced with two hypotheses that explain the data equally well to choose the simpler.
  9. Always ask whether the hypothesis can be, at least in principle, falsified. Propositions that are untestable, unfalsifiable are not worth much.

I think the hesitation of the masses to accept science and instead choose willful ignorance or belief in religion or pseudoscience is that ultimately science runs out of answers – there will always be the wall of “we don’t know”.  (But, over time, that wall inevitably shrinks; until it exposes the next one behind it…)  The quest for truth will never end, and precious little meaning to existence has been uncovered by science.  The alternatives have convenient, pleasing, and comprehensible (at least superficially) truths.  “Oh, just follow that prophet and I’ll get to heaven and be joyous forever!  Awesome!”  vs. “We are just highly evolved apes; there is no meaning in life beyond what you make of it.” — this makes us work to find our own causes; it’s so much easier to just have someone tell us what to do!

Maybe it is ok to permit some delusion?  Good things have been done by those believing in something other than reality.  Sagan:

…if the comfort, consolation and hope delivered by mysticism and superstition is high, and the dangers of belief comparatively low, should we not keep our misgivings to ourselves?  But the issue is tricky…if we offer too much silent assent about mysticism and superstition – even when it seems to be doing a little good – we abet a general climate in which skepticism is considered impolite, science tiresome, and rigorous thinking somehow stuffy and inappropriate.

 

 

 

“Elon Musk” by Ashlee Vance

Elon Musk seems like kind of a jerk to work for, and live with apparently – he often told he wife “if you were my employee I would fire you.”  But, man, what an incredible vision.  The reason he drives people so hard is because that’s what he demands of himself, and if he is giving his all then you should too.  For Elon, life is short and there is so much to be done to realize a goal so much more important than almost anything else: the very future of humanity itself.

This sounds very grandiose, but I think that is really what he is motivated by.  And I am glad he is out there doing it!  (But like I said, I think I’m too lazy and incompetent to work for him … but at the same time I sort of idolize his commitment and capability.  Weird/not weird?)  Elon’s purpose in life is to make humankind a multi-planetary species.  We need this as a kind of insurance policy against asteroid strikes or super-volcanoes or good ol’ fashioned nuclear holocaust or irreversible global warming.  A few of these at least seem a little too probable for us to remain comfortable while doing nothing.

One in particular, global warming.  Contrast what Elon is doing, with SpaceX trying to get us to Mars and Tesla (although he started out as more of an early investor in Tesla rather than a founder, but gets furious when people point this out) trying to get us using non-polluting cars, with Mayer Hillman giving up and saying we are doomed … Even if Hillman is right, I’d rather humanity goes down swinging!

Some of Elon’s lack of empathy and demanding nature might be explained by his father.  There isn’t much detail given, but Elon said “he managed to turn any happy moment miserable” and effectively psychologically tortured his kids.  Sounds horrible.

On the other side, his maternal grandfather sounds like quite a character.  Joshua Haldeman was a pioneering chiropractor in Canada when he abruptly decided to move the family to a life of adventure and flying bushplanes in South Africa in 1950.

After making a lot of money in the dot-com era with the sale of his first company Zip2, and then after being forced out at Paypal, Musk found himself with a lot of money and free to pursue his real goals.  He became involved in a concept called Mars Oasis, which would try to grow Earth plants on Mars.  This led to starting SpaceX.

In 2008, SpaceX seemed unable to have a successful launch, Tesla was running out of money, and Elon was going through a divorce.  Not a fun time.  But he perservered, and really was vindicated with the 2012 successful Falcon 9+Dragon launch to the ISS and the launch of the Tesla Model S.  And things have looked bright since then.

Recently I was in LA and stopped by the SpaceX factory in Hawthorne.  I wasn’t expecting to see much, but there is a mockup of the Falcon 9 first stage outside, which is pretty cool.  Later the same day, we saw the Getty Villa, which is a recreated Roman villa, stocked with ancient Greek and Roman statues and other artwork.  The contrast kind of struck me: here are two ways to spend your wealth; one looking forward and one looking back.

Elon Musk is a serial workaholic, very impatient with “fools” (anyone who disagrees with him), and fairly lacking in empathy.  But like I wrote above, I think it is all due to how important he feels his goals really are.  I’m glad he’s working on them and I’m sure he’ll have a place in the history books.

A few things from the Appendix which were interesting on their own:

  • Per Musk, PayPal’s secret to success was minimizing cost per transaction.  The best way to do this is with internal transactions, which are secure (no costs due to fraud) and have no external processing fees.  So, the goal is to encourage people to keep money in PayPal.  Counter-intuitively, making it very easy to transfer money out of PayPal made people more comfortable with leaving money there. Also, offering high money market rates is not a money maker for PayPal – it is to have people maintain a balance.
  • Musk’s letter to SpaceX employees on (not) going public (2013): very clear that he’s not in business to get (more) rich: “Creating the technology needed to establish life on Mars is and always has been the fundamental goal of SpaceX. If being a public company diminishes that likelihood, then we should not do so until Mars is secure.”  Also: “If you really are better than most hedge fund managers, then there is no need to worry about the value of your SpaceX stock, as you can just invest in other public stocks and make billions of dollars in the market.”

“Boomerang” by Michael Lewis

Before the 2008 credit crisis, countries discovered they could borrow extraordinary sums and do whatever they wanted.  Big debt ensues.

  • Iceland – became heavily involved in investment banking, from virtually no experience at all. They would borrow foreign money cheaply, use it buy assets (land and companies – usually not the best ones) at inflated prices. Therefore they now have booked some very valuable assets, and they would continue the cycle by borrowing again, with the assets as collateral.  Worked as long as people kept accepting the rising, inflated asset prices.
    • “We don’t have a debt crisis; just a liquidity crisis!”  Well, here’s what that really means: you sell me your cat for $1 billion, and I sell you my dog for $1 billion.  Now we each have assets worth $1 billion, awesome!  I decide to borrow a paltry sum, $10 million, with my $1 billion cat as collateral.  Life is good!  But $10 million doesn’t last as long as it used to, and I start to get behind on the payments…  Hmmm, well, (sorry Fluffy!) I guess it’s time to sell this $1 billion cat!  Uh, oh; no one will pay me $1 billion for old Fluffy.  But I’m still worth $1 billion, you know; it’s just a non-liquid market right now for $1 billion cats.  A liquidity crisis!
  • Greece – government was too generous. Incredible pension and govt wage insolvency. Everyone cheats on taxes.  There’s a monastery which traded a lake it had been ceded in medieval times for millions in government land.
  • Ireland – incredible property development boom, but with no real customers. A few banks about to go under due to their ill-advised investments; inexplicably govt decided to bail them out.
  • Germany – very trusting; think that everyone else follows the rules like they do.  And so they get burned.  They thought AAA rated bonds meant risk free. Didn’t care about what the bonds were actually for, as long as they had a good rating. Interesting stories of American banks creating complicated investment products with sole purpose of selling to suckers like the Germans and then having their own traders short.
  • California – incredible pension debt and gerrymandering which prevents anyone from solving the problem.  Points to example of moderate, popular Schwarzenegger making no progress as example of this.

In the end, Lewis doesn’t really leave us anywhere besides knowing some stories about bad big finance decisions.  There’s some attempt at guilt – bankers choosing to go so deeply in debt that they sink their country does seem pretty immoral.  But did that stop anyone from doing it?  No.  People are wired for self-interest, that’s why capitalism works.  Unfortunately they also are poor at evaluating risk; but even if we could do it perfectly no one’s risk tolerance is the same.  So what do we do?  I think that’s the pickle.  It seems like the answer is regulation to prevent future-crushing deals (for those other than the parties to the deal itself – we should allow banks to fail!) from happening in the first place, but I think the problem is bankers are creative at finding loopholes, and politicians don’t want onerous regulation which would be seen as hurting they economy.

From a personal level, takeaway is that debt is bad – avoid.  But even if you are totally clean, it is possible that others will screw up your country or currency.  Maybe bitcoin is the answer?  Although that suffers from similar problems – large bitcoin holders kind of determine its future.  Diversification in many currencies?

“Rework” by Jason Fried and David Heinemeier Hansson

Really short audio book of 3 CDs, but very dense on good ideas.  (Well, at least they sound pretty good.  Lately I often think of the survivorship fallacy when hearing someone who “made it” tell their secrets of success – are those really repeatable formulae that would work for me, or were they just lucky??)

Lots of good tips on starting/maintaining a business, but overall the biggest message I got is this: have a great product and be confident about it.  Doesn’t have to be great for everyone, just enough to satisfy you and enough to secure customers to sustain your business.  Never forget why you are in business: to get a better life for yourself (via providing a useful product or service to others).

There’s something of the message of Siddhartha here too – you have to make your own path in business, too; as well as in life in general.

  • Learn from successes, not failures. Success rate of businesses with a founder who succeeded already at a first business is 34% vs 23% for those who already failed with a business… 23% is the same success rate for those who are starting their first business
  • Start small and frugal – no need for unnecessary growth
  • Your idea doesn’t need to be unique; you just need to execute better than anyone else

 

 

“Backstage Wall Street” by Joshua Brown

This is not a book advising you on what to invest in; rather it is advice on what to avoid.  Or rather, who to avoid.  Never forget that brokers, fund managers and the like are salesman, first and foremost and often last.  They want your business because that is how they make their money.  According to the author, who was one for many years, they spend so much time honing their sales skills that they typically are no better at picking stocks than their clients.

Some specific tips:

  • Go ETF, not mutual funds
  • For foreign indices go with equal weight indices rather than market cap weight (since typically one or two large companies dominate)
  • “Buy and hold” and the futility of timing the markets “is one of the greatest stories ever told, despite the fact that in the past century we’ve seen 25 cyclical bear markets and two bone-crushing secular bear markets.”  Investment professions market and promote stories which serve their interests, so always think about what they are trying to convince you to do, and why.
  • Avoid like the plague: SPACs (companies which set up an all-star management team first, they find a struggling company to buyout and “turn around”), reverse Chinese mergers (similar; but involves a Chinese company with majorly cooked books buying a small, yet stock market listed, company in order to get themselves listed after the merger), “one-drug biotechs” (there are only ~7 biotech-developed drugs approved by the FDA each year)
  • If you must get investment advice, hire an RIA (Registered Investment Advisor), who are fee-based rather than commission-based, and have a higher fiduciary responsibility to their clients: “I work with smart people who are more concerned with what’s right rather than ‘What can I sell?'”

“Islam: A Very Short Introduction” by Malise Ruthven

I heard about the “Very Short Introduction” series not long ago and thought it sounded so cool!  But now I’m not so sure – there’s a lot of info in this book, but it didn’t seem like a very good beginner’s introduction to the topic.  Very highbrow and graduate-level, I thought.  Anyway, I did learn quite a bit.

  • There’s no central religious authority in Islam like Western Christianity had the Papacy.  By itself this led to some unique characteristics, but consequentially for world history the Islamic world didn’t develop secular political powers as a counterbalance to religious ones, like what happened in Europe.  So the political realm is intricately tied in with religious life in most Islamic countries.
  • “Jihad” is misunderstood; first and foremost it is an inward struggle in one’s own heart against wickedness.
  • Islam is very insistent on obedience: “whichever verses of the Quran may seem to us to contradict truth or reality, there are two explanations: either we have made an error in understanding the meaning of these verses, or we are mistaken in our understanding of what is truth and reality.”  Might be my whole religious mindset right now, but this just strikes me as almost chilling arrogance…  For the faithful, there is no way they can be wrong.  But how does that jive with faithful in other religions, who also believe there is no way they can be wrong?